C-33/99

OPINION OF MR ALBER — CASE C-33/99

OPINION OF ADVOCATE GENERAL ALBER delivered on 12 October 2000 1

I — Introduction Article 41 of the Cooperation Agreement between the European Economic Commu- nity and the Kingdom of Morocco 2(here- inafter: the Cooperation Agreement) and, in the second, the provisions of Council Regulation (EEC) No 1408/71 of 14 June 1. Two disputes form the basis of this 1971 on the application of social security reference for a preliminary ruling. In both schemes to employed persons and their cases, workers who used to be resident in families moving within the Community the Netherlands — and have since (hereinafter: Regulation No 1408/71), 3in returned to their respective countries of particular Article 3 thereof, and Arti- origin, Morocco and Spain, where they cle 7(1) of Council Regulation (EEC) receive Netherlands social security benefits No 1612/68 of 15 October 1968 on free- for their incapacity for work — have insti- dom of movement for workers within the tuted proceedings with a view to obtaining Community 4 (hereinafter: Regulation child allowance for their children studying No 1612/68) and Articles 48 and 52 of in Morocco and Spain respectively. The the EC Treaty (now, after amendment, Netherlands is refusing to grant that allow- Articles 39 and 43 EC). ance on the ground that the relevant benefits intended to finance studies would now be paid directly to students, not to their parents. In both cases, the student children do not in any event meet the conditions of eligibility for a study grant.

I I — The main proceedings and the facts

5. Mrs Esmoris Cerdeiro-Pinedo Amado's daughter, Erika, was born on 15 November 1976 in the Netherlands. In the 1995-1996 2. ... academic year, Erika studied at the Insti- tuto de Educación Secundaria y Profe- sional; since the start of the 1996/1997 academic year, she has been studying at the Facultad de Ciencias Económicas y Empre- 3. The workers in question shall receive sariales of the University of Corunna. family allowances for members of their families who are resident in the Commu- nity.

6. Mr Fahmi and Mrs Esmoris Cerdeiro- 4. The workers in question shall be able to Pinedo Amado initially received child transfer freely to Morocco... any pensions allowances for those children. However, or annuities in respect of old age, death, once the children had embarked on a new industrial accident or occupational disease, course of education in 1996, their parents or of invalidity [resulting from industrial ceased to be entitled to those benefits. accident or occupational disease].

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5. ...' 9. Article 4(1) defines the material scope of Regulation No 1408/71 as follows:

'This Regulation shall apply to all legisla- It is clear from the other language versions tion concerning the following branches of and the context that paragraph 1 of the social security: German version, which is open to misun- derstanding, in fact prohibits discrimina- tion against Moroccan nationals in relation to the nationals (Staatsangehörigen) of the Member States, not in relation to the nationalities (Staatsangehörigkeiten) of the Member States in which the Moroccans are (a) - (g)..· employed.

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(b) - (e)... invalidity... and increases or supplements to such pensions in respect of the children of such pensioners... .

(f) a person to whom the legislation of a Member State ceases to be applicable, without the legislation of another 2. Benefits shall be granted in accordance Member State becoming applicable to with the following rules, irrespective of the him in accordance with one of the rules Member State in whose territory the pen- laid down in the aforegoing subpara- sioner or the children are residing: 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- ber State in whose territory he resides (a) to a pensioner who draws a pension in accordance with the provisions of under the legislation of one Member that legislation alone.' State only, in accordance with the legislation of the Member State respon- sible for the pension;

12. Article 73 reads:

(b) ...'.

B — National law 17. Although there was no entitlement to study finance, child allowance as provided for by the AKW was nevertheless still 15. Under Netherlands law, benefits paid in initially paid where a child was born before respect of incapacity for work in principle 1 October 1986, was aged between 18 and also carry an entitlement to child allowance 25, pursued a course of education of at pursuant to the Algemene Kinderbijslagwet least 213 hours per term and one of his (General Law on Dependent Children's parents, who was entitled to claim child Allowances; hereinafter: the AKW). Initi- allowance, bore most of the cost of main- ally that benefit was also in principle taining him. This child allowance, which granted for dependent children aged 18 or was an alternative to study finance, was over when they were pursuing a course of introduced into the AKW, upon adoption education — particularly, therefore, when of the WSF, in the form of Article 7a(1). they were studying.

20. The Arrondissementsrechtbank, Amsterdam, has therefore asked the Court 19. The referring court takes the view that to answer the following questions: the entitlement to study finance under the WSF replaced the entitlement to child allowance paid in accordance with the AKW. That change involves not only the express distinction drawn in the WSF between Dutch students and students of other nationalities, but also a distinction In the Fahmi case: 'with respect to nationality... in relation to persons insured under the AKW, since the overwhelming majority of non-Dutch chil- dren of persons insured under the AKW have parents who do not possess Nether- lands nationality'. Consequently, 'it is pre- cisely non-Dutch persons insured under the '1. (a) Must Article 41(1) of the Coopera- AKW that are excluded on the conversion tion Agreement be interpreted as of their right to receive child allowance into meaning that a Moroccan worker an entitlement on the part of their chil- may rely on the prohibition of dren) to receive a study grant'. discrimination laid clown in that provision if he no longer resides on the territory of a Member State of the European Community?

Furthermore, the place-of-study criterion set out in the WSF likewise results in a distinction being drawn between persons insured under the AKW on the basis of residence. The overwhelming majority of (b) If so, does Article 41(3) of the parents insured under the AKW who are Cooperation Agreement preclude resident in the Netherlands have children reliance on Article 41(1) thereof who study at Netherlands educational by a Moroccan worker whose

V — Legal analysis '1. (a) Does Article 3 of Council Regula- tion (EEC) No 1408/71, or any other provision of that regulation, preclude the abolition of the right to child allowance for student children over the age of 18 if A — Subject-matter of the questions eligibility for the entitlement which replaces that right is in principle enjoyed only by students who are Netherlands nationals and who are 21. It is first necessary to arrive at a more pursuing their studies in the Neth- precise definition of the subject-matter of erlands? the questions referred. By its questions, the

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24. The defendant SVB proceeds from the Submissions of the parties principle that only the version of the AKW currently applicable should be examined for the purpose of establishing whether any impermissible discrimination exists. No comparison can be drawn with the rules applicable before 1996. At present, the AKW does not contain any distinction 22. The Netherlands Government points on grounds of nationality, residence or out that the national legislature has indeed place of study. Furthermore, the SVB also both restricted entitlement to receipt of cites the freedom of Member States to child allowance under the AKW and intro- organise their social security systems. duced an independent financing system under which benefits are paid to individual students. However, the fact that those two pieces of legislation are simultaneous does not mean that study finance is simply a new type of child allowance which largely excludes parents who do not possess Neth- 25. The other parties concerned do not erlands nationality. In fact, the WSF differs expressly address that issue. However, Mrs in several ways from the arrangements Esmoris Cerdeiro-Pinedo Amado, Mr previously applicable, for example, in rela- Fahmi, the Spanish and Austrian Govern- tion to the taking into account of parents' ments proceed from the premiss that the income. Moreover, when the system of benefits at issue paid under the AKW and study finance was changed in 1996, other those paid under the WSF are to be treated categories of benefit were restricted in as the same, whereas the United Kingdom addition to those paid to children of non- Government and the Commission make a Dutch parents. clear distinction between the two benefits.

Assessment 28. This amendment of Netherlands law simply provides an opportunity to review the conditions governing the grant of benefits under the WSF. 9 However, it 26. The Arrondissementsrechtbank enter- cannot be concluded from this that the tains doubts not as regards the rules question referred is inadmissible because governing the transition between two dif- the Arrondissementsrechtbank has limited ferent systems for the grant of benefits to jurisdiction over the arrangements laid students but as regards the more restrictive down by the WSF. It is, in principle, for conditions governing the grant of benefits the national court to assess the relevance of under the new system, the WSF. the questions of law raised in a dispute before it and the necessity for a preliminary ruling so as to enable it to give judgment. 10 The Court of Justice does not, however, have jurisdiction to determine how the Arrondissementsrechtbank should react 27. The transitional arrangements set out were it to identify the existence of discri- in the AKW do not involve any manifest mination as a result of the WSF. It is discrimination. As the Court of Justice has exclusively for the Netherlands courts to ruled on several occasions, the Member make that decision. There are at least two States are free to organise their social possible courses of action here. On the security systems.6 In particular, they are basis of such a finding, it might, on the one to a large extent entitled to determine hand, be necessary to amend the applica- themselves how far they employ State tion of the WSF. According to information resources to grant social security benefits. supplied by the Netherlands Government, They must nevertheless comply with Com- the Arrondissementsrechtbank would have munity law 7 when exercising those powers no jurisdiction to do so. On the other hand, and, in particular, observe the principle of the Arrondissementsrechtbank might, on the prohibition of discrimination on the basis of such discrimination, be forced grounds of nationality, 8 but the with- to refrain from putting into effect the repeal drawal or restriction without distinction

29. Departing from the order in which the 31. Mrs Esmoris Cerdeiro-Pinedo Amado questions have been raised, it is advisable takes the view that the restriction of to examine the Fahmi case second because benefits paid under the AKW on the the answer to the questions referred in that introduction of the WSF is not compatible case depends on the analysis to be under- with Regulation No 1408/71. Mrs Esmoris taken in the context of the Esmoris Cer- Cerdeiro-Pinedo Amado relies first on deiro-Pinedo Amado case. Article 77(2) of the regulation, under which it follows from the application of Netherlands law to her invalidity pension that she must receive benefits in respect of her daughter also, without being subject to discrimination on the basis of her nation- ality. Independently of that, the amendment of the Netherlands system is contrary to the (1) Regulation No 1408/71 prohibition of discrimination laid down in Article 3 of the regulation. Netherlands nationals are in practice affected by those restrictions only if their children wish to pursue their studies abroad. However, the 30. According to the Arrondissements- very fact that their children are in principle rechtbank, under Netherlands law, the case required to study in the Netherlands is far of Mrs Esmoris Cerdeiro-Pinedo Amado more likely to represent a burden for falls within the personal scope of Regula- parents who are not Netherlands nationals tion No 1408/71. However, it raises the than for parents who are Netherlands question whether the facts of this case also nationals. In addition, the conditions for fall within the material scope of that treating non-Dutch children as Dutch stu- regulation and whether the regulation, in dents are restrictive.

34. It is immaterial whether the benefit in 36. On the basis of their views on the question constitutes a personal right vested subject-matter of the proceedings, as set out in the student or a derived right. Referring above, the Netherlands Government and to the judgment of the Court in Cabanis the SVB consider that only the rules of the Issarte, 11 the Spanish Government notes AKW, which have no discriminatory effect, that that distinction is relevant only where should be examined in this case. unemployment benefits are involved. The 12 — Joined Cases C-245/94 and C-312/94 Hoever and Zachow [1996] ECR I-4895, and judgment in Case C-321/93 11 — Case C-308/93 Cabanis Issarte [1996] ECR I-2097. Imbernon Martinez [1995] ECR I-2821.

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38. The United Kingdom Government pro- ceeds from the premiss that the benefits paid under the WSF do not constitute social 40. The Commission first points out that security benefits within the meaning of the Netherlands is, in principle, free to alter Article 4 of Regulation No 1408/71 nor, in the way in which it organises its social particular, do they constitute family bene- security systems — including by removing fits within the meaning of Article 1(u)(i) of some branches or replacing them with that regulation. The United Kingdom Gov- different arrangements. Article 3 of Regu- ernment considers that study finance does lation No 1408/71 is effective only within not serve to meet family expenses, but only the material scope of that regulation. That to provide financial support for students. is clear from Article 4(1)(h) which men- tions family benefits. The Commission considers that the child allowance paid under the AKW must accordingly be clas- sified as a family benefit falling within the material scope of Regulation No 1408/71. Benefit payments made directly to students 39. Even if study finance were to represent in accordance with the WSF, on the other a social security benefit, in the United hand, should no longer be classified as Kingdom Government's view, it is apparent benefits covered by the branches of social from Article 13(2)(f) of Regulation security mentioned in Article 4 of Regula- tion No 1408/71. Consequently, any dis- crimination which may exist by virtue of 13 — The French Government draws attention in particular to the WSF is not to be assessed in the light of Cases C-308/93 (cited ahove at footnote 11) and C-126/95 Halhiizi-Cboho [1996] ECR I-4807. Article 3 of Regulation No 1408/71.

Assessment The link between study finance and child allowances on which the questions are based nonetheless raises the question whe- ther the benefits paid under the WSF must be regarded as family benefits within the meaning of Article 4(1)(h) of Regulation No 1408/71. 41. Mrs Esmoris Cerdeiro-Pinedo Amado falls within the personal scope of Regula- tion No 1408/71. That is clear from Arti- cle 2 of the regulation. Although Mrs Esmoris Cerdeiro-Pinedo Amado is no longer an employed person, to be classified as such, in accordance with the definition contained in Article 1(a)(i) of Regulation 43. In Joined Cases Hoever and Zachov, No 1408/71, it is nonetheless sufficient that the Court held as follows with regard to the the person in question 'is insured, compul- classification of certain benefits: sorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme...'. Since Mrs Esmoris Cerdeiro- Pinedo Amado receives invalidity benefit, she must be considered to be a worker within the meaning of Regulation No 1408/71. 'The Court has repeatedly held that the distinction between benefits excluded from the scope of Regulation No 1408/71 and those which fall within its scope is based essentially on the constituent elements of each particular benefit, in particular its purposes and the conditions on which it is granted, and not on whether a benefit is 42. Benefits paid under the AKW must also classified as a social security benefit by be regarded as family benefits in accor- national legislation... dance with Article 1(u)(i) of Regulation No 1408/71 and, possibly, even as family allowances as provided for by Arti- cle 1(u)(ii). They therefore fall within the material scope of Regulation No 1408/71. However, it is much more difficult to determine whether that also applies to benefits in the form of the study finance paid in accordance with the WSF which is In that regard, it has, on a number of to be assessed in this case. Study finance as occasions, stressed that a benefit is to be such is not a social security benefit which regarded as a social security benefit if it is falls within the material scope defined by granted to recipients without any indivi- Article 4(1) of Regulation No 1408/71. dual or discretionary assessment of perso-

45. The fact that parental income is taken 46. Contrary to those arguments, the over- into account does seem capable of arguing riding consideration is, however, that study in favour of such benefits being regarded as finance must cover the needs of children a family benefit. In that respect, study who are usually aged 18 or over and finance depends on parents' ability to personally responsible for organising their provide financial assistance and conse- own lives. As a rule, when children begin quently also seek to reduce the financial their studies, they leave the family unit burden imposed, as a result of children's within the narrow meaning attached to that studies, on families with lower incomes, term by custody law and on which the whereas children of families with higher concept of meeting family expenses is incomes receive only very limited study based. Account must also be taken of the finance or none at all. In the case at issue, fact that study finance is a cost-intensive there is an even closer relationship between benefit which is not offset through the the family benefit of child allowance and payment of contributions by students. Consequently, it seems improper to broaden the concept of family benefits to 14 — Cited above at footnote 12 (paragraph 17 et seq.). cover benefits which serve only indirectly 15 — See Casc C-78/91 Hughes [1992] ECR I-4839, para- graph 17. to meet family expenses.

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47. Even if the Court were to support the they are not exclusively granted in accor- arguments in favour of broadening the dance with the above criteria and cannot be concept of family benefits, Regulation regarded as family allowances. No 1408/71 does not in this case require that the daughter of Mrs Esmoris Cerdeiro- Pinedo Amado be accorded Netherlands study finance.

17 — See in particular Article l(a)(iv), first indent, in addition to 16 — Case 313/86 Lenoir [1988] ECR 5391, paragraph 9 et seq. Article 1(c), (r) and (s) and Article 10a(2).

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Article 13(2)(f) of Regulation No 1408/71. 53. Consequently, the study finance for Under that provision, the law of Mrs Mrs Esmoris Cerdeiro-Pinedo Amado's Esmoris Cerdeiro-Pinedo Amado's place daughter must be subject exclusively to of residence, that is to say Spanish law, the provisions of Spanish law, not to those must in principle apply to her, in accor- of Netherlands law. This is so, irrespective dance with Regulation No 1408/71. of whether, in practice, Spanish law confers entitlement to study finance. On the basis of Netherlands law, the facts of this case are not in any event caught by Article 73 of Regulation No 1408/71.

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she might have suffered as a result of disadvantaged in relation to insured per- Netherlands law. sons who possess Netherlands nationality or reside in the Netherlands.

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principle to be effective when a worker also in principle attributed to former work- returns with his family to his country of ers. She may therefore, in the Commission's origin. Any exceptions to that principle do view, claim benefits under the WSF in not apply in this case. respect of her daughter under the same conditions as those which apply to the children of Dutch workers, that is to say in particular without being subject to a resi- dence requirement.

60. The representative of the United King- dom Government pointed out at the hear- ing that, in accordance with existing case- law, derogations apply only to frontier workers, not to migrant workers who return to their home country.

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Assessment for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration must be considered to be a worker. Once the employment 65. A distinction must first be made relationship has ended, the person con- between the conditions for the application cerned as a rule loses his status of worker, of Article 7(2) of Regulation No 1612/68, although that status may produce certain or indeed Article 48 of the EC Treaty, and effects after the relationship has their legal consequences. The condition for ended...'. 24 the application of that provision is that a worker who is a national of a Member State must be seeking to benefit from a social advantage in the territory of another Member State.

67. Mrs Esmoris Cerdeiro-Pinedo Amado was a worker as defined above, but has in the meantime lost that status. The question therefore arises as to whether the facts of the present case are covered by the effects (a) Conditions of application referred to in that definition.

69. The benefits which were the subject of the judgments, cited by the parties, in Meints and Paraschizs are different from the child-raising allowance, primarily 71. Since Mrs Esmoris Cerdeiro-Pinedo because they are directly linked to previous Amado did not remain in the Netherlands, employment. The Meints case involved a consequences of the employment relation- special benefit paid when the worker in ship cannot be drawn from Article 2(1 )(b) question became unemployed, whilst the or Article 7 of Regulation No 1251/70 Paraschi case was concerned with invalid- either,27 under which the prohibition of ity benefits. Those two benefits are asso- discrimination contained in Article 7(2) of ciated with the termination of employment Regulation No 1612/68 also applies to relationships. The similarly cited judgment recipients of an invalidity pension who in Case C-35/97, 26 refers not only similarly remain in the host State. to unemployment benefits — the award of supplementary pension points — but also to Article 7(1) of Regulation No 1612/68, which in turn refers inter alia to equal treatment in the event of dismissal and not, therefore, to Article 7(2) which is relevant to this case. 72. Consequently, on the basis of the Court's case-law and of secondary legisla- tion, while application of the prohibitions of discrimination under Article 7 of Reg- ulation No 1612/68 and Article 48 of the EC Treaty to the facts of this case is not precluded, nor is it expressly required. 70. The study finance for Mrs Esmoris Cerdeiro-Pinedo Amado's daughter in Spain is not, however, directly linked to the employment of the former in the Netherlands. Since the allowance is attached to a family member, it is far more 73. However, the question arises whether closely related to the child-raising allow- the state of Community law as reflected in ance than to unemployment or invalidity the above considerations ought not to be benefits, to which, according to case-law, reconsidered in the light of citizenship of

the Union and, in particular, the right of from previous employment relationships, residence under Article 8a of the EC Treaty namely, inter alia, that Article 7 of Regula- (now, after amendment, Article 18 EC). tion No 1612/68 continues to apply to Under that article citizens of the Union are retired persons who remain in the host guaranteed the fundamental right to choose State. freely their place of residence in a Member State. Under Article 48 of the EC Treaty, on the other hand, individuals are entitled only to choose their place of residence for the purpose of an employment contract, or to remain in the host State after the employ- ment contract has ended. 76. If, however, retired persons become established in another Member State, they usually depend on the social security ben- efits which they have been able to bring with them from the previous host State. That assumption derives in particular from Council Directive 90/365/EEC, 28 of 74. With regard to equal treatment in the 28 June 1990 on the right of residence for enjoyment of social advantages, there may employees and self-employed persons who be justification for limiting the effects of have ceased their occupational activity. 29 employment relationships to advantages In that respect, Regulation No 1408/71 directly linked to the employment relation- guarantees only a minimum of exportable ship, where the working life of the migrant benefits. Consequently, where retired per- worker has not yet come to an end. As long sons avail themselves of the right of resi- as migrant workers are gainfully employed, dence, there is still a gap in the protection they are integrated into the social security they are afforded with regard to social system of the host State as a result of that advantages. employment activity, as guaranteed in par- ticular by Regulation No 1408/71. When deciding to take up employment, citizens of the Union may themselves influence their status in terms of social law and, in that context, weigh up the advantages and disadvantages of changing their place of 77. This is demonstrated, at least as regards residence. the problems raised in this case, by a comparison with migrant workers who remain in the host State. With regard to

— pay tax on that pension in the host State; and

78. Lastly, it is also necessary to take account of the fact that Mrs Esmoris Cerdeiro-Pinedo Amado pays the tax on her retirement pension in the Netherlands and the WSF is financed from taxation, not from contributions. 31 — leave the host State to become estab- lished in another Member State, in particular the State of origin.

79. By analogy with R e g u l a t i o n No 1251/70, which applies only to retired persons who have remained in the host State, the consequences of previous In such cases also, therefore, the prohibi- employment should therefore in principle tion of discrimination laid down in Arti- be extended to social advantages financed cle 7 of Regulation No 1612/68 should — by extension — be applied mutatis mutan- dis in the relationship between the migrant 30 —Case C-3/90 (paragraph 22 ct seq.l and Case C-337/97 (paragraph 18 er seq.), cited above at footnote 23, and worker and the original host State. This also Case C-308/89 Ü, Leo [1990] ECR 1-4185. principle is restricted only in so far as social 31 — Sec the Opinion of Advocate General La Pergola of advantages from various Member States 28 January 1999 in Case C-337/97, cited above at footnote 23, point 20. may not be enjoyed on a cumulative basis,

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in particular on top of benefits from the or a recognised establishment is compatible State of origin. 32 with the prohibition of discrimination. That condition could involve indirect dis- crimination. The judgment in O'Flynn contains an extensive discussion of indirect discrimination: 34

81. It is also necessary to establish whether the condition that studies must be pursued 82. The Commission rightly contends in in a Netherlands educational establishment this case that, for cultural and linguistic reasons, migrant workers are far more likely to want their children to study out- 32 — Thus, if a study finance system were to exist in Spain side the host State, that is to say in the State which was comparable with the system provided for by the of origin. Therefore, excluding such chil- WSF, and from which Mrs Cerdeiro-Pinedo Amado's daughter could benefit, Dutch benefit would have to be granted only in respect of a sum equal to any difference which might exist between that benefit and the Spanish benefit. 34 — Case C-237/94 O'Flynn [1996] ECR I-2617, paragraph 18 33 — Case 94/84 Deak [1985] ECR 1873, paragraph 23 et seq. et seq. with further references.

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86. Consequently, if a national diploma leading to the same occupation made it possible, in principle, to claim study 84. Justification could, however, lie in the finance, restrictions on that finance in fact that the diplomas awarded upon respect of studies pursued abroad can be completion of studies have not yet been justified only where the Member State fully harmonised in the European Union. concerned subjects the holders of diplomas Study finance is not intended to finance to measures for the recognition of such students' freedom to pursue a course of higher education, but is primarily intended to enable them to gain the qualification 35 — OJ 1989 L 19, p. 16. required to pursue certain occupations. 36 — OJ 1998 L 77, p. 36.

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diplomas within the meaning of Article 4 social security pursuant to Article 41 of the of Directive 89/48. Cooperation Agreement, 37even though he is no longer resident in the Community and his son has never even lived there. Should the Court answer both questions in the affirmative, the Arrondissementsrechtbank also asks the Court to examine whether the prohibition of discrimination precludes the 87. However, impermissible indirect discri- replacement of child allowance by study mination against the children of migrant finance. workers exists where the host State awards study finance only in respect of courses of study at educational establishments situ- ated in its territory and at a limited number of establishments in neighbouring States.

Submissions of the parties

(3) Article 52 of the EC Treaty

family benefits within the meaning of determined by analogy with Regulation Regulation No 1408/71. Netherlands child No 1408/71. allowance must, however, be understood as meaning family allowance within the meaning of Article 1(u)(ii) of Regulation No 1408/71. The distinction drawn by Regulation No 1408/71 between the broad concept of family benefits and the narrow concept of family allowances must be 93. However, it is impossible for workers transposed to Article 41 of the Coopera- to rely on Article 41(1) of the Cooperation tion Agreement, so that paragraph 3 Agreement once they have left the Com- thereof, which limits the export of benefits munity, at least in so far as they are from the Community, applies only to objecting to unequal treatment which can- family benefits, whilst family allowances, not be disassociated from their departure. on the other hand, are caught by Arti- This follows from the wording of that cle 41(1). This is consistent with Regula- article, from its context, in particular tion No 1408/71 which limits the export of Article 41(2), and from a comparison with family benefits whilst laying down more Article 3(1) of Decision 3/80 of the EEC- generous rules governing the export of Turkey Association Council. 39 There is family allowances. Consequently, the pro- nothing in the Court's case-law to indicate hibition of discrimination also extends to that the protection afforded by that provi- the latter. Since the previous child allow- sion extends to a worker who has left the ance system under the AKW did not Community. contain any discrimination, its abolition in favour of the discriminatory study finance system is incompatible with Article 41(1) of the Cooperation Agreement.

the Netherlands Government refers to the 98. The United Kingdom Government submissions it made regarding the subject- finally submits, in the alternative, that the matter of the questions and again submits disputed student benefit is not a social that the arrangements under the AKW are security benefit within the meaning of not in any event discriminatory. Regulation No 1408/71 — that is to say that it is neither a family benefit nor a family allowance — since it is paid directly to students to provide them with financial independence from their parents. Since the material scope of Article 41(1) of the Cooperation Agreement is the same as that of Regulation No 1408/71, application of the prohibition of discrimination is out of 96. The United Kingdom Government the question. takes the view that Article 41(1) of the Cooperation Agreement is applicable to Moroccan workers only for as long as they are resident in the Community. That provi- sion comes under the heading of coopera- tion in the field of labour and expressly requires employment in a Member State, as does Article 40(1) of the Cooperation Agreement, which regulates the prohibition of discrimination in employment law. The possibility of transferring certain benefits to Morocco, provided by Article 41(4) of the Cooperation Agreement, confirms that interpretation since such a possibility would be superfluous if the prohibition of discrimination extended to workers return- 99. The Austrian Government draws atten- ing to their country of origin. None of the tion to the fact that, unlike the Association judgments delivered in relation to the Agreement with Turkey, the Cooperation Cooperation Agreement contradict that Agreement with Morocco does not hold interpretation, since they all relate to out to the latter the possibility of accession. Moroccan nationals who are resident in a It concludes from this that the principles of Member State. interpretation applicable to fundamental freedoms cannot be transposed to the prohibitions of discrimination contained in the Cooperation Agreement. Those prin- ciples are intended to protect Moroccan workers and members of their family only during the period that they remain in the Community. A transfer of benefits is like- wise precluded in this case because Arti- 97. Irrespective of this, Article 41(3) of the cle 41(3) of the Cooperation Agreement Cooperation Agreement in any event pre- provides for payment of family allowances vents individuals from relying on the pro- only in respect of family members who are hibition of discrimination in respect of resident in the Community, and the specific children living outside the Community. rules on the transfer of benefits, contained

101. The Commission first points out, citing case-law, that Article 41(1) of the Cooperation Agreement is directly applic- able and that Mr Fahmi falls within its scope in his capacity as a former worker. However, the Commission raises the issue 103. The Commission also considers that of whether the question referred is covered Article 41(1) of the Cooperation Agree- by social security within the meaning of ment applies to Moroccan workers only for Article 41(1) of the Cooperation Agree- as long as they are resident in the Commu- ment. Only at first sight is the answer to the nity. The very wording of that provision question apparent from case-law, which refers to the Member State in which they provides that the rules governing the mate- are employed. Even in the organisation of rial scope of Regulation No 1408/71 must social security, for which the individual be applied mutatis mutandis. There is no Member States are responsible in the Com- doubt that child allowance paid on the munity, equal treatment may be applied basis of the AKW comes under the heading only at Member State level. Article 41 of of social security. the Cooperation Agreement provides for only a slight degree of coordination for those areas in which it appears to be possible. This involves the aggregation of periods of insurance under Article 41(2), and entitlement to family allowances under Article 41(3). However, such entitlement is 102. However, Mr Fahmi loses his entitle- specifically restricted to family members ment to those benefits because they have who are resident in the Community. Fur-

104. The Commission also mentions the prohibition of discrimination in the field of employment law, as referred to in Arti- cle 40 of the Cooperation Agreement, which likewise applies only to Moroccan nationals employed in a Member State. A comparative reading of the main human 106. To some extent, the Court's case-law rights covenants shows that the signatory itself provides an answer to the questions States' duty of protection under those covenants is limited to persons who are within their territory and subject to their 42 — OJ 2000 L 70, p. 1. Article 65 of the Euro-Mediterranean jurisdiction, 40 or to persons who are within Agreement, which is comparable with Article 41 of the Cooperation Agreement, is worded as follows: their jurisdiction. 41 The protective effect of '1. Subject to the provisions of the following paragraphs, workers of Moroccan nationality and any members of the Cooperation Agreement cannot extend their families living with them shall enjoy, in the field of further. social security, treatment free from any discrimination based on nationality relative to nationals of the Member States in which they are employed. The concept of social security shall cover the branches of social security dealing with sickness and maternity bene- fits, invalidity, old-age and survivors' benefits, industrial accident and occupational disease benefits and death, unemployment and family benefits. These provisions shall not, however, cause the other coordination rules provided for in Community legislation based on Article 5] of the EC Treaty to apply, except under the conditions set out in Article 67 of this Agree- ment. Assessment 2. All periods of insurance, employment or residence completed by such workers in the various Member States shall be added together for the purpose of pensions and annuities in respect of old-age, invalidity and survivors' benefits and family, sickness and maternity benefits and also for that of medical care for the workers and for members of their families resident in the Community. 105. It should first be pointed out that the 3. The workers in question shall receive family allowances for members of their families who are resident in the Cooperation Agreement has been replaced, Community. 4. The workers in question shall be able to transfer freely to Morocco, at the rates applied by virtue of the legislation of the debtor Member State or States, any pensions or annuities in respect of old age, survivor status, industrial 40 — Article 2(1} of the International Covenant on Civil and accident or occupational disease, or of invalidity resulting Political Rights, New York, 1966. from industrial accident or occupational disease, except in 41 — Article 1 of the European Convention for the Protection of the case of special non-contributory benefits. Human Rights and Fundamental Freedoms. 5. ...'.

'The fact that Article 41(1) states that that prohibition of discrimination applies only subject to the provisions of the following 107. The prohibition of discrimination paragraph means that, as regards... the therefore relates only to benefits which fall grant of family benefits..., that prohibition within the material scope of Regulation of discrimination is guaranteed only within No 1408/71. As has already been shown, the limits of the conditions laid down in benefits paid under the AKW are family paragraphs 2, 3 and 4 of Article 41.' 46 benefits, or even family allowances within the meaning of that regulation, whereas study finance does not, in principle, fall within the scope of that regulation. 44 There is therefore no question of applying Article 41 of the Cooperation Agreement to this case. 110. Consequently, regardless of the answer to all other questions and in accordance with Article 41 of the Coopera- tion Agreement, Mr Fahmi could claim family allowances only in respect of mem- bers of his family who were resident in the Community. Therefore, any entitlement to 108. Even if — as discussed in the Esmoris a study grant for his son who is resident in Cerdeiro-Pinedo Amado case 4 5 — the Morocco is in any event precluded if family benefits has the same meaning in the Cooperation Agreement as it does in the 43 — Case C-18/90 (cited above at footnote 38, paragraph 25). Article 65(1) of the Euro-Mediterranean Agreement con- regulation. Given the translation problems tains an exhaustive definition of social security, based on this judgment. 44 — See above, paragraph 43 et seq. 45 — See above, paragraph 47 et seq. 46 — Case C-18/90 (cited above at footnote 38, paragraph 18).

which arise, it should be noted that the Euro-Mediterranean Agreement also refers German version of the EEC-Morocco to 'Familienbeihilfen'. 48 Agreement uses the term 'Familienzulage' whereas the German version of Regulation No 1408/71 uses the terms 'Familienleis- tung' for family benefits and 'Familienbei- hilfe' for family allowances. The Euro- Mediterranean Agreement, on the other hand, uses the term 'Familienbeihilfen' 112. Consequently, the term 'Familienzu- which was translated into French as 'pre- lage' used in the German version of the stations familiales' [family benefits]. Cooperation Agreement in any event appears to be an inaccuracy in translation which is of no importance as far as its meaning is concerned. The concept of family allowances which is used in the English version of the Cooperation Agree- ment and is also found in at least two other 111. The Court has not yet stated its versions of the Euro-Mediterranean Agree- position on the meaning of 'Familienzu- ment, cannot result in the assumption, for lage'. A comparison of the various language the purposes of Article 41(3) of the Coop- versions of the Cooperation Agreement, eration Agreement, that the term means however, argues in favour of taking 'Famil- anything other than 'family benefits'. It ienzulagen' to mean family benefits in would be incorrect, in view of the fact that accordance with Article 1(u)(i) of Regula- the term 'family benefits' is used predomi- tion No 1408/71. The Italian, Danish, nantly, to base Article 41(3) of the Coop- Dutch and, in particular, French versions eration Agreement on the narrower concept of the Cooperation Agreement in fact use, of family allowances. whenever that word occurs, the term cor- responding with 'Familienleistungen' [family benefits] in the German version of Regulation No 1408/71. It is to be assumed from this that the French version is parti- cularly authoritative because French was probably the most common language of negotiation during the preparatory work 113. The parallel nature of the individual for the Cooperation Agreement. That branches of social security in Regulation choice of words is confirmed in the differ- No 1408/71 and in Article 41 of the Coop- ent versions of Article 65(4) of the Euro- eration Agreement is confirmed by Arti- Mediterranean Agreement. 47 Only the cle 65(1) of the Euro-Mediterranean Agree- English version of the two agreements ment. The list of the individual branches to mentions 'family allowances', which corre- which the agreement applies, set out in the sponds to the term 'Familienbeihilfen' in second subparagraph of Article 65(1) of the German version of Regulation the abovementioned agreement, is identical No 1408/71. The German version of the in the French version to the list set out in

VI — Conclusion

115. I therefore suggest that the questions referred be answered as follows:

(1) In the Fahmi case:

Article 41(1) of the EEC-Morocco Cooperation Agreement does not confer any entitlement to benefits intended to finance studies on members of the families of Moroccan workers where those family members are resident outside the Community.

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OPINION OF MR ALBER — CASE C-33/99

FAHMI AND ESMORIS CERDEIRO-PINEDO AMADO

It is incompatible with that prohibition of discrimination for the children of a migrant worker, in contrast to the nationals of the host State, to receive benefits for study finance only if they are resident in the territory of that host State.

Furthermore, the host State discriminates against migrant workers if it grants benefits for study finance only in respect of courses of study provided by educational establishments in its own territory and by certain establishments in neighbouring States.

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