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2. The dispute arises from an assessment by the Staatssecretaris van Financiën to national insurance contributions for 1984 in the sum 4. Before the Gerechtshof Mr De Jaeck of H F L 13 665, calculated on the basis of claimed that he had no obligation to pay Mr De Jaeck's earned income in the Nether- national insurance contributions because he lands in that period, which totalled H F L was self-employed in both the Netherlands 212 342. He objected to the assessment, and Belgium. Therefore, pursuant to the first which was confirmed by the Inspector. He sentence of Article 14a(2) of Council Regu- then appealed against this decision to the lation (EEC) N o 1408/71 of 14 June 1971 on Gerechtshof, which set it aside and reduced the application of social security schemes to the amount to HFL 8 223. employed persons, to self-employed persons and to members of their families moving within the Community, in the consolidated version of Council Regulation (EEC) N o 2001/83 of 2 June 1983 1 ('Regulation N o 1408/71'), only the Belgian legislation applied to him since he resided in Belgium.

3. It appears from the documents in the file 1 — Council Regulation (EEC) N o 2001/83 of 2 June 1983 that the applicant is a Belgian national who amending and updating Regulation (EEC) N o 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to mem- bers of their families moving within the Community and also amending and updating Regulation (EEC) N o 574/72 laying down the procedure for implementing Regulation * Original language: Spanish. (EEC) N o 1408/71 (OJ 1983 L 230, p. 6).

6. In the judgment which is now the subject In the alternative, he claimed that, since he of an appeal on a point of law, the Gerecht- had worked in the Netherlands only two shof followed the abovementioned case-law days a week in that year, if he had to pay of the Hoge Raad and ruled that the rela- contributions, then he should pay two- tionship between the appellant and the lim- sevenths of the maximum contribution. ited company during 1984 was to be treated as an employer-employee relationship for the purposes of the Algemene Ouderdomswet (General Law on Old-Age Insurance) and the corresponding provisions of the other national insurance laws and that therefore Article 14c(l)(b) of Regulation N o 1408/71, in conjunction with paragraph 1 of Annex 5. The Inspector contested those arguments VII to the Regulation, was applicable to the on the ground that Mr De Jaeck's work in appellant. This meant that in 1984 he was the Netherlands had to be classified as subject to both the Belgian and the Dutch employment and that, for that reason, Dutch social security legislation. law was applicable to him in respect of work in the Netherlands, pursuant to Article 14c(l)(b) of Regulation N o 1408/71 in con- junction with paragraph 1 of Annex VII to the Regulation.

With regard to the subsidiary issue, the Gerechtshof found that in 1984 the appellant was subject to wages tax since he had worked in the Netherlands on a regular basis The Inspector reached this conclusion on the during that period, and that he was compul- basis of the case-law of the Hoge Raad relat- sorily covered by national insurance and ing to wages tax and national insurance had to pay the appropriate contributions

'1. For the purposes of the application of 3. If, as a result of the application of Articles 14a and 14c of Regulation N o Article 14c(l)(b) of Regulation N o 1408/71, is the expression "employed" 1408/71, the legislation of two Member to be interpreted as covering the States is applicable, do Community employment relationship of a person rules preclude national insurance contri- managing, as an appointed remunerated butions being levied by one Member director, a company with capital divided State, under the legislation of that State, into shares, where that person is also a in connection with work performed —

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not on every working day each week — (ii) any person who is compulsorily in that State, without regard to the pos- insured for one or more of the con- sibility that contributions may be levied tingencies covered by the branches under the legislation of the other Mem- of social security dealt with in this ber state in connection with work per- Regulation, under a social security formed in that other State during the scheme for all residents or for the other working days each week, and if whole working population, if such so, to what extent is that the case?' person:

Community provisions — can be identified as an employed or self-employed person by virtue of the manner in which such scheme is administered or financed, or,

9. Article 1 of Regulation N o 1408/71 pro- vides as follows: — failing such criteria, is insured for some other contingency specified in Annex I under a scheme for employed or self-employed per- sons or under a scheme referred to in (iii), either compulsorily or '[...] on an optional continued basis, or, where no such scheme exists in the Member State concerned, complies with the definition given in Annex I;

12. Article 14c lays down the special rules applying to persons simultaneously employed in one Member State and self- employed in another. Pursuant to this provi- '1. Subject to Article 14c, persons to whom sion, in the version in force at the material this Regulation applies shall be subject time: 2 to the legislation of a single Member State only. That legislation shall be determined in accordance with the pro- visions of this Title.'

'1. A person who is employed simulta- neously in the territory of one Member State and self-employed in the territory of another Member State shall be subject:

11. Article 14a of Regulation N o 1408/71 lays down the special rules applying to per- sons, other than mariners, who are self- employed. It does not contain the term (a) to the legislation of the Member State in 'employed' which the national court requires which he is engaged in paid employ- to be interpreted. However, I presume that ment, subject to subparagraph (b); the provision of this article which is of inter- est for resolving the dispute is paragraph (2):

'1. The person referred to in [...] Article 14c(l)(a) shall be treated, for the purposes of application of the legislation laid down in accordance with these provisions, as if he pursued all his professional activity or activi- Instances in which a person shall be simulta- ties in the territory of the Member State con- neously subject to the legislation of two cerned.' Member States

14. Annex I to the Regulation, which gives 1. Where he is self-employed in Belgium and definitions of self-employed persons, gainfully employed in any other Member employed persons and members of their State except Luxembourg. ...' family for certain Member States, provides, so far as relevant here:

16. Written observations on this preliminary reference have been submitted by the Neth- erlands Government and the Commission. 'I. The Netherlands The defendant authority, the Staatsecretaris van Financiën, informed the Court that it associated itself with the observations of the Netherlands Government. The latter, together with the Council and the Commis- sion, replied to certain questions from the Any person pursuing an activity or occupa- Court after the completion of the written tion without a contract of employment shall procedure. The Netherlands Government,

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the United Kingdom Government, the Court to state whether, for the application of Council and the Commission appeared at the Title II of Regulation N o 1408/71, the hearing. phrase 'under the direction of another per­ son' requires a de facto relationship of sub­ ordination or whether it is sufficient for the relationship to be merely formal.

According to the Netherlands Government, the phrase 'a person who is employed' must be construed taking account of the definition by the Court of Justice of 'worker' for the purposes of Article 48 of the EC Treaty: The Netherlands Government adds that in 'The essential characteristic of the employ­ the present case Mr De Jaeck's relationship ment relationship is that for a certain period with the limited liability company fulfilled of time a person performs services for and the essential requirements of an employment under the direction of another person in relationship: he worked for the company, he return for which he receives remuneration', 3 was subject to its authority and received and, in this connection, the Netherlands remuneration for his services. This is suffi­ Government considers it essential for the cient to conclude that he was an employed person. Therefore his situation is not covered by Article 14a of the Regulation, but by Article 14c(l)(b) in conjunction with para­ 3 — See the judgment in Case 66/85 Lawrie-Blum ν Land Baden- Württemberg [1986] ECR 2121, paragraph 17. graph 1 of Annex VII to the Regulation.

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20. This situation may be resolved by apply- ing either Article 14a(2), if his activity in the 19. In its written observations, the Commis- Netherlands was on a self-employed basis, in sion observes that Title II of Regulation N o which case he would remain subject to Bel- 1408/71 contains a number of rules of con- gian legislation because he resided in Bel- flict applying to persons who are employed gium in 1984 and was also self-employed and/or self-employed in two or more Mem- there, or Article 14c, if that activity was on ber States simultaneously, and that Title II an employed basis, in which case he would forms a complete, homogeneous system of be subject to both Belgian and Dutch social rules of conflict based on the fundamental security legislation simultaneously in relation principle of Article 13(1) that such persons to his activity in each of those States. There- are subject to the social security legislation fore, it is necessary to be able to decide of a single Member State. The only exception whether Mr De Jaeck's activity in the Neth- to this, which did not appear in the Commis- erlands throughout that year constituted sion proposal submitted to the Council and employment or self-employment, but these which was the result of an amendment terms are not defined by the Regulation.

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22. The Commission states that its position may appear to contradict the Court's case- law on the scope ratione personae of Article 23. In the Commission's opinion, the ques- 48 of the Treaty and of Regulation (EEC) tion whether an activity must be treated as N o 1612/68 4 ('Regulation N o 1612/68'), employment or self-employment depends on according to which the term 'worker' has a whether the Member State where it takes Community meaning and must be defined place regards it as employment or self- according to objective criteria which employment for the purpose of membership of its social security schemes. In the present case, the Commission points out that the Netherlands does not have a social security 4 — Council Regulation (EEC) No 1612/68 of 15 October 1968 scheme for self-employed persons as such on freedom of movement for workers within the Commu- nity (OJ, English Special Edition 1968(11), p. 475). and, if a person is not insured under the

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scheme for employees but only under the the answer is not so simple, the Commission national insurance scheme, it is more difficult concludes that, with regard to social security than in other countries to identify the type legislation, he was employed, in which case of activity for the purpose of applying the his situation is covered by Article 14c(l)(b), Regulation. which means that the legislation of Belgium and the legislation of the Netherlands apply to him simultaneously.

24. In the light of this reply, the Commis- sion states that it is already possible to apply Title II of the Regulation to Mr De Jaeck. There is no doubt that, in Belgium, the social 26. With regard to the first question, the security legislation treats him as having been Commission states that, to establish whether self-employed. In the Netherlands, although a person should be treated as employed or

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self-employed or as belonging to neither cat- employed, in which case he cannot be treated egory, it will be necessary to be guided by as self-employed for the purpose of the other the reply to the following questions: firstly, provisions of the Regulation. whether he falls within the scope ratione per- sonae of the Regulation (Title I); if so, which legislation is applicable to him (Title II), and this may differ from that which was used to classify him as employed or self-employed, 5 and, finally, whether pursuant to that legisla- tion he is insured as an employed or self- employed person or is not insured. 6 27. In order to reply to the second question, the Commission offers the following examples:

5 — This occurred in Case C-121/92 Staatssecretaris van Finan- ciën v Zinnecker [1993] ECR I-5023. The person concerned, a German national resident in Germany who was self- employed for approximately one-half of the time in Ger- many and for the other half in the Netherlands, had to be treated, pursuant to the Dutch legislation, as within the scope ratione personae of the Regulation (Title I), but the legislation applying to him was that of the Member State (2) If it were necessary to follow the Court's where he resided (Article 14a of Title II). definition of 'worker' for the purposes of 6 — The conclusion in the Zinnecker judgment, cited in footnote 5 above, was that the person concerned was not insured in Article 48 of the Treaty, a person employed either State because the German legislation only provided for for a short period, such as two hours a day voluntary insurance for persons in that situation and Mr Zinnecker had not opted to take out such insurance. on two days per week, as in the case of

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Mr van Heijningen, could not be treated as the purpose of applying Article 48 of the either an employed person or a self- Treaty, 'non-wage earner' for the purpose of employed person. In that case, 7 however, the Article 52, or 'wage-earner or assimilated Court held that a person is covered by Regu- worker' for the purpose of the Community lation N o 1408/71 if he meets the conditions rules on social security. laid down in Article 1(a) in conjunction with Article 2(1), irrespective of the time devoted to his occupational activity.

8 — Sec the judgments in Case C-3/90 Bernini [1992] ECR I-1071, paragraph 14, and Case 197/86 Brown ν Secretary of 7 — Sec the judgment in Case C-2/89 Bestuur der Sociale Verzek- State for Scotland [1988] ECR 3205, paragraph 21. eringsbank ν Kits van Heijningen [1990] ECR I-1755. 9 — Case C-107/94 Asscher [1996] ECR I-3089, paragraph 26.

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the Treaty, but as pursuing an activity as a This principle, which was developed by case- 'self-employed person' within the meaning law, was incorporated in Regulation N o of Article 52 of the Treaty. 10 1408/71, in particular in Article 1(a).

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do so in the Van Roosmalen judgment, 15 in under such a scheme, provided that in this which it ruled that the expression 'self- connection there is no discrimination employed person' within the meaning of between nationals of the host State and Article 1(a)(iv) of Regulation N o 1408/71, nationals of other Member States.' 16 which covers persons who are voluntarily insured, applies to persons who are pursuing or have pursued, otherwise than under a contract of employment or by way of self- employment in a trade or profession, an occupation in respect of which they receive 32. Nevertheless, it must be remembered income permitting them to meet all or some that, although the Member States are in prin- of their needs, even if that income is supplied ciple competent to lay down the conditions by third parties benefiting from the services for membership of their social security of a missionary priest. schemes, they are not authorized to deter- mine the territorial scope of their own legis- lation, which is entirely a matter for Com- munity law. In the Ten Holder judgment, 17 the Court observed that the provisions of Title II constitute a complete system of con- flict rules the effect of which is to divest the 30. I agree with the Commission that the legislature of each Member State of the decisive factor as to whether a person is cov- power to determine the ambit and the condi- ered by the Regulation consists in being tions for the application of its national legis- insured under a social security scheme of a lation so far as the persons who are subject Member State for employed or self- thereto and the territory within which the employed persons and that, for the purpose provisions of national law take effect are of the Regulation, when deciding whether a concerned. particular activity is to be treated as one of employment or self-employment, it is neces- sary in each case to determine how these activities are treated by the Member State in question when applying its social security legislation. 33. In the light of these considerations, I propose that the Court's reply to the first question be that the word 'employed' in Title II of Regulation N o 1408/71 refers to activity which is treated as such, for the

purpose of its social security system, by the liability company of which he was the sole legislation of the Member State in whose ter- shareholder, and likewise worked in Belgium ritory such activity is pursued. as the director of another company, for which his activity was confined to Belgium. He was insured under the Dutch national insurance scheme until he transferred his residence to Belgium in May 1986. Thereaf- ter he was under no obligation to contribute to the Dutch national insurance, but was subject exclusively to the Belgian social secu- rity legislation and was, in particular, insured 34. O n the basis of this reply the national under the compulsory scheme for self- court will have to determine, taking account employed persons. of the first and second indents of Article 1(a)(ii) of Regulation N o 1408/71, whether Mr De Jaeck ought to have been insured under and contributed to a scheme for employed or self-employed persons in the Netherlands. In the former case, his situation will be covered by Article 14a(2) and he will have been subject to only Belgian legislation, as if he had worked entirely in Belgium, whereas, in the latter case, Article 14c(1)(b) will apply and he will have been subject The second question simultaneously to the social security legisla- tion of both States in relation to his activity in each.

36. The Netherlands Government proposes observance of the principle of non- a reply in the affirmative to this question. It discrimination. It follows that, if the legisla- observes that since 1985, as a result of a tion of a particular Member State is found to judgment of the Centrale Raad van Beroep, be applicable pursuant to Title II, the the social security cover of a company direc- requirements it lays down for insurance tor 'who is at the same time the principal under a scheme or a particular branch of shareholder does not extend to certain con- such a scheme must be fulfilled. tingencies for which there is provision for payment of benefits according to the remu- neration previously received, i. e. sickness, invalidity and unemployment, and he is insured only in respect of the following risks: old age, widowerhood and orphan- hood, invalidity (right to minimum benefits), The Commission also proposes a reply in the sickness (special benefits) and family ben- affirmative to the second question as follows: efits. in cases where Article 14c(1)(b) of Regu- lation N o 1408/71 is found to be applicable, the rules concerning the right or the obliga- tion to be insured under a social security scheme or a particular branch thereof will be those laid down by the legislation of each of the Member States concerned, provided that The Government adds that, as the Court of no distinction is made between nationals of Justice has repeatedly held, it is for the legis- the host State and those of other Member lation of the Member States to determine the States. conditions of insurance under a compulsory or voluntary social security scheme, pro- vided that the rules are applied without dis- crimination between nationals of the host State and nationals of other Member States, the only purpose of the rules of conflict in 38. O n this point I agree with the views of Title II being to determine the legislation the Netherlands Government and the Com- applicable, and they cannot have the effect mission and the arguments they put forward. that a person is insured in relation to certain contingencies contrary to the provisions of such legislation.

However, as the Netherlands Government in relation to only some of the contingencies and the Commission correctly point out, it covered by the Netherlands social security must be borne in mind that, firstly, the pro- system, i. e. those provided for by the visions of Title II of Regulation N o 1408/71, national insurance scheme, and not in rela- of which Article 14c forms part, constitute a tion to the other contingencies covered by complete, uniform system of rules of conflict that scheme, i. e. those provided for by the the purpose of which is to determine the compulsory insurance scheme for employees. national legislation applicable to persons covered by the Regulation, but not to lay down the conditions creating a right or obli- gation to be insured under a social security scheme or a particular branch of such a scheme and, secondly, as Community law stands at present, it is for the legislation of The third question each Member State to create a right or obli- gation to be insured under its social security schemes and the conditions, provided that such rules apply without discriminating between its own nationals and those of other Member States.

Mr De Jaeck's position is not subject alterna- on his total income from his work in the tively to the social security legislation of two Netherlands, and that they may be calculated Member States, but simultaneously. Herein as if his work had been full-time work and lies the difference from the situation exam- not part-time work. ined in the Perenboom judgment, 19 in which the Court ruled that, in the case of a worker who was subject for part of the year to Ger- man legislation, and for the remainder of the year to Netherlands legislation, a Member State could not require contributions for the salary received in the other Member State during the period when the legislation of the other State was applicable. 43. The Commission also proposes a reply in the negative. It observes, firstly, that in cases where Article 14c(l)(b) of Regulation N o 1408/71 applies, contributions can be levied only on the income received in the Member State in question and under no cir- cumstances on income in another State, and that this principle appears acceptable in the light of the provisions which normally O n the contrary, pursuant to Article appear in conventions for preventing double 14c(l)(b) of Regulation N o 1408/71, the taxation. Member State whose legislation applies to paid employment charges contributions, under the conditions laid down by that State, on the remuneration received, but under no circumstances can it require contributions on the income received during the same period from self-employment in another Member State.

46. Having thus given a complete reply to the three questions from the national court, I 44. I concur with the submissions of the must say that I am perplexed, as in my Netherlands Government and the Commis­ Opinion in the Hervein case, 2 0 by the pros­ sion with regard to the reply to this ques­ pect of Article 14c(l)(b) of Regulation N o tion. I think there is no doubt that, if Article 1408/71 being applied in conjunction with 14c(l)(b) of Regulation N o 1408/71 is found Annex VII to the Regulation. to apply, the worker is subject simulta­ neously, not successively, to the legislation of both States in relation to the activities in each and that, as there is no Community law rule which would require the authorities of a Member State to apply special rules for cal­ culating contributions where the person con­ cerned has to pay contributions simulta­ 47. In the first place, when the Community neously in another Member State, the rules applying to migrant workers were con­ respective national legislation must be tained in Regulation N o 3, the Court of Jus­ applied without reservation. tice ruled, in the Nonnenmacher judgment, 2 1 when deciding whether the compulsory application of the legislation of the State where the worker is employed excludes the application of that of any other Member State, that Article 12 of Regulation N o 3, forming part of Title II (which, like Title II of Regulation N o 1408/71, set out the rules of conflict for the purpose of determining the legislation applicable to persons within 45. Consequently, I propose that the answer to be given to the third question is that, for the purposes of applying Article 14c(l)(b) of Regulation N o 1408/71, Community law 20 — Cited in footnote 13. In that case, the application of Article 14c(1)(b) affected a French national who had worked for does not require the Member States to take several years in a very similar capacity in France and Bel­ gium. To be precise, he was the chairman and managing account, in calculating the contributions pay­ director of a number of public companies. In France, he able by the person concerned in the State was covered by the social security scheme for employees, while the respective Belgian institution also claimed that he where he is employed, of the fact that he is should pay contributions to the scheme for self-employed persons. also obliged to pay contributions in respect 21 — Case 92/63 Nonnenmacher ν Bestuur der Sociale Vezeker- of self-employment in another Member ingsbank [1964] ECR 281, in particular 288.

48. Secondly, as long as Regulation N o 1408/71 applied only to employed persons and members of their family, the situation where a person was subject to the social 50. In the Stanton case, 25 the plaintiff, a security legislation of two Member States did British national who was employed in the not arise. The provision to this effect was United Kingdom and in that capacity paid introduced by Regulation (EEC) No contributions to the British social security 1390/81, 2 3which extended Regulation N o scheme for employees, was at the same time 1408/71 to self-employed persons and mem- a director of a Belgian insurance company, a bers of their families and which came into subsidiary of the British company by which force on 1 July 1982 ('Regulation N o he was employed. As a consequence of that 1390/81'). It did not even appear in the activity, the Belgian authorities on their own initiative insured him under their own social security scheme for self-employed persons. 22 — Case 19/67 Sociale Verzekeringsbank ν Van der Vecht [1967] ECR 345, in particular at p. 354. 23 — Council Regulation (EEC) N o 1390/81 of 12 May 1981 extending to self-employed persons and members of their families Regulation N o 1408/71 on the application of social 24 — Cited in footnote 2. When it came into force, Article 14c security schemes to employed persons and to members of was reworded and paragraph 2 was deleted. their families moving within the Community (OJ 1981 25 — See the judgment in Case 143/87 Stanton v INASTI [1988] L 143, p. 1). ECR 3877.

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In both judgments the Court also observed that 'the provisions of the Treaty relating to the free movement of persons are thus intended to facilitate the pursuit by Commu- nity citizens of occupational activities of all 51. Mr Wolf and the company requested kinds throughout the Community, and pre- exemption from the payment of such contri- cludes national legislation which might place butions pursuant to Article 12, paragraph 2, Community citizens at a disadvantage when of Royal Decree N o 38 establishing the they wish to extend their activities beyond social security scheme for self-employed per- the territory of a single Member State'. The sons, under which a self-employed person is Court added that 'the legislation of a Mem- not liable to pay contributions if his income ber State which exempts persons whose prin- in that capacity does not reach a certain cipal occupation is employment in that threshold and if, in addition to that capacity, Member State from the obligation to pay he habitually pursues another principal occu- contributions to the scheme for self- pation. This was refused by INASTI on the employed persons but withholds such ground that the 'other occupational activity' exemption from persons whose principal mentioned in Article 12, paragraph 2, related occupation is employment in another Mem- solely to employment covered by a Belgian ber State has the effect of placing at a disad- social security scheme. vantage the pursuit of occupational activities

26 — See the judgment in Joined Cases 154/87 and 155/87 Wolf and Another [1988] ECR 3897. 27 — Ibid., paragraphs 10 to 12.

outside the territory of that Member State. Mr Kemmler had a fixed, permanent estab- Articles 48 and 52 of the Treaty therefore lishment in both Member States. preclude such legislation'. Bearing in mind that the national provision in question affords no additional social security cover to the persons concerned, who are insured under the social security scheme of the Member State in which they pursue their 55. Following the same reasoning as in the principal employment, the Court concluded Stanton and Wolf cases, the Court arrived at that ‘the impediment to the pursuit of occu- the same conclusion in the Kemmler case: pational activities in more than one Member State may not in any event be justified on that basis'. 28 'Legislation of a Member State which requires contributions to be made to the scheme for self-employed persons by per- sons already working as self-employed per- 53. In a more recent judgment in the sons in another Member State, where they Kemmler case, 29 the Court replied to a ques- have their habitual residence and are affili- tion referred by a Belgian court. In that case ated to a social security scheme, inhibits the INASTI claimed that Mr Kemmler should pursuit of occupational activities outside the pay contributions to the social security territory of that Member State. Article 52 of scheme for self-employed persons for 1981 the Treaty therefore precludes legislation of and the first half of 1982. As in the Stanton that kind unless it is duly justified.' and Wolf cases, the contributions were for periods prior to the entry into force of Regulation N o 1390/81. Mr Kemmler prac- tised as a lawyer in Frankfurt and Brussels In this respect the legislation in question, and refused to pay the contributions on the which compelled Mr Kemmler to be insured ground that he was already insured under under and to pay contributions to the Bel- the German social security scheme for self- gian self-employed scheme, afforded no employed persons and that he would not additional social security cover, just as in the obtain additional social security cover from Stanton and Wolf cases. Consequently, added the Belgian scheme. H e was domiciled in the Court, 'the impediment to the pursuit of Germany and had resided in Belgium for occupational activities in more than one part of the period in respect of which contri- Member State may not in any event be justi- butions were claimed. fied on that basis' and its reply to the national court was as follows:

security scheme, that obligation affording The Council adds that an exception such as them no additional social security cover.' 3 0 that in Article 14c(1)(b) of Regulation N o 1408/71 to the principle laid down in Article 13 that persons to whom the Regulation applies are to be subject to the legislation of a single Member State only cannot conflict 56. In the present case, both the Council and with Articles 48 to 52. For this to happen, the Commission were requested to submit the application of that provision would have observations on the compatibility of Article to produce undesired secondary effects or 14c(l)(b) of Regulation N o 1408/71 with practical problems to the disadvantage of Articles 48 to 52 of the Treaty in the light migrant workers in relation to their competi­ of the Court's case-law, particularly the tors who are nationals of the host State, and Kemmler judgment. 31 it did not appear that the application of the provision had caused problems in the Administrative Commission on Social Secu­ rity for Migrant Workers.

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the social security systems of the Member 59. I cannot accept the Council's arguments. States mentioned in Annex VII to the Regu- According to the recitals of Regulation N o lation, which would be contrary to the 1390/81, particularly the second, 'freedom of Treaty and which, in the long term, could movement for persons, which is one of the prejudice the social security schemes of those cornerstones of the Community, is not con- States by aggravating their deficit situation. fined to employed persons but also extends So far as additional social security cover is to self-employed persons in the framework concerned, the Council observes that in cer- of the freedom of establishment and the free- tain cases double contribution, which is cal- dom to supply services'; the third, 'the coor- culated on the income in the Member State dination of the social security schemes appli- concerned, may mean additional cover in cable to self-employed persons is necessary relation to pension rights or family benefits. to attain one of the objectives of the Treaty'; and the fifth, 'in the sphere of social security, the application of national legislations only would not afford sufficient protection to self-employed persons moving within the Community; whereas, in order to make the freedom of establishment and the freedom to provide services fully effective, the social security schemes for self-employed persons should be coordinated.'

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scheme, whereas, pursuant to Article 63. In this connection it remains to add that 14c(l)(b) of Regulation N o 1408/71, Mr De in the Stanton, Wolf and Kemmler judgments Jaeck may have to be insured under and pay the Court appears to contemplate the possi- contributions to the Dutch social security bility that impeding the pursuit of occupa- scheme and to the Belgian self-employed tional activities outside a single Member scheme in relation to his work in each coun- State could be justified if the national rules try. afforded some kind of additional social secu- rity cover. However, in accordance with the principle of the hierarchy of norms and in the light of Articles 48 and 52 of the Treaty, which have the object of facilitating the pur- suit of occupational activities in all the Mem- ber States, there is no justification whatever for the Council, in exercising its legislative power, to place Community nationals in an 61. The difference between the situation of unfavourable situation if they wish to extend Messrs Stanton, Wolf and Kemmler on the their activities to the territory of certain one hand and that of Mr De Jaeck on the other Member States. other is that, for the former, the obligation to be insured under a social security scheme in one Member State when they were already covered in another arose from the applica- tion of national, i. e. Belgian, legislation, whereas the same obligation would be imposed on Mr De Jaeck by the Community rules.

to prevent persons who are simultaneously were self-employed in Germany instead of employed and self-employed in two Member Belgium, unless he were engaged in farming, States from paying smaller contributions or in Denmark, unless he was resident there, than persons who are both employed and or in the United Kingdom or Ireland, to take self-employed in one Member State only, a few more examples. O n the other hand, his which would give the former an unjustified situation would be comparatively worse if he advantage over their competitors whose proposed to work on a self-employed basis activities are not divided between two Mem- in Belgium, as we have seen, or in Italy or ber States. I now wish to consider whether Greece, as he would be subject simulta- Article 14c(1)(b) has this object, taking neously to the legislation of two Member Mr De Jaeck's case as an example. States, which would entail a double obliga- tion to be insured and pay contributions, although only for the activities carried on in each State.

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the amount of the contributions would be scheme. I am inclined to think that this was lower. in fact the reason why the Council amended the Commission's wording at the time but, as I have already shown, this provision has the effect of creating an obstacle to the pur- suit of occupational activities outside the ter- ritory of a Member State.

This argument of the Council seems to me even less persuasive in view of the amend- ments made to Regulation N o 1408/71 by Regulation N o 3811/86. From the date when the latter came into force on 1 January 1987, although a person who is employed simulta- neously in one Member State and self- I would add that a person residing in Bel- employed in one of the others listed in gium where he is both self-employed and Annex VII continues to be subject to the leg- employed would perhaps be in a similar situ- islation of both, it is not clear whether this is ation if he remains in that State or, pursuant solely in relation to the work in each, to Article 14c(l)(b), if he moves to France to because this point was deleted in the two take up employment whilst continuing to indents of which Article 14c(b) consists. Fur- work on a self-employed basis in Belgium. thermore, pursuant to the new paragraph (2) However, this situation would be very differ- of Article 14d, a person in this situation is ent from that of a person resident and treated, for the purposes of determining the employed in, for example, Germany and rates of contributions to be charged to self- who is at the same time self-employed in employed workers under the legislation of Denmark or in any of the other Member the Member State in whose territory he is States not listed in Annex VII. self-employed, as if he pursued his paid employment in the territory of the Member State concerned. A provision worded in this way may, when the national legislation is applied, have the effect of either reducing or increasing the rate of contribution.

70. The fact that the national court has referred questions of interpretation in this 71. Likewise Advocate General Darmon, in case does not prevent the Court from exam- his Opinion in Case C-37/89, observed in ining the validity of a legislative provision. In this respect that 'it is for the Court to verify this connection the principle laid down by the validity of a legislative provision even the Court in the judgment in Case 16/65 36 is though the question referred to it does not very important. The Court observed that: ask for this to be done, once the Court con- templates interpreting the provision in a way which may cause it to be rendered invalid.' 38 'The conclusion to be drawn from the for- mulation of the questions put by the [national court] is that the court is concerned less with the interpretation of the Treaty or of a measure adopted by a Community insti- tution than with obtaining a preliminary rul- 72. And this is precisely what the Court has ing on the validity of such a measure always done over the years. For example, in which the Court is empowered to give by the Strehl case, 39 in which a Belgian court subparagraph (b) of the first paragraph of asked the Court of Justice to interpret Article 177.' Article 46(3) of Regulation N o 1408/71 and Decision N o 91 of the Administrative Com- mission on Social Security of Migrant Work- In such cases: ers, the Court examined by way of prelimi- nary ruling the legality of those provisions and found them incompatible with Article 51 of the EC Treaty. In the Roquette Frères 'it is appropriate for the Court of Justice to case 40 the Court found that six of the ques- inform the national court at once of its views tions referred by the national court for inter- without compelling the national court to pretation also asked indirectly for an assess- comply with purely formal requirements ment of the validity of certain legislative which would uselessly prolong the pro- cedure ... and would be contrary to [the] very nature [of Article 177]. Although [such] strict adherence to formal requirements may 37 — See the Opinion of Advocate General Mancini in Case 20/85 Roviello ν Landesversicherungsanstalt Schwaben be defended in the case of litigation between [1988] ECR 2805, in particular pp. 2822 and 2826. 38 — Case C-37/89 Weiser [1990] ECR I-2395, in particular at p. I-2411. 39 — Sec the judgment in Case 62/76 Strehl [1977] ECR 211, paragraph 10. 36 — Firma C. Schwarze ν Einfuhr-und Vorratsstelle für Getreide 40 — See the judgment in Case 145/79 Roquette Frères [1980] und Futtermittel [1965] ECR 877. ECR 2917, paragraph 6.

73. With regard to the consequences of the invalidity of Article 14c(l)(b) and Annex VII 74. Under these circumstances, I propose to Regulation N o 1408/71, the Court has that, as in the Pinna judgment, 48 the Court ruled that 'where it is justified by overriding should rule that, owing to overriding consid- considerations Article 174(2) of the Treaty erations of legal certainty affecting all the gives the Court discretion to decide, in each interests at stake, both public and private,

41 — Cited in footnote 37. 46 — See the judgments in Case 112/83 Société des Produits de 42 — Cited in footnote 38. Maïs v Administration des Douanes et Droits Indirects 43 — See the judgment in Case 313/86 Lenoir [1988] ECR 5391. [1985] ECR 719, paragraph 18, and Case 41/84 Pinna v 44 — See the judgment in Case C-204/88 Ministère Public ν Paris Caisse d'Allocations Familiales de la Savoie [1986] ECR 1, [1989] ECR 4361. paragraph 26. 45 — See the judgment in Case C-117/88 Trend-Moden Textil­ 47 — Cited in footnotes 25, 26 and 29 respectively. handel [1990] ECR I-631. 48 — Cited in footnote 46.

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affiliation to social security schemes and con- in principle be called into question, save in tributions payable pursuant to Article the case of workers or persons claiming 14c(l)(b) of Regulation No 1408/71 in under them who, before that date, brought respect of periods prior to the delivery of the legal proceedings or made an equivalent judgment declaring that article invalid cannot claim under the national law applicable.

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prevents the first State from charging contributions in respect of his income earned in the second, and vice versa.

O n the grounds set out above, I also propose that the Court give the following ruling:

(1) Article 14c(l)(b) of and Annex VII to Council Regulation (EEC) N o 1408/71 on the application of social security schemes to employed persons, to self- employed persons and to members of their families moving within the Com- munity, must be declared invalid in so far as they provide that a person who is simultaneously employed in the territory of one Member State and self- employed in that of another is to be subject to the legislation of both States.

(2) Such invalidity cannot be relied upon in order to call into question affiliation to social security schemes and contributions payable pursuant to the provision which has been declared invalid, in respect of periods prior to the delivery of the judgment declaring it invalid, save in the case of workers or persons claim- ing under them who, before that date, brought legal proceedings or made an equivalent claim under the national law applicable.

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