Commission v Italy (Free movement of persons) [2000] EUECJ C-424/98 (25 May 2000)

Judgment By application lodged at the Court Registry on 25 November 1998, the Commission of the European Communities brought an action under Article 169 of the EC Treaty (now Article 226 EC) for a declaration that - by requiring family members of beneficiaries of Council Directive 90/364/EEC of 28 June 1990 on the right of residence (OJ 1990 L 180, p. 26) to have resources one third higher in amount than the minimum required for family members of beneficiaries of Council Directive 90/365/EEC of 28 June 1990 on the right of residence for employees and self-employed persons who have ceased their occupational activity (OJ 1990 L 180, p. 28); - by limiting the types of proof which may be submitted and, in particular, by providing that certain documents must be issued or certified by the authorities of another Member State; and - by requiring students who are citizens of other Member States and who are requesting recognition of their right of residence in Italy pursuant to Council Directive 93/96/EEC of 29 October 1993 on the right of residence for students (OJ 1993 L 317, p. 59) and members of their family to guarantee to the Italian authorities that they have resources of a certain amount and, as regards the means to be used for that purpose, not clearly leaving the student a choice between making a declaration and such alternative means as are at least equivalent, and by not allowing the declaration to be used where the student is accompanied by members of his family, the Italian Republic had failed to fulfil its obligations under those directives. Legal background Community legislation Article 1(1) of Directive 90/364 provides: '1. Member States shall grant the right of residence to nationals of Member States who do not enjoy this right under other provisions of Community law and to members of their families as defined in paragraph 2, provided that they themselves and the members of their families are covered by sickness insurance in respect of all risks in the host Member State and have sufficient resources to avoid becoming a burden on the social assistance system of the host Member State during their period of residence. The resources referred to in the first subparagraph shall be deemed sufficient where they are higher than the level of resources below which the host Member State may grant social assistance to its nationals, taking into account the personal circumstances of the applicant and, where appropriate, the personal circumstances of persons admitted pursuant to paragraph 2. Where the second subparagraph cannot be applied in a Member State, the resources of the applicant shall be deemed sufficient if they are higher than the level of the minimum social security pension paid by the host Member State. Article 1(1) of Directive 90/365 provides: '1. 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 paragraph 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. The resources of the applicant shall be deemed sufficient where they are higher than the level of resources below which the host Member State may grant social assistance to its nationals, taking into account the personal circumstances of [the applicant and, where appropriate, the personal circumstances of] (2) persons admitted pursuant to paragraph 2. Where the second subparagraph cannot be applied in a Member State, the resources of the applicant shall be deemed sufficient if they are higher than the level of the minimum social security pension paid by the host Member State. Article 1 of Directive 93/96, replacing in substance Council Directive 90/366/EEC of 28 June 1990 on the right of residence for students (OJ 1990 L 180, p. 30) which was annulled by the Court of Justice (Case C-295/90 Parliament v Council [1992] ECR I-4193 ), provides: 'In order to lay down conditions to facilitate the exercise of the right of residence and with a view to guaranteeing access to vocational training in a non-discriminatory manner for a national of a Member State who has been accepted to attend a vocational training course in another Member State, the Member States shall recognise the right of residence for any student who is a national of a Member State and who does not enjoy that right under other provisions of Community law, and for the student's spouse and their dependent children, where the student assures the relevant national authority,by means of a declaration or by such alternative means as the student may choose that are at least equivalent, that he has sufficient resources to avoid becoming a burden on the social assistance system of the host Member State during their period of residence, provided that the student is enrolled in a recognised educational establishment for the principal purpose of following a vocational training course there and that he is covered by sickness insurance in respect of all risks in the host Member State. National legislation The three directives referred to in paragraph 1 of this judgment were transposed into Italian law by Legislative Decree No 470 of 26 November 1992 on the application of Directives 90/364, 90/365 and 90/366 concerning the right of residence of Community nationals, employees and self-employed persons having ceased their occupational activity, and students ( Gazzetta Ufficiale della Repubblica Italiana No 286 of 4 December 1992; hereinafter 'Decree No 470/92). Decree No 470/92 inserted a number of new provisions into Presidential Decree No 1656 of 30 December 1965 (hereinafter 'amended Decree No 1656/1965), in particular Article 5a on the right of residence of nationals of a Member State having exercised an occupational activity and Article 5c on the right of residence of nationals of a Member State who do not have the right of residence under other provisions. In accordance with paragraph (1) of each of those articles, the persons concerned were to have an income not less than the minimum wage laid down by the Italian compulsory general insurance scheme. Under paragraph (2) of both Article 5a and Article 5c of amended Decree No 1656/1965, the right of residence is also granted to dependent members of the main beneficiary's family. Article 5c(2) provides, however, that the right of residence is granted only on condition that the main beneficiary has 'an overall income of not less, in respect of each household member, than the minimum wage referred to in paragraph (1) (the minimum wage laid down by the Italian compulsory general insurance scheme), whereas the right of residence of dependent members of the family of the beneficiary referred to in Article 5a (person having exercised an occupational activity) is granted 'on condition that the minimum amount of income referred to in the first paragraph is increased by one third for each family member. Article 5b, also inserted by Decree No 470/92 into Presidential Decree No 1656, concerns the right of residence of students and states in particular, in paragraph (1), that 'registered students who are nationals of a Member State of the European Community ... who have an income in Italy not less than the minimum amount under the Italian compulsory general insurance scheme have the right of residence in the territory of the Republic. The same article adds in paragraph (2) that members of the student's family are recognised as having a similar right 'on condition that the citizen upon whom they are dependent has an overall income of not less, in respect of eachfamily member, than the minimum amount under the Italian compulsory general insurance scheme. As regards the documents which must be presented in order to obtain the residence permit, Article 5d of amended Decree No 1656/1965 provides: '1. The residence permit and the residence document ... are issued ... on presentation of the following documents: ... (b) a declaration of the competent consular authority certifying that the applicant is registered with the health service of a Member State of the Community, an appropriate insurance policy for sickness, medical care and hospitalisation valid for the territory of the Republic, or a certified copy of the document of registration with the Italian national health service; (c) for the citizens referred to in Article 5a, a declaration of the competent consular authority certifying that the applicant has a pension or an allowance for occupational injury or disease or another source of income, stating the amount; (d) for the students referred to in Article 5b, an appropriate declaration by the person concerned, made before the competent public security authority, certifying the amount of available income, or a copy of the documents referred to in point (e); (e) for dependent family members and the nationals referred to in Article 5c, copies of documents in accordance with the provisions in force in the State of origin or provenance certified by the competent consular authority, attesting the existence of the income required, or, for income existing in the territory of the Republic, issued by the competent bodies; (f) for dependent family members, a document issued by the competent authority of the State of origin or provenance, certifying the existence of the family relationship and that the family member is a dependant. The pre-litigation procedure Taking the view that the Italian Republic had not correctly transposed Directives 90/364, 90/365 and 93/96 into domestic legislation the Commission put the Italian Government on formal notice by letter of 13 June 1995 to submit its observations in accordance with Article 169 of the Treaty. The Italian authorities replied by letter of 6 December 1995, attaching two memoranda from the Ministry of Employment and the Ministry of Social Security. Having examined that reply, the Commission decided that it was insufficient, and by letter of11 November 1996 issued a reasoned opinion to the Italian Republic, calling upon it to take the measures necessary to comply therewith within two months of its notification. By letter of 13 December 1996, the Italian authorities informed the Commission that the sixth paragraph of Article 1 of the draft law concerning the 'Provisions for the implementation of the obligations consequent upon the membership of Italy in the European Communities - Community law 1995-1996, approved by the Cabinet at its meeting on 8 November 1996, required the Government to adopt the additional provisions and amendments necessary to bring the rules applicable under Decree No 470/92 into line with the three directives at issue in this action. Having received no further information on the state of the procedure for adopting those provisions since receipt of that letter, the Commission has concluded that, to date, the Italian Republic has not adopted the provisions necessary to comply with Directives 90/364, 90/365 and 93/96, or at least has failed to inform the Commission of them. It therefore decided to bring the present action. Substance The amount of income for family members of beneficiaries of Directive 90/364 Arguments of the parties Under this head, the Commission asks the Court to declare that by placing family members of beneficiaries of Directive 90/364 'under an obligation to have at their disposal resources one third higher than the minimum amount for family members of beneficiaries of Directive 90/365 the Italian Republic has failed to fulfil its obligations under Directive 90/364. According to the Commission, a comparison of Articles 5a and 5c of amended Decree No 1656/1965 shows that family members of beneficiaries of Directive 90/364 are required to have an income one third higher than that of family members of persons benefiting from Directive 90/365. However, the Commission maintains that, since Directives 90/364 and 90/365 are drafted in identical terms as regards the amount of resources which may be required of beneficiaries of the two directives, the Italian Republic must transpose the two directives in an identical manner. The Commission does not deny in this context that if a beneficiary of Directive 90/364 or Directive 90/365 is accompanied by one or more members of his family, Member States have the right to provide that the amount of family resources must be higher than where one person alone seeks the benefit of one or other of the directives. It alsoacknowledges that the Member State must have some latitude in securing compliance with the condition that the persons concerned must have 'sufficient resources to avoid becoming a burden on the social assistance system. It argues, however, that the difference in treatment between the family members referred to in Article 5c of amended Decree No 1656/1965 and those referred to in Article 5a is not objectively justified. The more favourable regime for dependent family members of beneficiaries of Directive 90/365 shows that the Italian authorities consider it sufficient, in order to ensure that the persons concerned do not become a burden on the social assistance system, that they fulfil the conditions laid down in that regime. In relation to this complaint, the Italian Government refers in its defence to the existence of a draft law to amend the rules criticised by the Commission. It states that the draft is at an advanced stage of inter-ministerial consultation. Findings of the Court Amended Decree No 1656/1965 lays down different rules according to whether the persons in question are beneficiaries under Directive 90/364 or Directive 90/365. Article 5c of the decree requires beneficiaries of Directive 90/364 to have an overall income of not less than the minimum wage under the Italian compulsory general insurance system in respect of each dependant. By contrast, Article 5a requires beneficiaries of Directive 90/365 (persons having carried on an occupational activity) to have an income corresponding to that minimum wage, plus one third for each dependent family member. It follows that a beneficiary of Directive 90/364 must have the minimum amount laid down by the Italian compulsory general insurance system in respect of both himself and each dependent family member, whereas for persons who have carried on an occupational activity, referred to in Directive 90/365, the same minimum amount is merely increased by one third for each family member dependent on the beneficiary. In concluding that the Italian legislation requires family members of beneficiaries of Directive 90/364 to have resources one third higher than the minimum amount for family members of beneficiaries of Directive 90/365, the Commission seems to have misunderstood the difference between the amounts of income which Italian legislation requires of the beneficiaries of the two directives. In fact, the legislation requires resources three times higher in respect of family members of beneficiaries of Directive 90/364 than those required of family members of beneficiaries of Directive 90/365. It also appears from the documents before the Court that, in the reasoned opinion of 11 November 1996, the Commission alleged that the Italian Republic required each family member of beneficiaries of Directive 90/364 to have resources 'tre volte più elevato (three times higher) than the minimum amount required for each familymember of beneficiaries of Directive 90/365. In its application, however, the Commission no longer refers to 'tre volte più elevato but merely to 'un terzo superiore (one third higher) without there being the least indication in the documents to explain this change. Moreover, in support of its complaint concerning the higher amount of resources required in respect of family members of beneficiaries of Directive 90/364, the Commission has done no more than compare the systems laid down by Directives 90/364 and 90/365, basing its reasoning, first, on the identical wording of the directives as regards the amount of resources that may be required of their beneficiaries, and, secondly, on the fact that the Italian authorities seem to consider that the amount required for family members of beneficiaries of Directive 90/365 is sufficient. However, the Commission acknowledges that Member States have some latitude in the matter. In those circumstances, even if the wording of the two directives is identical as regards the amount of the resources required, it does not follow that the Member States are required to fix the same amounts in both cases. Thus the fact that a Member State has a more favourable regime for family members of persons who have carried on an occupational activity than for those of beneficiaries of Directive 90/364 does not of itself constitute proof that the higher amount required of the latter exceeds the latitude allowed to Member States. The Commission has therefore not established that its first complaint is well founded, and accordingly it must be dismissed. The documents which beneficiaries of Directives 90/364 and 90/365 are required to submit Arguments of the parties According to the Commission, Article 5d of amended Decree No 1656/1965 shows that the Italian authorities accept only some of the documents capable of proving that the beneficiaries of Directives 90/364 and 90/365 satisfy the conditions laid down for the purposes of granting the right of residence. In order to obtain a residence permit, beneficiaries of Directives 90/364 and 90/365 must submit inter alia a declaration of the consular authority certifying that the applicant is registered with the health service of a Member State, a sickness insurance policy covering medical care and hospitalisation, valid for Italian territory, or a certified copy of the document of registration with the Italian national health service. Beneficiaries of Directive 90/365 are also required to produce a declaration of the consular authority certifying that they are holders of a pension, an allowance or other income and stating the amount, whereas beneficiaries of Directive 90/364 and their dependent family members must supply copies, certified by the consular authority, of documents issued in the State of origin or provenance attesting to the existence of the income required or, if that income is derived in Italy, supporting documents issued by the competent authorities. In addition, the holder of the residence permit must produce an official document for members of his family who are dependent upon him, issued by the competent authority of the Member State of origin or provenance, certifying the family relationship and that the persons concerned are dependants. The Commission acknowledges that refusal to accept documents not issued by a public authority may be justified in certain cases in order to avoid the use of false documents. However, the obligation which Italian legislation imposes on beneficiaries of Directives 90/364 and 90/365 to submit in every case documents issued by the public authorities of a Member State is, the Commission submits, clearly disproportionate. The beneficiaries of those directives might encounter difficulty in obtaining such documents given that, for example, it is not certain that there is a public authority in each Member State which can certify that one person is dependent upon another. The Commission further argues that, in most cases, the Italian authorities are in a position to ensure by other equivalent means that the conditions concerning the right of residence are complied with, and they should therefore allow the persons concerned to adduce the necessary proof by means of any appropriate document. The Italian Government does not share the doubts expressed by the Commission concerning, in particular, the existence in each Member State of a public authority capable of certifying the amount of income available to a person who decides to reside in another Member State. Findings of the Court It is common ground that Directives 90/364 and 90/365 lay down the substantive conditions, in particular as regards sickness insurance and resources, for issuing a residence permit, but that they do not deal expressly with the manner in which the beneficiaries of those directives must demonstrate that they fulfil those conditions. The fact remains, however, that when exercising their powers in this area Member States must ensure both the basic freedoms guaranteed by the Treaty and the effectiveness of directives containing measures to abolish obstacles to the free movement of persons between those States, so that the exercise by citizens of the European Union and members of their family of the right to reside in the territory of any Member State may be facilitated (see Joined Cases C-193/97 and C-194/97 DeCastro Freitas and Escallier v Ministre des Classes Moyennes et du Tourisme [1998] ECR I-6747, paragraph 23). Moreover, Member States must make use of the various possibilities offered by other rules of Community law, particularly in relation to the production of evidence, by means of certificates issued by national social security bodies at the request of the persons concerned, of the fact that those persons are covered by a specific social security scheme and of the amount of the pensions and allowances paid by those bodies. It follows that by limiting the means of proof which may be relied upon, and in particular by providing that certain documents must be issued or certified by the authority of a Member State, the Italian Republic has exceeded the limits imposed upon it by Community law. The Commission's second complaint must therefore be upheld. The provisions concerning students' resources Arguments of the parties According to the Commission, the effect of Articles 5b and 5d of amended Decree No 1656/1965 is that the Italian authorities require students and members of their family to have resources of a specific amount, not being lower than the minimum amount laid down by the Italian compulsory general insurance scheme. In addition, Article 5d(d) does not make clear whether, in relation to his resources, the student is free to make a simple declaration before the competent authorities. It appears to follow from the wording of Article 5d(e) of the decree that members of the student's family are in any event required to submit one of the documents mentioned in that provision, and that they do not therefore have the option of making a declaration. In that respect, the Commission argues that, unlike Directives 90/364 and 90/365, which refer to the minimum amount of income which the beneficiaries of those directives must have, Article 1 of Directive 93/96 provides that a beneficiary must assure the national authority that 'he has sufficient (3) resources to avoid becoming a burden on the social assistance system ... during their period of residence. The Commission also notes that in fixing the level of resources the Community legislature even avoided using the term 'sufficient, which was used in Article 1(1) of Directives 90/364 and 90/365. The Commission submits that it is therefore enough that the student have resources which do not require him to have recourse to social assistance, the assessment of the amount necessary for his stay being a matter for him and not the national authorities concerned. As for the reasons capable of justifying this difference between Directive 93/96 and Directives 90/364 and 90/365, the Commission cites first the fact that the student's stay - in his capacity as student - will be temporary, since it is limited to the duration of his studies. The risk of his becoming a burden on social assistance is therefore less than in the case of beneficiaries of the other two directives. In addition, the Community legislature has limited the validity of the residence permit to one year, renewable annually, thereby allowing the national authorities to intervene more rapidly where a student has become a burden on social assistance. Finally, the Commission maintains that it is far more easy for a student than for the beneficiaries of the other two directives to supplement resources by income from work, which might be part-time or periodic, since, as a national of a Member State, he has the right to respond to any offer of employment. It would, however, be difficult to produce proof in advance that a student will supplement his resources with income from such work. The Commission adds that the same applies to members of a student's family, since their right of residence derives from that of the person upon whom they are dependent. The wording of Article 1 of Directive 93/96 clearly shows that a student is required to make only one declaration, which is valid both for him and for members of his family. As for the assurance to be given to the national authority to the effect that the student and members of his family have resources to avoid becoming a burden on the social assistance system, the Commission argues that Directive 93/96 is also precise as regards the means of proof in that respect, since it provides that the latter is to be furnished 'by means of a declaration or such alternative means as the student may choose that are at least equivalent. Thus, the Commission submits, Directive 93/96 prohibits Member States from demanding other proof or documents concerning resources. However, the text of Article 5d(d) of amended Decree No 1656/1965 does not clearly show that the Italian authorities do in fact leave the student the choice of making a declaration. The Italian Government has made no submissions in relation to this complaint. Findings of the Court It is evident from the wording of Article 1 of Directive 93/96 that the conditions for obtaining a right of residence do not include any requirement to have resources of a specific amount, evidenced by specific documents. The article refers merely to a declaration, or such alternative means as are at least equivalent, which enables the student to assure the national authority concerned that he has, for himself and, in appropriate cases, for his spouse and dependent children, resources to avoid becoming a burden on the social assistance system of the host Member State during their stay. However, that provision makes recognition of the right of residence conditional upon the student being enrolled at a recognised establishment for the principal purpose offollowing a vocational training course and being covered by sickness insurance in respect of all risks in the host Member State. The differences in the wording of Directive 93/96 by comparison with that of Directives 90/364 and 90/365 are explained by the reasons mentioned by the Commission in its action and referred to in paragraph 40 of this judgment. It follows, first, that by requiring students who are nationals of other Member States and who are seeking recognition of their and their families' right of residence in Italy pursuant to Directive 93/96 to guarantee to the Italian authorities that they have resources of a specific amount; secondly, as regards the means to be used for that purpose, by not clearly leaving the student the choice between a declaration and such alternative means as are at least equivalent; and, finally, by not allowing the use of a declaration where a student is accompanied by members of his family, the Italian Republic has also exceeded the limits imposed upon it by Community law. The Commission's third complaint must therefore also be upheld. It must therefore be held that - by limiting the means of proof that may be relied upon, and in particular by providing that certain documents must be issued or certified by the authority of a Member State, and - by, first, requiring students who are nationals of other Member States and who are seeking recognition of their and their families' right of residence in Italy pursuant to Directive 93/96 to guarantee to the Italian authorities that they have resources of a specific amount; secondly, as regards the means to be used for that purpose, by not clearly leaving such students the choice between a declaration and such alternative means as are at least equivalent; and, finally, by not allowing the use of a declaration where a student is accompanied by members of his family, the Italian Republic has failed to fulfil its obligations under Directives 90/364, 90/365 and 93/96. The remainder of the action must be dismissed. Costs 50. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. However, under the first subparagraph of Article 69(3), the Court may order that the costs be shared or that the parties bear their own costs where each party succeeds onsome and fails on other heads. Since the Italian Republic and the Commission have each been partially unsuccessful, the parties must be ordered to bear their own costs. On those grounds, THE COURT (Fifth Chamber) hereby: 1. Declares that - by limiting the means of proof that may be relied upon, and in particular by providing that certain documents must be issued or certified by the authority of a Member State, and - by, first, requiring students who are nationals of other Member States and who are seeking recognition of their and their families' right of residence in Italy pursuant to Council Directive 93/96/EEC of 29 October 1993 on the right of residence for students to guarantee to the Italian authorities that they have resources of a specific amount; secondly, as regards the means to be used for that purpose, by not clearly leaving such students the choice between a declaration and such alternative means as are at least equivalent; and, finally, by not allowing the use of a declaration where a student is accompanied by members of his family, the Italian Republic has failed to fulfil its obligations under Council Directive 90/364/EEC of 28 June 1990 on the right of residence, Council Directive 90/365/EEC of 28 June 1990 on the right of residence for employees and self-employed persons who have ceased their occupational activity, and Directive 93/96; 2. Dismisses the remainder of the action; 3. Orders the Italian Republic and the Commission of the European Communities to bear their own costs. Edward Sevón Kapteyn JannRagnemalm Delivered in open court in Luxembourg on 25 May 2000. R. Grass D. A. O. Edward Registrar President of the Fifth Chamber 1: Language of the case: Italian. 2: - Phrase missing from the English version. 3: - The word 'sufficient appears only in the English and Dutch versions. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII