C-121/92

OPINION OF MR JACOBS — CASE C-121/92

OPINION OF ADVOCATE GENERAL JACOBS delivered on 22 April 1993 *

My Lords, period mentioned above, which is the mate- rial period for the purposes of the present proceedings, but each year during the period when the Slagharen park was open. He entered into oral contracts with the park operator each year on the basis of which he obtained the right to carry on his business 1. In this case the Hoge Raad of the Nether- there. lands has referred to the Court five questions concerning the interpretation of Council Regulation (EEC) No 1408/71 on the appli- cation of social security schemes to employed persons and their families moving within the Community (OJ, English Special 3. In respect of his activities in Germany Edition 1971 (II), p. 416) as amended by during 1982, Mr Zinnecker was not compul- Council Regulation (EEC) N o 1390/81 (OJ sorily insured in that State for one or more 1981 L 143, p. 1) which extended its applica- of the contingencies covered by the branches tion to self-employed persons and their fam- of social security to which the Regulation ilies moving within the Community (hereaf- applies. Nor was he covered by voluntary ter 'the Regulation'). insurance. Although he could have registered for pension insurance (Rentenversicherung), he did not do so.

self-employed and members of their family No 1408/71 be answered on the basis of the came into force on 1 July 1982. definition of the concept of a self-employed person applicable to the Netherlands or that applicable to Germany under Article l(a)(ii) of the Regulation in conjunction with the corresponding paragraph C (Germany) and I (Netherlands) of Annex I thereto? 5. According to the assessment sent to Mr Zinnecker, the amount due by him was HFL 8 335 calculated on the basis of an income of HFL 36 763. Following a com- plaint by him, the assessment was reduced repeatedly. According to the final assess- ment, the amount due by him was HFL 3 407 calculated on the basis of an income of HFL 16 339 and a period of 180 insured days. He appealed against that assessment to the Regional Court of Appeal (Gerechtshof) which set aside the assessment. The Secretary 2. If the reply to the first question must be of State for Finance (Staatssecretaris van Fin- that the definition applicable to Germany is anciën) appealed against the decision of the not decisive on its own, but that the defini- Regional Court of Appeal to the Hoge Raad. tion applicable to the Netherlands may also, or solely, be decisive, does the fact that under Netherlands legislation a person as referred to in the first question is not covered by compulsory insurance because he is non- resident, render it impossible to deem 6. The Hoge Raad has referred to the Court Article l(a)(ii), in conjunction with Annex I. the following questions: I (Netherlands), applicable to him?

8. Before discussing the issues identified 4. If a person as referred to in the previous above, I will examine the relevant provisions questions is subject to Netherlands legisla- of the Regulation. For convenience, I will tion, which for present purposes provides for refer to the provisions of the Regulation as a system of national insurance to which they appear in the consolidated version con- solely residents are affiliated, does it follow tained in Annex I to Council Regulation from Article 13(2)(b) of the Regulation that (EEC) No 2001/83 of 2 June 1983 (OJ such a person, although non-resident, must 1983 L 230, p. 6). be deemed to be an insured person for the purposes of that system?

9. Article 2 determines the scope of applica- tion ratione personae of the Regulation. Arti- cle 2(1) provides as follows: 5. If Question 4 is answered in the affirma- tive, is the person referred to insured in the Netherlands solely during the period in which he carries on activities on Netherlands 'This Regulation shall apply to employed or territory?' self-employed persons who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States ...'.

7. The first three questions raise in substance two issues. First, where a person carries on activities on a self-employed basis in the ter- 10. According to Article 1(a), for the pur- ritory of two or more Member States, the poses of the Regulation the terms 'employed law of which of those States determines person' and 'self-employed person' mean: whether he is a self-employed person within the meaning of Article l(a)(ii) and, therefore, whether he falls within the personal scope of the Regulation? Secondly, there is the issue which legislation is applicable to a person in '(i) any person who is insured, compulso- the position of Mr Zinnecker. By the fourth rily or on an optional continued basis, and fifth questions the referring court wishes for one or more of the contingencies

— failing such criteria, is insured for some other contingency specified in — to join, or pay contributions in respect Annex I under a scheme for of, an old-age insurance within a scheme employed or self-employed persons for self-employed persons, ... either compulsorily or on an optional continued basis, or, where no such scheme exists in the Mem- or ber State concerned, complies with the definition given in Annex I; — to join a scheme within the framework of compulsory pension insurance.

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'... persons to whom this Regulation applies 14. I turn now to examine the questions shall be subject to the legislation of a single Member State only. That legislation shall be referred by the national court as reformu- determined in accordance with the provi- lated above. sions of this Title.'

13. As a general rule, a person is subject to 15. As stated, the first issue raised by the the law of the Member State of his employ- questions referred is this: where a person car- ment. Thus, according to Article 13(2)(b), a ries on activities on a self-employed basis in person who is self-employed in the territory the territory of two or more Member States, of one Member State shall be subject to the the law of which of those States determines

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17. The Dutch Government claims that the 19. The Commission claims that the ques- fact that according to Dutch legislation a tion whether a person is an employed or a person in the position of Mr Zinnecker is not self-employed person within the meaning of compulsorily insured because he does not Article 1(a) should be determined by the law reside in the Netherlands does not prevent of the Member State whose legislation is such a person from being considered a self- applicable on the basis of the choice-of-law employed person for the purposes of the rules provided for in Title II. The Commis- Regulation. According to the Dutch Govern- sion concedes that this approach is not sup- ment, it follows from the definition of self- ported by the letter of Article 13(1) but employed person given in Annex I in respect argues that it is dictated by the objectives of of the Netherlands that, as regards the activ- Title II. ities which he carries on in the Netherlands, a person in the position of Mr Zinnecker is a self-employed person within the meaning of Article l(a)(ii) notwithstanding the fact that he is not resident in the Netherlands. It fol- lows, according to the Dutch Government, 20. According to the Commission, if it were that he falls within the personal scope of the accepted that the provisions of Title II apply Regulation. only to persons who are employed or self- employed persons within the meaning of Article 1(a), certain categories of migrant workers might find themselves in a situation where they would not benefit from the social 18. Mr Zinnccker states that whether a per- security scheme of any Member State even son is a self-employed person within the though they satisfied the substantive require- meaning of Article l(a)(ii) depends on the ments for affiliation to a national social secu- definition of the term 'self-employed person' rity scheme. This would be the case, for given in Annex I to the Regulation. Annex I example, if a person carried on activities in a

23. I am also unable to accept the arguments of the Commission. As the Commission itself concedes, its approach is not supported by the terms of Article 13(1). According to 21. The Commission concludes that the that provision only 'persons to whom this question whether a person is employed or Regulation applies' are subject to the choice- self-employed within the meaning of of-law rules of Title II. It follows that Title Article 1(a) should be determined on the II applies only to persons who are covered basis of the law of the Member State whose by Article 2, i. e. persons who are employed legislation is applicable on the basis of the or self-employed within the meaning of choice-of-law rules provided for in Title II. Article 1(a). To use, therefore, the choice-of- According to the Commission, therefore, it law rules specified in Title II in order to is necessary first to determine the law appli- decide whether a person is a self-employed cable to a person in the position of Mr Zin- person within the meaning of Article 1(a) necker according to the choice-of-law rules would amount to a petitio principu. In addi- of Title II and then to determine whether tion, for the reasons that I shall explain, the such a person falls within the personal scope Commission's approach is contrary not only of the Regulation. to the terms but also to the general scheme of the Regulation. The Commission states that its view finds support in the judgment of the Court in Case 39/76 Metaalnijverheid v Mouthaan [1976] ECR 1901, paragraph 6. It is clear, however, that in that case the Court was concerned with a different issue and did not examine the issue which arises in 22. I have to say that I do not find persua- the present case. sive any of the arguments that have been

'Whereas the considerable differences exist- ing between national legislations as regards the persons to whom they apply make it preferable to establish the principle that the 28. It is clear that in order for a person to be Regulation applies to all nationals of Mem- a self-employed person within the meaning ber States insured under social security of Article l(a)(ii), it is sufficient that he is schemes for employed persons.' affiliated to a social security scheme and meets the conditions specified in that provi- sion in only one Member State. It is not a requirement that in order for a person to fall within the scope of Article l(a)(ii) he must 26. The same principle is followed by Regu- be affiliated to the social security schemes of lation No 1390/81 (OJ 1981 L 143, p. 1) two or more Member States. It follows that which extended Regulation No 1408/71 to in order for a person in the position of cover the self-employed and members of Mr Zinneckcr to be a self-employed person their family. The last recital of the preamble within the meaning of Article 1(a)(ii), it is to that regulation provides as follows: sufficient that he is affiliated to a social secu- rity scheme and meets the requirements of that provision, having regard to the provi- sions of Annex I, in one of the Member States where he carries on activities. 'Whereas ... it is necessary to stipulate in an Annex, what the terms "employed person" and "self-employed person", introduced in Regulation (EEC) No 1408/71, mean when the person concerned is insured under a 29. The conditions for affiliation to a social security scheme which applies to all national social security scheme are not

specified by Community law but remain in 276/81 (Sociale Verzekeringsbank v Kuijpers principle a matter for the Member States. I [1982] ECR 3027) and in Case 275/81 (Koks say 'in principle' because the Court has v Raad van Arbeid [1982] ECR 3013), "the accepted that the concepts of employed per- Member States are [not] entitled to deter- son and self-employed person are terms of mine the extent to which their own legisla- Community law and must be interpreted tion or that of another Member State is broadly (see e. g. with regard to self- applicable" since they are "under an obliga- employed persons, Case 300/84 van Roos- tion to comply with the provisions of Com- malen v Bestuur van de Bedrijfsvereniging munity law in force".' voor de Gezondheid [1986] ECR 3097). The Court has also held that a person comes within the scope of the Regulation if he sat- isfies the substantive conditions for affilia- tion to a national social security scheme laid down by national law even if the steps nec- It is clear therefore that the rules laid down essary for affiliation to that scheme have in Title II take precedence over the rules of not been completed (see Case 39/76 the Member States determining the territorial Metaalnijverheid v Mouthaan [1976] ECR scope of their social security laws. This 1901, paragraph 10 of the judgment). approach is justified by the objective of Title II which, as already stated, is to ensure that persons to whom the Regulation applies are subject to the legislation of one, and only one, Member State. If the Member States were entitled to replace the choice-of-law 30. It should be noted, however, that rules provided for in Title II with their own although Member States are in principle free rules, that objective would be defeated. A to determine the conditions for affiliation to person could find himself subject to the leg- their national social security schemes, they islation of two or more Member States or are not entitled to determine the territorial outside the scope of the legislation of any scope of their own legislation. That is a mat- Member State. ter for Community law. In Case 302/84 Ten Holder v Nieuwe Algemene Bedrijfsvereni- ging [1986] ECR 1827, the Court stated at paragraph 21 of the judgment: 31. Since Member States are not entitled to determine the territorial scope of their own legislation, it follows that a Member State may not deny affiliation to its social security 'The provisions of Title II constitute a com- scheme to a person who fulfils the substan- plete system of conflict rules the effect of tive requirements for affiliation to that which is to divest the legislature of each scheme on the ground that that person is not Member State of the power to determine the resident in the territory of that State. Nor ambit and the conditions for the application may a Member State extend its law so as to of its national legislation so far as the per- make subject to its own social security sons who are subject thereto and the terri- scheme persons who according to the tory within which the provisions of national choice-of-law rules of Title II are subject to law take effect are concerned. As the Court the social security scheme of another Mem- pointed out in its judgments ... in Case ber State.

32. Two conclusions can be drawn from the 34. I will now examine whether Mr Zin- above. On the one hand, according to necker is a self-employed person within the Article 1(a), the scope of application of the meaning of Article l(a)(ii) on the basis of the Regulation is defined by reference to persons above conclusion. who are affiliated to the social security scheme of a Member State and, in principle, it is up to the Member States to specify the conditions for affiliation to their own social

It fol- lows that he falls within the scope of appli- cation rattorte personae of the Regulation. It is therefore unnecessary to consider the applicability of the provisions of Annex I in relation to Germany referred to in the 33. I therefore reach the conclusion that national court's first question and set out in whether a person is a self-employed person paragraph 11 above. within the meaning of Article l(a)(ii) depends on whether he satisfies the substan- tive requirements for affiliation to a social security scheme of a Member State, and meets the requirements specified in that pro- vision, excluding the requirements concern- ing the territorial application of that scheme 36. Since a person in the position of Mr Zin- laid down by national law. The advantage of necker falls within the scope of application that approach is that it is consistent with the of the Regulation, the law applicable to him case-law of the Court holding that the con- is determined by the choice-of-law rules cept of self-employed person should be provided for in Title II. It should be noted, interpreted broadly, and also that it prevents in this context, that although Annex I defines a person who fulfils the substantive require- as a self-employed person for the purposes ments for affiliation to a social security of Article l(a)(ii) in relation to the Nether- scheme from finding himself in a situation lands any person pursuing an activity or where he is not subject to any national law occupation without a contract of employ- because Title II cannot be applied. ment, it cannot be the purpose of that

37. According to Article 14a(2), a person who is normally self-employed in the terri- tory of two or more Member States is sub- ject to the legislation of the Member State in whose territory he resides if he pursues any part of his activity there. It appears from the facts as set out in the order for reference that during the material time Mr Zinnecker divided his time as to approximately one-half in the Netherlands and one-half in Germany. It follows that at the material time, he was 39. Under Article 14a(2), when a person is subject to the legislation of Germany where self-employed in two or more Member he resided. States the law of one of those States is solely applicable. This becomes clear from Article 14d(l) which states that the person referred to in, inter alia, Article 14a(2) shall be treated, for the purposes of the applica- tion of the legislation laid down in accord- ance with that provision, as if he pursued all his activities in the territory of the Member 38. The fact that German law does not pro- State concerned. It follows that a person in vide for a system of compulsory insurance to the position of Mr Zinnecker is subject to which persons in the position of Mr Zin- the law of Germany as regards both his necker are affiliated does not render the pro- activities in Germany and those in the Neth- visions of Article 14a(2) any less applicable erlands. It is not the case that the legislation in the case of such a person. Article 14a(4) of the Netherlands applies in relation to his makes clear that the choice-of-law rule of activities in the Netherlands and the legisla- Article 14a(2) applies provided that the per- tion of Germany applies in relation to his son concerned has the right to join a pension activities in Germany. That would be con- scheme on a voluntary basis in the Member trary to the letter and the spirit of State where he resides. It is only if the law of Articles 14a(2) and 14d(l) and also of

44. The Commission comes to the conclu- 41. It should be noted that the situation sion that, according to Article 14a(2), would be different if he carried on activities Mr Zinnecker is subject to German law. It as a self-employed person solely in the proceeds to examine whether under German Netherlands. As stated, under law he is a self-employed person within the Article 13(2)(b), a person who is self- meaning of Article 1(a). Since he is not affil- employed in the territory of one Member iated to a compulsory or voluntary insurance State is subject to the legislation of that State scheme in Germany, the Commission comes even if he resides in the territory of another to the conclusion that he is not a self- Member State. It follows that if Mr Zinneck- employed person for the purposes of er had been self-employed solely in the Article 1(a) and, therefore, that he falls out- Netherlands, he would have been subject to side the scope of application ratione personae Dutch law notwithstanding the fact that he of the Regulation. was resident in Germany. In such a case, the requirement of residence laid down in Dutch legislation could not be relied on in order to deny him affiliation to the Dutch compul- sory social insurance scheme. If that were 45. According to the Commission, since he possible, Article 13(2)(b) would have no is not covered by the Regulation, it follows effect. The effect of that provision is pre- that whether he is affiliated to a compulsory cisely to replace the condition of residence scheme of social insurance in the Nether- with a condition that the person is self- lands depends on the provisions of the Neth- employed in the territory of the Member erlands legislation including the provisions

47. It seems to me that the approach which I have proposed is more in conformity with 49. As stated, in order for a person in the the objectives and the scheme of the Regu- position of Mr Zinnecker to be a self- lation. If the approach proposed by the employed person within the meaning of Commission were accepted, it would follow Article l(a)(ii), he must be affiliated to a that the Netherlands could extend its law so social security scheme, such as provided for as to make it applicable to a person in the in that provision, in one of the Member position of Mr Zinnecker without such States where he carries on activities. It could extension bringing him within the scope of be argued that Mr Zinnecker falls outside the Regulation. That, however, would run the scope of the Regulation because he is

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Conclusion

52. I am accordingly of the opinion that the questions asked by the national court should be answered as follows:

Where a person is resident in G e r m a n y and carries on activities as a self-employed person partly in Germany and partly in the Netherlands and falls within the scope of the Regulation because if he were resident in the Netherlands he would have been subject to compulsory insurance in that Member State, Council Regulation ( E E C ) N o 1408/71 must be interpreted as meaning that he is subject exclusively to German legislation.

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