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2. This alleged incompatibility between German law and the Community rules was pointed out by the Commission in the letter of formal notice it sent to the German The Commission maintains that the appli- Government on 17 September 1997. The cation of Paragraph 23 et seq. of the infringement proceedings arose out of a Künstlersozialversicherungsgesetz (Law on complaint lodged by Mr Stutzer, a German social security for artists and journalists) to journalist who resides in Belgium and authors who reside in another Member works in a self-employed capacity both in State and are normally self-employed in Belgium and in other Member States. that other Member State and in Germany, is contrary to Articles 51 and 52 of the EC Treaty (now, following amendment, Arti- cles 42 EC and 43 EC) and/or Article 59 of the EC Treaty (now Article 49 EC). It also infringes Title II of Regulation (EEC) 3. The German Government replied to the No 1408/71 2 (hereinafter 'Regulation formal notice in a statement dated No 1408/71'), in particular, the first sen- 21 November 1997 which it enclosed in a tence of Article 14a(2), in conjunction with letter sent to the Commission on 1 Decem- Article 13(1) and (2)(b), according to ber 1997.

1 — Original language: Spanish. 2 — Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (OJ, English Special Edition 1971 (II), p. 416), 4. The Commission was not satisfied with as amended by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6). the reply and, on 7 August 1998, delivered

All self-employed authors are required to join the social security scheme. However,

3 — The German Government points out that, for 1997, the rate was 3.8% for the Wort (literature) sector, 5.9% for the bildende Kunst sector, 2.6% for the Musik sector and 5.1% Under Paragraph 36a of the Law, in for the darstellende Kunst sector. On the other hand, for the same period, the artist or journalist covered by the conjunction with Paragraph 32 of the compulsory scheme was required to contribute 10.15% of Sozialgesetzbuch (social security code), the his income to the old-age pension, 0.85% to invalidity benefit and, depending on the sickness fund, between 6% contribution for which the employer is and 7% for sickness insurance. liable may not be passed on to the authors.

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...’. I I I— The Community legislation alleg- edly infringed

6. The Commission considers that, by applying that legislation, the Federal Republic of Germany has infringed Arti- cles 51, 52 and/or 59 of the EC Treaty and 7. The first sentence of Article 14a(2) of several provisions of Title II of Regulation the Regulation states as follows: 1408/71 concerning the determination of the legislation applicable.

IV — Examination of the action fund a specific social security scheme. Nor may it be likened to a parafiscal charge because its beneficiaries are not the taxable persons but the authors who are affiliated 8. For the purpose of assessing the claims to the scheme. In its reply, the Commission of the parties, I have divided them into two maintains that, in spite of the differences sections. I shall deal, first, with those which between parafiscal charges and social refer to the nature of the social security security contributions, the latter have the contribution and then with those which same effect as a charge equivalent to a question the compatibility of the legislation customs duty, in so far as authors who also in issue with Articles 51, 52 and 59 of the pursue their activity in another Member Treaty and with the provisions of Title II of State, in which they reside, are not entitled Regulation No 1408/71. to the benefits which they help to fund.

A. Whether the social security charge should be regarded as an employers' con- tribution

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when calculating it, no account is taken of tion does not mean that, as regards Reg- the minimum and maximum limits of the ulation No 1408/71, that same levy cannot charges for the undertaking liable for it, be regarded as falling within the scope of and the percentage of the charge differs that regulation and caught by the prohibi- from that of the contribution. It takes the tion against overlapping legislation. 4 view that this is a parafiscal charge on all undertakings, established in Germany, which market the work of artists and journalists.

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to avoid double liability to pay social 13. The German Government, on the other security contributions, a worker is in prin- hand, considers that its legislation does not ciple subject to the legislation of one infringe Regulation No 1408/71, since the Member State only. social charge is not borne, either directly or indirectly, by the authors but by the employers, who cannot pass it on to the authors. It believes that, if the charge were abolished, the undertakings would still not make a corresponding increase in the remuneration they pay to the authors, while competition would be distorted, to the detriment both of the authors working It maintains that the remuneration paid by and residing in Germany and subject to its the employer in such a case may be affected social security legislation and of the under- by the requirement to pay the charge, to the takings which market their work. It detriment of the author, whose fees in the believes it unlikely that it would be of German market would be reduced, and advantage to authors established in another that, whether the charge was payable by Member State if their fees were not inclu- one or other of them, the cross-border ded in the basis of assessment on which the provision of services would be penalised. If charge is calculated, and points out that it the undertaking which markets his work in is more logical to assume that the employer Germany did not have to pay that charge, it would not pass on to the professionals the could pay the sum to him and thus help him financial benefit it would obtain. to finance his social security in Belgium.

16. Title II of Regulation No 1408/71 14. Although I am not wholly persuaded by contains a complete system of rules for the arguments put forward by the Federal determining the legislation applicable to Republic of Germany in its defence, I do the persons who fall within its scope. The not agree with the analysis made in these general principle, as expressed in Arti- proceedings by the Commission of the cle 13(1), is that a worker is subject to the consequences of the application of the legislation of a single Member State. Provi- contested legislation to self-employed sion for persons who normally exercise a workers who, like Mr Stutzer, exercise self-employed activity in the territory of their right to freedom of movement. two or more Member States is made in Article 14a(2), under which they are sub- ject to the legislation of the Member State in which they reside, if they pursue part of that activity in its territory.

As we have seen, the Commission main- 19. When the Community rules applying to tains that, when publishing in Germany, the social security for migrant workers were professional is compelled, albeit indirectly, contained in Regulation No 3, 8the Court to pay contributions to a social security of Justice ruled, in the Nonnenmacher scheme which does not afford him any judgment, 9when determining whether the entitlement to benefits, while the German compulsory application of the legislation of Government states that, where an author the State where the worker is employed does not reside in Germany, the only person excludes the application of that of any required to fund the national social security other Member State, that Article 12 of scheme for artists and journalists is the Regulation No 3, forming part of Title II, undertaking which markets his work, and did not prohibit application of the legisla- the economic rights of the professional tion of a Member State other than that in remain completely unaffected since the which the person concerned worked, contribution cannot be passed on to him. except to the extent that he was required to contribute to the financing of a social security institution which was unable to provide him with additional advantages in 7 — In the Opinions which I delivered in the cases which led to the judgments of 30 January 1997 in Case C-340/94 De respect of the same risk and of the same Jaeck 119771 ECR I-461 and Case C-221/95 Hervem and Hervilher [1977] ECR I-609, especially pp. I-494 and I-634 period. respectively, I proposed to the Court, apart from the replies to ne given to the national courts which had referred the questions for a preliminary ruling, that it should declare that Article 14c(b) and Annex VII to Regulation No 1408/71 were invalid, in so far as they provide that a person 8 — Regulation No 3 of the Council of the EEC concerning employed in the territory of one Member State and social security for migrant workers (OJ, English Special simultaneously self-employed in the territory of another Edition 1952-1958, Series I, p. 63). Member State is to be subject to the legislation of each of 9 — Judgment of 9 June 1964 in Case 92/63 Noimcnmacbcr those States. 11964] ECR 281 et seq., particularly 288.

Likewise in the Van der Vecht judgment, 10 precludes a Member State from requiring the Court held that the purpose of Arti- contributions to be paid to the social cle 12 of Regulation No 3 was to avoid any security scheme for self-employed persons simultaneous application of national laws by persons already working as self- which could increase unnecessarily the employed persons in another Member State social security charges of the employee where they have their habitual residence and the employer, and that Article 12 and are affiliated to a social security prohibits Member States other than the scheme, that obligation affording them no State of employment from applying their additional social security cover. In that own social security legislation to the case, a German lawyer, who resided and worker if such application entailed an practised in Germany, had, at the same increase in social security charges for time, a residence in Brussels, where he also employees or employers, without a corre- practised his profession. In Belgium he sponding increase in social security protec- received a claim for payment of contribu- tion. tions due. He refused to pay them on the ground that, during the same period, he was affiliated to the German compulsory social security scheme for self-employed persons. In the Perenboom judgment, 11 the Court reiterated that the fact that a worker is required to pay, in respect of the same earned income, social charges arising under the legislation of several States, although he can be an insured person only in respect of the legislation of one State, means that the worker must pay contributions twice over, contrary to the provisions of Article 13 of Regulation No 1408/71. 12 This precedent was confirmed by the Court in February this year. 13 21. With regard to the freedom to provide services, the Seco judgment 15 considers the position of an employer who is liable in the State in which he is established to pay employers' contributions and is also required to pay additional contributions 20. In the context of freedom of establish- in the State in which work is performed in ment, the Court held, in the Kemmler respect of the same workers and periods of judgment, 14 that Article 52 of the Treaty employment, even though the contributions paid in the State in which work is per- formed do not entitle those workers to any 10—Judgment of 5 December 1967 in Case 19/67 Van der social security benefits. The Court held that Vecht [1967] ECR 345 et seq. particularly 354. 11—Judgment of 5 May 1977 in Case 102/76 Perenboom an employer cannot be required to pay the [1977] ECR 81J, paragraph 13. employers' share of the social security 12 —See also judgment of 29 June 1994 in Case C-60/93 contributions for the workers he takes to Alderwereld [1994] ECR 1-2991, paragraph 26. 13—Judgments in Case C-34/98 Commission v France, para- graph 31, and Case C-169/98 Commission v France, paragraph 29, cited above in footnote 4. 14 —Judgment of 15 February 1996 in Case C-53/95 Kemmler 15 —Judgment of 3 February 1982 in Joined Cases 62/81 and [1996] ECR I-703, paragraph 14. 63/81 Seco [1982] ECR 223, paragraph 15.

23. In the case which I am considering, In its judgment in Arblade and Others, 17 however, I see no such double obligation to the Court held that national rules which pay contributions. require an employer to pay employers' contributions to the host Member State's fund, in addition to those which he has already paid to the fund of the Member State in which he is established, constitute a restriction on freedom to provide services. Such an obligation gives rise to additional expenses and administrative and economic 24. Firstly, the only social security legisla- burdens for undertakings established in tion applicable to a professional such as Mr another Member State, with the result that Stutzer, who is self-employed and exercises such undertakings are not on an equal his right to freedom of establishment or footing, from the standpoint of competi- freedom to provide services within the tion, with employers established in the host meaning of the Treaty, is that of the State Member State, and may thus be deterred in which he resides, in this case Belgium. from providing services in the host Member Under Article 14d of Regulation State. No 1408/71 he will be regarded in that State as if he carried out all his professional activities within its territory. It is in that State that he must pay contributions, probably on all his professional income and, perhaps, subject to minimum and maximum limits. In the other Member States in which he provides services, whe- ther or not he is established in them, he 22. In all the abovementioned cases, the may not be required to join a social security infringement of Community law arose out scheme nor may the income he receives be subject to contributions. Furthermore, as the parties to the dispute have explained, 16 — In that case, the applicant companies were established in France and had moved to Luxembourg with their workers, no deduction is made from the remunera- who were nationals of non-member States, to carry out tion agreed between the professional and construction and maintenance work on the railway net- work. the employer who markets his work in 17 — Judgment of 23 November 1999 in Joined Cases C-369/96 and C-376/96 Arblade ami Others [1999] ECR I-8453, Germany for the purpose of financing a paragraph 50. social security scheme in that State.

Case-law has imposed some restrictions on the exercise of those powers by the Mem- ber States: they must observe the principle 26. Although this is an employers' contri- of equal treatment so as not to discriminate bution to a social security scheme, which between their own nationals and those of does not give a self-employed worker other Member States; they must ensure that resident in another Member State entitle- their national social security provisions do ment to benefits, in my view the fact that not constitute an obstacle to the effective the amount of the remuneration paid to exercise of the freedoms guaranteed by the professionals resident in other Member Treaty, 20 and that a migrant worker, who States is included in the basis of assessment has exercised his right to freedom of does not constitute an infringement of movement, is not placed at a disadvantage Community law. in relation to a non-migrant worker. 21

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professionals established in other Member 30. According to the case-law of the Court, States. in infringement proceedings under Arti- cle 169 of the Treaty, it is incumbent upon the Commission to prove the alleged infringement and to place before the Court of Justice the information necessary to enable the Court to establish the existence of the infringement, and in doing so the Commission may not rely on any presump- The Commission rightly points out that the tion. 22 Since the Commission has not Federal Republic of Germany may apply succeeded in proving the existence of the less favourable treatment to authors who alleged infringement, its application should are subject to its legislation and not be dismissed. required to join the social security scheme for artists and journalists, but the contested legislation, as I have said, is not prejudicial either to freedom of establishment or to freedom to provide services, and therefore the Community legal system cannot require that professionals who are established in other Member States and publish in Ger- many receive different treatment. V — Costs

(2) order the Commission to pay the costs.

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