C-34/02

PASQUINI

OPINION OF ADVOCATE GENERAL ALBER delivered on 6 March 2003 1

I — Introduction II — Applicable provisions

A — Community legislation

Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed per- sons and to members of their families moving within the Community 2

2. According to its heading, Article 49 governs the '[ejakulation of benefits where the person concerned does not simulta- 1. This reference for a preliminary ruling neously satisfy the conditions laid down by was made by the Tribunale ordinario di all the legislations under which periods of Roma (Rome District Court) (Italy). The insurance or of residence have been com- parties to the main proceedings are Sante pleted or when he has expressly requested a Pasquini (hereinafter 'the applicant') and postponement of the award of old-age the Istituto Nazionale della Previdenza benefits'. The provision states: Sociale (National Institute of Social Insur- ance) (hereinafter 'the INPS'). The defend- ant stopped pension payments to the appli- cant, who lives in Luxembourg, in order thus to offset what it considers to be overpayments of pension benefit. This case '1. If, at a given time, the person concerned concerns the question whether the recovery does not satisfy the conditions laid down of backdated pension payments is subject for the provision of benefits by all the to time-limits under Community law. 2 — In the version contained in Council Regulation (EC) No 1 1 8 / 9 7of 2 December 1996 amending and updating 1 — Original language: German. Regulation (EEC) No 1 4 0 8 / 7 1 ( O J1197I. 28, p. 1).

3. A recalculation shall automatically be 4. According to the heading of Article 111, made in accordance with paragraph 1, Articles 111 and 112 of that regulation without prejudice to Article 40(2), where the conditions required by one or more of the legislations concerned are no longer 3 — In the version contained in Council Regulation (EC) satisfied.' No 118/97 of 2 December 1996 amending and updating Regulation (EEC) No 574/72 (OJ 1997 L 28, p. 1).

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govern the '[rl]covery by social security tion under the conditions and within the institutions of payments not due, and limits provided for such setting-off by the claims by assistance bodies'. legislation which it administers, as if the sums had been overpaid by itself, and shall transfer the amount deducted to the credi- tor institution.

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through another institution, and when their payment of the supplement up to the level recovery has become impossible, the of a minimum pension is Article 8 of Law amounts in question shall remain finally No 153/1969. Paragraph 1 of that provi- chargeable to the first institution, save sion relates to Italo-Libyan pension situ- where the payment which was not due is ations, which are of no significance in this the result of fraud.' case. Paragraphs 2 to 4, which, the parties all agree, also apply to pension claims acquired other than under the Italo-Libyan pensions agreement, read in essence as follows: 5. Article 49 of Regulation No 574/72 governs the 'recalculation of benefits' and paragraph 2 thereof provides:

7. The parties to the proceedings also refer Pension payments are to be considered final to the following national provisions, the where they have not been refused by the applicability of which in this case is dis- National Social Insurance Fund within a puted. year of notification to the recipient; in that event, subsequent corrections of any errors other than those resulting from fraudulent conduct on the part of the person con- cerned are not capable of affecting pay- Codice Civile ments already made.

8. Article 2946 of the Codice Civile (Italian Civil Code) lays down a general limitation period of 10 years in respect of debts. Law No 88/1989

Royal Decree No 1422/1924 10. Article 52 of Law No 88/1989, which is entitled 'undue benefits', provides in essence as follows: 9. A r t i c l e 80 of R o y a l D e c r e e No 1422/1924 reads in essence as follows:

The Committee ('comitato esecutivo della 1. Pensions payable inter alia by the gen- cassa nazionale per le assicurazioni sociali' eral compulsory insurance scheme may be (Executive Committee of the National corrected at any time by the institution Social Insurance Fund)) is to use all appro- making the payment if any errors have been priate means to review pension payments made in the award or reassessment of the by welfare institutions. benefit.

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1. The provisions laid down in Article 52(2) of Law No 88 of 9 March 1989 are to be interpreted as meaning that the correction provided for applies to sums which were paid on the basis of a formal and final decision expressly notified to the person '260. No action to recover sums paid concerned and vitiated by an error of any though not due is to be taken against kind for which the institution making the persons who have received pension benefits payment is to be held responsible, except wholly or partly undue, including cash where the sums paid though not due are the awards, paid inter alia by a compulsory result of fraudulent conduct on the part of insurance body in respect of periods before the person concerned. Failure on the part of 1 January 1996, if in 1995 those persons the person in receipt of the pension to had an income subject to 'IRPEF' (personal communicate, or incomplete communi- income tax) of ITL 16 million or less. cation, of facts which are relevant to entitlement to the pension or to its amount and which are not already known to the competent body authorises the latter to recover the sums paid though not due.

261. If persons who in 1995 received undue benefits for the purposes of subpara- graph 260 had an income subject to IRPEF 2. Once a year, the INPS is to review the of over ITL 16 million, only one quarter of income of persons in receipt of pensions the amount cannot be recovered. I - 6522

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262. Recovery is to be effected in the form of the abovementioned Law No 662/1996 of a deduction from the pension, which for the period before 1 January 2001, fixing deduction may not exceed one fifth of the the threshold for taxable income in the year pension. The debt is to be recovered by 2000 at EUR 8 262.31. means of interest-free monthly instalments within a period of 24 months. That period can be extended in order to ensure that the deduction does not exceed one fifth of the pension.'

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tion on 1 September 1998 asking to be that he continue to be paid a partial informed of the payments made since pension by the Italian authorities. The 1 January 1996, the Luxembourg institu- national court before which he brought tion sent the requested information on the action has doubts as to whether or not 10 September 1998. In the correspondence the unlimited recoverability of sums paid that followed, the Luxembourg institution, though not due, which is said to follow by letter of 17 November 1999, expressly from national law, is compatible with informed the Italian institution of the Community law where payment of the Luxembourg pension payments made since sums allegedly undue results from the 1 July 1988. On 3 March 2000, the Italian concurrent application of various national institution recalculated the Italian pension pension schemes, in accordance with Com- in the light of the Luxembourg pension and munity law. The referring court would like reduced the amount of the former to to know whether or not the two-year ITL 7 500 per month, applicable with re- time-limit applicable to the retrospective trospective effect to 1 July 1988. In that enforcement of rights conferred by Regu- decision it ordered the recovery of an lation No 1408/71 can, in the appropriate amount equal to EUR 29 005 in respect circumstances, also be applied, by analogy, of the period from 1 March 1988 to to a situation such as that in this case. 30 April 2000.

16. On 30 October 2000, the applicant brought an administrative appeal against 18. More specifically, the referring court that latter decision which was rejected by words its questions as follows: decision of 13 December 2000. The Italian institution considered both the recovery of the sums paid though not due and the consequential cessation of all pension pay- ments by the Italian institution to be lawful.

20. The applicant submits that, after he had already started to draw his Italian pension, the Luxembourg institution Is it possible, given that the transitional informed both the Italian and French rules for the application of the social institutions that he had applied for a security regulations provide for a time-limit Luxembourg and a French pension and of two years in which to claim, with had taken early retirement. retrospective effect, the rights conferred by those regulations, to apply a contrario the same time-limit of two years from notification of recovery of undue payment in cases of reduction of rights previously conferred, except where more favourable 21. He contends that there is nothing time-limits are laid down by national law, which he personally omitted to do, having and provided that the person concerned is informed the Italian institution by means of not guilty of fraudulent conduct? a letter of 18 October 1988 from the Patronato A.C.L.I. (the Italian workers' social assistance body in Luxembourg) that he was in receipt of a Luxembourg pension. He sent the Italian institution a copy of the decision to award the benefit and asked that institution to take the Luxembourg IV — Submissions of the parties to the benefit into consideration in order to rule proceedings out any right to reimbursement assemble against him.

A — Applicant 22. He maintains that recovery of the sums paid though not due is contrary to the principles laid down in Regulations 19. The applicant refers to the Italian No 1408/71 and No 574/72. Although provisions cited above. He contends that the institution was informed of the situ- those provisions, which take precedence ation, it recalculated the benefit with 13 over the general rule contained in years' retrospective effect to 3 March 2000, Article 2033 of the Codice Civile, are which is contrary to Article 49 of Regu- applicable to his case, and that he therefore lation No 574/72.

24. The applicant nevertheless contends that an answer can also be inferred from Article 94 et seq. of Regulation No 1408/71 and Article 49 of Regulation No 574/72. Article 49 of Regulation No 574/72 requires the competent institutions to B — INPS notify the person concerned of a recalcu- lation 'immediately'. However, the major- ity of sums paid though not due are the result of an incorrect or belated application of that provision. It is his submission that, 26. With regard to the facts of the case, the if the competent institution does not INPS explains that the applicant's adminis- observe that rule, thereby leaving the trative appeal was rejected on the ground that Article 13 of Law No 412/1991 is not applicable to the recovery, as a result of the 4 —Judgment in Case 35/74 Rzepa [1974] ECR 1241. award of a foreign pension, of sums paid 5 — Judgment in Case C-199/88 Cabras [1990] ECR I-1023. though not due in connection with the 6 —Judgment in Case 24/75 Petroni [1975] ECR 1149. pension supplement, since, at the time 7 — Judgment in Case C-443/93 [1995] ECR I-4033. when the benefit was granted, the bene- I - 6526

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ficiary was informed that the amount of the intermediary of the Patronato A.C.L.I., that benefit was provisional, in accordance with he was in receipt of the Luxembourg Article 8 of Law No 153/1969. In the pension. dispute before the Tribunale di Roma, the INPS argued that the exemption rules were not applicable in respect of the period before 1 December 1995 and Article 13 of Law No 412/1991 was not applicable in respect of the period thereafter.

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C — The Italian Government the Codice Civile. Member States have discretion in the determination of limi- tation periods. The period laid down by the Italian legislature is not contrary to the provisions or principles of Community law.

31. The Italian Government too points out, inter alia, that the Italian pension supple- ment was awarded provisionally, on the understanding that it would be recalculated as from the award of a foreign pension and 34. Moreover, it submits, the INPS has not that any sums overpaid would be committed any error which justifies the recovered. protection of a worker who has received a benefit in good faith. Rather, the INPS made payments for which it was not liable and which it is now recovering under the general provisions on sums paid though not due (Article 2033 of the Codice Civile).

32. It refers to judgment No 1967 of 1995 of the Corte di Cassazione (Italian Court of Cassation) in which that court made it clear that Article 8 of Law No 153 of 1969 is a specific mechanism for granting benefits. The award is made on the assumption that, D — The Austrian Government where an advance is paid on the benefit, the definitive benefit will be recalculated and, therefore, adjusted at a later date. The recovery of sums overpaid is a possibility inherent in the scheme of Article 8, which 35. The Austrian Government points out therefore constitutes a specific and separate first of all that, unfortunately, the order for ground for recovery. reference does not contain all the infor- mation needed to assess the case fully. It must nevertheless be recognised, it submits, that the issue raised regularly leads to difficulties in Austria too.

ciples of equivalence and effectiveness are than one Member State who, as a result of taken into account in the process. 9It takes the concurrent application of various legal the view that the answer to the question systems, are generally placed at a disadvan- whether or not the recovery of sums paid tage by comparison with workers who have though not due can be effected without only ever been insured in one Member temporal limitation depends, first, on the State. From that point of view, there is relevant provisions of Italian procedural justification for special protection of law. The principle of respect for legitimate migrant workers' legitimate expec- expectations should also be taken into tations, 13 which might include, inter alia, consideration. The Austrian Government the limitation to two years of the retro- refers in that connection to Cabras 10 and in spective effects possible in principle at particular to the Opinion of Advocate national level. The Republic of Austria General Jacobs in that case. 11The Repub- would support such a solution because, it lic of Austria submits that it is also worth submits, it is difficult to explain to the considering whether it is possible to deduce migrant workers concerned that, although in a general way from the transitional they have done nothing wrong, they can be provisions of Regulation No 1408/71 that required to repay, without temporal limi- retrospective effect is limited to two years tation, overpayment of benefits, when in respect of all the legal consequences for those sums are largely the result of the migrant workers. After all, those provisions overlapping of the differing and extremely (Article 94, for example) contain not only complex social security laws of the various rules applicable to the circumstances spe- Member States, and not of their own cifically mentioned in them, but also gen- personal actions. eral procedural principles for the appli- cation of the regulation. 12 Those transi- tional provisions constitute rules which are also intended to relieve insurance institu- tions from the unreasonable burden of liabilities with excessive retrospective effect. By analogy, that principle could also be applied, a contrario, to the reimburse- E — The Portuguese Government ment obligations of the persons concerned.

39. In view of the principle of effectiveness, it contends, the fact is, however, that the lack of limitation periods for the recovery of sums paid though not due — especially in the context of the reduction of pre- F — The Commission viously recognised rights as a result of the belated or incorrect application of provi- sions of Community law — is contrary to Article 49(2) of Regulation No 574/72 and the principle of legal certainty. According to the case-law of the Court, 15 that prin- 41. The Commission did not express ciple is intended to protect both the auth- doubts as to the admissibility of the refer- orities and individuals. National law must ence for a preliminary ruling until the therefore set an appropriate time-limit after hearing. In its written observations, it was the expiry of which the legal position of the still proceeding on the premiss that this individual is 'consolidated'. case is essentially concerned with an issue of equal treatment as between situations governed by Community law and situations governed purely by national law.

40. If, however, national law does not provide for such a time-limit, then Com- munity law at least gives some guidance as 42. At the hearing, on the basis of the to how the question should be answered, as written and oral submissions, in particular the referring court already suggests. of the INPS, the Commission said that it Article 94(6) of Regulation No 1408/71, was possible that the national exemption for example, gives expression to the prin- rules are applied without discrimination ciple of legal certainty for the benefit of and that, on the ground of his income social insurance institutions. With a view to alone, the applicant does not qualify foi- exemption under those rules. Con- sequently, the reference for a preliminary 15 — Judgment in Case C-128/93 Fisscher [1994] ECR I-4583. ruling suggests that there has been unequal

A — Admissibility

44. The INPS has from the outset voiced 46. Only where the questions submitted to doubts as to the admissibility of the refer- the Court are clearly irrelevant to the ence for a preliminary ruling, on the one resolution of the dispute in the main hand, because of the brevity of the order proceedings, for example where the dispute for reference, which gives an inadequate account of the issues in the main proceed- ings, and, on the other, because, in the 16 — Judgments in Case C-472/99 Clean Car Autoservice [2001] ECR 1-9687, paragraph 13, and Case C-306/99 BIAO INPS's opinion, the questions referred are [2003] ECR I-1, paragraph 88. not relevant to the resolution of the dispute 17 —See the judgments in Case C-424/97 Haim [2000] ECR I-5123, paragraph 58, and Case C-366/98 Ceffroy 20001 before the national court. The INPS con- ECR I-6579, paragraph 20.

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is fictitious or the questions asked are 48. The reference for a preliminary ruling purely hypothetical, 18 does the Court reject must therefore be considered to be admiss- a reference for a preliminary ruling as ible. inadmissible because it does not consider itself competent to deliver advisory opinions in the context of a preliminary ruling procedure. 19

B — Merits

18 — Judgment in BIAO (cited above in footnote 16), paragraph 89. 19 — Judgment in Case C-83/91 Meilicke [1992] ECR I-4871, 20 — On the content of those articles, see points 2, 4 and 5 above. paragraph 25.

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recovery of sums paid though not due and munity law without influence from Com- the applicability of any limitation periods munity law. As has already been stated in are therefore, in principle, a matter for the the observations of the parties to the legislature of the Member State concerned. proceedings, the Court has consistently held 23 that the principles of equivalence and effectiveness must be observed when national law is applied to situations gov- 50. Thus, as long ago as 1974, the Court, erned by Community law. in its judgment in Rzepa, 21 duly held as follows with regard to Regulations No 3 and No 4, the precursors to Regulations No 1408/71 and No 574/72:

23 — See, inter alia, the judgments in Reive (cited above in footnote 14), paragraph 5, Case 45/76 Comet [1976] ECR 51. It cannot be assumed from this, how- 2043, paragraphs 12 to 16, Case 68/79 Just [1980] ECR ever, that national law can be applied to 501, paragraph 25, Case 199/82 San Giorgio [1983] ECR 3595, paragraph 14, Joined Cases 331/85, 376/85 and situations falling within the scope of Com- 378/85 Bianco and Girard [1988] ECR 1099, paragraph 12, Case 104/86 Commission v Italy [1988] ECR 1799, paragraph 7, Joined Cases 123/87 and 330/87 Jeune- homme and EGI [1988] ECR 4517, paragraph 17, Case C-96/91 Commission v Spain [1992] ECR I-3789, para- 21 — Case 35/74 (cited above in footnote 4). graph 12, Joined Cases C-6/90 and C-9/90 Francovich and 22 — See the judgment in Rzepa (cited above in footnote 4), Others [1991] ECR I-5357, paragraph 43, and Case paragraphs 12 and 13, my emphasis. Article 34(3) of the C-312/93 Peterbroeck [1995] ECR I-4599. then Regulation No 4 concerned revocable advances. 24 — Cited above in footnote 9; paragraph 34.

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53. In addition, observance of the principle body before it — took the view before the of equivalence presupposes 'that the pro- national court that Article 13 of Law cedural rule at issue applies without dis- No 412/1991 is not applicable to a case tinction to actions alleging infringements of such as the applicant's. Elsewhere in its Community law and to those alleging written submissions, however, it contends infringements of national law, with respect that, in its defence before the referring to the same kind of charges or dues'. 25 court, it, like the administrative appeal body, recognised that the provisions of Article 1(260) et seq. of Law No 662/1996 are applicable, and that circulars No 96 of 1997 and No 84 of 2002 also provide for the applicability of the exemption rules.

59. Even the warning that the pension assessment under Article 8 of Law 61. Of relevance in this context is judgment No 153/1969 is provisional does nothing No 1967 of 22 February 1995 of the Corte to change that view. It is true that the di Cassazione, as cited by the Italian benefit assessment is provisional in so far as Government. In that judgment, the Corte a change of circumstances in the form of di Cassazione describes Article 8 of Law the grant of benefit by another institution No 153/1969 as a specific provision. It also has an impact on the applicant's entitle- states that, for the purposes of the recovery ment which then justifies a recalculation of of sums paid though not due, that legal the national benefit. This, however, is a basis takes precedence over the general phenomenon inherent in the rules for legal basis contained in Article 2033 of the calculating benefit, and occurs both at the Codice Civile. To that extent that judgment level of Community law and in the cannot be criticised. However, the further domestic legal system. In the context of conclusion it draws, that the rules for Community law, this is borne out for effecting recovery of sums paid though example by Articles 49 and 94 et seq. of not due in the field of social security, such Regulation No 1408/71, which refer at as, for example, those contained in several points to the reassessment of bene- Article 52 of Law No 88/1989, the material fit. This happens in the domestic legal legislation in the aforementioned case system as well, however. At the hearing, in before the Corte di Cassazione, are not response to a question from the Judge- applicable precisely because of the specific Rapporteur, the issue of the overlapping of nature of the legal basis, is highly ques- various benefits granted by national insti- tionable from the point of view of Com- tutions was discussed, and it was expressly munity law. That is because the legal basis confirmed that it is entirely possible for a for accrual of the recovery claim, on the person to receive pro rata pension pay- one hand, and the rules for effecting such ments from various national institutions. recovery, on the other, must on that premiss be separated. Under the principle of equivalence, the rules for asserting recovery claims arising from the concurrent 26 — According to the Italian Government's submissions, this is Article 2 of Presidential Decree No 488 of 27 April 1968. application of various national legal sys-

62. The submission that the assessment 64. It is only in the event that the applica- was provisional cannot, therefore, be put bility in principle of the exemption rules forward as a valid argument against appli- does not lead to a satisfactory resolution of cation of the national rules governing the case that the question expressly raised, exemption from claims for the recovery of whether a limitation period in respect of sums paid though not due in the field of the recovery of sums paid though not due in social security. Consequently, the specific the field of social security can be inferred legal basis for any claims for the recovery from Community law, needs to be of sums paid though not due must not lead answered. to discrimination, as regards the rules for effecting recovery, in relation to claims for the recovery of sums paid though not due in the context of purely internal pension situations. The exemption rules are there- fore fully applicable as to their substance to claims for the recovery of sums paid though 65. In the context of the principle of not due on the basis of Article 8 of Law equivalence, it also seems relevant that, in No 153/1969 also. purely internal situations, it is not possible for such long periods of time, in this case some 13 years and considerably longer in others, 27 to elapse before recovery is effected. The fact, moreover, that this dispute is not an isolated case is confirmed 63. The dispute pending before the refer- by the Austrian Government's submissions. ring court could conceivably be satisfac- Article 13(2) of Law No 412/1991 provides torily resolved here and now by means of that the circumstances of persons in receipt the unrestricted application of the exemp- of a pension must be reviewed annually and tion rules. The criteria for non-applicability that any adjustment necessary on the of those rules are based exclusively on grounds of benefits paid though not due fraudulent conduct on the part of the be made within a year. The different person in receipt of the pension. Strictly administrative treatment of benefit entitle- speaking, it would seem that such conduct ments arising from the concurrent appli- can be ruled out in this case. After all, not cation of various national administrative only was it the responsibility of the com- systems must not lead to such blatant petent institutions, in the course of the discrimination against the person entitled reciprocal exchange of information, to to a pro rata pension from another Member ensure that no significant overpayments State. ensued, but also, according to his own account of the facts, the applicant actually informed the Italian institution by means of 27 — At the hearing, mention was made of 30 years.

69. In 1987, the Luxembourg institution had already taken steps in its capacity as 'investigating institution'. 28 The Italian institution had been informed by means of form E 202, which bore an INPS receipt stamp of 4 March 1987 and a date of issue from the Luxembourg institution of 23 July 1985 (!), that the applicant had made a pension application first on 11 July 1985 and then again on 5 February 1987. 29 That 67. It must be conceded that, in this case, form also shows that the applicant had the reason it took so long to effect recovery applied for a pension in France and in lay in the initial failure by the Luxembourg Luxembourg. 30 The Italian institution, for institution to report the fact that the its part, did not start to pay the partial Luxembourg pension had become due. pension until after the applicant had turned However, where national law provides for sixty. It must therefore have realised that it an automatic annual review in the case of would not be too long before benefits were purely internal pensions, any substantial due from the French and Luxembourg disadvantage suffered by an individual as a institutions as well. result of the fact that a similar practice is not adopted where only a pro rata pension is granted must inevitably be at odds with 28 — With regard to this term, see Article 41 ot Regulation No 574/72. the principles governing the application of 29 — Sec Annex 1 of the INTS's submissions, section 12. Community law. 30 — Cited above in footnote 29, section 13.

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32 — On this issue, see also the Opinion of Advocate General 31 — No regular review, recovery within a year. Jacobs in Cabras (cited above in footnote 11), point 32.

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VI — Conclusion

75. In the light of the foregoing considerations, I propose that the questions referred for a preliminary ruling be answered as follows:

'(1)A provision of national law, which provides for the recovery of sums paid though not due arising from the application of Community law without any time-limit is incompatible with the objectives of Council Regulations (EEC) No 1408/71 and No 574/72. The principle of equivalence requires that national exemption rules applicable to comparable situations of a purely internal nature should also be fully applicable to situations governed by Community law.