Christopher Stanton and SA Belge d'Assurances l'Etoile v. Institut National d'Assurances Sociales pour Travaileurs Independants (I.N.A.S.T.I.) (Case 143/87) Before the Court of Justice of the European Communities (3rd Chamber) ECJ (3rd Chamber) (Presiding, Moitinho de Almeida P.C.; Everling and Galmot JJ.) Sig. Federico Mancini, Advocate General. 7 July 1988 Reference from Belgium by the Tribunal de Travail (Labour Court), Brussels, under Article 177 EEC. Community law and national law. Occupied field. Establishment. Member-States are required to observe the establishment rules in Article 52 EEC even in areas of law where they retain legislative competence. [10] Establishment. Multiple centres of activity. Freedom of establishment is not confined to the right to create a single establishment within another member-State but entails the right also to set up and maintain, subject to observance of any relevant rules of conduct, more than one place of work within the Community. That applies equally to a person who is employed in one member-State and wishes, in addition, to work in another member-State in a self-employed capacity. [11]-[12] Establishment. Social security. Overlapping charges. The law of a member-State which exempts local employees from the obligation to pay social security contributions in respect of secondary self-employment but does not so exempt those who are employees in another member-State places at a disadvantage those who work outside the former State. It therefore infringes Articles 48 and 52 EEC. [14]

Establishment. Social security. Overlapping charges. Where persons principally employed in one member-State, where they pay social security contributions, are required to pay contributions in a second memberState in which they pursue a secondary, self-employed, activity but are not afforded any additional social protection thereby, and are not granted the *762 same exemption that local nationals in multiple activity receive, that constitutes an unjustified impediment to working in more than one member-State and infringes Articles 48 and 52 EEC. The Court interpreted Articles 52 and 48 EEC in the context of Belgian social security law for the self-employed which did not apply to those who carried on secondary self-employed activity if their principal job was as an employee in Belgium (irrespective of nationality) but did apply if they were primarily an employee in another member-State, in casu England, to the effect that there was no discrimination under Article 7 EEC, that freedom of establishment included the right to establish in several member-States simultaneously, that that applied to a combination of employment in one member-State and establishment as a selfemployed person in another, that the Belgian rules hindered such multiple establishment, and that therefore they were unlawful as contrary to Articles 52 and 48. Representation Jean Bayart and Francois-Xavier de Doorlot of the Brussels Bar, for the plaintiffs. J. Lejuste, Deputy Director of I.N.A.S.T.I. and J. V. de Weirt for the defendant institution. J. Buchmann for the Belgian Government as amicus curiae. E. Lasnet, Legal Adviser to the E.C. Commission, assisted by F. Herbert of the Brussels Bar, for the E.C. Commission as amicus curiae. The following cases were referred to in the judgment: 1. Re Tax Credits: E.C. Commission v. France (270/83), 28 January 1986: [1986] E.C.R. 273, [1987] 1 C.M.L.R. 401. Gaz:270/83 2. Ordre des Avocats Au Barreau de Paris v. Klopp (107/83), 12 July 1984: [1984] E.C.R. 2971, [1985] 1 C.M.L.R. 99, Gaz:107/83 The following additional cases were referred to in argument: 3. Van Binsbergen v. Bestuur Van de Bedrijfsvereniging voor de Metaalnijverheid (33/74), 3 December 1974: [1974] E.C.R. 1299, [1975] 1 C.M.L.R. 298. Gaz:33/74 4. Ministere Public and Chambre Syndicale des Agents Artistiques et Impresarii de Belgique Asbl. v. Van Wesemael and Follachio (110 & 111/78), 18 January 1978: [1979] E.C.R. 35, [1979] 3 C.M.L.R. 87. Gaz:110/78 5. Webb (279/80), 17 December 1981: [1981] E.C.R. 3305, [1981] 1 C.M.L.R.

719. Gaz:279/80 6. D'Amico v. Landesversicherungsanstalt Rheinland-Pfalz (20/75), 9 July 1975: [1975] E.C.R. 891, [1976] 2 C.M.L.R. 361. Gaz:20/75 *763 7. Seco SA v. Etablissement D'Assurance contre la Vieillesse et L'Invalidite (62 & 63/81), 3 February 1982: [1982] E.C.R. 223. Gaz:62/81 8. Kenny v. Insurance Officer (1/78), 28 June 1978: [1978] E.C.R. 1510, [1978] 3 C.M.L.R. 651. Gaz:1/78 9. Walrave and Koch v. Association Union Cycliste Internationale (36/74), 12 December 1974: [1974] E.C.R. 1241, [1975] 1 C.M.L.R. 320. Gaz:36/74 10. Reyners v. the Belgian State (2/74), 12 June 1974: [1974] E.C.R. 631, [1974] 2 C.M.L.R. 305. Gaz:2/74 11. Re Biological Laboratories: E.C. Commission v. Belgium (221/85), 12 February 1987: [1987] E.C.R. 719, [1988] 1 C.M.L.R. 620. Gaz:221/73 12. Sotgiu v. Deutsche Bundespost (152/73) 12 March 1974: [1974] E.C.R. 153. Gaz:152/73 13. Pinna v. Caisse D'Allocations Familiales (41/84), 15 January 1986: [1986] E.C.R. 1, [1988] C.M.L.R. 350. Gaz:41/84 14. Hoeckx v. Openbaar Centrum voor Maatschappelijk Welzijn (249/83) 27 March 1985: [1985] E.C.R. 973, [1987] 3 C.M.L.R. 368. Gaz:249/83 15. Choquet (16/78), 28 November 1978: [1978] E.C.R. 2293, [1979] 1 C.M.L.R. 535. Gaz:16/78 16. Segers v. Bestuur Van de Bedrijfsvereniging voor Bank-en Verzekeringswezen, Groothandel en Vrije Beroepen (79/85), 10 July 1986: [1986] E.C.R. 2375, [1987] 2 C.M.L.R. 247. Gaz:79/85 17. Moebs (Nonnenmacher) v. Bestuur der Sociale Verzekeringsbank (92/630), 9 June 1964: [1964] E.C.R. 281, [1964] C.M.L.R. 338. Gaz:92/63 18. Sociale Verzekeringsbank v. Van der Vecht (19/67), 5 December 1967: [1967] E.C.R. 345, [1968] C.M.L.R. 151, Gaz:19/67 TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Opinion of the Advocate General (Sig. Federico Mancini) 1 In the three references for a preliminary ruling now before the Court, the Tribunal de Travail, Brussels, and the Belgian Hof van Cassatie (Supreme Court) request the Court to interpret the provisions of the EEC Treaty relating to the free movement of persons and the freedom to provide services. *764 The parties in the relevant proceedings are, on the one hand, the Institut National d'Assurances Sociales pour Travailleurs Indépendants (National Social Insurance Institution for Self-Employed Persons) (INASTI) and, on the other hand, Christopher Stanton, a British national employed by a British insurance company (Case 143/87); Heinrich Wolf, a German national employed as an engineer with Degussa in Frankfurt; and Wilfried Dorchain, a Belgian national employed in Germany by Ford-Werke A.G. (Joined Cases 154- 155/87).

In addition to those principal occupations, each of these persons has for some time carried out duties as a director in a Belgian company, namely L'Etoile 1905, NV Microtherm Europe and PVBA Almare, respectively. Since, under Belgian law, a director of a commercial company is deemed to be a self-employed person, INASTI requires Messrs Stanton, Wolf and Dorchain to pay the relevant social security contributions. The three directors, on the other hand, argue that they are not obliged to pay anything, and put forward the following arguments: (a) they are compulsorily affiliated, as employees, to the respective social security systems of the States in which they are employed; (b) under Belgian legislation, a self-employed person who already pays contributions as an employee to a national scheme is, on this account, exempt from payment of further contributions; (c) to plead, as INASTI does, that their contributions are paid into schemes of member-States other than Belgium is contrary to the principal of equal treatment and to the Community provisions relating to freedom of movement for workers. In view of those arguments, the Tribunal de Travail, Brussels, (Case 143/87) and the Belgian Hof van Cassatie (Cases 154 and 155/87) referred to the Court, by judgments of 30 April and 4 May 1987, questions of a substantially similar nature. They may be summarised as follows: Must Article 52 et seq. EEC be interpreted as meaning that the legislation of a member-State is incompatible with those provisions where it provides that self-employed persons are exempt from the payment of social security contributions when they are already affiliated to a social security scheme in that State but there is no exemption for self-employed persons who are covered, in relation to their employment, by the social security scheme of another member-State? During the proceedings before the Court written observations were submitted by INASTI, the Belgian Government and the E.C. Commission (Case 143/87 and Joined Cases 154-155/87); by Mr. Stanton and L'Etoile 1905 (Case 143/87); and by Mr. Wolf and NV Microtherm Europe (Joined Cases 154-155/87). INASTI, the Commission and Mr. Wolf presented oral argument at the hearing. *765 2 Let me begin with a few words about the national legislation whose compatibility with Community law is in issue. Section 3(1) of Royal Decree 38 of 27 July 1967, which established the social security scheme for self-employed persons, provides that 'any natural person carrying on in Belgium an occupational activity in respect of which he is not bound by a contract of employment or fixed conditions of employment' must pay contributions to the social security scheme. Under section 2 of the Royal Decree of 19 December 1967, which gave effect to this scheme, the holding of a remunerated directorship in a commercial company is deemed to be such an occupational activity. Moreover, section 12(2) of Royal Decree 38 provides that 'a person subject to the scheme who, ... habitually pursues by way of principal occupation another employment or occupational activity is not liable to pay any contributions if his income as a self-employed person' does not reach a certain level. The concept of a habitual and principal occupation is further defined in section 35(1) of the Royal

Decree of 19 December 1967. The definition is satisfied if '(a) [the] employment of [the person concerned] as a manual worker, clerical worker, miner or sailor on a ship flying the Belgian flag meets the definition of a principal occupation within the meaning of the scheme applicable to those categories of workers; (b) the activity he pursues is covered by another pension scheme established by or under a statute, by a provincial regulation or by the Belgian Railways ...'. Finally paragraph 3 of that provision states that 'employment by an international ... organisation of which Belgium is a member shall be treated as employment as a manual worker or clerical worker ...'. 3 Stressing that Community co-ordinating rules were only introduced in this field by Regulation 1390/81, INASTI observes that the legislation described above sought to ensure adequate social protection for any person carrying on an occupational activity in Belgian territory without giving any importance, even indirectly, to that person's nationality. Furthermore, employment pursued by way of principal occupation in another member-State is governed by the scheme specific to that State and cannot therefore have any effect on the application of Belgian social legislation. In the final analysis, in order to give entitlement to exemption from contributions the employment must be governed by a Belgian social security scheme or--and this is the only exception--it must be in the service of an international organisation of which Belgium is a member. *766 This argument is not persuasive. I should observe first of all that the problem raised by the national courts concerns a situation in which the refusal to grant exemption is based not on the nationality of the employee who is also a director of a Belgian company, but on the fact that the social security scheme to which he pays contributions is not governed by Belgian legislation. It is not necessary to determine whether this state of affairs conceals indirect discrimination in order to recognise that it makes the self-employed person's right to benefit from the exemption depend on employment in Belgium. If that condition is not met, the worker is required to pay a sum (contributions in respect of work as a self-employed person) whose collection is not justified by any social consideration once he is affiliated to a social security scheme, even if it is in a different State. Consequently, the national legislation in question is capable of impeding the freedom of workers to establish themselves in another member-State and for that reason alone is incompatible with Community law. I should observe in this connection that Article 52 of the Treaty is a fundamental provision in the Community legal order and has been directly applicable in the member-States since the end of the transitional period. It seeks 'to ensure that all nationals of member-States who establish themselves in another member-State, even if that establishment is only secondary, for the purpose of pursuing activities there as self-employed persons receive the same treatment as nationals of that State' (Case 270/83, E.C. Commission v. France [FN1]). FN1 [1986] E.C.R. 273, [1987] 1 C.M.L.R. 401, at Paras. [13] and [14].

The conclusion thus reached is not affected by the argument that the Royal Decrees of 27 July and 19 December 1967 were adopted at a time when there were not yet any Community co-ordinating rules. As is clear from the Court's case law, Article 52 imposes 'an obligation to attain a precise result the fulfilment of which must be made easier by, but not made dependent on, the implementation of a programme of progressive measures. Consequently the fact that the Council has failed to issue the directives provided for by Articles 54 and 57 cannot serve to justify failure to meet the obligation' (Case 107/83, Ordre des Avocats v. Klopp [FN2]). FN2 [1984] E.C.R. 2971, [1985] 1 C.M.L.R. 99, At Para. [10]. 4 In the light of the foregoing considerations, I suggest that the Court should reply as follows to the questions referred by the Tribunal de Travail, Brussels, and the Belgian Hof van Cassatie by judgment of 30 April and 4 May 1987 respectively: Articles 52 et seq. of the EEC Treaty must be interpreted as meaning that the legislation of a member-State is incompatible therewith where *767 exemption from the payment of social security contributions of self-employed persons who work there depends on their affiliation at the same time, by virtue of an employment relationship, to a social security scheme in that State. JUDGMENT [1] By a judgment of 30 April 1987, which was received at the Court Registry on 11 May 1987, the Tribunal de Travail (Labour Tribunal), Brussels, referred to the Court for a preliminary ruling under Article 177 EEC two preliminary questions relating to the freedom of establishment and the freedom to provide services. [2] Those questions arose in the course of proceedings between the Institut National pour l'Assurance des Travailleurs Indépendants (National Institute for Social Insurance for Self-Employed Persons, hereinafter referred to as ' INASTI') and Mr. Stanton and the company of which he has been a director since 1979, relating to the payment of contributions to the Belgian social security scheme for self-employed persons in respect of his activities. [3] Mr. Stanton is employed in the United Kingdom and in that capacity pays contributions to the British social security scheme for employees. He bases his request for exemption from payment of the contributions in question on section 12(2) of Royal Decree 38 establishing the social security scheme for selfemployed persons. [FN3] Under that provision a self-employed person is not liable to pay contributions if his income earned in that capacity does not reach a certain threshold and if, in addition to that activity, he habitually pursues by way of principal occupation another occupational activity. FN3 M.B. 29 July 1967.

[4] INASTI, however, claims that the 'other occupational activity' mentioned in section 12(2), as further defined by section 35 of the Royal Decree of 19 December 1967, [FN4] amended by Royal Decree of 15 July 1970, relates solely to employment covered by a Belgian social security scheme. FN4 M.B. 29 December 1967. [5] The Tribunal de Travail, Brussels, considered that the arguments thus submitted by the parties to the dispute raised a question of interpretation of Community law; it therefore stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling: (1) Is the refusal by a member-State to exempt wholly or in part a national of another member-State providing services in the first State from payment in the first State of social security contributions under the scheme for self-employed persons in respect of activities of a secondary nature pursued in that capacity in that State even though he is subject to the social security legislation of the second State in respect of his principal activity as an employed person, *768 solely on the ground that his activity as an employed person pursued ' habitually and by way of principal occupation' takes place outside the territory of the member-State in which the service is provided, compatible with the wording and spirit of Article 7, Article 8(1) and (7), Article 52, the first paragraph of Article 59, the third paragraph of Article 60 and Article 65 of the Treaty of Rome of 25 March 1957 establishing the European Economic Community (approved by the Belgian Act of 2 December 1957)? (2) If the reply to that question is in the negative, are the applicable Community provisions incompatible with paragraphs 1 and 3 of section 35 of the Belgian Royal Decree of 19 December 1967 laying down general rules for the implementation of Royal Decree 38 of 27 July 1967 on the social security scheme for self-employed persons, inasmuch as only an activity pursued in Belgium is regarded as an occupational activity other than that pursued as a selfemployed person, even where those paragraphs do not contain an express provision to that effect? [6] Reference is made to the Report for the Hearing for a more detailed account of the facts of the main proceedings, the provisions of national and Community law in issue and the observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. [7] A Community scheme for self-employed persons was introduced by Council Regulation 1390/81 extending to self-employed persons and members of their families Council Regulation 1408/71. According to Article 2 of that regulation, no rights are acquired thereunder in respect of a period prior to the date of its entry into force. It appears from Article 4 that the regulation entered into force only on 1 July 1982, that is to say, after the period relevant to the main proceedings (1979 to 1980). The regulation is therefore not applicable to the dispute and the question put by the national court is correct in referring only to the relevant Treaty provisions.

[8] Article 7 of the Treaty forbids any discrimination on grounds of nationality within the scope of application of the Treaty. [9] It appears, however, from the documents before the Court that the national legislation which gave rise to the main proceedings is applicable without distinction to all self-employed persons working in Belgium and does not discriminate according to the nationality of those persons. Although it is true that self-employed persons whose principal occupation is employment in a memberState other than Belgium are thereby placed at a disadvantage, nothing has been submitted to the Court to show that the persons disadvantaged are exclusively or mainly foreign nationals. Nor, therefore can the national legislation at issue be considered to result in indirect discrimination on grounds of nationality. Consequently, Article 7 of the Treaty may be dismissed from consideration. *769 [10] The first paragraph of Article 52 of the Treaty requires the abolition of all restrictions on the freedom of establishment of nationals of a member-State in the territory of another member-State. It is settled law that that is a directly applicable rule of Community law. Member-States were therefore under the obligation to observe that rule even though, in the absence of Community legislation on social security for self-employed persons, they retained legislative jurisdiction in this field. [11] As the Court has held (in particular in Case 107/83, Ordre des Avocats v. Klopp [FN5] and Case 270/83, E.C. Commission v. France [FN6]), freedom of establishment within the Community is not confined to the right to create a single establishment within the Community, but entails the right to set up and maintain, subject to observance of the relevant professional rules of conduct, more than one place of work within the Community. FN5 [1984] E.C.R. 2971, [1985] 1 C.M.L.R. 99. FN6 [1986] E.C.R. 273, [1987] 1 C.M.L.R. 401. [12] That is equally true in respect of a person who is employed in one memberState and wishes, in addition, to work in another member-State in a selfemployed capacity. [13] The provisions of the Treaty relating to the free movement of persons are thus intended to facilitate the pursuit by Community citizens of occupational activities of all kinds throughout the Community, and preclude national legislation which might place Community citizens at a disadvantage when they wish to extend their activities beyond the territory of a single member-State. [14] The legislation of a member-State which exempts persons whose principal occupation is employment in that member-State from the obligation to pay contributions to the scheme for self-employed persons but withholds such exemption from persons whose principal occupation is employment in another member-State has the effect of placing at a disadvantage the pursuit of occupational activities outside the territory of that member-State. Articles 48 and 52 of the Treaty therefore preclude such legislation. [15] Finally, it should be noted that the contested national provision affords no

additional social protection to the persons concerned, who are affiliated to the social security and pension scheme of the member-State in which they pursue their principal employment. It follows that the impediment to the pursuits of occupational activities in more than one member-State may not in any event be justified on that basis. [16] The reply to be given to the questions of the national court must therefore be that Articles 48 and 52 of the Treaty must be interpreted as meaning that a member-State may not refuse to exempt self-employed persons working within its territory from the contributions provided for under the national legislation on social security for self-employed persons on the ground that the *770 employment which is capable of giving entitlement to such exemption is pursued within the territory of another member-State. Costs [17] The costs incurred by the Belgian Government and by the Commission of the European Communities, which submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court. Order On those grounds, THE COURT (Third Chamber), in answer to the questions referred to it by the Tribunal de Travail, Brussels, (Thirteenth Chamber), by a judgment of 30 April 1987, HEREBY RULES: Articles 48 and 52 of the Treaty must be interpreted as meaning that a memberState may not refuse to exempt self-employed persons working within its territory from the contributions provided for under the national legislation on social security for self-employed persons on the ground that the employment which is capable of giving entitlement to such exemption is pursued within the territory of another member-State. (c) Sweet & Maxwell Limited END OF DOCUMENT