COMMISSION v HOSMAN-CHEVALIER 
JUDGMENT OF THE COURT (Third Chamber) 
21 June 2007 * 
In Case C-424/05 P, 
APPEAL under Article 56 of the Statute of the Court of Justice, lodged on 
29 November 2005, 
Commission of the European Communities, represented by H. Kraemer and 
M. Velardo, acting as Agents, with an address for service in Luxembourg, 
appellant, 
the other party to the proceedings being: 
Sonja Hosman-Chevalier, represented by J.-R. García-Gallardo Gil-Fournier, 
A. Sayagués Torres, and D. Domínguez Pérez, abogados, 
applicant at first instance, 
* Language of the case: French. 
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THE COURT (Third Chamber), 
composed of A. Rosas, Presidents of the Chamber, A. Tizzano, J. Malenovský 
(Rapporteur), U. Lõhmus and A. Ó Caoimh, Judges, 
Advocate General: P. Mengozzi, 
Registrar: B. Fülöp, Administrator, 
having regard to the written procedure and further to the hearing on 13 September 
2006, 
after hearing the Opinion of the Advocate General at the sitting on 15 March 2007, 
gives the following 
Judgment 
1 In its appeal, the Commission of the European Communities asks the Court of 
Justice to set aside the judgment of the Court of First Instance of the European 
Communities of 13 September 2005 in Case T-72/04 Hosman-Chevalier v 
Commission [2005] ECR II-3265 ('the judgment under appeal'), by which it annulled 
the decisions of the Commission of 8 April 2003 and 29 October 2003 refusing to 
pay Ms Hosman-Chevalier an expatriation allowance and an installation allowance. 
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COMMISSION v HOSMAN-CHEVALIER 
Legal context 
2 Article 69 of the Staff Regulations of Officials of the European Communities ('the 
Staff Regulations'), in the version applicable to the present case, lays down that the 
expatriation allowance is equal to 16% of the total amount of the basic salary plus 
household allowance and dependent child allowance to which the official is entitled. 
3 Article 4(1) of Annex VII to the Staff Regulations provides for payment of the 
expatriation allowance: 
'(a) to officials: 
— who are not and have never been nationals of the State in whose territory the 
place where they are employed is situated, and 
— who during the five years ending six months before they entered the service 
did not habitually reside or carry on their main occupation within the 
European territory of that State. For the purposes of this provision, 
circumstances arising from work done for another State or for an 
international organisation shall not be taken into account; 
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JUDGMENT OF 21. 6. 2007 — CASE C-424/05 P 
(b) to officials who are or have been nationals of the State in whose territory the 
place where they are employed is situated but who during the 10 years ending at 
the date of their entering the service habitually resided outside the European 
territory of that State for reasons other than the performance of duties in the 
service of a State or of an international organisation. 
Facts of the case 
4 The factual background to the dispute was summarised by the Court of First 
Instance in paragraphs 4 to 10 of the judgment under appeal: 
'4. The applicant, an Austrian national, studied and worked in Austria until 14 May 
1995. From 15 May 1995 to 17 March 1996 she worked in Belgium for the 
Verbindungsbüro des Landes Tirol, the Liaison Office for the Land Tirol, 
located in Brussels. 
5. From 18 March 1996 to 15 November 2002, the applicant was a member of staff 
of the Permanent Representation of the Republic of Austria to the European 
Union in Brussels [("the Permanent Representation of the Republic of 
Austria")]. As such, she worked, first, for the Verbindungsstelle der Bundes¬ 
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COMMISSION v HOSMAN-CHEVALIER 
länder ("the VB"), the Länder Liaison Office and, then, for the Österreichischer 
Gewerkschaftsbund ("the OGB"), the Austrian Federation of Trade Unions. 
6. On 16 November 2002, the applicant took up her duties at the Commission as 
an official The five years referred to in the second indent of Article 4(1)(a) of 
Annex VII to the Staff Regulations for the purposes of payment of the 
expatriation allowance, known as "the reference period", were fixed between 
16 May 1997 and 15 May 2002. 
7. By memorandum of 8 April 2003, the applicant was informed by the 
Directorate-General for Personnel and Administration of the Commission that 
she could not be granted payment of the expatriation allowance. 
8. On 7 July 2003, the applicant submitted a complaint, under Article 90(2) of the 
Staff Regulations, about that memorandum of 8 April 2003. By email of 
14 August 2003 and by fax of 11 September 2003, she sent two additions to that 
complaint. 
9. By memorandum of 29 October 2003, brought to the applicant's attention on 
3 November 2003, the appointing authority rejected the applicant's complaint. 
10. According to that decision the applicant was refused the expatriation allowance 
and the allowances associated therewith primarily on the ground that the work 
that she did in Brussels during the reference period could not be considered 
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JUDGMENT OF 21. 6. 2007 — CASE C-424/05 P 
"work done for another State" within the meaning of the exception laid down in 
Article 4(1)(a) of Annex VII to the Staff Regulations. The appointing authority 
considered that, although it was true that the VB was located on the premises of 
the Permanent Representation of the Republic of Austria, it was nevertheless an 
independent and distinct entity set up by the Länder and responsible for 
defending their interests and not those of the Bund (Federal State). As regards 
the OGB, the documents sent by the applicant and, in particular, her contract of 
employment made no reference to a link of any kind with the Republic of 
Austria. This was the reason why the work done for the OGB could not be 
classed as work done for that State either.' 
Procedure before the Court of First Instance and the judgment under appeal 
5 By application lodged at the Registry of the Court of First Instance on 20 February 
2004, Ms Hosman-Chevalier brought an action for annulment of the Commission 
decision of 29 October 2003 refusing to pay her the expatriation allowance and the 
allowances associated therewith. 
6 By the judgment under appeal, the Court of First Instance held that the action 
sought not only the annulment of the Commission decision of 29 October 2003, but 
also the annulment of that of 8 April 2003. The Court of First Instance proceeded to 
annul those decisions. 
7 The Court of First Instance upheld the second plea in law raised by Ms Hosman-
Chevalier, which alleged infringement of Article 4(1)(a) of Annex VII to the Staff 
Regulations. 
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COMMISSION v HOSMAN-CHEVALIER 
8 According to the Court of First Instance, the issue to be determined was whether the 
work which Ms Hosman-Chevalier was required to do for the Permanent 
Representation of the Republic of Austria during the reference period was to be 
considered as work done for a State within the meaning of Article 4(1)(a) of Annex 
VII to the Staff Regulations. In addition, the Court of First Instance stated that the 
term 'State' used in that article relates only to the State as a legal person and unitary 
subject of international law and its government bodies. 
9 The Court of First Instance stated at the outset, at paragraph 30 of the judgment 
under appeal, that it was not disputed that work done for bodies such as the 
Permanent Representation of a Member State to the European Union or the 
embassies of a State was to be considered to be work done for a State within the 
meaning of Article 4(1)(a) of Annex VII to the Staff Regulations. 
10 At paragraphs 31 to 36 of the judgment under appeal, the Court of First Instance set 
out the various factors which led it to hold that Ms Hosman-Chevalier was a 
member of staff of the Permanent Representation of the Republic of Austria, that 
she was subject to the supervisory authority of the ambassador, a permanent 
representative of the Republic of Austria to the European Union, and that her status 
was the same as that of the other members of staff assigned to that representation. 
11 The Court of First Instance inferred from this that the work which Ms Hosman¬ 
Chevalier did at the Permanent Representation of the Republic of Austria 
throughout the reference period was to be regarded as work done for that State. 
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12 At paragraphs 38 to 41 of the judgment under appeal, the Court of First Instance 
subsequently dismissed the Commissions argument that Ms Hosman-Chevalier, 
although working for the Permanent Representation of the Republic of Austria, 
worked not for that State, but for the VB and OGB, bodies not responsible for 
defending the interests of the State. 
13 At paragraph 42 of the judgment under appeal, the Court of First Instance on the 
contrary accepted that it is sufficient that a person works for a body which is part of 
the State in the sense referred to, such as a permanent representation, in order to fall 
fully within the exception laid down in Article 4(l)(a) of Annex VII to the Staff 
Regulations, regardless of the particular and specific functions carried out by that 
person within that body. If this were not the case it would be necessary to carry out a 
detailed analysis of the tasks and functions performed from the point of view of 
national law, which would be contrary to the requirement of a uniform application 
of Community law and the principle of equality. That is all the more so since it is the 
exclusive role of every Member State to organise its services as it deems most 
appropriate and to thus determine the objectives and functions it assigns to its 
officials and employees. 
14 The Court of First Instance therefore concluded from that that Ms Hosman¬ 
Chevalier fulfilled the conditions laid down by Article 4(1)(a) of Annex VII to the 
Staff Regulations, thus entitling her to be paid the expatriation allowance. 
15 At paragraph 51 of the judgment under appeal, the Court of First Instance held that, 
since the installation allowance provided for by Article 5(1) of Annex VII to the Staff 
Regulations was payable to an official fulfilling the conditions for payment of the 
expatriation allowance, Ms Hosman-Chevalier was justified in claiming payment of 
that installation allowance. The Court of First Instance did not, however, find that 
she was entitled to payment of the daily subsistence allowance, for the reasons set 
out at paragraph 52 of the judgment under appeal. 
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COMMISSION v HOSMAN-CHEVALIER 
Procedure before the Court 
16 In the present appeal, the Commission claims that the Court should: 
— set aside the judgment under appeal and refer the case back to the Court of First 
Instance; 
— order Ms Hosman-Chevalier to pay the costs of the proceedings, including her 
own costs in the proceedings before the Court of First Instance. 
17 Ms Hosman-Chevalier contends that the Court should: 
— dismiss the appeal as manifestly inadmissible or, in the alternative, as 
unfounded; 
— order the Commission to pay the costs both at first instance and on appeal 
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JUDGMENT OF 21. 6. 2007 — CASE C-424/05 P 
The appeal 
Arguments of the parties 
18 By its single plea in law, the Commission complains that the Court of First Instance 
erred in law in its application of the provisions of Article 4(l)(a) of Annex VII to the 
Staff Regulations relating to the grant of the expatriation allowance by 
misinterpreting the concept of work done for another State' to which those 
provisions refer. 
19 According to the Commission, it is clear from a series of facts taken into 
consideration at paragraphs 31 to 36 and 42 of the judgment under appeal that the 
Court of First Instance considered, wrongly, that, in order for the condition of work 
done for another State, as established by those provisions, to be fulfilled, it was 
sufficient that the person concerned was integrated into the functional and/or 
organisational context of a body of that State, such as a permanent representation to 
the European Union. 
20 The Commission asserts, conversely, that that condition must be interpreted as 
meaning that there must be a direct legal tie linking the person concerned and the 
State at issue and that that tie cannot consist solely of the fact that the person 
concerned is integrated into the context indicated. 
21 According to the Commission, the derogation provided for by the last sentence of 
the second indent of Article 4(1)(a) of Annex VII to the Staff Regulations, according 
to which the officials concerned are entitled to the expatriation allowance, is justified 
inasmuch as they cannot be deemed to have established a lasting tie with the country 
in which they are employed (Case 246/83 De Angelis v Commission [1985] 
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COMMISSION v HOSMAN-CHEVALIER 
ECR 1253, paragraph 13). Moreover, that underlying purpose specifically 
presupposes that the person concerned has a direct tie to another State or to an 
international organisation by virtue of a statutory and/or contractual 
relationship. Such a relationship alone is liable to imply a right on the part of the 
other State or international organisation to call on that person to work for a limited 
period within the territory of the State in which is situated the place of his 
subsequent employment ('the country of employment') as an official of the European 
Communities. 
22 The Commission states that the last sentence of the second indent of Article 4(1)(a) 
of Annex VII to the Staff Regulations is an exception to the conditions of grant of 
the expatriation allowance and should therefore, as such, be interpreted strictly. 
Furthermore, since it also concerns a provision governing a financial benefit, a strict 
interpretation is called for (see Joined Cases 146/81, 192/81 and 193/81 BayWa and 
Others [1982] ECR 1503, paragraph 10, Case T-41/89 Schwedler V Parliament [1990] 
ECR II-79, paragraph 23, confirmed on appeal by Case C-132/90 P Schwedler v 
Parliament [1991] ECR I-5745). 
23 In addition, the Court of First Instances interpretation of the last sentence of the 
second indent of Article 4(1)(a) of Annex VII to the Staff Regulations at paragraphs 
31 to 36 and 42 of the judgment under appeal deviates from its own case-law, 
according to which a direct legal tie with the State is required (see Case T-190/03 
Olesen v Commission [2005] ECR-SC I-A-181 and 11-805, paragraphs 49 to 51; Case 
T-205/02 Salvador Garíia v Commission [2005] ECR-SC I-A-285 and II-1311, 
paragraph 55; Case T-83/03 Salazar Brier v Commission [2005] ECR-SC I-A-311 
and II-1407, paragraph 45; Case T-298/02 Herrero Romeu v Commission [2005] 
ECR II-4599 and ECR-SC I-A-295 and 11-1349, paragraph 41, and Case T-368/03 
De Bustamante Tello v Council [2005] ECR-SC I-A-321 and II-1439, paragraph 42). 
24 Moreover, according to the case-law of the Court of First Instance, as regards the 
provision concerning work done for [...] an international organisation', a direct legal 
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JUDGMENT OF 21. 6. 2007 — CASE C-424/05 P 
tie with the international organisation at issue has also been required (see Case 
T-43/93 Lo Giudice v Parliament [1995] ECR-SC I-A-57 and II-189, paragraph 36, 
and Case T-127/00 Nevin v Commission [2002] ECR-SC I-A-149 and II-781, 
paragraph 51). It would be inconsistent, even arbitrary, to require such a direct legal 
tie for one part of the exception, but not for the other. 
25 The Court of First Instance failed, in the view of the Commission, to investigate 
whether there was a direct legal tie linking Ms Hosman-Chevalier and the Republic 
of Austria. In the present case, no such legal tie existed, given that the person 
concerned was employed during the reference period by the VB and the OGB in 
turn. 
26 Ms Hosman-Chevalier contends that the appeal should be declared inadmissible, 
maintaining that the Commission is, in fact, seeking to obtain a new assessment of 
the facts from the Court. 
27 As to the substance, Ms Hosman-Chevalier contends that, in establishing the 
existence of a legal tie linking the person concerned and the State, without 
necessarily requiring that that tie be direct, the action of the Court of First Instance 
is compliant with Community law. 
28 From the moment that work for a permanent representation such as that here at 
issue is considered to be work for a State, the condition that there be a legal tie 
linking Ms Hosman-Chevalier and the State is satisfied. 
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COMMISSION v HOSMAN-CHEVALIER 
29 In that respect, the case-law of the Court of First Instance is not formalistic and the 
existence of such a tie does not imply strictly or in itself the existence of a legal' tie 
of dependency. That tie may be established in the light of the individual 
circumstances of each case. Thus, in the present case, from the moment at which 
it was clear from the court file that Ms Hosman-Chevalier was one of the staff of the 
Permanent Representation of the Republic of Austria, it was not necessary to go any 
further, or to demonstrate expressly the existence of a legal or other tie. 
Findings of the Court 
Admissibility 
30 It is necessary to point out that, under Article 225(1) EC and the first paragraph of 
Article 58 of the Statute of the Court of Justice, an appeal is only possible on 
grounds relating to the infringement of rules of law, to the exclusion of any 
assessment of the facts. 
31 According to those provisions, the Court of First Instance has exclusive jurisdiction, 
first, to establish the facts, except where the substantive inaccuracy of its findings is 
apparent from an examination of the documents which were submitted to it and, 
second, to assess those facts. When the Court of First Instance has established or 
assessed the facts, the Court of Justice has jurisdiction under Article 225 EC to 
review the legal characterisation of those facts by the Court of First Instance and the 
legal conclusions it has drawn from them (see, inter alia, Case C-284/98 P 
Parliament v Bieber [2000] ECR I-1527, paragraph 31, and Case C-270/99 P Z v 
Parliament [2001] ECR I-9197, paragraph 37). 
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JUDGMENT OF 21. 6. 2007 — CASE C-424/05 P 
32 In the present case, it must be noted that the Commission does not dispute that 
Ms Hosman-Chevalier was a member of the staff of the Permanent Representation 
of the Republic of Austria during the reference period. In support of its appeal, the 
Commission merely asserts that this fact was not such as to entitle the party 
concerned to the expatriation allowance, on the ground that no direct legal tie 
existed linking her and the Republic of Austria. 
33 Thus, contrary to Ms Hosman-Chevalier's contentions, the Commissions appeal 
relates not to the assessment of the facts but to their legal characterisation. 
Ms Hosman-Chevaliers plea of inadmissibility must therefore be rejected. 
Substance 
34 In order to address the plea in law raised by the Commission, it is necessary to 
examine the concept of work done for another State' in the light of all the 
provisions of Article 4(1) (a) of Annex VII to the Staff Regulations which govern the 
grant of the expatriation allowance and of which that concept forms part. 
35 As the Court has consistently held, the purpose of the expatriation allowance is to 
compensate officials for the extra expense and inconvenience of taking up 
employment with the Communities if they have been thereby obliged to change 
their residence and move to the country of employment and to integrate themselves 
in a new environment. Furthermore, the concept of expatriation also depends on the 
personal position of an official, that is to say, on the extent to which he is integrated 
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COMMISSION v HOSMAN-CHEVALIER 
in his new environment, which is demonstrated for example, by habitual residence 
or by the main occupation pursued (see Case 201/88 Atala-Palmerini v Commission 
[1989] ECR 3109, paragraph 9, and Case C-452/93 P Magdalena Fernández v 
Commission [1994] ECR I-4295, paragraph 20). 
36 The grant of the expatriation allowance is thus intended to correct actual instances 
of inequality arising between officials who are completely integrated into the society 
of the country of employment and those who are not 
37 It is clear from the last sentence of the second indent of Article 4(1) (a) of Annex VII 
to the Staff Regulations that the Community legislature necessarily intended to treat 
as also being in such a situation of expatriation an official who, whilst residing or 
carrying on an occupation within the European territory of the State in which his 
place of employment is situated during the five years ending six months before he 
entered the service, worked for another State or for an international organisation. 
38 The Community legislature accordingly concluded that the performance of that 
work has the effect of preserving a specific tie of the party concerned linking him to 
that other State or that international organisation, thereby hindering the creation of 
a lasting tie to the country of employment and thus his sufficient integration in the 
society of the country of employment (see, to that effect, Case 1322/79 Vutera v 
Commission [1981] ECR 127, paragraph 8, and De Angelis v Commission, 
paragraph 13). 
39 In the country to which the official concerned was posted, the other States are 
represented by embassies or diplomatic missions and by permanent representations 
to international organisations, as follows from the rules of customary international 
law, codified in particular by the Vienna Convention of 18 April 1961 on Diplomatic 
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JUDGMENT OF 21. 6. 2007 — CASE C-424/05 P 
Relations and the Vienna Convention of 14 March 1975 on the Representation of 
States in their Relations with International Organisations of a Universal Character. 
40 Consequently, the concept of 'State' referred to by the last sentence of the second 
indent of Article 4(1)(a) of Annex VII to the Staff Regulations necessarily includes 
the permanent representation of a Member State to the European Union, something 
which, moreover, has not been challenged in the context of the appeal. 
41 Therefore, the members of the staff of such a permanent representation, including 
its administrative and technical staff, must, since they are part of the structures of 
that representation, be considered to be working for the Member State concerned 
and, consequently, to be in a situation of 'expatriation' under the second indent of 
Article 4(1)(a) of Annex VII to the Staff Regulations. 
42 In the present case, as the Court of First Instance found, Ms Hosman-Chevalier, 
although not employed by the Austrian central administration, was a member of 
staff of the Permanent Representation of the Republic of Austria, was subject to the 
supervisory authority of its ambassador and had the same status as other officials 
posted to that representation. It is also clear from the judgment under appeal that, as 
such, she was accorded various privileges and immunities, namely, in particular, an 
exemption from regional taxes on property. In those circumstances, she must be 
regarded as having worked for the Austrian State. 
43 Ms Hosman-Chevalier's special status, as described in the foregoing paragraph, 
resulted in her having a specific tie linking her to the Republic of Austria. The very 
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COMMISSION v HOSMAN-CHEVALIER 
existence of the latter prevents her from forming a lasting tie linking her to the 
country to which she was posted and, consequently, from integrating to the requisite 
degree in the society of that country. 
44 Thus, in the light of the underlying purpose of the last sentence of the second indent 
of Article 4(1)(a) of Annex VII to the Staff Regulations, the Court of First Instance 
was fully entitled, at paragraph 42 of the judgment under appeal, to hold that, for 
Ms Hosman-Chevalier to be entitled to the expatriation allowance, it was sufficient 
for her to have worked for the Permanent Representation of the Republic of Austria, 
regardless of the particular and specific functions she carried out within that body. 
45 Consequently, the Commissions argument that entitlement to the expatriation 
allowance is conditional on the existence of a direct legal tie linking the person 
concerned and the State at issue is wholly unfounded. 
46 Such an interpretation is, moreover, consistent with the autonomy enjoyed by the 
Member States in the internal organisation of their permanent representations. As 
the Advocate General has pointed out at point 89 of his Opinion, it is for the 
Member State to determine which bodies will form part of its permanent 
representation and to identify the public interests which the various bodies 
coexisting with the permanent representation must promote in relations with the 
Community institutions. 
47 In view of the foregoing, it must be held that the Court of First Instance did not err 
in law when it found, at paragraph 47 of the judgment under appeal, that it was 
necessary to annul the decisions of the Commission of 8 April 2003 and 29 October 
2003 inasmuch as they refused to pay Ms Hosman-Chevalier the expatriation 
allowance. 
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JUDGMENT OF 21. 6. 2007 — CASE C-424/05 P 
48 It follows from all of the foregoing that the Commissions appeal must be dismissed 
as unfounded. 
Costs 
49 Under Article 69(2) of the Rules of Procedure, applicable to the procedure on appeal 
by virtue of Article 118, the unsuccessful party is to be ordered to pay the costs if 
they have been applied for in the successful party's pleadings. Since Ms Hosman-
Chevalier has applied for costs and the Commission has been unsuccessful in its plea 
in law, the Commission must be ordered to pay the costs. 
On those grounds, the Court (Third Chamber) hereby: 
1. Dismisses the appeal; 
2. Orders the Commission of the European Communities to pay the costs, 
[Signatures] 
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