Fahmi and Another v. Bestuur Van de Sociale Verzekeringsbank (Case C-33/99) Before the Court of Justice of the European Communities ECJ (Presiding, RodrÍguez Iglesias P.; Gulmann, La Pergola ( Rapporteur), Wathelet and Skouris PP.C.; Edward, Puissochet, Jann, Sevón, Schintgen and Macken JJ.) Siegbert Alber, Advocate General. March 20, 2001 H1 Reference from the Netherlands by the Arrondissementsrechtbank (District Court), Amsterdam, under Art.177 (now Art.234) EC. H2 European Court procedure--references under Art.234 EC--admissibility-social security--Art.41 of EEC--Morocco Co-operation Agreement--third country nationals--non-discrimination principle--Art.3 of Regulation 1408/71--Art.7 of Regulation 1612/68--Art.48 (now Art.39) EC--freedom of movement--migrant workers--recipients of an invalidity pension no longer residing in competent Member State--entitlement to allowance for dependent children--amendment of national legislation on study finance--entitlement to allowance ceasing-- children not benefiting from independent right to study finance because not studying in paying Member State--freedom of Member States to organise social security systems--changes in funding of students compatible with Community law in the absence of discrimination on grounds of nationality--no right to study finance under Regulation 1408/71 for recipient of benefit not resident in paying Member State--only family allowances payable to non-residents--study finance not meeting criteria to be classified as family allowance--no right to study finance under Art.48 where worker having ceased employment and returned to State of origin--no right to study finance under Art.7(2) of Regulation 1612/68 where worker no longer resident in host State--no right to family allowance under EEC-Morocco Co-operation Agreement where worker not resident in Community. H3 F and E were Moroccan and Spanish nationals respectively who had worked in the Netherlands but had later returned to their countries of origin. Both were in

receipt of incapacity benefit from the Netherlands, *1281 which carried with it a right to an allowance for dependent children. The allowance was regulated by the national law, the Algemene Kinderbijslagwet (AKW). Although this allowance had originally been available in respect of children over 18 who were pursuing a course of education, a new law was introduced in 1986 (the Wet op de studiefinanciering (WSF)), whereby allowances were paid directly to students instead of their parents. Such allowances were, subject to limited exceptions, only payable to students at educational establishments in the Netherlands. Under transitional amendments to the AKW, parents could still claim child allowance for dependent children who were born before October 1, 1986, were aged between 18 and 27, and were undertaking a certain number of hours of study per term. In 1996, however, this allowance was also abolished. According to the new amendment to the AKW, entitled persons already in receipt of the allowance during the final quarter of 1995 were to continue receiving that allowance for as long as the child in question was still pursuing the course of study on which he was enrolled on the first day of the term in question. F and E had children who were studying in Morocco and Spain respectively. At the end of 1996, they finished their secondary education and began new courses of study. Under the Dutch legislation F and E lost their entitlement to child allowance at this time. They challenged the decision refusing to pay them the allowance, arguing that this constituted discrimination on grounds of nationality contrary to Community law. The children of non-nationals who benefited under the AKW were less likely than the children of Dutch nationals to pursue a course of study in the Netherlands, and so were less likely to benefit under the WSF. The national court hearing their claims stayed its proceedings to refer several questions of interpretation of Community law to the Court of Justice. It sought to find out whether the prohibition of discrimination in Art.41(1) of the EEC--Morocco Cooperation Agreement, Art.48 (now Art.39) EC, Art.3(1) of Regulation 1408/71 and Art.7 of Regulation 1612/68 made the abolition of the dependent child allowance impermissible, in particular where the claimant was no longer working and resident in the host State and where the allowance was replaced by study finance enjoyed only by students who were Dutch nationals and who were pursuing their studies in the Netherlands. Held: National laws to be examined separately for compatibility with Community law H4 As to the question whether, rather than examine separately the compatibility of the AKW and the WSF with Community law, the Court should in reality compare the entire two-stage legislative process comprising the partial repeal of existing rules and the adoption of new rules in their stead with the requirements of Community law, the mere *1282 fact that the two legislative amendments in question formed part of a comprehensive reform of the national arrangements for study finance could not itself, in the absence of special circumstances, suffice to justify combining the two sets of rules for the purpose of examining their compatibility with Community law. The Member States were free to organise their social security systems, in particular by determining the conditions for entitlement

to benefits, provided that they did not infringe Community law when exercising that power. The rules on freedom of movement for workers within the Community referred to by the national court and the Co-operation Agreement therefore had to be interpreted separately, in the light of each of the two national laws. [23]-[26] Kenny v Insurance Officer (1/78): [1978] E.C.R. 1489; [1978] 3 C.M.L.R. 651; Coonan v Insurance Officer (110/79): [1980] E.C.R. 1445; Decker v Caisse de Maladie des Employés (C-120/95): [1998] E.C.R. I-1831; [1998] 2 C.M.L.R. 879, followed. Admissibility H5 (a) It was solely for the national court before which the dispute had been brought, and which had to assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submitted to the Court. [28] Sehrer v Bundesknappschaft (C-302/98): [2000] E.C.R. I-4585, followed. H6 (b) In the cases before the national court, it was by no means obvious that, in so far as it concerned the WSF rather than the AKW, the interpretation of Community law sought by that court bore no relation to the purpose or facts of the main action or was likely to have no effect on the outcome of the proceedings, so that there was no need to reject the requests made by the national court. [29] Landesgrundverkehrsreferent de Tiroler Landesregierung v Beck Liegenschaftsverwaltungsgesellschaft mbH (C-355/97): [1999] E.C.R. I-4977; Guimont, Re (C-448/98): [2003] C.M.L.R. 3, followed. Gradual abolition of allowance for dependent children compatible with Community law H7 Neither the EEC--Morocco Co-operation Agreement nor Art.48 (now Art.39) EC, nor Regulations 1408/71 and 1612/68, might be interpreted as meaning that they prevent a Member State from gradually abolishing an allowance for dependent children aged between 18 and 27 years pursuing studies provided that, as in the case of the legislation at issue in the main proceedings, its abolition did not involve discrimination based on nationality. [30] *1283 Study finance not a family allowance under Art.77 of Regulation 1408/71 H8 (a) Article 77 of Regulation 1408/71 gave a person entitled to a pension or a benefit payable under the legislation of a single Member State, residing in the territory of another Member State, entitlement only to family allowances, to the exclusion of other family benefits. The specific purpose of Art.77 was to define the conditions in which a person in receipt of a pension might claim a dependent child's allowance from a Member State under whose legislation he received a pension and that provision expressly restricted its scope to family allowances. In those circumstances, neither the rule prohibiting discrimination on the basis of nationality laid down in Art.3(1) of Regulation 1408/71 nor any other provision of that Regulation could be interpreted as meaning that it enabled the recipient of a pension who resided outside the territory of the paying Member State to obtain from that Member State dependent child allowances other than family

allowances. [33]-[34] Lenoir v Caisse d'Allocations Familiales des Alpes-Maritimes (313/86): [1988] E.C.R. 5391; [1990] 1 C.M.L.R. 543, followed. H9 (b) It followed that, without its being necessary to determine whether the study finance introduced by the WSF might be classified as a family benefit within the meaning of Art.1(u)(i) of Regulation 1408/71, it was sufficient in the present case to observe that that finance could not be regarded as a family allowance within the meaning of that Regulation, since such a classification was, in the very words of Art.1(u)(ii) of the Regulation, reserved to benefits granted exclusively by reference to the number and, where appropriate, the age of members of the family. Thus, a person entitled to a pension payable under the legislation of a single Member State and residing on the territory of another Member State could not rely on Art.3(1) of Regulation 1408/71 or any other provision therein in order to obtain from the Member State under whose legislation he received his pension study finance such as that introduced by the WSF. [35]-[36] National legislation on study finance not impeding right to free movement under Art.39 EC following end of employment relationship and return to Member State of origin H10 (a) Once the employment relationship had ended, the person concerned as a rule lost his status of worker within the meaning of Art.48 (now Art.39) EC, although that status might produce certain effects after the relationship had ended. [42] MartÍnez Sala v Freistaat Bayern (C-85/96): [1998] E.C.R. I-2691, followed. H11 (b) It could not be claimed that, in the case of a migrant worker who had ceased work and returned to her Member State of origin, where her children also lived, the conditions to which the WSF subjected the grant of study finance were capable of impeding the right to freedom of *1284 movement which that worker enjoyed under Art.48 of the EC Treaty. [43] Prohibition of discrimination in Art.7(2) of Regulation 1612/68 confined to migrant workers remaining within the host State H12 (a) Article 7(2) of Regulation 1612/68, which prohibited any discrimination between national workers and migrant workers in the granting of social advantages, was prima facie applicable since the study finance introduced by the WSF constituted such a social advantage. However, it had to be noted that a provision such as Art.7(2) could not be interpreted as being of such a kind as to guarantee the maintenance of a social advantage such as the finance introduced by the WSF for migrant workers who had ceased to exercise an activity in the host Member State and returned to their Member State of origin. [44]-[46] Bernini v Minister Van Onderwijs en Wetenschappen (C-3/90): [1992] E.C.R. I1071; Meeusen v Hoofddirectie Van de Informatie Beheer Groep (C-337/97): [1999] E.C.R. I-3289; [2000] 2 C.M.L.R. 659, followed. H13 (b) It followed, in particular from the context to which that provision belonged and also its aims, that in so far as it guaranteed access without discrimination to the social benefits granted by the host Member State, it could not, as a general rule and except in special circumstances, be extended to workers who, after

ceasing to exercise their occupational activity in the host Member State, had decided to return to their Member State of origin. [47] Meints v Minister Van Landbouw (C-57/96): [1997] E.C.R. I-6689; [1998] 1 C.M.L.R. 1159, cited by way of example. No right to family allowance for child not resident within the Community under EEC--Morocco Co-operation Agreement H14 (a) The purpose of the Agreement was to consolidate the position of Moroccan workers and members of their families living with them in the host Member State in relation to social security and, with specific regard to family allowances, the prohibition of discrimination laid down in Art.41(1) of the Agreement was guaranteed only within the limits of the conditions laid down in Art.41(3). [56] Belgium v Mesbah (C-179/98): [1999] E.C.R. I-7955; Office National de l'Emploi v Kziber (C-18/90): [1991] E.C.R. I-199, followed. H15 (b) It followed both from the wording of Art.41(1) and (3) of the Co-operation Agreement and also from the spirit of that provision that, unless the children of a Moroccan worker were resident in the Community, neither that worker nor his children could rely, in regard to benefits of the kind at issue in the main proceedings, on the principle of the prohibition of discrimination laid down in that provision. Thus, F and his son could not rely, in regard to study finance such as that introduced by the WSF, on the principle of the prohibition of *1285 discrimination on the basis of nationality laid down in that provision in relation to social security [57]-[58] H16 Representation H.M. van Dam, Advocaat, for Mr Fahmi. C.A.J. de Roy van Zuydewijn, Advocaat, for Mrs Esmoris Cerdiero-Pinedo Amado. G.J. Vonk, acting as Agent, for Bestuur van de Sociale Verzekeringsbank. M.A. Fierstra, acting as Agent, for the Dutch Government. M. López-MonÍs Gallego, acting as Agent, for the Spanish Government. K. Rispal-Bellanger and C. Bergeot, acting as Agents for the French Government. W. Okresek, acting as Agent, for the Austrian Government. R.V. Magrill, acting as Agent, and D. Rose, Barrister, for the UK Government. P.J. Kuijper and P. Hillenkamp, acting as Agents, for the EC Commission. H17 Cases referred to in the judgment: 1. Belgium v Mesbah (C-179/98), November 11, 1999: [1999] E.C.R. I-7955. 2. Bernini v Minister Van Onderwijs en Wetenschappen (C-3/90), February 26, 1992: [1992] E.C.R. I-1071. 3. Coonan v Insurance Officer (110/79), February 14, 1980: [1980] E.C.R. 1445. 4. Decker v Caisse de Maladie des Employés (C-120/95), April 28, 1998: [1998] E.C.R. I-1831; [1998] 2 C.M.L.R. 879. 5. Guimont, Re (C-448/98), December 5, 2000: [2003] C.M.L.R. 3.

6. Kenny v Insurance Officer (1/78), June 28, 1978: [1978] E.C.R. 1489; [1978] 3 C.M.L.R. 651. 7. Landesgrundverkehrsreferent de Tiroler Landesregierung v Beck Liegenschaftsverwaltungsgesellschaft mbH (C-355/97), September 7, 1999: [1999] E.C.R. I-4977. 8. Lenoir v Caisse d'Allocations Familiales des Alpes-Maritimes (313/86), September 27, 1988: [1988] E.C.R. 5391; [1990] 1 C.M.L.R. 543. 9. MartÍnez Sala v Freistaat Bayern (C-85/96), May 12, 1998: [1998] E.C.R. I2691. 10. Meeusen v Hoofddirectie Van de Informatie Beheer Groep (C-337/97), June 8, 1999: [1999] E.C.R. I-3289; [2000] 2 C.M.L.R. 659. 11. Meints v Minister Van Landbouw (C-57/96), November 27, 1997: [1997] E.C.R. I-6689; [1998] 1 C.M.L.R. 1159. 12. Office National de l'Emploi v Kziber (C-18/90), January 31, 1991: [1991] E.C.R. I-199. 13. Sehrer v Bundesknappschaft (C-302/98), June 15, 2000: [2000] E.C.R. I4585. *1286 H18 Further cases referred to by the Advocate General: 14. Bestuur Van de Sociale Verzekeringsbank v Cabanis Issarte (C-308/93), April 30, 1996: [1996] E.C.R. I-2097; [1996] 2 C.M.L.R. 729. 15. Di Leo v Land Berlin (C-308/89), November 13, 1990: [1990] E.C.R. I-4185. 16. EC Commission v France (C-35/97), September 24, 1998: [1998] E.C.R. I5325. 17. Hallouzi-Choho v Bestuur Van de Sociale Verzekeringsbank (C-126/95), October 3, 1996: [1996] E.C.R. I-4807. 18. Hoever v Land Nordrhein-Westfalen (C-245 & 312/94), October 10, 1996: [1996] E.C.R. I-4895; [1996] 3 C.M.L.R. 611. 19. Hughes v Chief Adjudication Officer (C-78/91), July 16, 1992: [1992] E.C.R. I4839; [1992] 3 C.M.L.R. 490. 20. Imbernon MartÍnez v Bundesanwalt für Arbeit (C-321/93), October 5, 1995: [1995] E.C.R. I-2821; [1996] 1 C.M.L.R. 247. 21. Office National de l'Emploi v Deak (94/84), June 20, 1985: [1985] E.C.R. 1873. 22. O'Flynn v Adjudication Officer (C-237/94), May 23, 1996: [1996] E.C.R. I2617; [1996] 3 C.M.L.R. 103. 23. Paraschi v Landesversicherungsanstalt Württemberg (C-349/87), October 4, 1991: [1991] E.C.R. I-4501; [1994] 2 C.M.L.R. 240. 24. Pardini v Minstero del Commercio Con l'estero (338/85), April 21, 1988: [1988] E.C.R. 2041. 25. Snares v Adjudication Officer (C-20/96), November 4, 1997: [1997] E.C.R. I6057; [1998] 1 C.M.L.R. 897. Opinion of Advocate General Alber

[FN1] FN1 Delivered on October 12, 2000. I --Introduction AG1 Two disputes form the basis of this reference for a preliminary ruling. In both cases, workers who used to be resident in the Netherlands--and have since returned to their respective countries of origin, Morocco and Spain, where they receive Dutch social security benefits for their incapacity for work--have instituted proceedings with a view to obtaining child allowance for their children studying in Morocco and Spain respectively. The Netherlands is refusing to grant that allowance 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. AG2 The Arrondissementsrechtbank, Amsterdam, is therefore asking the Court of Justice to answer various questions principally concerning whether the abovementioned amendment of the Netherlands *1287 provisions applicable to study finance is compatible with various prohibitions of discrimination. These are, in the first case, Art.41 of the Co-operation Agreement between the European Economic Community and Morocco [FN2] (hereinafter: the Co-operation Agreement) and, in the second, the provisions of Council Regulation 1408/71 (hereinafter: Regulation 1408/71), [FN3] in particular Art.3 thereof, and Art.7(1) of Council Regulation 1612/68 [FN4] (hereinafter: Regulation 1612/68) and Arts 48 and 52 of the EC Treaty (now, after amendment, Arts 39 and 43 EC). FN2 Council Regulation 1405/71 of June 14, 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community [1978] O.J. L264/2. FN3 O.J. L149/2, most recently amended by Council Regulation, amending Regulation 1408/71 and Regulation 574/72; the provisions relevant to this case are contained in the consolidated version: [1992] O.J. C325/1. FN4 Council Regulation 1612/68 of October 15, 1968 on freedom of movement for workers within the Community [1968] O.J. Spec.Ed. p.475. II --The main proceedings and the facts AG3 The questions have been referred in the context of two disputes between Mr H. Fahmi, a Moroccan national, and Mrs M.M. Esmoris Cerdeiro-Pinedo Amado, a Spanish national, on the one hand, and the Netherlands Sociale Verzekeringsbank (Social Insurance Bank, hereinafter: SVB) on the other, which was responsible for disbursing to parents the benefit which has now been abolished.

AG4 Mr Fahmi's son, Rida, who was born on July 9, 1977, has never lived in the Netherlands. During the 1995-1996 academic year, he attended secondary school in Al-Hoceima and, in the 1996-1997 academic year, began a course of study at university in Morocco. AG5 Mrs Esmoris Cerdeiro-Pinedo Amado's daughter, Erika, was born on November 15, 1976 in the Netherlands. In the 1995-1996 academic year, Erika studied at the Instituto de Educación Secundaria y Profesional; since the start of the 1996/1997 academic year, she has been studying at the Facultad de Ciencias Economicas y Empresariales of the University of Corunna. AG6 Mr Fahmi and Mrs Esmoris Cerdeiro-Pinedo Amado initially received child allowances for those children. However, once the children had embarked on a new course of education in 1996, their parents ceased to be entitled to those benefits. III --Relevant legislation A --Community law AG7 Article 41 of the Co-operation Agreement provides: 1. Subject to the provisions of the following paragraphs, workers of Moroccan nationality and any members of their families living with them shall enjoy, in the field of social security, treatment free from any discrimination based on nationality in relation to nationals of the Member States in which they are employed. *1288 2. ... 3. The workers in question shall receive family allowances for members of their families who are resident in the Community. 4. The workers in question shall be able to transfer freely to Morocco ... any pensions or annuities in respect of old age, death, industrial accident or occupational disease, or of invalidity [resulting from industrial accident or occupational disease]. 5. ... It is clear from the other language versions and the context that para.1 of the German version, which is open to misunderstanding, in fact prohibits discrimination against Moroccan nationals in relation to the nationals of the Member States, not in relation to the nationalities of the Member States in which the Moroccans are employed. Regulation 1408/71 AG8 Article 3(1) reads: Subject to the special provisions of this Regulation, persons resident in the territory of one of the Member States to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of that State. AG9 Article 4(1) defines the material scope of Regulation 1408/71 as follows: This Regulation shall apply to all legislation concerning the following branches of

social security: (a)-(g) ... (h) family benefits. AG10 According to Art.1(u)(i), "family benefits means all benefits in kind or in cash intended to meet family expenses ...". AG11 Article 13(2) states inter alia that: (a) a person employed in the territory of one Member State shall be subject to the legislation of that State even if he resides in the territory of another Member State ... (b)-(e) ... (f) a person to whom the legislation of a Member State ceases to be applicable, without the legislation of another Member State becoming applicable to him in accordance with one of the rules laid down in the aforegoing subparagraphs or in accordance with one of the exceptions or special provisions laid down in Arts 14 to 17 shall be subject to the legislation of the Member State in whose territory he resides in accordance with the provisions of that legislation alone. AG12 Article 73 reads: An employed ... person subject to the legislation of a Member State shall be entitled, in respect of the members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State ... AG13 Article 77 provides: 1. The term benefits, for the purposes of this Article, shall mean family *1289 allowances for persons receiving pensions for old age, invalidity ... and increases or supplements to such pensions in respect of the children of such pensioners .... 2. Benefits shall be granted in accordance with the following rules, irrespective of the Member State in whose territory the pensioner or the children are residing: (a) to a pensioner who draws a pension under the legislation of one Member State only, in accordance with the legislation of the Member State responsible for the pension; (b) .... Regulation 1612/68 AG14 The provisions of Art.7(1) and (2) state: 1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or re-employment. 2. He shall enjoy the same social and tax advantages as national workers. B --National law AG15 Under Dutch law, benefits paid in respect of incapacity for work in principle also carry an entitlement to child allowance pursuant to the Algemene

Kinderbijslagwet (General Law on Dependent Children's Allowances; hereinafter: the AKW). Initially that benefit was also in principle granted for dependent children aged 18 or over when they were pursuing a course of education-particularly, therefore, when they were studying. AG16 On October 1, 1986, the Netherlands began granting benefits for students which were paid directly to the students, not to their parents. In accordance with the Wet op de studiefinanciering (Law on Study Finance, hereinafter: the WSF), the grant of such a benefit is conditional either on the student possessing Dutch nationality or being resident in the Netherlands and treated as a Dutch student in the Netherlands. Furthermore, study finance is in principle awarded only in respect of studies at Dutch educational establishments. In some very limited circumstances, educational establishments outside the Netherlands may also be recognised for the purposes of study finance. Such arrangements involve a select number of universities in Belgium and Germany and, at Community level, courses of study leading to diplomas harmonised under Community law. [FN5] The children of Mr Fahmi and of Mrs Esmoris Cerdeiro-Pinedo Amado do not meet any of those conditions. FN5 These courses of study are mainly medicine, veterinary medicine, dentistry, pharmacology, architecture, nursing and midwifery. AG17 Although there was no entitlement to study finance, child allowance as provided for by the AKW was nevertheless still initially paid where a child was born before October 1, 1986, was aged between 18 and 25, *1290 pursued a course of education of at least 213 hours per term and one of his parents, who was entitled to claim child allowance, bore most of the cost of maintaining him. This child allowance, which was an alternative to study finance, was introduced into the AKW, upon adoption of the WSF, in the form of Art.7a(1). AG18 That alternative entitlement was also, in principle, abolished on January 1, 1996--that is to say, almost 10 years after study finance was introduced. Only entitled persons already in receipt of benefits pursuant to the abovementioned rules during the final quarter of 1995 were to continue receiving them for as long as the child in question was still pursuing the course of study on which he was enrolled on the first day of the term in question. IV --Assessment of the referring court and the questions referred AG19 The referring court takes the view that 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 "with respect to nationality ... in relation to persons insured under the AKW, since the overwhelming majority of non-Dutch children of persons insured under the AKW have parents who do not possess Netherlands nationality". Consequently, "it is precisely non-Dutch persons insured under the AKW that are excluded on the conversion of their right to receive child allowance into an entitlement on the part of their child(ren) to receive a study grant".

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 parents insured under the AKW who are resident in the Netherlands have children who study at Netherlands educational establishments, whereas most of the parents insured under the AKW who are resident outside the Netherlands have children who study at educational establishments outside the Netherlands. The referring court consequently wishes to ascertain whether that amendment of Dutch law results in impermissible discrimination. AG20 The Arrondissementsrechtbank, Amsterdam, has therefore asked the Court to answer the following questions: In the Fahmi case: 1. (a) Must Art.41(1) of the Co-operation Agreement be interpreted as meaning that a Moroccan worker may rely on the prohibition of discrimination laid down in that provision if he no longer resides on the territory of a Member State of the European Community? (b) If so, does Art.41(3) of the Co-operation Agreement preclude reliance on Art.41(1) thereof by a Moroccan worker whose children reside outside the Community? 2. If a worker such as the first plaintiff may rely on the prohibition of discrimination laid down in Art.41(1) of the Co-operation Agreement, *1291 does that prohibition have the effect of rendering the abolition of the entitlement to receive child allowance impermissible if the effect of that abolition is such that that right is replaced by an entitlement to receive a contribution to (inter alia) the cost of maintaining student children aged 18 or over which far more frequently benefits Dutch nationals or persons insured under the AKW who reside in the Netherlands than workers such as the plaintiff? In the case of Esmoris Cerdeiro-Pinedo Amado: 1. (a) Does Art.3 of Council Regulation 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 eligibility for the entitlement which replaces that right is in principle enjoyed only by students who are Dutch nationals and who are pursuing their studies in the Netherlands? (b) Must Art.7(1) of Council Regulation 1612/68 be interpreted as precluding the abolition of the right to child allowance for student children over the age of 18 if eligibility for the entitlement which replaces that right is in principle enjoyed only by students who are Dutch nationals and who are pursuing their studies in the Netherlands? 2. Must Art.48 or Art.52 of the EEC Treaty be interpreted as meaning that the restriction of entitlement to receive from the national authorities a contribution to the cost of maintaining student children aged 18 or over results, for nationals of

Member States other than the Netherlands who move to the Netherlands or for the children of such nationals, in an obstacle to freedom of movement for workers, alternatively to freedom of establishment, which is such as to render that restriction incompatible with those Articles or either of them? V --Legal analysis A --Subject-matter of the questions AG21 It is first necessary to arrive at a more precise definition of the subject matter of the questions referred. By its questions, the Arrondissementsrechtbank is seeking to ascertain whether the replacement of child allowance with study finance is compatible with various prohibitions of discrimination under Community law. That raises the question whether--and, if so, in what circumstances--the repeal of a significant part of an existing law in conjunction with the introduction of a new law should be regarded as constituting a single legislative process under Community law. Submissions of the parties AG22 The Dutch Government points out that the national legislature has indeed both restricted entitlement to receipt of child allowance under the AKW and introduced 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 Dutch nationality. In fact, the WSF differs in several ways from the arrangements previously applicable, for example, in relation to the taking into account of *1292 parents' income. Moreover, when the system of study finance was changed in 1996, other categories of benefit were restricted in addition to those paid to children of nonDutch parents. AG23 The Dutch Government maintains that if there is any impermissible discrimination, it can exist only within the context of the WSF and must be considered within that context, not in relation to the transitional arrangements laid down in the AKW. Entitlements under the WSF do not, however, form the subject matter of the two disputes in the main proceedings, since the Arrondissementsrechtbank has no jurisdiction in that respect. The transitional arrangements laid down by the AKW apply uniformly to all persons concerned, irrespective of their nationality. AG24 The defendant SVB proceeds from the 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 on grounds of nationality, residence or place of study. Furthermore, the SVB also cites the freedom of Member States to organise their social security systems. AG25 The other parties concerned do not expressly address that issue.

However, Mrs Esmoris Cerdeiro-Pinedo Amado, Mr Fahmi, the Spanish and Austrian Governments proceed from the premiss that the benefits at issue paid under the AKW and those paid under the WSF are to be treated as the same, whereas the UK Government and the Commission make a clear distinction between the two benefits. The French Government regrets that the information contained in the order for reference does not allow it to determine the legal nature of the WSF. Assessment AG26 The Arrondissementsrechtbank entertains doubts not as regards the rules governing the transition between two different systems for the grant of benefits to students but as regards the more restrictive conditions governing the grant of benefits under the new system, the WSF. AG27 The transitional arrangements set out in the AKW do not involve any manifest discrimination. As the Court of Justice has ruled on several occasions, the Member States are free to organise their social security systems. [FN6] In particular, they are to a large extent entitled to determine themselves how far they employ State resources to grant social security benefits. They must nevertheless comply with Community law [FN7] when exercising those powers and, in particular, *1293 observe the principle of the prohibition of discrimination on grounds of nationality, [FN8] but the withdrawal or restriction without distinction of entitlements such as child allowance do not disclose any infringement of Community law. FN6 Decker v Caisse de Maladie des Employés (C-120/95): [1998] E.C.R. I1831; [1998] 2 C.M.L.R. 879, para.[21] with further references. FN7 Decker, cited above at fn.5, para.[23]. FN8 See, for instance, Coonan v Insurance Officer (110/79): [1980] E.C.R. 1445, para.[12]. AG28 This amendment of Dutch law simply provides an opportunity to review the conditions governing the grant of benefits under the WSF. [FN9] However, it cannot be concluded from this that the question referred is inadmissible because the Arrondissementsrechtbank has limited jurisdiction over the arrangements laid down by the WSF. It is, in principle, for the national court to assess the relevance of 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. [FN10] The Court of Justice does not, however, have jurisdiction to determine how the Arrondissementsrechtbank should react were it to identify the existence of discrimination as a result of the WSF. It is exclusively for the Dutch courts to make that decision. There are at least two possible courses of action here. On the basis of such a finding, it might, on the one hand, be necessary to amend the application of the WSF. According to information supplied by the Dutch Government, the Arrondissementsrechtbank would have no jurisdiction to do so.

On the other hand, the Arrondissementsrechtbank might, on the basis of such discrimination, be forced to refrain from putting into effect the repeal of the relevant provisions of the AKW, and that would fall within its jurisdiction. It is not inconceivable, therefore, that the question referred for a preliminary ruling is actually of practical significance for the Arrondissementsrechtbank as regards the WSF. It is consequently necessary to establish whether the rules laid down in the WSF involve impermissible discrimination. FN9 Closer examination reveals that the distinctions made in Dutch law which form the basis of the question have apparently existed since the WSF was introduced in 1986. However, until 1996, the legal consequences of that distinction were less significant for persons in Mr Fahmi's or Mrs Esmoris Cerdeiro-Pinedo Amado's situation. FN10 Pardini v Minstero del Commercio Con l'estero (338/85): [1988] E.C.R. 2041, para.[8]. B --The main proceedings in the Esmoris Cerdeiro-Pinedo Amado case AG29 Departing from the order in which the questions have been raised, it is advisable to examine the Fahmi case second because the answer to the questions referred in that case depends on the analysis to be undertaken in the context of the Esmoris Cerdeiro-Pinedo Amado case. (1) Regulation 1408/71 AG30 According to the Arrondissementsrechtbank, under Dutch law, the case of Mrs Esmoris Cerdeiro-Pinedo Amado falls within the personal scope of Regulation 1408/71. However, it raises the question whether *1294 the facts of this case also fall within the material scope of that Regulation and whether the Regulation, in particular Art.3 thereof, precludes the replacement of child allowance by study finance which, in general, does not benefit persons who are not Dutch nationals or who do not live in the Netherlands. Submissions of the parties AG31 Mrs Esmoris Cerdeiro-Pinedo Amado takes the view that the restriction of benefits paid under the AKW on the introduction of the WSF is not compatible with Regulation 1408/71. Mrs Esmoris Cerdeiro-Pinedo Amado relies first on Art.77(2) of the Regulation, under which it follows from the application of Dutch 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 nationality. Independently of that, the amendment of the Dutch system is contrary to the prohibition of discrimination laid down in Art.3 of the Regulation. Dutch nationals are in practice affected by those restrictions only if their children wish to pursue their studies abroad. However, the very fact that their children are in principle required to study in the Netherlands is far more likely to represent a

burden for parents who are not Dutch nationals than for parents who are Dutch nationals. In addition, the conditions for treating non-Dutch children as Dutch students are restrictive. AG32 The Spanish Government considers that the benefits paid under the AKW are family benefits within the meaning of Regulation 1408/71. In view of the way in which the legislation has developed, the benefits paid under the WSF should be classified in exactly the same way. In practice, the WSF initially guaranteed the rights "acquired" under the AKW. Only subsequently did a further provision restrict those rights. The fact that the benefits provided for by the AKW were not simply abolished when the WSF was introduced illustrates that the legislature intends the two systems to serve the same purpose. They are both based on the family's need for financial support when a child is pursuing his studies. AG33 Under Art.3 of Regulation 1408/71, direct and covert discrimination is prohibited. According to the Spanish Government, the requirement of Dutch nationality under the WSF constitutes direct discrimination and the requirement that studies must be pursued at a Dutch educational establishment constitutes covert discrimination. AG34 It is immaterial whether the benefit in question constitutes a personal right vested in the student or a derived right. Referring to the judgment of the Court in Cabanis Issarte, [FN11] the Spanish Government notes that that distinction is relevant only where unemployment benefits are involved. The Spanish Government also refers to Art.73 of *1295 Regulation 1408/71 and the case law which has been developed concerning that Article, [FN12] under which payment of family benefits to employed persons and self-employed persons should not be refused where the family members concerned live in another Member State. FN11 Bestuur Van de Sociale Verzekeringsbank v Cabanis Issarte (C-308/93): [1996] E.C.R. I-2097; [1996] 2 C.M.L.R. 729. FN12 Hoever v Land Nordrhein-Westfalen (C-245 & 312/94): [1996] E.C.R. I4895; [1996] 3 C.M.L.R. 611, and judgment in Imbernon MartÍnez v Bundesanwalt für Arbeit (C-321/93): [1995] E.C.R. I-2821; [1996] 1 C.M.L.R. 247. AG35 In the Austrian Government's view, the benefits paid under the WSF have to be classified as family benefits within the meaning of Art.1(u)(i) of Regulation 1408/71. Accordingly, the prohibition of discrimination contained in Art.3 of Regulation 1408/71, which also prohibits covert or indirect discrimination, is applicable. The conditions governing the payment of benefits laid down in the WSF will result in such indirect discrimination since children of non-Dutch parents will be far more frequently excluded from the benefits paid under the WSF. AG36 On the basis of their views on the subject matter of the proceedings, as set out above, the Dutch Government and the SVB consider that only the rules of the AKW, which have no discriminatory effect, should be examined in this case. AG37 The French Government considers that even where social security systems are amended, migrant workers may not be placed at a disadvantage in relation to nationals. However, the order for reference does not contain sufficient

information on the entitlement to study finance to enable it to assess the compatibility of that entitlement with the provisions cited in the order. In any event, the French Government has misgivings concerning the fact that the most recent case law of the Court indicates a trend towards family members increasingly being regarded as independent, which creates considerable problems for the individual social security systems of the Member States. [FN13] FN13 The French Government draws attention in particular to C-308/93, cited above at fn.10 and Hallouzi-Choho v Bestuur Van de Sociale Verzekeringsbank (C-126/95): [1996] E.C.R. I-4807. AG38 The UK Government proceeds from the premiss that the benefits paid under the WSF do not constitute social security benefits within the meaning of Art.4 of Regulation 1408/71 nor, in particular, do they constitute family benefits within the meaning of Art.1(u)(i) of that Regulation. The UK Government considers that study finance does not serve to meet family expenses, but only to provide financial support for students. AG39 Even if study finance were to represent a social security benefit, in the UK Government's view, it is apparent from Art.13(2)(f) of Regulation 1408/71 that, as regards study finance, Mrs Esmoris Cerdeiro-Pinedo Amado is covered by Spanish law alone because she has returned to Spain. She cannot in any event rely on Art.77(2)(a) of the Regulation since that provision concerns only family allowances, which cannot in any circumstances cover study finance. AG40 *1296 The Commission first points out that the Netherlands is, in principle, free to alter the way in which it organises its social security systems--including by removing some branches or replacing them with different arrangements. Article 3 of Regulation 1408/71 is effective only within the material scope of that Regulation. That is clear from Art.4(1)(h) which mentions family benefits. The Commission considers that the child allowance paid under the AKW must accordingly be classified as a family benefit falling within the material scope of Regulation 1408/71. Benefit payments made directly to students in accordance with the WSF, on the other hand, should no longer be classified as benefits covered by the branches of social security mentioned in Art.4 of Regulation 1408/71. Consequently, any discrimination which may exist by virtue of the WSF is not to be assessed in the light of Art.3 of Regulation 1408/71. Assessment AG41 Mrs Esmoris Cerdeiro-Pinedo Amado falls within the personal scope of Regulation 1408/71. That is clear from Art.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 Art.1(a)(i) of Regulation 1408/71, it is nonetheless sufficient that the person in question "is insured, compulsorily 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 1408/71.

AG42 Benefits paid under the AKW must also be regarded as family benefits in accordance with Art.1(u)(i) of Regulation 1408/71 and, possibly, even as family allowances as provided for by Art.1(u)(ii). They therefore fall within the material scope of Regulation 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 to be assessed in this case. Study finance as such is not a social security benefit which falls within the material scope defined by Art.4(1) of Regulation 1408/71. The link between study finance and child allowances on which the questions are based nonetheless raises the question whether the benefits paid under the WSF must be regarded as family benefits within the meaning of Art.4(1)(h) of Regulation 1408/71. AG43 In Joined Cases Hoever and Zachov, the Court held as follows with regard to the classification of certain benefits: The Court has repeatedly held that the distinction between benefits excluded from the scope of Regulation 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 *1297 is granted, and not on whether a benefit is classified as a social security benefit by national legislation ... In that regard, it has, on a number of occasions, stressed that a benefit is to be regarded as a social security benefit if it is granted to recipients without any individual or discretionary assessment of personal needs on the basis of a legally defined position and if it concerns one of the risks expressly listed in Art.4(1) of Regulation 1408/71 .... [FN14] FN14 Cited above at fn.11, paras [17] et seq. AG44 According to the documents in the case, benefits paid under the WSF are granted in accordance with conditions strictly laid down by law, not on a discretionary basis. The fact that part of the study finance depends on parental income is not inconsistent with this. As far as can be ascertained, the grant of that benefit does not involve a full individual assessment of the claimant's personal needs; criteria are applied which are objectively and legally defined and which, if met, confer entitlement to the study finance, the competent authority having no power to take account of other personal circumstances. [FN15] FN15 See Hughes v Chief Adjudication Officer (C-78/91): [1992] E.C.R. I-4839; [1992] 3 C.M.L.R. 490, para.[17]. AG45 The fact that parental income is taken into account does seem capable of arguing in favour of such benefits being regarded as a family benefit. In that respect, study finance depends on parents' ability to provide financial assistance and consequently also seek to reduce the financial burden imposed, as a result of children's studies, on families with lower incomes, whereas children of families with higher incomes receive only very limited study finance or none at all. In the case at issue, there is an even closer relationship between the family benefit of

child allowance and the study finance since the child allowance was paid as an alternative to the study finance and, in limited circumstances, still is. It could be inferred from this that the purpose of the study finance, as provided for by the WSF, is in principle also to meet family expenses. Since Art.1(u)(i) expressly defines family benefits as meaning "all" benefits intended to meet family expenses, such a definition could include benefits which at least serve to offset such expenses. Thus, benefits paid under the WSF would fall within the material scope of Regulation 1408/71 at least inasmuch as their amount is calculated by reference to parental income. AG46 Contrary to those arguments, the overriding consideration is, however, that study finance must cover the needs of children who are usually aged 18 or over and personally responsible for organising their own lives. As a rule, when children begin their studies, they leave the family unit within the narrow meaning attached to that term by custody law and on which the concept of meeting family expenses is based. Account must also be taken of the fact that study finance is a cost intensive benefit which is not offset through the payment of contributions by students. Consequently, it seems improper to broaden the concept of family benefits to cover benefits which serve only indirectly to meet family expenses. AG47 *1298 Even if the Court were to support the arguments in favour of broadening the concept of family benefits, Regulation 1408/71 does not in this case require that the daughter of Mrs Esmoris Cerdeiro-Pinedo Amado be accorded Dutch study finance. AG48 If the Court were to adopt that approach, it would first be necessary to apply the special rules contained in Regulation 1408/71 concerning the grant of family benefits which take precedence over the application of the general prohibition of discrimination laid down in Art.3. AG49 In so far as Mrs Esmoris Cerdeiro-Pinedo Amado relies on Art.77(2) of Regulation 1408/71, it should first of all in any event be established that that provision applies only to family allowances. [FN16] In accordance with the legal definition set out in Art.1(u)(ii) of Regulation 1408/71, those family allowances are "periodical cash benefits granted exclusively by reference to the number and, where appropriate, the age of members of the family". Whilst benefits paid in the past under the AKW might, in some circumstances, have been regarded as family allowances, the benefits provided for in the WSF are at most, if at all, covered by Regulation 1408/71 where their award is based on parental income. Consequently, they are not exclusively granted in accordance with the above criteria and cannot be regarded as family allowances. FN16 Lenoir v Caisse d'Allocations Familiales des Alpes-Maritimes (313/86): [1988] E.C.R. 5391; [1990] 1 C.M.L.R. 543, paras [9] et seq. AG50 Furthermore, Ch.7 of Regulation 1408/71 is to be applied to family benefits. In accordance with Art.73 of Regulation 1408/71, Mrs Esmoris CerdeiroPinedo Amado may assert a right to family benefits under the provisions in force in the State to whose legislation she is subject. The identity of that State can be ascertained from the rules on conflict of laws set out in Arts 13 to 17a of

Regulation 1408/71. Under Art.13(2)(a), employment in a Member State is in principle subject to the application of the legislation of that Member State. Although Mrs Esmoris Cerdeiro-Pinedo Amado is a worker within the meaning of Regulation 1408/71 because she receives a Dutch pension for incapacity for work, she cannot be regarded as continuing to be employed in the Netherlands. In accordance with its meaning and use in Regulation 1408/71, the term employment is usually used to denote periods during which a worker actually carries out an activity as an employed person. [FN17] Consequently, the abovementioned provisions do not make clear which law is applicable. FN17 See in particular Art.1(a)(iv), first indent, in addition to Art.1(c), (r) and (s) and Art.10a(2). AG51 Nor is there any other obvious reference to Dutch law. It is therefore necessary to apply the catch-all provision of Art.13(2)(f) of Regulation 1408/71. Under that provision, the law of Mrs Esmoris Cerdeiro-Pinedo Amado's place of residence, that is to say Spanish law, must in principle apply to her, in accordance with Regulation 1408/71. AG52 That conclusion is not contradicted by the fact that Mrs Esmoris *1299 Cerdeiro-Pinedo Amado receives a Dutch invalidity pension. Article 10 of Regulation 1408/71 expressly requires that invalidity pensions be exported. Article 17a of Regulation 1408/71 [FN18] shows that, by way of derogation, the exporting Member State has competence and its provisions are applicable. The possibility laid down in that Article of exempting employed persons from the provisions of the Member State in which they are resident is justified only by the fact that, on account of the structure of its social security system, the State which exports its benefits links the benefit to be exported to other benefits, [FN19] though Community law does not require those additional benefits to be exported. This linkage of benefits may result in the persons concerned having to pay amounts, in respect of the same risk, to two different insurance systems if they cannot be exempted from one of those systems. FN18 "The recipient of a pension due under the legislation of a Member State or of pensions due under the legislation of several Member States who resides in the territory of another Member State may at his request be exempted from the legislation of the latter State provided that he is not subject to that legislation because of the pursuit of an occupation." FN19 German pension insurance is, for example, associated with sickness insurance. AG53 Consequently, the study finance for Mrs Esmoris Cerdeiro-Pinedo Amado's daughter must be subject exclusively to the provisions of Spanish law, not to those of Dutch law. This is so, irrespective of whether, in practice, Spanish law confers entitlement to study finance. On the basis of Dutch law, the facts of this case are not in any event caught by Art.73 of Regulation 1408/71.

AG54 The above considerations concerning the applicable law apply mutatis mutandis to Art.3 of Regulation 1408/71 cited by the Arrondissementsrechtbank. That provision does not require that the person relying on the prohibition of discrimination contained in Art.1 be resident in the Member State in respect of which he is asserting his right to equal treatment. However, it is applicable only in cases where not only are the conditions for the application of Regulation 1408/71 ratione personae and ratione materiae fulfilled, but also where that Regulation further requires that the national law concerned be applied to the circumstances at issue. Otherwise, a migrant worker could--subject to the special provisions of Regulation 1408/71--make simultaneous claims for social security benefits paid under the national law of each of the Member States. Since in this case only Spanish law would apply to the student finance, Mrs Esmoris Cerdeiro-Pinedo Amado cannot rely on Regulation 1408/71 as regards any discrimination she might have suffered as a result of Dutch law. (2) Regulation 1612/68 and Art.48 of the EC Treaty AG55 The Arrondissementsrechtbank also considers it possible that the rules of the WSF as they apply to Mrs Esmoris Cerdeiro-Pinedo Amado are incompatible with Art.7 of Regulation 1612/68. *1300 Furthermore, that court considers that there may be an infringement of Art.48 of the EC Treaty. Those two issues should be considered together as Art.48 of the EC Treaty cannot in any event produce broader effects within the scope of Regulation 1612/68 than Art.7 thereof. Submissions of the parties AG56 Mrs Esmoris Cerdeiro-Pinedo Amado first draws attention to the fact that, according to the Court's case law, benefits paid on the basis of the WSF constitute a social advantage within the meaning of Art.7(2) of Regulation 1612/68. At the same time, again according to case law, that Regulation prohibits making the place of residence a condition for the grant of a social advantage. Therefore persons insured under the AKW who are not Dutch nationals and are resident outside the Netherlands are unlawfully disadvantaged in relation to insured persons who possess Dutch nationality or reside in the Netherlands. AG57 The Spanish Government refers in particular to the judgment in Meints, [FN20] where the Court held that a residence requirement is incompatible with Art.7(2) of Regulation 1612/68. It is therefore incompatible with the principles of equal treatment and freedom of movement to require residence in the Netherlands and Dutch nationality. FN20 Meints v Minister Van Landbouw (C-57/96): [1997] E.C.R. I-6689; [1998] 1 C.M.L.R. 1159, paras [43] et seq. AG58 The Dutch Government accepts that the status of worker within the meaning of Regulation 1612/68 can be retained even after a period of employment has ended but nonetheless disputes whether, in this case, being in

receipt of invalidity benefits is sufficient to maintain that status. In the alternative, it notes--as does the SVB--on the basis of the view it put forward when defining the subject matter of the action, that the rules of the AKW did not comprise any overt or covert discrimination on grounds of nationality and that the WSF is not the subject matter of the question referred. AG59 The Austrian Government and the UK Government take the view that Regulation 1612/68 ceases in principle to be effective when a worker returns with his family to his country of origin. Any exceptions to that principle do not apply in this case. AG60 The representative of the UK Government pointed out at the hearing that, in accordance with existing case law, derogations apply only to frontier workers, not to migrant workers who return to their home country. AG61 Irrespective of this, the UK Government contends that the requirement of Dutch nationality could represent impermissible discrimination under Art.48 of the EC Treaty. Referring to the judgments of the Court, [FN21] it submits, however, that restricting study *1301 finance to students enrolled at Dutch universities is compatible with Art.48 of the EC Treaty. The exportability of benefits can be restricted if they are associated with a certain social or economic situation. FN21 Lenoir, cited above at fn.15, paras [16] et seq. and Snares v Adjudication Officer (C-20/96): [1997] E.C.R. I-6057; [1998] 1 C.M.L.R. 897, paras [38] to [49]. AG62 Citing case law, [FN22] the Commission first argues that Mrs Esmoris Cerdeiro-Pinedo Amado is a worker within the meaning of Regulation 1612/68 since that status is also in principle attributed to former workers. She may therefore, in the Commission's view, claim benefits under the WSF in 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 residence requirement. FN22 Meints, cited above at fn.19, Paraschi v Landesversicherungsanstalt Württemberg (C-349/87): [1991] E.C.R. I-4501; [1994] 2 C.M.L.R. 240 and EC Commission v France (C-35/97): [1998] E.C.R. I-5325. AG63 At the hearing, the Commission also drew attention to the fact that the condition that students must study in the Netherlands, which applies without distinction, constitutes indirect discrimination. Because of linguistic and cultural kinship, children of migrant workers have a far greater interest in studying in the country of origin of their parents than children of Dutch nationals. Whether such discrimination can be supported by statistics is irrelevant since potential indirect discrimination is impermissible also. Nor can such discrimination be justified on the basis of social and economic differences between the various locations of universities either, because those differences could be taken into consideration when the appropriate flat-rate amounts are determined. AG64 The Commission further submits that in relation to Art.48 of the EC Treaty, Art.7 of Regulation 1612/68 constitutes a lex specialis.

Assessment AG65 A distinction must first be made between the conditions for the application of Art.7(2) of Regulation 1612/68, or indeed Art.48 of the EC Treaty, and their legal consequences. The condition for 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. (a) Conditions of application AG66 According to the Court's case law, benefits intended to finance the studies of children of migrant workers are to be regarded as social advantages granted to migrant workers within the meaning of Art.7(2) of Regulation 1612/68. [FN23] However, doubts remain as to whether Mrs Esmoris Cerdeiro-Pinedo Amado should continue to be regarded as a worker within the meaning of that provision. In that regard, the Court found in its judgment in MartÍnez Sala: *1302 In the context of Art.48 of the Treaty and Regulation 1612/68, a person who, 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 relationship has ended, the person concerned as a rule loses his status of worker, although that status may produce certain effects after the relationship has ended .... [FN24] FN23 Bernini v Minister Van Onderwijs en Wetenschappen (C-3/90): [1992] E.C.R. I-1071, paras [24] et seq. and Meeusen v Hoofddirectie Van de Informatie Beheer Groep (C-337/97): [1999] E.C.R. I-3289; [2000] 2 C.M.L.R. 659, para.[9]. FN24 MartÍnez Sala v Freistaat Bayern (C-85/96): [1998] E.C.R. I-2691, para.[32]. AG67 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 referred to in that definition. AG68 The judgment in MartÍnez Sala is helpful in that regard. In it, the Court expressly refrained from delivering a ruling on whether Spanish national Mrs MartÍnez Sala enjoyed worker status since it did not have sufficient information to answer that question. However, it was established that Mrs MartÍnez Sala had initially been employed in Germany but that, from 1989, she was no longer employed there and, from January 1993, she claimed a child raising allowance for a child born during that month. In that case at least, the Court tacitly proceeded from the assumption that periods of employment dating back a relatively long time in any event ceased to have any effect on benefits such as child raising allowance. AG69 The benefits which were the subject of the judgments, cited by the parties, in Meints and Paraschi [FN25] are different from the child raising allowance, primarily because they are directly linked to previous employment. The Meints case involved a special benefit paid when the worker in question became

unemployed, whilst the Paraschi case was concerned with invalidity benefits. Those two benefits are associated with the termination of employment relationships. The similarly cited judgment in Case C-35/97, [FN26] refers not only similarly to unemployment benefits--the award of supplementary pension points--but also to Art.7(1) of Regulation 1612/68, which in turn refers, inter alia, to equal treatment in the event of dismissal and not, therefore, to Art.7(2) which is relevant to this case. FN25 Meints, cited above at fn.19 and Paraschi, cited above at fn.21. FN26 Cited above at fn.21. AG70 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 closely related to the child raising allowance than to unemployment or invalidity benefits, to which, according to case law, Regulation 1612/68 is applicable, even though the employment relationship has already ended. On the basis of the abovementioned case law, the present case cannot consequently be said to be caught by Art.7(2) of Regulation 1612/68. AG71 Since Mrs Esmoris Cerdeiro-Pinedo Amado did not remain in the *1303 Netherlands, consequences of the employment relationship cannot be drawn from Art.2(1)(b) or Art.7 of Regulation 1251/70 either, [FN27] under which the prohibition of discrimination contained in Art.7(2) of Regulation 1612/68 also applies to recipients of an invalidity pension who remain in the host State. FN27 Commission Regulation 1251/70 of June 29, 1970 on the right of workers to remain in the territory of a Member State after having been employed in that State: [1970] O.J. Spec.Ed. p.402. AG72 Consequently, on the basis of the Court's case law and of secondary legislation, while application of the prohibitions of discrimination under Art.7 of Regulation 1612/68 and Art.48 of the EC Treaty to the facts of this case is not precluded, nor is it expressly required. AG73 However, the question arises whether the state of Community law as reflected in the above considerations ought not to be reconsidered in the light of citizenship of the Union and, in particular, the right of residence under Art.8a of the EC Treaty (now, after amendment, Art.18 EC). Under that Article, citizens of the Union are guaranteed the fundamental right to choose freely their place of residence in a Member State. Under Art.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 employment contract has ended. AG74 With regard to equal treatment in the enjoyment of social advantages, there may be justification for limiting the effects of employment relationships to advantages directly linked to the employment relationship, where the working life

of the migrant worker has not yet come to an end. As long as migrant workers are gainfully employed, they are integrated into the social security system of the host State as a result of that employment activity, as guaranteed in particular by Regulation 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 residence. AG75 However, by retiring permanently from working life, migrant workers to a large extent lose the opportunity to influence their situation as regards social advantages. Regulation 1251/70 therefore makes express provision for an effect deriving from previous employment relationships, namely, inter alia, that Art.7 of Regulation 1612/68 continues to apply to retired persons who remain in the host State. AG76 If, however, retired persons become established in another Member State, they usually depend on the social security benefits which they have been able to bring with them from the previous host State. That assumption derives in particular from Council Directive 90/365. [FN28] In *1304 that respect, Regulation 1408/71 guarantees only a minimum of exportable benefits. Consequently, where retired persons avail themselves of the right of residence, there is still a gap in the protection they are afforded with regard to social advantages. FN28 Council Directive 90/365 of June 28, 1990 on the right of residence for employees and self-employed persons who have ceased their occupational activity [1990] O.J. L180/28. Article 1(1) of the Directive states: "Member States shall grant the right of residence to nationals of Member States who have pursued an activity as an employee or self-employed person and to members of their families as defined in para.2, provided that they are recipients of an invalidity or early retirement pension, or old age benefits, or of a pension in respect of an industrial accident or disease of an amount sufficient to avoid becoming a burden on the social security system of the host Member State during their period of residence and provided they are covered by sickness insurance in respect of all risks in the host Member State ..." AG77 This is demonstrated, at least as regards the problems raised in this case, by a comparison with migrant workers who remain in the host State. With regard to financing their children's studies, such workers--or their children-- may, in accordance with case law, rely on Regulation 1612/68 in conjunction with Art.7 of Regulation 1251/70 after their working life has ended. [FN29] Migrant workers who return to their State of origin, on the other hand, would be exclusively dependent on the benefits granted by that State, even if they themselves or their children cannot meet the conditions required because of the time spent in employment abroad. That gap is at the very least incompatible with the spirit of the right of residence. FN29 Bernini, paras [22] et seq. and Meeusen, paras [18] et seq., cited above at fn.22, and also Di Leo v Land Berlin (C-308/89): [1990] E.C.R. I-4185.

AG78 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. [FN30] FN30 See the Opinion of Advocate General La Pergola in Meeusen, cited above at fn.22, para.20. AG79 By analogy with Regulation 1251/70, which applies only to retired persons who have remained in the host State, the consequences of previous employment should therefore in principle be extended to social advantages financed from taxation where, at the end of their employment activity, migrant workers: - draw a pension from the host State; - pay tax on that pension in the host State; and - leave the host State to become established in another Member State, in particular the State of origin. In such cases also, therefore, the prohibition of discrimination laid down in Art.7 of Regulation 1612/68 should--by extension--be applied mutatis mutandis in the relationship between the migrant worker and the original host State. This principle is restricted only in so far as social advantages from various Member States may not be enjoyed on a cumulative basis, in particular on top of benefits from the State of origin. [FN31] FN31 Thus, if a study finance system were to exist in Spain which was comparable with the system provided for by the 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. *1305 (b) Legal consequences AG80 If the foregoing is applied to this case, it follows, first, that the condition of residence in the Netherlands cannot be applied to the daughter of Mrs Esmoris Cerdeiro-Pinedo Amado because Dutch nationals do not have to meet that condition. In its judgment in Deak, [FN32] the Court ruled that Art.7(2) of Regulation 1612/68 prohibits (unjustified) discrimination arising from the fact that, because of their nationality, offspring of employed persons who receive maintenance from those employed persons do not receive benefits which the Member State concerned grants to the children of its own citizens on the basis of their nationality. Such discrimination, affecting the treatment of offspring, could prevent the latter from exercising their right to freedom of movement. FN32 Office National de l'Emploi v Deak (94/84): [1985] E.C.R. 1873, paras [23] et seq. AG81 It is also necessary to establish whether the condition that studies must be

pursued in a Dutch educational establishment or a recognised establishment is compatible with the prohibition of discrimination. That condition could involve indirect discrimination. The judgment in O'Flynn contains an extensive discussion of indirect discrimination [FN33]: Accordingly, conditions imposed by national law must be regarded as indirectly discriminatory where, although applicable irrespective of nationality, they affect essentially migrant workers ... or the great majority of those affected are migrant workers ... where they are indistinctly applicable but can more easily be satisfied by national workers than by migrant workers ... or where there is a risk that they may operate to the particular detriment of migrant workers .... FN33 O'Flynn v Adjudication Officer (C-237/94): [1996] E.C.R. I-2617; [1996] 3 C.M.L.R. 103, paras [18] et seq. with further references. It is otherwise only if those provisions are justified by objective considerations independent of the nationality of the workers concerned, and if they are proportionate to the legitimate aim pursued by the national law .... AG82 The Commission rightly contends in this case that, for cultural and linguistic reasons, migrant workers are far more likely to want their children to study outside the host State, that is to say in the State of origin. Therefore, excluding such children from study finance to study at educational establishments situated in the State of origin is particularly likely to be prejudicial to their interests. There is, consequently, indirect discrimination against migrant workers. AG83 However, indirect discrimination is permissible provided that it is justified. The arguments put forward by the UK Government to the effect that study finance is based on the social and economic conditions existing at places of study in the Netherlands, cannot, however, provide justification. On the one hand, the relevant differences can be taken into account in the amount of the study finance, and, on the other, according to the Commission's uncontested submissions, benefits under the WSF are already paid throughout the European *1306 Union if students pursue a course of study which has been the subject of harmonisation. AG84 Justification could, however, lie in the fact that the diplomas awarded upon completion of studies have not yet been fully harmonised in the European Union. Study finance is not intended to finance students' freedom to pursue a course of higher education, but is primarily intended to enable them to gain the qualification required to pursue certain occupations. Financing only those studies which meet certain quality criteria is therefore justified. AG85 However, within the scope of Council Directive 89/48 [FN34] it is in principle to be assumed that the courses of study in all Member States achieve the required quality standard. Additional requirements may be imposed only within the scope of Art.4 of the Directive where the combination of subjects studied or the duration of the period of studies in another Member State differs considerably from national requirements. Article 4 of that Directive also allows additional requirements to be imposed in respect of advisory occupations in the

field of law, although these have become largely insignificant as a result of European Parliament and Council Directive 98/5. [FN35] FN34 Council Directive 89/48 of December 21, 1988 on a general system for the recognition of higher education diplomas awarded on completion of professional education and training of at least three years duration [1989] O.J. L19/16. FN35 European Parliament and Council Directive 98/5 of February 16, 1988 to facilitate practice of the profession of lawyers on a permanent basis in a Member State other than that in which the qualification was obtained [1998] O.J. L77/36. AG86 Consequently, if a national diploma leading to the same occupation made it possible, in principle, to claim study finance, restrictions on that finance in respect of studies pursued abroad can be justified only where the Member State concerned subjects the holders of diplomas to measures for the recognition of such diplomas within the meaning of Art.4 of Directive 89/48. AG87 However, impermissible indirect discrimination against the children of migrant workers exists where the host State awards study finance only in respect of courses of study at educational establishments situated in its territory and at a limited number of establishments in neighbouring States. (3) Art.52 of the EC Treaty AG88 There is nothing in this dispute to support the application of this provision. C --The main proceedings in the Fahmi case AG89 By its questions, the Arrondissementsrechtbank is seeking to ascertain, first, whether Mr Fahmi may, both personally and in relation to his son, rely on the prohibition of discrimination in the area of social security pursuant to Art.41 of the Co-operation Agreement, [FN36] even though he is no longer resident in the Community and his son has never *1307 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 replacement of child allowance by study finance. FN36 For the contents of that Article, see para.[7] above. Submissions of the parties AG90 Citing the judgment in Kziber, [FN37] Mr Fahmi first points out that recipients of a retirement pension are also workers within the meaning of Art.41 of the Co-operation Agreement. It follows from Art.41(4) of the Co-operation Agreement that recipients of a pension may also return to Morocco whilst continuing to draw that pension. FN37 Office National de l'Emploi v Kziber (C-18/90): [1991] E.C.R. I-199,

para.[27]. AG91 He maintains that the term "family allowances" under Art.41(3) of the Cooperation Agreement is to be construed in accordance with the broad definition of family benefits within the meaning of Regulation 1408/71. Dutch child allowance must, however, be understood as meaning family allowance within the meaning of Art.1(u)(ii) of Regulation 1408/71. The distinction drawn by Regulation 1408/71 between the broad concept of family benefits and the narrow concept of family allowances must be transposed to Art.41 of the Co-operation Agreement, so that para.3 thereof, which limits the export of benefits from the Community, applies only to family benefits, whilst family allowances, on the other hand, are caught by Art.41(1). This is consistent with Regulation 1408/71 which limits the export of family benefits whilst laying down more generous rules governing the export of family allowances. Consequently, the prohibition of discrimination also extends to the latter. Since the previous child allowance system under the AKW did not contain any discrimination, its abolition in favour of the discriminatory study finance system is incompatible with Art.41(1) of the Co-operation Agreement. AG92 The Dutch Government takes the view that, as a former worker, Mr Fahmi falls within the personal scope of the directly applicable prohibition of discrimination laid down in Art.41(1) of the Co-operation Agreement. The benefits paid under the AKW also fall within that provision's material scope which must be determined by analogy with Regulation 1408/71. AG93 However, it is impossible for workers to rely on Art.41(1) of the Cooperation Agreement once they have left the Community, at least in so far as they are objecting to unequal treatment which cannot be disassociated from their departure. This follows from the wording of that Article, from its context, in particular Art.41(2), and from a comparison with Art.3(1) of Decision 3/80 of the EEC-Turkey Association Council. [FN38] There is nothing in the Court's case law to *1308 indicate that the protection afforded by that provision extends to a worker who has left the Community. FN38 This Article states: "Subject to the special provisions of this Decision, persons resident in the territory of one of the Member States to whom this Decision applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as nationals of that State." AG94 If, in the absence of implementing measures, Art.41(3) of the Co-operation Agreement can in fact be directly applied, it necessarily follows from its clear wording that family allowances are to be paid only to members of the worker's family who are resident in the Community. AG95 As regards any application of the prohibition of discrimination to this case, the Dutch Government refers to the submissions it made regarding the subject matter of the questions and again submits that the arrangements under the AKW are not in any event discriminatory. AG96 The UK Government takes the view that Art.41(1) of the Co-operation Agreement is applicable to Moroccan workers only for as long as they are

resident in the Community. That provision comes under the heading of cooperation in the field of labour and expressly requires employment in a Member State, as does Art.40(1) of the Co-operation Agreement, which regulates the prohibition of discrimination in employment law. The possibility of transferring certain benefits to Morocco, provided by Art.41(4) of the Co-operation Agreement, confirms that interpretation since such a possibility would be superfluous if the prohibition of discrimination extended to workers returning to their country of origin. None of the judgments delivered in relation to the Cooperation Agreement contradict that interpretation, since they all relate to Moroccan nationals who are resident in a Member State. AG97 Irrespective of this, Art.41(3) of the Co-operation Agreement in any event prevents individuals from relying on the prohibition of discrimination in respect of children living outside the Community. AG98 The UK Government finally submits, in the alternative, that the disputed student benefit is not a social security benefit within the meaning of Regulation 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 Art.41(1) of the Co-operation Agreement is the same as that of Regulation 1408/71, application of the prohibition of discrimination is out of the question. AG99 The Austrian Government draws attention to the fact that, unlike the Association Agreement with Turkey, the Co-operation Agreement with Morocco does not hold out to the latter the possibility of accession. It concludes from this that the principles of interpretation applicable to fundamental freedoms cannot be transposed to the prohibitions of discrimination contained in the Co-operation Agreement. Those principles 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 likewise precluded in this case because Art.41(3) of the Co-operation Agreement provides for payment of family allowances only in respect of family *1309 members who are resident in the Community, and the specific rules on the transfer of benefits, contained in Art.41(4) of the Co-operation Agreement, do not include the disputed benefit. AG100 The French Government considers that the prohibition of discrimination laid down in Art.41 of the Co-operation Agreement applies only where the members of Moroccan workers' families are at least resident in the Community (Art.41(3)). In addition, Art.41(4) also provides for the possibility of transferring certain benefits to Morocco. However, this case does not involve either of those two situations. AG101 The Commission first points out, citing case law, that Art.41(1) of the Cooperation Agreement is directly applicable and that Mr Fahmi falls within its scope in his capacity as a former worker. However, the Commission raises the issue of whether the question referred is covered by social security within the meaning of Art.41(1) of the Co-operation Agreement. Only at first sight is the answer to the question apparent from case law, which provides that the rules governing the material scope of Regulation 1408/71 must be applied mutatis mutandis. There is no doubt that child allowance paid on the basis of the AKW

comes under the heading of social security. AG102 However, Mr Fahmi loses his entitlement to those benefits because they have been completely abolished for student children aged 18 or over, and replaced by a study finance system that is not related to contributions paid and no longer comes under the heading of social security. As the Court has consistently held, Community law contains only rules relating to co-ordination in the field of social law, but it does not affect Member States' competence to organise their social security systems provided that they take into account the freedom of movement of workers and observe the principles of equal treatment associated with that freedom. However, freedom of movement of workers protects only nationals of the Member States, not Moroccan nationals such as Mr Fahmi. Since study finance no longer comes under the heading of "social security", Art.41(1) of the Co-operation Agreement is not in any event applicable in this case. AG103 The Commission also considers that Art.41(1) of the Co-operation Agreement applies to Moroccan workers only for as long as they are resident in the Community. The very wording of that provision refers to the Member State in which they are employed. Even in the organisation of social security, for which the individual Member States are responsible in the Community, equal treatment may be applied only at Member State level. Article 41 of the Co-operation Agreement provides for only a slight degree of co-ordination for those areas in which it appears to be possible. This involves the aggregation of periods of insurance under Art.41(2), and entitlement to family allowances under Art.41(3). However, such entitlement is specifically restricted to family members who are resident in the Community. Furthermore, the Commission argues that family allowances in *1310 particular are not among the transferable benefits provided for in Art.41(4). Lastly, Morocco's obligation to grant the same rights only to Community nationals who are resident in Morocco supports the argument that the effect of Art.41(1) of the Co-operation Agreement is restricted to Moroccan nationals who are resident in the Community. AG104 The Commission also mentions the prohibition of discrimination in the field of employment law, as referred to in Art.40 of the Co-operation Agreement, which likewise applies only to Moroccan nationals employed in a Member State. A comparative reading of the main human rights covenants shows that the signatory States' duty of protection under those covenants is limited to persons who are within their territory and subject to their jurisdiction, [FN39] or to persons who are within their jurisdiction. [FN40] The protective effect of the Co-operation Agreement cannot extend further. FN39 Article 2(1) of the International Covenant on Civil and Political Rights, 1966. FN40 Article 1 of the European Convention on Human Rights 1950. Assessment AG105 It should first be pointed out that the Co-operation Agreement has been

replaced, with effect from March 1, 2000, by the Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and Morocco, of the other part (hereinafter: the Euro-Mediterranean Agreement). [FN41] For the purposes of this case, however, this raises no *1311 fundamentally new issues, since the provisions relevant to the following considerations have remained largely unchanged. FN41 [2000] O.J. L70/2. Article 65 of the Euro-Mediterranean Agreement, which is comparable with Art.41 of the Co-operation Agreement, is worded as follows: 1. Subject to the provisions of the following paragraphs, workers of Moroccan nationality and any members of their families living with them shall enjoy, in the field of 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 benefits, 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 Art.51 of the EC Treaty to apply, except under the conditions set out in Art.67 of this Agreement. 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. 3. The workers in question shall receive family allowances for members of their families who are resident in the 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 accident or occupational disease, or of invalidity resulting from industrial accident or occupational disease, except in the case of special non-contributory benefits. 5. .... AG106 To some extent, the Court's case law itself provides an answer to the questions referred. In its judgment in Kziber, the Court found as follows: The concept of social security in Art.41(1) of the Agreement must be understood by means of an analogy with the identical concept in Regulation 1408/71. [FN42] FN42 Kziber, cited above at fn.36, para.[25]. Article 65(1) of the EuroMediterranean Agreement contains an exhaustive definition of social security, based on this judgment. AG107 The prohibition of discrimination therefore relates only to benefits which fall within the material scope of Regulation 1408/71. As has already been shown, benefits paid under the AKW are family 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. [FN43] There is therefore no question of

applying Art.41 of the Co-operation Agreement to this case. FN43 See above, paras [43] et seq. AG108 Even if--as discussed in the Esmoris Cerdeiro-Pinedo Amado case [FN44]--the study finance were regarded as a family benefit in so far as it takes account of parental income, Mr Fahmi would not be entitled to it. FN44 See above, paras [47] et seq. AG109 This follows at least indirectly from the following further findings in the judgment in Kziber: The fact that Art.41(1) states that that prohibition of discrimination applies only subject to the provisions of the following paragraph means that, as regards ... the grant of family benefits ..., that prohibition of discrimination is guaranteed only within the limits of the conditions laid down in paras 2, 3 and 4 of Art.41. [FN45] FN45 Kziber, cited above at fn.36, para.[18]. AG110 Consequently, regardless of the answer to all other questions and in accordance with Art.41 of the Co-operation Agreement, Mr Fahmi could claim family allowances only in respect of members of his family who were resident in the Community. Therefore, any entitlement to a study grant for his son who is resident in Morocco is in any event precluded if family benefits has the same meaning in the Co-operation Agreement as it does in the Regulation. Given the translation problems which arise, it should be noted that the German version of the EEC-Morocco Agreement uses the term "Familienzulage" whereas the German version of Regulation 1408/71 uses the terms "Familienleistung" for family benefits and "Familienbeihilfe" for family allowances. The EuroMediterranean Agreement, on the other hand, uses the term "Familienbeihilfen" which was translated into French as "prestations familiales" [family benefits]. AG111 The Court has not yet stated its position on the meaning of "Familienzulage". A comparison of the various language versions of *1312 the Co-operation Agreement, however, argues in favour of taking "Familienzulagen" to mean family benefits in accordance with Art.1(u)(i) of Regulation 1408/71. The Italian, Danish, Dutch and, in particular, French versions of the Co-operation Agreement in fact use, whenever that word occurs, the term corresponding with "Familienleistungen" [family benefits] in the German version of Regulation 1408/71. It is to be assumed from this that the French version is particularly authoritative because French was probably the most common language of negotiation during the preparatory work for the Co-operation Agreement. That choice of words is confirmed in the different versions of Art.65(4) of the EuroMediterranean Agreement. [FN46] Only the English version of the two agreements mentions "family allowances", which corresponds to the term "Familienbeihilfen" in the German version of Regulation 1408/71. The German version of the Euro-Mediterranean Agreement also refers to "Familienbeihilfen".

[FN47] FN46 Furthermore, the Finnish, Greek, Spanish and Swedish versions of that Agreement also use a term which corresponds to the term "Familienleistung" [family allowances] used in Regulation 1408/71. FN47 The Portuguese version of the Euro-Mediterranean Agreement also uses a term which corresponds to the concept of "Familienbeihilfen" [family allowances] used in Regulation 1408/71. AG112 Consequently, the term "Familienzulage" used in the German version of the Co-operation 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 Agreement and is also found in at least two other versions of the EuroMediterranean Agreement, cannot result in the assumption, for the purposes of Art.41(3) of the Co-operation Agreement, that the term means anything other than "family benefits". It would be incorrect, in view of the fact that the term "family benefits" is used predominantly, to base Art.41(3) of the Co-operation Agreement on the narrower concept of family allowances. AG113 The parallel nature of the individual branches of social security in Regulation 1408/71 and in Art.41 of the Co-operation Agreement is confirmed by Art.65(1) of the Euro-Mediterranean Agreement. The list of the individual branches to which the Agreement applies, set out in the second subparagraph of Art.65(1) of the abovementioned agreement, is identical in the French version to the list set out in Art.7(1) of Regulation 1408/71. Furthermore, the third subparagraph of Art.65(1) of the Euro-Mediterranean Agreement prohibits the application of other rules for co-ordinating social security systems on the basis of Art.51 of the EC Treaty (now, after amendment, Art.42 EC), if such application is not expressly provided for by the Association Council of the Euro-Mediterranean Agreement. It is to be inferred from this that the second subparagraph of Art.65(1) of the *1313 Euro-Mediterranean Agreement incorporates at least that part of Regulation 1408/71 which defines the material scope. AG114 It should therefore be assumed that Art.41(3) of the Co-operation Agreement provides exhaustively for the grant of family benefits and precludes the grant of those benefits in this case. Consequently, Art.41(1) of the Cooperation Agreement does not confer on members of the families of Moroccan workers who are resident outside the Community any entitlement to benefits intended to finance their studies. In view of those findings, the other questions raised by the Arrondissementsrechtbank in relation to the Fahmi case need not be answered. VI --Conclusion AG115 I therefore suggest that the questions referred be answered as follows: (1) In the Fahmi case: Article 41(1) of the EEC-Morocco Co-operation 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. (2) In the Esmoris Cerdeiro-Pinedo Amado case: Regulation 1408/71 does not confer on a migrant worker who has returned to his State of origin and is in receipt of an invalidity pension from his previous host State any entitlement as against the host State to benefits intended to provide study finance for his children. As regards the social advantages granted by the host State and financed from taxation, the prohibition of discrimination under Art.7(2) of Regulation 1612/68 is to be applied mutatis mutandis to a migrant worker, - if he receives an invalidity pension from the host State, - if he pays tax on that pension in the host State, and - if he has returned to his State of origin. 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. JUDGMENT 1 By an order of January 28, 1999, received at the Court on February 8, 1999, the Arrondissementsrechtbank te Amsterdam (District Court, *1314 Amsterdam) referred to the Court for a preliminary ruling under Art.177 of the EC Treaty (now Art.234 EC) four questions concerning the interpretation of Art.41 of the Cooperation Agreement between the European Economic Community and Morocco, signed at Rabat on April 27, 1976 and approved on behalf of the Community by Council Regulation 2211/78 [FN48], Art.3 of Council Regulation 1408/71, [FN49] Art.7 of Council Regulation 1612/68 [FN50] and Arts 48 and 52 of the EC Treaty (now, after amendment, Arts 39 and 43 EC). FN48 Council Regulation 2211/78 of September 26, 1978 concerning the conclusion of the Co-operation Agreement between the European Economic Community and Morocco [1978] O.J. L264/1. FN49 Council Regulation 1408/71 of June 14, 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the community, as amended and updated by Council Regulation 2001/83: [1983] O.J. L230/6, as amended by Council Regulation 1247/92 of April 30, 1992: [1992] O.J. L136/1, hereinafter "Regulation 1408/71". FN50 Council Regulation 1612/68 of October 15, 1968 on freedom of movement

for workers within the Community [1968] O.J. Spec.Ed. (II) 475. 2 The first two questions, which concern the interpretation of Art.41 of the Cooperation Agreement, were raised in proceedings between Mr Fahmi, who is of Moroccan nationality, and the Bestuur van de Sociale Verzekeringsbank (Board of the Social Insurance Bank) (hereinafter "the SVB") concerning the latter's refusal to grant him a dependent child's allowance for the fourth quarter of 1996. 3 The third and fourth questions, which concern the interpretation of Art.3 of Regulation 1408/71, Art.7(1) of Regulation 1612/68 and Arts 48 and 52 of the Treaty, were raised in proceedings between Mrs Esmoris Cerdeiro-Pinedo Amado, who is of Spanish nationality, and the SVB concerning the latter's refusal to grant her a dependent child's allowance for the fourth quarter of 1996 and the first quarter of 1997. Legal framework Community law 4 Article 41 of the Co-operation Agreement provides: 1. Subject to the provisions of the following paragraphs, workers of Moroccan nationality and any members of their families living with them shall enjoy, in the field of social security, treatment free from any discrimination based on nationality in relation to nationals of the Member States in which they are employed. ... 3. The workers in question shall receive family allowances for members of their families who are resident in the Community. 4. The workers in question shall be able to transfer freely to Morocco, at the rates applied by virtue of the law of the debtor Member State or States, any pensions or annuities in respect of old age, death, industrial accident or occupational disease, or of invalidity resulting from industrial accident or occupational disease. ... 5 Article 1 of Regulation 1408/71 provides: *1315 For the purposes of the application of this Regulation: ... (u) (i) family benefits means all benefits in kind or in cash intended to meet family expenses under the legislation provided for in Art.4(1)(h), excluding the special childbirth allowances mentioned in Annex II; (ii) family allowances means periodical cash benefits granted exclusively by reference to the number and, where appropriate, the age of members of the family. 6 Article 3(1) of Regulation 1408/71 provides: Subject to the special provisions of this Regulation, persons resident in the territory of one of the Member States to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation

of any Member State as the nationals of that State. 7 Article 77 of Regulation 1408/71, entitled "Dependent children of pensioners", provides: 1. The term benefits, for the purposes of this Article, shall mean family allowances for persons receiving pensions for old age, invalidity or an accident at work or occupational disease, and increases or supplements to such pensions in respect of the children of such pensioners, with the exception of supplements granted under insurance schemes for accidents at work and occupational diseases. 2. Benefits shall be granted in accordance with the following rules, irrespective of the Member State in whose territory the pensioner or the children are residing: (a) to a pensioner who draws a pension under the legislation of one Member State only, in accordance with the legislation of the Member State responsible for the pension; .... 8 Article 7(1) and (2) of Regulation 1612/68 provides: 1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and, should he become unemployed, reinstatement or re-employment; 2. He shall enjoy the same social and tax advantages as national workers. National legislation 9 Before October 1, 1986, a person insured under the Algemene Kinderbijslagwet (General Law on Dependent Children's Allowances, hereinafter "the AKW") of December 19, 1962 was entitled to a dependent child's allowance as provided for in Art.7(1) of the AKW, which was worded as follows: In accordance with the provisions of this Law, an insured is entitled to a dependent child's allowance for children, whether born of his marriage, born of a previous marriage or adopted, who are dependent on or maintained by the insured, provided that such children: ... (c) are aged 16 years or over but have not yet reached the age of 27 years and devote the main part of the time which they might devote to work to *1316 studies or related activities or to occupational training or related activities and that the insured is largely responsible for maintaining them. 10 From October 1, 1986, Art.7(1) of the AKW was amended by the Wet op de studiefinanciering (Law on Study Finance, hereinafter "the WSF") of April 24, 1986. The age limit of 27 years for entitlement to the dependent child's allowance was replaced by an age limit of 18 years. Under the WSF, students between the ages of 18 and 27 years would themselves be entitled to study finance. This new funding arrangement was designed, in particular, to enable students to be

financially independent of their parents, to ensure equal treatment for students at various levels of education and to enhance the status of students. 11 The new Art.7(1) of the AKW provided that an insured was entitled to a dependent child's allowance: ... For a child born of his own marriage, a child born of a previous marriage or an adopted child, who (a) has not yet reached the age of 16 years and is part of his household, or (b) has not yet reached the age of 18 years and is dependent on the insured to a significant degree. 12 However, the new arrangements introduced by the AKW did not become fully applicable with immediate effect. For children born before October 1, 1986, the WSF initially, and then Ch.4 of the AKW, had established a transitional arrangement under which entitlement to the dependent child's allowance was maintained for children aged between 18 and 27 years who were pursuing studies. 13 That transitional arrangement was amended with effect from January 1, 1996 by the Law of December 21, 1995. Since that date, under a new transitional arrangement, the entitlement to the dependent child's allowance provided for in the AKW has been maintained only for student children aged 18 years and over who were already entitled to the allowance, provided that they continued to follow the same type of education as they were following on October 1, 1995. 14 Under Art.7 of the WSF, that Law applies to, and the finance available thereunder benefits: (a) students who possess Dutch nationality; (b) students who do not possess Dutch nationality but are resident in the Netherlands and are treated as Dutch nationals in respect of the financing of studies under agreements with other States or a decision of an organisation of public international law which is binding on the Netherlands; .... 15 The finance provided for in the WSF consists of a basic grant, the level of which is independent of the parents' income and the same for all students receiving a particular type of education, and a *1317 supplementary grant, the level of which varies according to parental income. 16 As a general rule, with the exception of certain foreign institutions which are treated as Dutch institutions for the purpose of applying the WSF, only studies pursued in a Dutch institution give rise to an entitlement to study finance. The main proceedings 17 After working in the Netherlands, Mr Fahmi and Mrs Esmoris Cerdeiro-Pinedo Amado both became unfit for work. They then returned to Morocco and Spain respectively and continued to receive an allowance for incapacity for work. By virtue of that allowance, each was entitled to allowances under the AKW for his or her dependent child.

18 However, the SVB refused to pay those allowances to Mr Fahmi and to Mrs Esmoris Cerdeiro-Pinedo Amado, in Mr Fahmi's case for the fourth quarter of 1996 and in Mrs Esmoris Cerdeiro-Pinedo Amado's case for the same quarter and also for the first quarter of 1997. It did so on the ground that at the material time their children had already reached the age of 18 years and no longer satisfied the conditions of the transitional arrangement which had been in force since January 1, 1996. Having completed their secondary education in 1995/96, in Morocco and Spain respectively, Mr Fahmi's son and Mrs Esmoris CerdeiroPinedo Amado's daughter had both commenced a course of higher education in 1996/97. 19 Mr Fahmi and Mrs Esmoris Cerdeiro-Pinedo Amado lodged complaints against the SVB's decision refusing to pay the allowance. The SVB made a determination in respect of those complaints on March 26, and May 7, 1997 respectively and declared them unfounded. Mr Fahmi and Mrs Esmoris CerdeiroPinedo Amado appealed against those decisions before the Arrondissementsrechtbank te Amsterdam. 20 The Arrondissementsrechtbank te Amsterdam considers that the amendment of the AKW upon the entry into force of the WSF and the nationality and residence criteria applied to students on the basis of the WSF introduced a distinction based on nationality. It considers that that distinction also affects those insured under the AKW themselves, since, first, the overwhelming majority of the non-Dutch children of those insured are children of non-Dutch parents and, secondly, children of persons insured under the AKW who study abroad are for the main part children whose parents themselves live outside the Netherlands. According to the national court, the aims of the study finance provided for in the WSF are such that a distinction of this nature cannot be justified. 21 The Arrondissementsrechtbank te Amsterdam considered that the disputes before it required an interpretation of Community law. It therefore decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling: *1318 -- in Mr Fahmi's case: 1. (a) Must Art.41(1) of the Co-operation Agreement be interpreted as meaning that a Moroccan worker may rely on the prohibition of discrimination laid down in that provision if he no longer resides on the territory of a Member State of the European Community? (b) If so, does Art.41(3) of the Co-operation Agreement preclude reliance on Art.41(1) thereof by a Moroccan worker whose children reside outside the Community? 2. If a worker such as the plaintiff may rely on the prohibition of discrimination laid down in Art.41(1) of the Co-operation Agreement, does that prohibition have the effect of rendering the abolition of the entitlement to receive child allowance impermissible if the effect of that abolition is such that that right is replaced by (a different) entitlement to receive a contribution to (inter alia) the cost of

maintaining student children aged 18 or over which far more frequently benefits Dutch nationals or persons insured under the AKW who reside in the Netherlands than workers such as the plaintiff? -- in Mrs Esmoris Cerdeiro-Pinedo Amado's case: 1. (a) Does Art.3 of Regulation 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 eligibility for the entitlement which replaces that right is in principle enjoyed only by students who are Dutch nationals and who are pursuing their studies in the Netherlands? (b) Must Art.7(1) of Regulation 1612/68 be interpreted as precluding the abolition of the right to child allowance for student children over the age of 18 if eligibility for the entitlement which replaces that right is in principle enjoyed only by students who are Dutch nationals and who are pursuing their studies in the Netherlands? 2. Must Art.48 or Art.52 of the EEC Treaty be interpreted as meaning that the restriction of entitlement to receive from the national authorities a contribution to the cost of maintaining student children aged 18 or over results, for nationals of Member States other than the Netherlands who move to the Netherlands or for the children of such nationals, in an obstacle to freedom of movement for workers, or to freedom of establishment, which is such as to render that restriction incompatible with those Articles? Purpose and admissibility of the questions 22 By those questions the national court is essentially seeking to ascertain whether the various provisions of Community law to which it refers are to be interpreted as meaning that they do not permit a right to a dependent child's allowance, such as that guaranteed by the AKW, to be abolished in respect of students aged between 18 and 27 years and replaced by a right to study finance, which is granted directly to those children and generally available only to those having the nationality of the Member State concerned or residing in that State and attending an institution there, where the effect of such an amendment is to deprive persons in the plaintiffs' situation of the allowance guaranteed under the original legislation without conferring on their children the right to the finance provided for in the new legislation. 23 The national court thus seems to suggest that, rather than examine *1319 separately the compatibility of the AKW and the WSF with Community law, the Court should in reality compare the entire two-stage legislative process comprising the partial repeal of existing rules and the adoption of new rules in their stead with the requirements of Community law. 24 It must be pointed out, however, that the mere fact that the two legislative amendments in question form part of a comprehensive reform of the national arrangements for study finance cannot itself, in the absence of special

circumstances, suffice to justify combining the two sets of rules for the purpose of examining their compatibility with Community law. 25 The Member States are free to organise their social security systems, in particular by determining the conditions for entitlement to benefits, provided that they do not infringe Community law when exercising that power. [FN51] FN51 See, in particular, Kenny v Insurance Officer (1/78): [1978] E.C.R. 1489; [1978] 3 C.M.L.R. 651, para.[16]; Coonan v Insurance Officer (110/79): [1980] E.C.R. 1445, para.[12]; and Decker v Caisse de Maladie des Employés (C120/95): [1998] E.C.R. I-1831; [1998] 2 C.M.L.R. 879, paras [21]-[23]. 26 The rules on freedom of movement for workers within the Community referred to by the national court and the Co-operation Agreement must therefore be interpreted separately, in the light of each of the two national laws. 27 As regards the AKW, as the Advocate General observes at para.27 of his Opinion, the gradual abolition of the dependent child allowance by that law in respect of students aged between 18 and 27 years, without regard to their nationality, does not as such disclose any infringement of the rules on freedom of movement for workers within the Community to which the national court refers, or of the Co-operation Agreement. 28 As regards, moreover, the fact that the national court may not have jurisdiction to make a determination concerning the WSF, or the fact that the action pending before it was brought on the basis of the AKW alone, and the doubts expressed in relation to those facts by the Commission and the Dutch Government respectively, it should be borne in mind that, in accordance with settled case law, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. [FN52] FN52 See, inter alia, Sehrer v Bundesknappschaft (C-302/98): [2000] E.C.R. I4585, para.[20]. 29 In the cases before the national court, it is by no means obvious that, in so far as it concerns the WSF rather than the AKW, the interpretation of Community law sought by that court bears no *1320 relation to the purpose or facts of the main action or is likely to have no effect on the outcome of the proceedings, so that there is no need to reject the requests made by the national court. [FN53] FN53 See, in that regard, inter alia, Landesgrundverkehrsreferent de Tiroler Landesreguering v Beck Liegenschaftsverwaltungsgesellschaft mbH (C-355/97): [1999] E.C.R. I-4977, para.[22], and Guimont, Re (C-448/98): [2003] C.M.L.R. 3, para.[22]. 30 In the light of the foregoing, the answer for the national court must be that

neither the Co-operation Agreement nor Art.48 of the Treaty, nor Regulations 1408/71 and 1612/68, may be interpreted as meaning that they prevent a Member State from gradually abolishing an allowance for dependent children aged between 18 and 27 years pursuing studies provided that, as in the case of the legislation at issue in the main proceedings, its abolition does not involve discrimination based on nationality. 31 As regards the arrangement for study finance introduced by the WSF, the questions referred to the Court must be examined separately according to whether they relate to a situation such as Mrs Esmoris Cerdeiro-Pinedo Amado's or Mr Fahmi's. The questions in Mrs Esmoris Cerdeiro-Pinedo Amado's case Question 1(a) 32 By Question 1(a), the national court is asking essentially whether Art.3 of Regulation 1408/71 or any other provision of that Regulation must be interpreted as meaning that that Regulation prevents the application of national legislation which limits study finance solely to national students or to those treated as national students by virtue of their residence on the territory of the Member State which has introduced that finance, both categories, moreover, being required in principle to be studying in an institution on that territory, where it follows from those conditions that the children of a person in a situation such as the plaintiff's are not eligible for that finance. 33 In order to answer the question as thus reformulated, it should be noted, first, that the Court has previously held that Art.77 of Regulation 1408/71 gives a person entitled to a pension or a benefit payable under the legislation of a single Member State, residing in the territory of another Member State, entitlement only to family allowances, to the exclusion of other family benefits. [FN54] FN54 Lenoir v Caisse d'Allocations Familiales des Alpes-Maritimes (313/86): [1988] E.C.R. 5391; [1990] 1 C.M.L.R. 543, paras [10] and [11]. 34 Second, it should be emphasised that the specific purpose of Art.77 is to define the conditions in which a person in receipt of a pension may claim a dependent child's allowance from a Member State under whose legislation he receives a pension and that that provision expressly restricts its scope to family allowances. In those circumstances, neither the rule prohibiting discrimination on the basis of nationality laid down in Art.3(1) of Regulation 1408/71 nor any *1321 other provision of that Regulation can be interpreted as meaning that it enables the recipient of a pension who resides outside the territory of the paying Member State to obtain from that Member State dependent child allowances other than family allowances. 35 It follows that, without its being necessary to determine whether the study finance introduced by the WSF may be classified as a family benefit within the meaning of Art.1(u)(i) of Regulation 1408/71, it is sufficient in the present case to

observe that that finance cannot be regarded as a family allowance within the meaning of Regulation 1408/71, since such a classification is, in the very words of Art.1(u)(ii) of that Regulation, reserved to benefits granted exclusively by reference to the number and, where appropriate, the age of members of the family. 36 The answer to Question 1(a) must therefore be that a person entitled to a pension payable under the legislation of a single Member State and residing on the territory of another Member State cannot rely on either Art.3(1) of Regulation 1408/71 or any other provision of that Regulation in order to obtain from the Member State under whose legislation he receives his pension study finance such as that introduced by the WSF. Question 1(b) and Question 2 37 By Question 1(b) and Question 2, which must be examined together, the national court is asking in substance whether Art.7(1) of Regulation 1612/68 and Arts 48 and 52 of the Treaty must be interpreted as meaning that they preclude the application of national legislation which limits the grant of study finance solely to national students or to those treated as such by virtue of their residence on the territory of the Member State which has introduced such finance, both categories of students, moreover, being required in principle to be studying in an institution on that territory, where it follows from those conditions that the children of a person in a situation such as the plaintiff's are not eligible for that finance. 38 In order to answer the questions as thus reformulated, it is necessary, first, to observe that Art.52 of the Treaty cannot apply to a dispute such as that before the national court, since Mrs Esmoris Cerdeiro-Pinedo Amado has not exercised the right of free establishment guaranteed by that provision. Since that part of the question clearly has no bearing on the subject matter of the proceedings before the national court and has no relevance to their outcome, there is no need to answer it. 39 As regards, second, Art.48 of the Treaty and Regulation 1612/68, it is first of all necessary to ascertain whether the dispute before the national court falls within the scope of those provisions and, in particular, whether Mrs Esmoris Cerdeiro-Pinedo Amado has the status of migrant worker for the purpose of those provisions. 40 The plaintiff did indeed exercise the right to freedom of movement *1322 laid down in Art.48 of the Treaty and, on that basis, she did fall within the scope of that provision, and also within that of Regulation 1612/68, during the period when she was employed in the Netherlands. 41 In the present case, however, the question is whether such provisions may be interpreted as meaning that they may be relied upon in order to defeat national legislation such as the WSF by a worker who has ceased to exercise her occupational activity in the host Member State and returned to her Member State of origin. 42 In that regard, the Court has held that, once the employment relationship has ended, the person concerned as a rule loses his status of worker within the

meaning of Art.48 of the Treaty, although that status may produce certain effects after the relationship has ended. [FN55] FN55 See MartÍnez Sala v Freistaat Bayern (C-85/96), May 12, 1998: [1998] E.C.R. I-2691, para.[32]. 43 In the present case, it cannot be claimed that, in the case of a migrant worker who, like the plaintiff, has ceased work and returned to her Member State of origin, where her children also live, the conditions to which the WSF subjects the grant of study finance, set out in para.[37] above, are capable of impeding the right to freedom of movement which that worker enjoys under Art.48 of the Treaty. 44 As regards Regulation 1612/68, it should first of all be observed that Art.7(1) relates to the conditions of employment and work, in particular as regards remuneration, dismissal and reinstatement or re-employment, so that it cannot as such apply in the context of the main proceedings. 45 On the other hand, it is common ground that Art.7(2) of Regulation 1612/68, which prohibits any discrimination between national workers and migrant workers in the granting of social advantages, is prima facie applicable since the study finance introduced by the WSF does indeed constitute such a social advantage. [FN56] To that extent, the question must be taken to refer to Art.7(2) and not to Art.7(1) of Regulation 1612/68. FN56 See Bernini v Minister Van Onderwijs en Wetenschappen (C-3/90): [1992] E.C.R. I-1071, para.[23], and Meeusen v Hoofddirectie Van de Informatie Beheer Groep (C-337/97): [1999] E.C.R. I-3289; [2000] 2 C.M.L.R. 659. 46 However, it must be noted that such a provision cannot be interpreted as being of such a kind as to guarantee the maintenance of a social advantage such as the finance introduced by the WSF for migrant workers who have ceased to exercise an activity in the host Member State and returned to their Member State of origin. 47 It should be remembered that it follows, in particular from the context to which that provision belongs and also its aims, that in so far as it guarantees access without discrimination to the social benefits granted by the host Member State, it cannot, as a general rule and except in special circumstances, [FN57] be extended to workers who, after ceasing to exercise their occupational activity in the host Member State, have decided to return to their Member State of origin. FN57 See inter alia, Meints v Minister Van Landbouw (C-57/96): [1997] E.C.R. I6689; [1998] 1 C.M.L.R. 1159 *1323 . 48 Article 7(2) of Regulation 1612/68 comes under Title II, on "Employment and equality of treatment". 49 Furthermore, it must be remembered that Regulation 1251/70 [FN58] expressly provides in Art.7 that the right to equality of treatment established by

Regulation 1612/68 is to apply also to migrant workers who have ceased to exercise their occupational activity where they have decided to remain in the host Member State. FN58 [1971] O.J. Spec.Ed. p.402. 50 As regards the purpose of the provision in question, the fifth recital of the preamble to Regulation 1612/68 states that "the right of freedom of movement, in order that it may be exercised, by objective standards, in freedom and dignity, requires ... that obstacles to the mobility of workers shall be eliminated, in particular as regards the worker's right to be joined by his family and the conditions for the integration of that family into the host country". 51 In the light of the foregoing considerations, and in the absence of special circumstances justifying a departure from the fundamental principle set out above, the answer to the court making the reference must be that a national of a Member State who has exercised the right to freedom of movement guaranteed by Art.48 of the Treaty and has ceased to exercise his occupational activity in the host Member State and returned to his Member State of origin, in which his children also reside, cannot rely on Art.48 or on Art.7(2) of Regulation 1612/68 in order to obtain from the Member State in which he was employed a right to have his children's studies financed in the same conditions as those applied by that State to its own nationals. The questions in Mr Fahmi's case Question 1 52 By Question 1, the national court is asking essentially whether Art.41 of the Co-operation Agreement is to be interpreted as meaning that a Moroccan worker who has ceased to exercise his occupational activity in the host Member State and has returned to his country of origin, or his dependent children who themselves live outside the Community, may rely, in regard to study finance such as that introduced by the WSF, on the principle laid down in that provision that any discrimination based on nationality in the field of social security is prohibited. 53 The Commission and the Dutch, Austrian and UK Governments consider, unlike Mr Fahmi, that a Moroccan worker who has ceased to exercise his occupation in a Member State and returned to his country of origin, where he lives, is no longer entitled to rely on Art.41(1) of the Co-operation Agreement, which prohibits any discrimination based on nationality between Moroccan workers and nationals of the Member State concerned in the field of social security. 54 The Commission and the UK Government further consider that the *1324 study finance introduced by the WSF does not come within the field of social security, so that Art.41 of the Co-operation Agreement does not apply to the main proceedings. 55 The Dutch, Austrian, French and UK Governments and the Commission also

assert that it follows from both Art.41(3) of the Co-operation Agreement, inasmuch as it limits the right to family allowances in the case of Moroccan workers to their children who are resident in the Community, and from Art.41(4), which provides that certain allowances are available outside the Community only in the case of the pensions and annuities listed therein, that the Agreement does not entitle Moroccan nationals resident outside the Community to obtain family allowances for members of their families who are themselves resident outside the Community. 56 It should be noted, first of all, that it is clear from the case law of the Court that the purpose of the Co-operation Agreement is to consolidate the position of Moroccan workers and members of their families living with them in the host Member State as regards social security [FN59] and that, with specific regard to family allowances, the prohibition of discrimination laid down in Art.41(1) of the Agreement is guaranteed only within the limits of the conditions laid down in Art.41(3). [FN60] FN59 Belgium v Mesbah (C-179/98): [1999] E.C.R. I-7955, para.[36]. FN60 Office National de l'Emploi v Kziber (C-18/90): [1991] E.C.R. I-199, para.[18]. 57 Without its being necessary to adjudicate on the precise legal classification, from the standpoint of the Co-operation Agreement, of benefits such as those paid under the WSF, it is sufficient in the present case to state that it follows both from the wording of Art.41(1) and (3) of the Agreement and also from the spirit of that provision that, unless the children of a Moroccan worker reside in the Community, neither that worker nor his children can rely, in regard to benefits of the kind at issue in the main proceedings, on the principle of the prohibition of discrimination laid down in that provision. 58 The answer to Question 1 must therefore be that Art.41 of the Co-operation Agreement must be interpreted as meaning that where the dependent children of a Moroccan worker do not reside in the Community, neither the Moroccan worker concerned nor his children can rely, in regard to study finance such as that introduced by the WSF, on the principle of the prohibition of discrimination on the basis of nationality laid down in that provision in relation to social security. Question 2 59 In the light of the answer to Question 1, there is no need to answer Question 2. *1325 Costs 60 The costs incurred by the Dutch, Spanish, French, Austrian and UK Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the

main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. R1 Order On those grounds, THE COURT, in answer to the questions referred to it by the Arrondissementsrechtbank te Amsterdam by order of January 28, 1999, HEREBY RULES: 1. Neither the Co-operation Agreement between the European Economic Community and Morocco signed at Rabat on April 27, 1976 and approved on behalf of the Community by Council Regulation 2211/78, nor Art.48 of the EC Treaty (now, after amendment, Art.39 EC), nor Council Regulation 1408/71, may be interpreted as meaning that they prevent a Member State from gradually abolishing an allowance for dependent children aged between 18 and 27 years pursuing studies provided that, as in the case of the legislation at issue in the main proceedings, its abolition does not involve discrimination based on nationality. 2. A person entitled to a pension payable under the legislation of a single Member State and residing on the territory of another Member State cannot rely on either Art.3(1) of Regulation 1408/71, or any other provision of that Regulation in order to obtain from the Member State under whose legislation he receives his pension study finance such as that introduced by the Wet op de studiefinanciering (Law on study finance). 3. A national of a Member State who has exercised the right to freedom of movement for workers guaranteed by Art.48 of the Treaty and has ceased to exercise his occupational activity in the host Member State and returned to his Member State of origin, in which his children also reside, cannot rely on Art.48 or on Art.7(2) of Regulation 1612/68 in order to obtain from the Member State in which he was employed a right to have his children's studies financed in the same conditions as those applied by that State to its own nationals. 4. Article 41 of the EEC-Morocco Co-operation Agreement must be interpreted as meaning that where the dependent children of a Moroccan worker do not reside in the Community, neither the Moroccan worker concerned nor his children can rely, in regard to study finance such as that introduced by the Wet op de studiefinanciering, on the principle of the prohibition of discrimination on the basis of nationality laid down in that provision in relation to social security. (c) Sweet & Maxwell Limited [2003] 1 C.M.L.R. 45 END OF DOCUMENT