C-235/99

1 — Original language: German. 2 — Decision 94/908/ĽCSC, EC, Euratom of the Council and the Commission of 19 December 1994 on the conclusion of the 3. The applicant submitted a claim for Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of political asylum on 23 July 1993. In her Bulgaria, of the other part (OJ 1994 L .358, p. 1). asylum interview on 4 March 1994, she

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admitted that, notwithstanding the state- 5. Immigration officers visited the matri- ments which she had made in order to monial home on 28 October 1995 and obtain entry clearance and on entry to the 9 November 1995. At an interview on United Kingdom, she had, in fact, always 9 November 1995, the applicant further intended to seek asylum in the United informed the IND that she was not in Kingdom. Her claim was refused on receipt of benefit but was working as a 19 April 1994 by the Immigration and cleaner for 18 hours a week, for which she Nationality Directorate (IND). The appli- received GBP 50 weekly. cant appealed against that refusal to the Special Adjudicator on 27 April 1994. In accordance with national immigration law, no action was taken against her on the expiry of her original leave to enter pending the outcome of that appeal.

6. On the basis of those visits and in light of the applicant's written explanations and replies during the interview, the respondent was not satisfied that the applicant's mar- riage was genuine and subsisting.

10. By letter of 4 July 1996, the AIRE 13. On 17 September 1996 the applicant's Centre, acting on the applicant's behalf, legal representatives informed the respon- applied for leave for her to remain in the dent that they were bringing proceedings, United Kingdom on the basis of the Europe and requested that the applicant's detention Agreement with Bulgaria. It explained that be reviewed and that she be released. the applicant wished to establish herself in business as a self-employed person offering general household care services. Her hus- band, it stated, was in employment and had undertaken to support his wife as much as possible until her business began to gener- 14. On 24 September 1996 the applicant ate sufficient profit. The AIRE Centre issued an application for leave to apply for enclosed with that letter copies of leaflets judicial review. advertising the applicant's business, an estimate of anticipated monthly income and expenditure, references from custo- mers, confirmation of her financial resources and a letter confirming that the applicant would be working exclusively in 15. The applicant was released on a self-employed capacity. 10 October 1996, exactly one month after her original detention.

16. By letter of 23 October 1996, the respondent again set out the calculations of profitability on which the refusal of the applicant's application had been based; 11. The respondent turned down this appli- these, he claimed, showed that she would cation on 24 July 1996 on the ground that not receive sufficient funds from her busi- he was not satisfied that the profits which ness to meet her future outgoings. He noted the applicant would receive from her that the applicant's representatives had not proposed business would be sufficient to yet addressed that specific point and invited maintain and accommodate her without them to provide realistic projections to recourse to employment or to public funds. show that the business would indeed gen-

19. The respondent invited the applicant to withdraw her application for judicial review. In a letter of 15 January 1997, her '1. Does Article 45 of the Association representatives set out a list of terms on the Agreement between the EEC and the basis of which the applicant would with- Republic of Bulgaria ("the Agree- draw her application. ment": OJ 1994 L 358, p. 1) confer

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rights of establishment upon a Bulgar- (ii) does Article 59, in any and if so ian national who, under national immi- what circumstances, permit the gration law, is treated as having entered refusal of an application under the territory of that Member State Article 45 of the Agreement made illegally? by someone whose initial entry into that Member State was other- wise unlawful?

2. If the answer to the first question is 4. If the answer to the second question is "yes", does Article 45 of the Agree- "yes", does Article 45 and/or Arti- ment have direct effect within the cle 59 of the Agreement permit the national legal systems of Member application of a provision of national States, notwithstanding the provisions law under which the competent of Article 59 of the Agreement? national authorities may require a Bulgarian national seeking to exercise rights as a self-employed person to demonstrate —·

23. The Europe Agreement with Bulgaria 3 (hereafter also referred to as 'the Bulgaria 5. If the answer to the preceding questions Agreement') was concluded having regard is that a Bulgarian national who is an to 'the commitment of the Community and illegal entrant may rely upon directly its Member States and of Bulgaria to effective rights of establishment under strengthening the political and economic the Agreement, then freedoms which constitute the very basis of the association'.4 The 17th recital in the preamble to the Agreement recognises further the fact that 'Bulgaria's ultimate objective is to become a member of the Community, and that this association, in the view of the Parties, will help Bulgaria to achieve this objective'. (a) what factors, under such an Agree- ment, should the national court take into account in determining whether any breach by the compe- tent authorities of that person's directly effective rights was suffi- ciently serious to give rise to a right 24. Article 1(1) of the Bulgaria Agreement to reparation in damages against provides that 'an association is hereby the Member State concerned; and, established between the Community and in particular, its Member States on the one part, and Bulgaria on the other part'.

(b) in the state of Community law at 25. The objectives of this association are the relevant time (i.e., when the set out in Article 1(2). They concern the decisions of August/September provision of an appropriate framework for 1996 to refuse the Applicant's political dialogue between the Parties, the application for leave to remain as gradual establishment of a free trade area a self-employed person, and/or the covering substantially all trade between decision to detain the Applicant, them, promotion of the expansion of trade were taken), did the approach and harmonious economic relations adopted by the competent national authorities constitute a "grave and manifest disregard" of a superior 3 — Reference cited in footnote 2. rule of law?' 4 — Fourth recital in the preamble.

6 — Annex XVa is entitled: 'Legal acts relating to real-estate 5 — Pursuant to its Article 124, the Bulgaria Agreement, which was signed on 8 March 1993, entered into force on property in frontier regions in accordance with legislation in force in certain Member States of the Community'. 1 February 1995, and thus only at a date by which the Since the derogating provision i n the final part of Arti- applicant nad already been residing in the United Kingdom cle 45( 1 ) has no bearing on the decision in this case, it need for one and a half years. not be addressed in what follows.

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(ii) ... activities as self-employed persons in a Member State. This right exists indepen- dently of the applicant's entry status. It cannot in any event be made dependent on the grant of leave to remain or any other form of permission within the discretion of the Member State.

6. ...'

28. Chapter IV of Title IV of the Agreement 30. Article 45 of the Bulgaria Agreement, sets out general provisions. Article 59(1) she argues, contains a sufficiently clear and provides as follows: precise obligation not conditional on the adoption of implementing measures to be of direct effect. This is in no way affected by the rule in Article 59.

32. The applicant submits further that 35. A Member State is thus entitled to Article 45 and/or Article 59 of the Bulgaria continue to apply its rules regulating entry, Agreement do not permit a Member State stay and establishment to Bulgarian nation- to require Bulgarian nationals to provide als, on condition that it does not do so in a evidence of sufficient resources to maintain manner which makes the exercise of the themselves without recourse to public right of free establishment impossible or funds where no such requirement is very difficult. This is tantamount to com- imposed on its own nationals. plying with the principles of non-discrimi- nation and proportionality. Under Arti- cle 59 of the Agreement, a Member State can thus demand proof from a Bulgarian national, who, following his entry, is unlawfully present within the territory of that Member State for reasons other than those of establishment, that his intention is in fact to take up and pursue an economic activity as a self-employed person and that 33. Finally, the infringement of Articles 45 this activity will be financially successful. In and 59 of the Agreement by the competent the event of unlawful residence, refusal of authorities of the United Kingdom is, she an application based on Article 45 of the argues, sufficiently serious to entitle her to Agreement will therefore be correct in law. an award of reparation for the damage to her business and that otherwise suffered by reason of her detention for one month.

40. It should first be noted — as the Commission and the Irish Government have also proposed — that the order of the questions submitted should be changed and that it is first necessary to examine 38. The Belgian, German, Spanish, French, whether the applicant can at all rely before Irish, Netherlands and Austrian Govern- a national court directly on Article 45 of ments, together with the Commission, the Agreement and whether she can derive reach in their observations essentially the from that article the right of residence same conclusion as the United Kingdom which she seeks to acquire. Should that not Government, albeit by in part different be the case from the outset, all of the lines of argument. The submissions of these remaining questions submitted in this refer- parties and the further submissions of the ence for a preliminary ruling would neces- applicant and the United Kingdom Govern- sarily be merely hypothetical in nature. ment will — to the extent necessary — be examined in the analysis.

(a) The jurisdiction of the Court of Justice

VI — Analysis 41. Before we examine the individual pro- visions of the Europe Agreement, it is necessary to consider whether the Court has jurisdiction.

39. All of the questions submitted in this reference for a preliminary ruling seek clarification as to whether a person may invoke a direct right of establishment under 42. The Court has consistently ruled that Article 45 of the Bulgaria Agreement, and a association agreements form an integral separate right of residence derived there- part of the Community legal order and from, as against the Member State in involve an extensive jurisdiction on the part question, in particular where the person of the Court of Justice.7 concerned had already been unlawfully residing in the Member State for three years when he or she made the application 7 —Case 12/86 Demirel v Stadt Schwäbisch Gmünd [1987] and had even been doing so before the ECR 3719, paragraphs 7 to 12, and Case C-192/89 Sevince v Staatssecretaris van justitie [1990] ECR 1-3461, para- Bulgaria Agreement came into force. graphs 8 to 12.

46. There are, however, no differences between the Association Agreement with Turkey and the Europe Agreement with Bulgaria in regard to the jurisdiction of the Court. Both are agreements within the 44. There is to date an extensive body of meaning of Article 238 of the EC Treaty case-law of the Court on the Association (now Article 310 EC). In its established Agreement with Turkey. Since that Agree- case-law on agreements concluded pur- ment is quite similar to the Agreement with suant to Article 238 of the EC Treaty, the Bulgaria which falls to be applied in the Court has ruled that it has comprehensive present case, reference can be made in what jurisdiction in this regard to interpret such follows — at least in part — to the rele- agreements. 9 vant case-law. This concerns both questions of jurisdiction and interpretation, with the result that recourse can be had, at least in part, to that case-law within the context of the present reference regarding the Europe Agreement.

47. The Court's case-law on the Agreement with Turkey can thus be applied, at least with regard to jurisdiction, for the purpose of interpreting and construing provisions of

8 — Case C-416/96 El-Yassim v Secretary of State for the Home 45. That said, there are none the less Department [1999] ECR I-1209, paragraph 47. certain differences between the Association 9 — Demirel, cited above in footnote 7 ,paragraph 8, and Case C-53/96 Hermes v EHT [1998] ECR I-3603, paragraphs 22 Agreement with Turkey, on the one hand, to 29 and references cited therein.

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12 — Article 3(2) of the Bulgaria Agreement provides as follows 10 — Case 104/81 Hauptzollamt Mainz v Kupferberg [1982] with regard to the Association Council: 'At ministerial ECR 3641, paragraphs 22 to 26, and Demirel, cited above level, political dialogue shall take place within the in footnote 7, paragraphs 7 to 12. Association Council. This shall have general responsibility 11 — See, inter alia, Case C-262/96 Sürül v Bundesanstalt für for all matters which the Parties might wish to put to it.' Arbeit [1999] ECR I-2685, paragraph 60 and further Further provisions on the Association Council are to be references therein. found in Articles 105 to 110 of the Bulgaria Agreement.

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the areas of free movement of workers 55. The incidental fact that this Europe under Article 40(1) and the supply of Agreement is intended essentially to pro- services under Article 56(3) of the Agree- mote the economic development of Bul- ment, since these refer expressly to mea- garia and that therefore an imbalance arises sures still to be taken. between the various obligations assumed by the Community does not, according to the Court's settled case-law on similar association agreements, prevent the Com- munity from recognising some of its provi- sions as having direct effect. 15

57. Contrary to the applicant's submis- sions, however, the rights derived from Article 45(1) of the Bulgaria Agreement 54. The purpose and object of the Europe do not correspond to the right of establish- Agreement with Bulgaria are also not at ment under Article 52 of the EC Treaty variance with the direct applicability of (now Article 43 EC), which the settled Article 45(1) of the Bulgaria Agreement. case-law of the Court has confirmed to be The immediate aims of the Agreement, directly applicable. 16 That, however, is no which are also listed in Article 1(2) — see longer the issue in the present case. First, point 25 above — can be inferred from the recitals in the preamble. 1 5 — J u d g m e n t s in Case C-469/93 Amministrazione delle Finanze dello Stato v Chiquita Italia [1995] ECR I-4533, paragraph 34, and of 11 May 2000 in Case C-37/9S The 13 — See Demirel, cited above in footnote 7, paragraph 16. Queen v Secretary' of State for the Home Department, ex 14 — See the judgment in S e v i n c e , cited above in footnote 7, parte Savas [2000] ECR I-2927, paragraph 53. paragraph 27 et seq. 16 — Case 2/74 Reyners v Belgium [1974| ECU 631.

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the wording of the two provisions is not the (c) The scope of Article 45(1) of the same, 17 and, second, the difference in Bulgaria Agreement treatment can be explained by the discrete objectives pursued by those respective instruments.

61. The applicant's arguments that the unlawful nature of her residence in the Member State is immaterial in the context of an application relating to Article 45(1) 59. It thus follows from the foregoing that, of the Bulgaria Agreement are unconvin- regard being had to its wording as well as cing. They fail to take account of the fact to its meaning and purpose, Article 45(1) that, within the context of that provision, a of the Bulgaria Agreement is directly effec- clear distinction needs to be drawn between tive in regard to the right of Bulgarian the right of residence and the right of nationals to establish themselves for the establishment. purpose of taking up self-employed activ- ities. There is, however, still no reference in this to a right of residence. In order to be able to determine to what extent Arti- cle 45(1) confers a separate right of resi- dence which is independent of national law, it is necessary to clarify the scope of that 62. According to the unambiguous word- provision. ing of Article 45(1) of the Bulgaria Agree- ment, that provision relates solely to the right of establishment of Bulgarian nation- 17 — The Court has also consistently ruled that the fact that an als in a Member State. At no point does the article in an association agreement is worded similarly to a provision of the EC Treaty does not in any way auto- Agreement mention an implied right of matically mean that those provisions must be interpreted identically (see in this connection Case C-312/91 Metalsa residence which may be derived from that [1993] ECR 1-3751, paragraphs 11 to 20). right of establishment.

67. Article 41 of the additional protocol annexed to this Association Agreement provides that the Contracting Parties are 65. The same must hold good for the to refrain from introducing between them- interpretation of Article 45(1) of the Bul- selves any new restrictions on the freedom garia Agreement. Contrary to the opinion of establishment and the freedom to pro- expressed by the applicant, this case-law vide services. can be applied to the Bulgaria Agreement. The contention that the Bulgaria Agree-

18 — Case 118/75 Watson and Belmann 11976] ECR 1185, paragraph 16. 19 — Case C-171/95 Tetik v Land Berlin [1997] ECR I-329, 68. However, most of the rights thus far paragraph 2 1 , Case C-237/91 Kus v Landesbaupstadt derived from the Association Agreement Wiesbaden [1992] ECR I-6781, paragraph 25, and Savas, cited above in footnote 15, paragraph 58. with Turkey are based on the very specific

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decisions of the Association Council 72. Article 59 of the Bulgaria Agreement, adopted to date. for which there is no comparable provision in the Association Agreement with Turkey, makes it in this connection all the more evident, through its express mention of the terms 'entry' and 'stay', that these areas of regulation are to remain within the compe- — The Europe Agreement with Bulgaria tence of the Member States, and thus makes clear what is already obvious from the case-law on the Association Agreement with Turkey.

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line of argument, however, fails to take only Turkish employed workers, to provi- account of the fact that a vital distinction sions relating to the right of establishment must be drawn between the political and of Turkish nationals in a Member State. 21 the juridical significance of an agreement. The Court has, however, expressly stressed in this regard that the implied right of residence applies only within the specific context of the Association Agreement with Turkey. 22From this it follows clearly and unequivocally that, as Community law stands at present, those principles cannot apply with regard to the Europe Agreement 75. Notwithstanding the partial applicabil- with Bulgaria — that is to say, so long as ity of the case-law on the Association no corresponding decisions have been Agreement with Turkey, as established adopted by the Association Council. above, the Court's settled case-law con- cerning an implied right of residence for Turkish workers under the Association Agreement concluded with Turkey 20 is to that extent not applicable to the present case, which involves the right of establish- ment of self-employed Bulgarian nationals. 77. The definition of the term 'establish- According to that case-law, the rights ment' in Article 45(5) of the Bulgaria accorded to Turkish workers in the area Agreement 23 also makes it clear that a of employment necessarily imply that the strict distinction has to be drawn under that persons concerned are entitled to residence, Agreement between Bulgarian employed since the right of access to the labour force workers and Bulgarian self-employed and the right to work as an employed workers, with the result that rights which person would otherwise be deprived of all may apply to employed persons are in no effect. This implied right of residence was, way also unconditionally applicable to self- however, derived solely and exclusively employed persons. from Decision No 1/80 of the Association Council of 19 September 1980 on the development of the Association. No rules similar to this decision exist in regard to the Europe Agreement with Bulgaria.

Bulgaria Agreement cannot form the basis (d) Unlawful residence even before the for any implied right of residence. Even in Bulgaria Agreement entered into force cases where self-employed Turkish nation- als have been recognised as having a right of residence pursuant to Decision No 1/80 of the Association Council, the Court has none the less derogated from that principle 81. The applicant deceived the national in those cases where, at the time of their authorities by providing false information application, applicants were residing in the on her entry. Account must be taken in this Member State in question contrary to regard of the fact that her residence was national immigration law. 24 In the cases unlawful even before the Europe Agree- in point, the Turkish nationals concerned ment entered into force.25 In that regard, had obtained their original authorisation to any rights to which the applicant would reside in a Member State only by providing have been entitled by virtue of the leave to false information. remain and work permit initially obtained are also irrelevant. Article 45(1) of the Bulgaria Agreement provides no support for the argument that earlier infringements of national law may be remedied by that provision.

79. Now, it would be entirely contrary to the system if persons from non-member countries with regard to which the EC has not concluded any implementing decisions 82. Neither the history of its adoption nor quite so specific as Decision No 1/80 of the the Agreement itself suggest that the Con- Association Council under the Association tracting Parties intended, at the time of its Agreement with Turkey were to be placed conclusion, to legalise unlawful instances in a better position than nationals of of residence arising before it entered into countries such as Turkey. force.

86. Since it is thus established that Arti- 89. With particular regard to the imple- cle 45(1) of the Bulgaria Agreement confers mentation of the Europe Agreement with only a right of establishment, but no right Bulgaria, the Member States must also be of residence, it follows that the effect of authorised to carry out certain checks on Article 59 of the Bulgaria Agreement can the entry, residence and establishment of relate, if at all, only to the right of Bulgarian nationals. establishment. The question, however, is to what extent Article 59 of the Bulgaria Agreement can restrict Member States in defining the right of establishment.

90. The fact that Articles 59 and 45(1) are both to be found in Title IV of the Bulgaria Agreement does not, contrary to the argu- 87. Article 59 of the Bulgaria Agreement ment put forward by the applicant, provide states that nothing in the Agreement is to any support whatever for the contention prevent a Member State from applying its that Article 45(1) has the effect of confer- laws and regulations regarding entry and ring a right of residence or that it may not stay, work, labour conditions and establish- be restricted in this regard by measures ment of natural persons and supply of taken by Member States. On the contrary,

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this systematic position of Article 59 show that the Member States continue to demonstrates a fortiori that Member States retain a not inconsiderable regulatory continue to be entitled to regulate the entry power in regard to the right of establish- and residence of Bulgarian nationals also in ment. regard to the right of establishment.

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provisions are applicable within the context procedure. In applying individual mea- of granting a right of establishment. sures, the Member State is of course also bound to comply with the principle of proportionality. However, in the case where an applicant has entered the country solely by deceiving the national authorities, that person cannot invoke the principle of 96. Since the provisions of an Association proportionality. That would, in particular, or Europe Agreement form an integral part run counter to the objectives of the Agree- of the Community legal order,26 those ment. Nor is it disproportionate, in that provisions take precedence over national connection, to require the applicant to first law, though it should also be noted that leave and then re-apply in Bulgaria for they do so only to the extent to which they residence in conjunction with an applica- actually overlap. tion for establishment.

97. The provisions germane to the present case are not, however, at variance with national law. The relevant provisions in the United Kingdom's rules on entry and resi- 100. It would not be compatible with the dence give effect only to the legitimate and principle of proportionality if the assump- permissible interests of that Member State, tion of an activity in a self-employed namely to regulate uncontrolled access of capacity were to be made subject to an nationals of non-member countries and to examination of national economic or prevent abuse of advantages granted to labour-market requirements or if an appli- persons entering in the proper manner. cation for establishment were to be turned down on the ground that the legal order of the Member State in question provides for a general restriction on immigration.

106. Nor does the national rule infringe the principle of equal treatment with the Member State's own nationals, as set out in Article 45(1) of the Bulgaria Agreement. Separate social systems apply to United (3) Question 4 Kingdom nationals, on the one hand, and Bulgarian nationals, on the other, and account must be taken of these in the present context. To date, there have, within 103. Question 4 will also be answered only the framework of the Europe Agreement by way of alternative submission, but also with Bulgaria, been no rules in the area of in order to clarify the view being expressed the right of establishment requiring the here. Member State to provide financial support for self-employed persons in a position of financial dependency. The host Member State must accordingly be allowed to check whether applicants are or are not likely to be independent of State benefits. 104. The United Kingdom provisions on the furnishing of proof of guaranteed income are also in accordance with what is laid down in the Europe Agreement. Such proof is appropriate for establishing that the applicant is serious in his or her intention. 107. Particular reference in this regard must also be made to the Council Resolu- tion of 30 November 1994 relating to the limitations on the admission of third-coun- try nationals to the territory of the Member States for the purpose of pursuing activities 105. Article 45(5)(a) of the Bulgaria Agree- as self-employed persons, 28 under which ment confers on Bulgarian nationals only Member States may demand evidence of the right to establish themselves as self- income such as that here under discussion. employed persons in a Member State. The Paragraph 7 in Part A expressly states that requirement that proof be produced of appropriate measures are required to pre- sufficient income serves in particular to vent persons establishing themselves in a monitor this criterion in an objective man- Member State without having the necessary ner, without rights of Bulgarian nationals financial means. being infringed thereby. This rule makes it possible to exclude, in a meaningful way, the chances of Bulgarian applicants seeking 28 — OJ 1996 C 274, p. 7.

111. Whereas Questions 3 and 4 bore a direct relationship to Questions 1 and 2 and were for that reason answered by way of alternative submission, that is not the case with regard to the final question, Question 5. 109. In the first place, the present case concerns provisions relating to self- employed workers, and, second, those provisions are to be found in a Europe Agreement, which, as has already been established above, cannot, within this area, 112. The question of the conditions under be in any way compared to the rules in the which a claim for damages may arise from Treaty. Once again, reference must here be an infringement of the Bulgaria Agreement made to the Court's case-law, according to has no direct connection to the first four which similar or identical provisions in questions and is, in view of the answer to different treaties or agreements must be Question 1, now no more than hypothetical interpreted in the light of their differing in nature. objectives and contextual conditions. 30 Further, Article 59 of the Bulgaria Agree-

29 — C.isc 53/81 Levin v Staatssecretaris van Justitie |1982| F.CR 1035. 30 — C a s c 270/80 Polydor v Harlequin Reami Shops |1982| 113. It is for that reason unnecessary to ECR 329. answer Question 5.

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V I I— Conclusion

114. I propose that the questions submitted should be answered as follows: