C-302/98

The gross amount of the French supple- mentary pension, which, varied during the period at issue — from December 1988 to September 1993 — from FRF 2 384.19 to I. The facts in the main proceedings FRF 2 538.45 per quarter, is subject to a deduction of 2.4% by way of contribution to the sickness insurance scheme. The amount of the contribution varied between 2. Mr Sehrer, who is the plaintiff in the FRF 57.22 and FRF 60.92 per quarter main proceedings, was born in 1924. Since during the period in question. This solidar- 1984, when he reached the age of sixty, he ity contribution does not give the plaintiff has been receiving a retirement pension any entitlement to benefits. from the Bundesknappschaft (Federal Insurance Fund for Miners), the defendant social security institution. He lives in Germany and is insured under the Kran- kenversicherung der Rentner (Pensioners' 4. When the defendant social security insti- Sickness Insurance Scheme). He also tution learned that Mr Sehrer was receiving receives in Germany, from the Landesver- the French pension, it demanded payment sicherungsanstalt für das Saarland (Regio- of the German sickness insurance contribu- tions, which it calculated on the basis of the gross amount of the French pension, with- * Original language: Spanish. out deducting the contributions already

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paid in France. The sum demanded in II. The question respect of arrears of contributions is DEM 1 005.67.

6. The Landessozialgericht für das Saar- land (Regional Social Court of the Saar- land) dismissed the appeal brought by the defendant institution, which then filed an application for 'Revision' (which, in Ger- many, is an appeal on a point of law) before 'Do Articles 6 and 48 to 51 of the Treaty the Bundessozialgericht. establishing the European Community and Article 3 of Council Regulation (EEC) No 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 Commu- The matter at issue in those proceedings is nity 1preclude national rules under which whether the part of the supplementary the whole of a supplementary French pension deducted by way of contribution pension paid on the basis of a collective to the French sickness insurance scheme agreement is subject to contributions both should be included in the calculation of the to the French sickness insurance scheme contribution to the pensioners' sickness and to the German sickness insurance insurance scheme in Germany, as the scheme for pensioners?' defendant institution claims it should, for the periods from December 1988 to Sep- tember 1993. 1 — OJ, English Special Edition 1971, p. 416.

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III. Community law of each Member State, relating to the branches and schemes of social security covered by Article 4(1) and (2) or those special non-contributory benefits covered by Article 4(2a). 9. Article 48 of the EC Treaty (now, after amendment, Article 39 EC) provides:

This term excludes provisions of existing or future industrial agreements, whether or '[···] not they have been the subject of a decision by the authorities rendering them compul- sory or extending their scope. '

(f) a person to whom the legislation of a kind under Articles 27, 28, 28a, 29, 31 and Member State ceases to be applicable, 32 are to be borne by an institution of the without the legislation of another said Member State. Member State becoming applicable to him in accordance with one of the rules laid down in the foregoing subpara- graphs or in accordance with one of the exceptions or special provisions laid down in Articles 14 to 17 shall be subject to the legislation of the Mem- 2. Where, in the cases referred to in Arti- ber State in whose territory he resides cle 28a, the acquisition of benefits in in accordance with the provisions of respect of sickness and maternity is subject that legislation alone.' to the payment of contributions or similar payments under the legislation of a Mem- ber State in whose territory the pensioner in question resides, by virtue of such resi- dence, these contributions shall not be payable.'

12. With regard to the contributions pay- able by pensioners, Article 33 of Regula- tion No 1408/71, as amended by Regula- tion (EEC) No 2332/92, 4provides: IV. The procedure before the Court

13. The German Government and the Commission submitted written observa- tions within the period prescribed for that purpose by Article 20 of the EC Statute of ' 1 . The institution responsible for payment the Court of Justice. Since none of the of a pension, and belonging to a Member interested parties asked to submit oral State whose legislation provides for deduc- observations, the Court decided, pursuant tions from pensions in respect of contribu- to Article 104(4) of its Rules of Procedure, tions payable by a pensioner to cover to dispense with the hearing. benefits in kind, shall be authorised to make such deductions from the pension payable by such institution, calculated in accordance with the legislation concerned, to the extent that the cost of the benefits in

The Commission observes, in the alterna- tive, that the results of applying German The German Government considers that, in legislation in the same way to a migrant principle, Community law does not allow worker as to a worker who has not sickness insurance contributions to be exercised his right to freedom of movement levied twice. Consequently, as Mr Sehrer may be incompatible with the objective of has comprehensive sickness cover in Ger- Article 48 of the EC Treaty, Article 49 of many, he should pay sickness insurance the EC Treaty (now, after amendment, contributions only in that State, since the Article 40 EC), Article 50 of the EC Treaty contribution he pays in France confers on (now Article 41 EC) and Article 51 of the him no entitlement or additional advantage EC Treaty (now, after amendment, Arti- whatsoever. cle 42 EC), because there will be laws in two or more Member States applying to the pension rights of migrant workers. Where such a difference in legislation exists, the principle of cooperation in good faith laid down in Article 5 of the EC Treaty (now It considers that the deduction, in France, Article 10 EC) requires the competent of sickness insurance contributions from authorities in the Member States to use all the pension of a migrant worker who the means at their disposal to achieve the neither lives in its territory nor is subject aim of Article 48 of the Treaty, by ascer- to French social security legislation, con- taining whether their legislation can be stitutes an obstacle to freedom of move- applied literally to migrant workers in ment, which is prohibited by Article 48 of exactly the same way as to non-migrant the Treaty and cannot be justified on the workers, without ultimately causing grounds of overriding public interest migrant workers to lose a social security because it does not confer on the interested advantage and, consequently, discouraging party any social advantage or entitlement them from actually exercising their right to to benefits. freedom of movement.

A. The obligation to pay contributions in France.

19. I think it is clear from the foregoing account of the facts that France levies V. Analysis of the question sickness insurance contributions on a pen- sion provided under a scheme established by a collective agreement, even though the recipient is not subject to French social security legislation and has no entitlement to sickness benefit in France.

17. By the question it has referred for a preliminary ruling, the Bundessozialgericht seeks to ascertain whether Community law and, in particular, the principle of equal 20. This is not the first time that doubts treatment in the context of freedom of have been raised as to whether such

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legislation is compatible with the principle advantage supplementing those pensions, of freedom of movement for workers. Nor were required to pay health insurance is France the only Member State which contributions, even if they did not reside resorts to this practice in order to swell the in Belgium and were entitled to sickness coffers of its social security fund, although benefit in the Member State in which they it is, apparently, the one which does so did reside. most assiduously. 5

5 — Indeed, two cases are currently pending before the Court, Case C-34/98 Commission v France, an application for a declaration that, by applying the social debt repayment contribution (CRDS), the proceeds of which go to the Social Debt Repayment Fund, to the employment income and substitute income of employed and self-employed persons resident in France but working in another Member State who are not subject to French social security legislation the Member State has failed to fulfil its obligations under Article 48 of the EC Treaty and Article 52 of the EC Treaty (now, after amendment, Article 4 3 EC) and Article 13 of Regulation N o 1408/71, and Case C-169/98 Commission v France, an application for a declaration that by applying the 22. It is to be inferred from the Court's g eneral social contribution (CSG), intended to fund all the ranches of the general French social security scheme, to the interpretation of the provision in that employment income and substitute income of employed and self-employed persons resident in France but w h o are not judgment, which has been confirmed by subject to French social security legislation the Member subsequent case-law, 7that, even if there is State has failed to fulfil its obligations under the same Community provisions. The hearing in the two cases was no direct link between the contribution and held on 4 May 1999. Advocate General La Pergola deliv- ered his Opinion in both cases on 7 September 1999; he the risk insured, deductions from statutory consideted that, although the CRDS and the CSG are applied objectively to all persons resident in France, the fact old-age, retirement and survivors' pensions, that migrant workers are required to finance a social cannot be made by a Member State where security scheme to which they are not affiliated discrimi- nates against them in relation to the non-migrant workers the sickness and maternity benefits received who are the only ones entitled to received benefits under the scheme. The Advocate General proposed that the Court should grant the two applications by declaring that France had failed to fulfil its obligations. 7 — Judgments in Case C-57/90 Commission v France [1992] 6 — Judgment in Case 275/83 Commission v Belgium [1985) ECR I-75, paragraph 15, and Case C-253/90 Commission v ECR 1097. Belgium [1992] ECR I-531, paragraph 13.

23. As a result of the 1985 judgment, the Belgian provisions which the Court had declared to be contrary to Community law ceased to apply to pensions paid under the general scheme to Community nationals Although the Commission acknowledged living in a Member State other than Bel- that neither early retirement pension gium, but continued to apply to supple- schemes nor supplementary retirement pen- mentary retirement pensions. 8 sion schemes fell within the material scope of Regulation No 1408/71, it considered that the fundamental principle established in Article 13(1), that migrant workers are to be subject to the legislation of a single Member State only, was a general principle which predated the Regulation and which could be invoked to prevent a migrant Something similar used to happen in worker being required to pay sickness France, where contributions intended to insurance contributions in two Member finance the general social security system States, when he was entitled to benefits in were deducted from supplementary and only one of them. early retirement pensions irrespective of the place where the recipients resided. 9 — In Case C-68/99 Commission v Germany, which is also pending before the Court, the Commission is seeking a declaration that by applying Paragraph 23 et seq. of the Künstlersozialversicherungsgesetz (Law on social insurance for artists) to artists and journalists who reside in another EU Member State and normally pursue a self-employed activity both in that other Member State and in the Federal Republic of Germany and who are thus exclusively subject as regards the social security system to the legislation of the Member State in the territory of which they reside, Germany has failed to fulfil its obligations under Articles 51, 52 and/

State.

28. In the present case, the Commission submits that the requirement that Mr Sehrer should pay sickness insurance con- tributions in France, in the circumstances which have been described, infringes the 27. However, Article 1(j) provides that the Treaty provisions relating to the free move- term 'legislation' excludes provisions of ment of workers, although it does not existing or future industrial agreements, appear to draw any practical conclusions whether or not they have been the subject from its submission. of a decision by the authorities rendering them compulsory or extending their scope, in so far as this limitation is not lifted, in 12 — This appraisal appears again in the judgment in Case C-35/97 Commission v France [1998] ECR I-5325, which concerned supplementary retirement pension schemes introduced under agreements concluded by the competent 10 — Cited in footnote 7. authorities with trade or inter-trade bodies, trade-union organisations or individual undertakings or under collec- 11 — This situation has been modified by the adoption of tive agreements concluded by both sides of industry, and Council Regulation No 2195/91, which added subpara- rendered compulsory by Article L 731-5 of the Social graph (f) to Article 13(2) of Regulation No 1408/71. Security Code.

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Second, the national court, in referring the question for a preliminary ruling, has not 29. I should like to make two observations asked the Court to examine the French in this regard. First, I can agree with the legislation, 1 3and has expressly stated, in Commission that the French rules, as its order for reference, that the plaintiff can presented in these proceedings, in which challenge the lawfulness of the French France has not even intervened, could be sickness insurance contributions only in considered to constitute an obstacle to proceedings before the French courts. freedom of movement for workers and to be contrary to Article 48 of the EC Treaty. Indeed, the French legislation might deter a worker from moving to France to take up paid employment if, as a result, the pension to which he will be entitled when he retires, even if he is not then living in France, is 30. The situation would have been very going to be subject to sickness insurance different if, instead of contesting, in Ger- contributions there, although he will not be entitled to receive benefits. 13 — In Case 261/81 Rau [1982] ECR 3961, the Court considered, at the request of a German court, whether the Belgian legislation constituted a measure having an effect equivalent to a quantitative restriction within the meaning of Article 30 of the EC Treaty (now, after amendment, Article 28 EC). In Case C-150/88 Parfüm- erie-Fabrik 4711 [1989] ECR 3891, at the request of another German court, it interpreted Council Directive 76/768/EEC of 27 July 1976 on the approximation of the laws of the Member States relating to cosmetic products (OJ 1976 L 262, p. 169) in connection with the Italian legislation relating to the packaging, advertising and naming of cosmetic products. A common feature of the two cases was that, in both, the national court had asked However, the Court may only consider the Court of Justice to give a ruling on legislation of another State which had given rise to the non-performance whether national provisions are compatible of contract which was the subject-matter of the proceed- ings. with Community law in the context of an

32. Nor, in the present case, have the parties jointly fabricated a dispute.

In the main proceedings, one party had brought an action against the other for breach of a contract to supply a consign- ment of wine to be delivered in Germany. 33. As regards the relevance of the question When the wine arrived from Italy, it was referred for a preliminary ruling, the Court subjected to controls by the German autho- has consistently held that it is a matter for rities, even though it was accompanied by the national courts alone, before which the certificates of analysis issued by labora- proceedings are pending and which must tories authorised in Italy confirming that it assume responsibility for the judgment to conformed with Community legislation. be given, to determine, having regard to the After the wine had been analysed according particular features of each case, both the need for a preliminary ruling to enable them to give judgment and the relevance of 14 — Case C-105/94 [1997] ECR I-2971. the questions which they refer to the Court.

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Under Article 13(2)(f) of Regulation 1408/71, 18 he is subject to the social security legislation of the Member state in which he resides, which provides him with sickness insurance and whose social secur- In the case which I am now considering, the ity system may require him to pay contri- Bundessozialgericht states in the order for butions to help finance it. reference that although Mr Sehrer could have brought proceedings in the French courts, he did not do so, but contested the decision which penalised him to a greater extent because of the level of the contribu- tion. Since the court is seeking the inter- pretation of Community law and the reply 35. Title III, Chapter 1, Section 5 of to the question it has referred will enable it Regulation No 1408/71 governs the entitle- to give judgment, the Court of Justice is, in principle, bound to give a ruling. 16 17 — If it were the French, instead of the German, pension which was a statutory pension, Article 17a of Regulation No 1408/71 could apply to Mr Sehrer and he would be 15 — See the more recent judgments in Case C-266/96 Corsica exempt from paying contributions in Germany. Ferries France [1998] ECR I-3949 and Case C-7/97 18 — Point (f) was added by Regulation No 2195/91 in order to Bronner [1998] ECR I-7791. close a loophole in the system of conflict rules contained in 16 — See, in particular, the judgments in Case C-125/94 Aprile Article 13 of Regulation No 1408/71, which had been [1995] ECR I-2919, paragraphs 16 and 17, and Case revealed by the Court's judgment in Case 302/84 Ten C-415/93 Bosman [1995] ECR I-4921, paragraph 59. Holder [1986] ECR 1821.

ment of pensioners and their families to their legislation to migrant workers, may sickness and maternity benefits. However, disregard the Treaty provisions concerning Mr Sehrer cannot rely on any of its the free movement of workers within the provisions since they relate to circum- Community. stances in which pensions are payable under the legislation of two or more Member States, as in Article 27 and Arti- cle 28a, or in which a pension is payable under the legislation of a single Member State, where no right to benefits in kind is enjoyed in the country of residence, as in Article 28. 37. Mr Sehrer's German nationality does not prevent him invoking Community law before the German authorities, since he has exercised one of the freedoms conferred on him by the Treaty. In its judgments in Scholz 19 and Terhoeve 20 the Court held that any Community national, irrespective of his place of residence and his nationality Nor is Article 33 of the Regulation — who has exercised the right to freedom of which authorises the institution responsible movement for workers and who has been for payment of a pension, and belonging to employed in another Member State, falls a Member State whose legislation provides within the scope of Article 48 of the Treaty. for deductions from pensions in respect of contributions payable by a pensioner to cover benefits in kind, to make such deductions from the pension payable by such institution — applicable to the present case. If it were, it would prevent Germany from levying contributions on the pension received by Mr Sehrer in France, but the provision presupposes that sickness and 38. The national court which has referred maternity benefits are provided pursuant to the question seeks the interpretation of Articles 27, 28 and 28a, and, as I have just Article 6 of the EC Treaty (now, after said, none of these is relevant to the case. amendment Article 12 EC), which prohi- bits any discrimination on grounds of nationality within the scope of its applica- tion, Article 48 of the Treaty, which applies the principle of equal treatment to the freedom of movement for workers in a specific instance, and Article 3 of Regula- tion No 1408/71, adopted by the Council in accordance with its obligation under 36. For the reasons I have given, I have to Article 51 of the Treaty to provide freedom conclude that Mr Sehrer's social security rights are governed exclusively by German legislation. However, this does not mean 19 — Case C-419/92 Scholz [1994] ECR I-505, paragraph 9. that the German authorities, when applying 20 — Case C-18/95 Terhoeve [1999) ECR I-345, paragraph 27.

22 — Judgment in Terhoeve, cited in footnote 20, paragraph 37. See also, the judgments in Case 143/87 Stanton [1988] ECR 3877, paragraph 13, Joined Cases 154/87 and 155/87 Wolf and Others [1988] ECR 3897, paragraph 13 and The Court has also held that the Treaty Singh and Bosman, cited in footnotes 21 and 16, provisions relating to freedom of move- paragraphs 16 and 94 respectively. 23 — Judgments in Case 368/87 Hartmann Troiani [1989] ECR 1333, paragraph 21, Case C-245/88 Daalmeijer [1991] ECR I-555, paragraph 15, and Case C-297/92 Baglieri [19931 ECR I-5211, paragraph 13. 21 —Judgments in Case 118/75 Watson and Belmann [1976] 24 — Judgment in Terhoeve, cited in footnote 20, paragraph 51. ECR 1185, paragraph 16, and Case C-370/90 Singh [1992] ECR I-4265, paragraph 15, and the judgment in 25 — Opinion in Terhoeve, cited in footnote 20, particularly Terhoeve, cited in footnote 20, paragraph 36. points 67 to 69.

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45. For the reasons I have given, I think that national legislation such as the legisla- tion at issue in the main proceedings 44. The social security provisions of the constitutes an obstacle to the free move- contested German legislation, which apply ment of workers, contrary to Article 48 of in the same way to migrant and non- the Treaty, because, when it establishes the migrant workers, may be detrimental only basis on which sickness insurance contri- butions are levied, it does not take into account the fact that part of the pension 26 — Judgment in Case C-10/90 Masgio (1991) ECR I-1119, which the party concerned receives in paragraphs 18 and 19, and Bosman, cited in footnote 16, paragraph 96. another Member State, provided under a

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In the circumstances, I think that, in the interests of brevity, the national court should be referred to the copious case-law of the Court, cited in my Opinion in Terhoeve, relating to the grounds of justi- The fact that those deductions are made by fication for indirect discrimination and way of social security contributions by a obstacles to the free movement of per- State which does not provide the person sons. 2 7 concerned with any social benefits in return, rather than by way of direct taxes, which is what they actually are although they are intended for a specific purpose, has two consequences, which are equally dis- advantageous to a migrant or frontier worker, whether working or retired: the first is that he will also have to pay C. Final considerations contributions in another Member State if he is to be entitled to receive social security benefits, and the second is that he may not rely on the double taxation agreements 47. Although the Court may not rule on the concluded between Member States to pre- matter in the preliminary ruling proceed- vent the income on which contributions have already been levied in one Member State from being subject to taxation again 27 — Cited in footnote 25, in particular points 54 to 64. in the State in which he resides.

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VI. Conclusion

48. In the light of the foregoing considerations, I propose that the Court gives the following answer to the question referred by the Bundessozialgericht:

Article 48 of the EC Treaty (now, after amendment, Article 39 EC) precludes a Member State, when calculating the sickness insurance contributions payable by a retired migrant worker subject to its legislation, from taking into account the gross amount of a pension provided in another Member State on the basis of a collective agreement, without regard to the fact that part of that pension has already been deducted by way of sickness insurance contributions in the latter State.