Judgment_paragraph 3. · 75/76

3.The Commission observes that it is possible to reply to the preliminary question submitted to the Court not only on the basis of the interpretation of Articles 27 and 28, the only provisions of Regulation No 3 to which the national court refers, but rather on the basis of the interpretation of Article 11 (2) of the regulation and of Article 9 (2) of Regulation No 4.It consequently considers that the questions which the Court is requested to answer should be worded as follows:1. Must Article 11 (2) of Regulation No 3 be interpreted to mean that the provisions for reduction in the legislation of a Member State may be applied to the beneficiary of an invalidity pension payable under such legislation and pursuant to Articles 27 and 28 of Regulation No 3 if such beneficiary is in receipt of an invalidity pension pursuant to the legislation of a third county?2. Must Article 9 (2) of Regulation No 4 which establishes the procedures for the implementation of Article 11 (2) of Regulation No 3 be interpreted to mean that the benefit giving rise to the reduction must be taken into account in determining the amount calculated for accounting purposes?’With regard to the first question which it has formulated the Commission maintains that the wording of Article 11 (2) of Regulation No 3 does not prevent the Belgian institution from applying its rule against overlapping of benefits in order to reduce the benefit payable by it if it is drawn concurrently with an invalidity benefit payable by a third country: since the person concerned is in receipt of a benefit acquired under Regulation No 3 and since the Austrian pension was by definition not calculated pursuant to Articles 27 and 28 of Regulation No 3 the provisions for reduction laid down by the Belgian Law are applicable to him, the more so since such reduction does not adversely affect the freedom of movement of the worker since it arises from his employment in a third country.The Commission adds nevertheless that such provisions for reduction may only be applied if Regulation No 3 is beneficial to the worker. The Court of Justice has indeed made this clear when, in its judgment of 15 May 1974 in Case 184/73 (Bestuur van de Nieuwe Algemene Bedrijfsvereniging v Kaufmann, [1974] ECR 517), it stated that the limitations referred to in Article 11 (2) are applicable to insured persons only as regards benefits acquired under those regulations.Nevertheless the Commission thinks that those considerations do not take fully into account all the factors in the present case. In its opinion a Member State of the EEC cannot invoke a bilateral convention concluded between another Member State and a third country in order to reduce a benefit which, but for that convention, could not have been reduced.In this respect it refers to the opinion of Mr Advocate-General Mayras in Case 14/72, Heinze v Landesversicherungsanstalt Rheinprovinz ([1972] ECR 1117).With regard to the second question which it has formulated the Commission observes that in so far as the Belgian institutions, on the basis of the foregoing statements, are entitled to reduce the benefit payable to Mr Kaucic, there is no doubt that such a reduction may only be made in accordance with the Community regulations, that is Article 11 (2) of Regulation No 3 completed by Article 9 (2) of Regulation No 4.According to the latter provision, the Belgian institution may only reduce its benefit by a fraction of the benefit giving rise to the reduction and only when the amount of the benefit payable pursuant to the Belgian legislation and Articles 27 and 28 of Regulation No 3 has been finally determined.Article 9 (2) of Regulation No 4 thus expressly excludes the possibility of making a reduction when calculating the amount determined ‘for accounting purposes’. This principle, which was recalled in a statement appearing in the minutes of the Council at the time of the adoption of Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (OJ, English Special Edition 1971 (II), p. 416) according to which: ‘Generally speaking, the reductions to be made pursuant to the provisions against overlapping may only be made if the benefit payable by each of the Member States has been finally determined’, was restated in Article 7 (1) (b) and (c) of Regulation No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation No 1408/71 (OJ, English Special Edition 1972 (I), p. 159).At the hearing on 8 December 1976 the appellants, represented by Daniele Rossini, Director of the Welfare Department of the Associazioni Cristiane Lavoratori Italiani, the respondent, represented by Adolf Houtekier, Advocate at the Belgian Cour de Cassation, and the Commission, represented by its Legal Adviser, Marie-Jose Jonczy, acting as Agent, presented oral argument.The following submissions inter alia were put forward in addition at this hearing.The appellants in the main action pointed out that they would have concurred the application of Article 70 (2) of the Belgian Law of 9 August 1963 if the invalidity of Mr Kaucic had been caused, for example, by an accident at work or an occupational disease occurring in Austria and accordingly compensated pursuant to Austrian legislation, in other words, if the overlapping of benefits of a different kind were involved. Since the proceedings relate not only to benefits of the same kind but also to benefits calculated proportionally it is necessary to apply the last sentence of Article 11 (2) of Regulation No 3 which expressly authorizes overlapping of benefits of the same kind. This provision is applicable by analogy even though in the present case one of the three benefits to which the person concerned is entitled is paid by a third country.With regard to the submission of the respondent in the main action that, if the Court were to hold that the Community regulations preclude the disputed application of Article 70 (2) of the Belgian Law of 9 August 1963, the Belgian institutions would be obliged to apply this article and deduct the amount of the Austrian pension from the amount of the Belgian benefit calculated proportionally, the appellants in the main action observed that such a calculation would be even more unfavourable to the insured person than deducting the Austrian pension from the Belgian amount calculated ‘for accounting purposes’.With regard to the Commission's argument that Belgium is relying upon the Austro-Italian Treaty in order to reduce the benefits payable by the latter the respondent in the main action maintains that this misrepresents the problem: Belgium should have applied the Belgian provision prohibiting overlapping.Furthermore the Commission is mistaken in invoking the opinion of Mr Advocate-General Mayras in Case 14/72, Heinze v Landesversicherungsanstalt Rheinprovinz. The Institution considers that the opinion means that it may invoke the provision for reduction laid down in the Belgian legislation. If the Commission's argument were followed the claim against Belgium would be in excess of that permitted under Community law alone. In this respect the Institution also relies upon the judgment of the Court of 16 November 1972 in Case 16/72, Allgemeine Ortskrankenkasse Hamburg v Landesversicherungsanstalt Schleswig-Holstein ([1972] ECR 1141).After the above-mentioned hearing Mr Advocate-General Mayras was indisposed and had to be replaced by Mr Advocate-General Capotorti.On this ground the Court ordered the oral procedure to be reopened.At the new hearing on 16 February 1977 the parties presented no oral argument, declaring that they referred to the submissions, arguments and conclusions which they had put forward at the hearing on 8 December 1976.The Advocate-General delivered his opinion at the hearing on 16 February 1977.