C-126/95

HALLOUZI-CHOHO v BESTUUR VAN DE SOCIALE VERZEKERINGSBANK

OPINION OF ADVOCATE GENERAL TESAURO delivered on 14 May 1996 *

1. The question referred for a preliminary The object of the Agreement is to promote ruling which forms the subject-matter of overall cooperation between the contracting these proceedings concerns the interpretation parties with a view to helping to strengthen of Article 41(1) of the Cooperation Agree­ relations between them and contributing to ment between the European Economic the economic and social development of Community and the Kingdom of Morocco, Morocco (Article 1). That cooperation is to signed in Rabat on 27 April 1976 and con­ be instituted and regulated in the economic, cluded on behalf of the Community by technical and financial areas (Title I), in the Council Regulation (EEC) No 2211/78 1 of field of trade (Title II) and in the field of 26 September 1978 ('the Agreement'). labour (Title III).

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OPINION OF MR TESAURO — CASE C-126/95

condition of similar treatment for nationals attaining 65 years of age. The maximum of a Member State employed in Morocco amount of the pension is payable after a (Article 41(5)). Article 42(1) entrusts to the period of 50 years, from the 15th to the 65th Cooperation Council the task of adopting year of age; a reduction of 2% is applied, provisions to implement the principles set pursuant to Article 13 of the AOW, for out in Article 41 before the end of the first every year without insurance. year following the entry into force of the Agreement. Lastly, among the General and Final Provisions (Title IV), Articles 44 and 45 establish the Cooperation Council which is to be composed, on the one hand, of mem­ bers of the Council and the Commission of the European Communities and, on the other hand, of members of the Government of Morocco and which is to have the power to take decisions binding on the Contracting Parties for the purposes of attaining the objectives set out in the Agreement.

I-4810

HALLOUZI-CHOHO v BESTUUR VAN DE SOCIALE VERZEKERINGSBANK

(c) continues to live in the Netherlands of their families and their survivors'. The after attaining 65 years of age (the 'present matters covered by that regulation are residence' condition). 3 restricted by Article 4 thereof. For our pur­ poses, I would recall that old-age benefits are listed among the branches of social security to which the Regulation is to apply at Article 4(1 )(c).

4. Finally, I would observe that Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, to self- employed persons and to members of their 4 families moving within the Community ('the Regulation') applies, according to Article 2(1), 'to employed or self-employed '(a) The reduction referred to in persons who are or have been subject to the Article 13(1) of the AOW shall not be legislation of one or more Member States applied for calendar years or parts and who arc nationals of one of the Member thereof before 1 January 1957 during States or who arc stateless persons or refu­ which a recipient, not satisfying the gees residing within the territory of one of conditions permitting him to have such the Member States, as well as to the members years treated as periods of insurance, resided in the territory of the Nether­ lands between the ages of 15 and 65 years, or during which, whilst residing 3 — This condition, also mitigated by a provision of the Royal in the territory of another Member Decree of 3 December 1985, docs not apply to persons who were continuously insured under the AOW between 1 Janu­ State, he pursued an activity as an ary 1957 and their 65th birthday. employed person in the Netherlands for 4 — See the consolidated version in Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6). an employer established in that country.

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OPINION OF MR TESAURO — CASE C-126/95

By way of derogation from Article 7 of as long as that person is residing in the the AOW, persons who resided or territory of one of these Member States. worked in accordance with the above- mentioned conditions only prior to 1 January 1957 shall also be regarded as being entitled to a pension. (...)

In short, according to the provisions I have set out above, a recipient under the AOW who does not satisfy the conditions permit­ ting him to have periods before 1 January By way of derogation from Article 7 of 1957 treated as periods of insurance is never­ the AOW, the said woman shall be con­ theless entitled — if the person resided for sidered as being entitled to a pension. six years in the territory of one or more Member States after the age of 59 years — to have treated as periods of insurance periods prior to 1 January 1957 during which he resided in the Netherlands after the age of 15 or during which, whilst residing within the (...) territory of another Member State, he pur­ sued an activity as an employed person in the Netherlands for an employer established in that country. These provisions thus allow entitlement to the transitional benefits to be (e) The provisions referred to in (a), (b), (c) obtained, albeit only in part, since recogni­ and (d) shall be applied only if the per­ tion of periods prior to 1 January 1957 is son concerned has resided for six years only possible in respect of periods in which, in the territory of one or more Member by means of residence or employment, there States after the age of 59 years and for has been a particular link between the person

I-4812

HALLOUZI CHOHO v BESTUUR VAN DE SOCIALE VERZEKERINGSBANK

concerned and the Netherlands social secu­ -Choho's pension, of the notional period of rity system. By accepting that entitlement to insurance between her 15th birthday and 1 the benefit of the transitional arrangements January 1957, when the AOW entered into should be subject to specific residence condi­ force, on the ground that she was a Moroc­ tions, the scheme laid down in the annex in can national. Since it is not disputed that Mrs question thus permits — and this must be Hallouzi-Choho fulfils the 'six years' and emphasized — an exception to be made to the 'present residence' conditions, the failure the obligation to waive residence clauses to take into account periods prior to 1 Janu­ under Article 10 of the Regulation. ary 1957 is therefore exclusively due to the fact that the claimant is not of Netherlands nationality.

In the decision of 5 July 1991, the SVB 6. Since the national court had doubts as to refused, however, to take account, for the whether the principle of non-discrimination purposes of calculating Mrs Hallouzi- laid down in Article 41(1) extended to the

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OPINION OF MR TESAURO — CASE C-126/95

transitional arrangements provided for by judgments, after recalling the conditions to the AOW, it considered it appropriate to be satisfied if a provision in an agreement is make a reference to the Court for a prelimi­ to have direct effect, the Court stated very nary ruling. clearly that 'it followed from the terms of Article 41(1), as well as from the purpose and nature of the Agreement of which that article formed part, that that provision was 7 capable of being applied directly'.

It asks whether Article 41(1) of the Coo­ peration Agreement between the EC and Morocco is to be interpreted as precluding the requirement of Netherlands nationality as a condition of eligibility for transitional In the same judgments, the Court stated in benefits under the Netherlands Algemene addition that 'the term "social security" used Ouderdomswet in the case of the spouse in Article 41(1) of the Cooperation Agree­ (a member of the family within the meaning ment must be deemed to be analogous with of Article 41(1) of the Agreement) of a the identical term used in Regulation Moroccan worker. No 1408/71'. 8

The question referred therefore seeks to 8. The direct effect of Article 41(1) of the ascertain whether the non-working spouse of Agreement and the fact that the concept of a Moroccan worker is also entitled to the social security which it contains should be transitional arrangements provided for by interpreted with reference to the correspond­ the AOW by virtue of the principle prohib­ ing concept in the Regulation constitute, iting discrimination based on nationality moreover, two factors which only the French under Article 41(1) of the Agreement. Government has called in question at the hearing, overlooking the consistent case-law of the Court.

of a Moroccan worker, clearly falls within 10. Nevertheless, the court making the refer­ the scope ratione personae of Article 41(1) of ence has expressed doubts in this regard, the Agreement, so that it remains only to observing, first, that the Agreement contains ascertain whether the transitional arrange­ no express provision in this respect and, sec­ ments provided for in Articles 55 and 56 of ondly, that the Court itself, referring to the the AOW are covered by the definition of special nature of the transitional arrange­ social security for the purposes of the Regu­ ments, acknowledged that the residence lation and fall, consequently, within the requirements provided for by the AOW, material scope of Article 41(1) of the Agree­ attenuated by Point 2 of Annex VI (J) of the ment. Regulation, which, as I said above, enables an exception to be made to the obligation to waive residence clauses under Article 10 of the Regulation, are lawful. On the basis of that premiss, the Netherlands Government and the SVB then maintained, in the course of proceedings, that Article 41(1) could not be interpreted more extensively than as pro­ vided for in the annex in question. In other words, they invite the Court to apply by analogy the provisions of the annex to the 9. It suffices to point out that Article 4(1) of present case. the Regulation, which mentions the various social security branches to which it applies, expressly refers to 'old-age benefits' in sub­ paragraph (c). It follows that the transitional arrangements under the AOW, which have the effect of increasing the old-age pension paid to the recipient, fall wholly within the scope of Regulation No 1408/71 and, there­ fore, of Article 41(1) of the Agreement. It is true that the Court, referring to the spe­ cial procedures under the AOW, as governed and amended by Point 2 of Annex VI (J) of the Regulation, has held that 'the rule con­ tained in Article 10, whereby the application of residence clauses is set aside, cannot be applied without restriction to a general old- age insurance scheme in which the mere fact of residence in the Netherlands is sufficient qualification for insurance purposes'. 9 It concluded, therefore, that 'the ... effects of the residence clauses, as far as the transitional It therefore follows, for the purposes of this arrangements under the Algemene Ouder­ case, that claimants who are Moroccan domswet arc concerned, are authorized by nationals and who are workers or members the provisions of Annex VI, which limit the of the family of a worker within the meaning and for the purposes of the relevant provi­ sions of the Agreement must also be able to claim the benefit of the transitional arrange­ 9 - Case C-293/88 Winter-l.utnm [1990] ECR I 1623, para graph 16. See, moreover. Case 284/84 Sprnyt [1986] ments provided for by the AOW. ECR 685.

11. That having been said, I would observe that such precedents are absolutely irrelevant to the present case. As I stated above, Mrs Hallouzi-Choho fulfils the 'six years' con­ dition (residence in the Netherlands for six years after the age of 59) and the 'present residence' condition (continued residence in the Netherlands after the age of 65 years). The SVB's refusal to allow her to benefit from the transitional arrangements is there­ 12. Admittedly, the SVB itself does not deny fore not due to the residence requirement, that the spouse of a Moroccan worker falls but to the fact that she is neither a Nether­ within the scope ratione personae of lands national nor can she be treated, on the Article 41(1) of the Agreement and that the basis of the abovementioned Royal Decree benefit in question falls within its material of 15 November 1985, as a Netherlands scope. As stated by the SVB during the pro­ national. ceedings, the refusal to allow Mrs Hallouzi- Choho to benefit from the transitional arrangements was in fact based on the assumption that the benefits in question could not be extended to the wife of a Moroccan worker. The SVB referred, in sub­ stance, to the distinction between personal rights and derived rights drawn by the Court in certain judgments in which it ruled on the 11 As regards the latter aspect, I consider to class of persons covered by the Regulation be likewise irrelevant the fact, referred to by ('the Kermaschek rules'). In those judgments the SVB and the Netherlands Government during the proceedings, that provided

The same approach was subsequently con­ firmed and clarified in the judgment in However, since all persons residing in the 13 Krid, which concerned Article 39(1) of the Netherlands are covered directly and indi­ 14 Cooperation Agreement with Algeria vidually by the AOW, from the 15th to the whose content is identical with that of the 65th year of age, irrespective of sex and provision at issue here. On that occasion the marital status, it is clear that entitlement to a Court, invited to extend the Kermaschek pension, and thus to the transitional arrange­ rules also to members of families of workers ments, far from constituting a derived right from non-member countries with which the acquired through status as a member of a Community had concluded cooperation worker's family, is a personal right to which agreements, declined to do so because the every person satisfying the conditions laid persons covered by the agreement 'are not down by the national legislation in question the same as those covered by Article 2 of is entitled. If the Kermaschek rules were to Regulation No 1408/71'. be applied to the present case, it would mean that Mrs Hallouzi-Choho, as a Moroccan national who has never worked in the Neth­ erlands, would not be entitled to transitional arrangements under the AOW

did not apply to the family members of mind, in particular, the scope of the Treaty workers from non-member countries who compared with that of a mere cooperation fall within the scope ratione personae of the agreement. It is also certain, over and above cooperation agreements, the result would be the legal significance of such differentiation, unacceptable and certainly unintended by that the apparent anomaly should be cor­ the drafters of such agreements. rected, but certainly not in the way proposed here. It is nevertheless the case that although Article 41(1) of the Agreement confirms the prohibition of discrimination based on nationality it contains no indication which could lend support to the arguments of the SVB and the Netherlands Government. The national court itself points out that Community workers' families would receive treatment less favourable than that accorded to families of workers who were nationals of a non-member country with which the Community had concluded cooperation agreements, citing by way of example the Cabanis-Issarte case, which was pending before the Court when the order for refer­ ence was made, in which precisely the tran­ The anomaly I referred to above could be sitional arrangements provided for by the eliminated in fact only by looking afresh at AOW were at issue. Briefly, the argument is the Kermaschek rules. This is precisely what that the principle of non-discrimination laid occurred in the recent judgment in Cabanis- down in Article 41(1) of the Agreement can­ Issarte, 15 in which the Court confirmed that not be applied irrespective of whether per­ Article 3(1) of the Regulation grants 'the sonal rights or derived rights are involved right to equal treatment as regards applica­ since the principle of equal treatment tion of the social security legislation of the enshrined in Article 3(1) of the Regulation, Member States, without drawing any distinc­ 'subject to the special provisions of this tion between workers, members of workers' regulation', applies to the members of work­ families or their surviving spouses. Further ers' families only where they rely on derived and in any event, any derogation from equal rights. treatment based on one of the provisions of the Regulation to which Article 3(1) refers must be objectively justified if the funda­ mental rule of non-discrimination laid down by Article 3(1) in the field of social security is not to be deprived of meaning' (para­ graph 26). In that judgment, the Court also 15. However, it is certain that the applica­ stated that 'the distinction between rights in tion of the distinction between personal person and derived rights which the Court rights and derived rights only to members of drew ... may undermine the fundamental the families of Community workers and not Community law requirement that its rules also to members of the families of workers should be applied uniformly, by making who are nationals of States with which the Community has concluded cooperation agreements could give rise to discrimination which would be difficult to justify, bearing in 15 — Case C-308/93 Cabanis-hsane [1996] ECR I-2097.

17. One final comment. The French Gov­ ernment requested the Court at the hearing to limit the temporal effects of the present judgment in the event that it should rule that the principle of non-discrimination enshrined in Article 41(1) of the Agreement is to be interpreted as meaning that the 16. Following that judgment, therefore, both members of the family of a Moroccan the members of Community workers' fami­ worker living with him cannot be refused lies (Mrs Cabanis-Issarte) and those of transitional benefits under the AOW. It justi­ nationals of non-member countries with fied that request on the basis of the serious which the Community has concluded coop­ or unforeseeable consequences for the Neth­ eration agreements (Mrs Hallouzi-Choho) erlands social security scheme. are entitled to benefits under the AOW sub­ ject to the same conditions imposed on Netherlands nationals. This outcome can only be welcome since it eliminates a differ­ entiation which created unease and which, moreover, was contrary to the very letter and 6 spirit of Article 3(1) of the Regulation. 1 I shall confine myself to pointing out, first, that neither the Netherlands Government nor the SVB have made such a request or in any event claimed that the Court's judgment might entail serious financial consequences for the Netherlands social security scheme and, secondly, that interpretation of Article 41(1) of the Agreement in the light of the case-law on the matter since Kziber This means that, for the purposes of this should not have given rise to any uncer­ case, it is no longer relevant to argue that not tainty. Leaving aside the arguably routine to apply the Kermaschek rules to the present nature of such a request, it follows that in case would clearly discriminate against fami­ the present case the strict conditions to lies of workers who were nationals of a which, according to the consistent case-law 7 Member State in relation to families of of the Court, 1 limiting the temporal effects workers who were nationals of non-member of preliminary rulings is subject have not countries with which the Community had been met.