1 By application lodged at the Court Registry on 8 October 1989, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that by imposing on nationals of Member States other than France who come within the scope of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving with the Community (consolidated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (Official Journal 1983 L 230, p. 6) who reside in France and receive social security benefit under a French scheme for social security benefits provided for in Articles L 815-2 and L 815-3 of the new French Social Security Code, two conditions regarding the signature of reciprocal international agreements and prior residence on French territory, the French Republic had failed to fulfil its obligations under Article 3(1) of Regulation (EEC) No 1408/71.
2 Articles L 815-2 and L 815-3 of the new French Code de la Sécurité Sociale (Social Security Code, hereinafter referred to as "CSS") specify the persons of French nationality who are entitled to a supplementary allowance from the Fonds National de Solidarité (National Solidarity Fund). That allowance is provided for in Chapter V of Title I ("Allowances for Elderly Persons") to Book VIII of the CSS. Under Article L 815-1, the Fund was set up with a view to promoting a general welfare policy for old people by improving retirement and other pensions and old-age allowances.
3 Article L 815-2 requires recipients to have resided in France for a period and on conditions laid down by decree. Article L 815-5 states that the supplementary allowance is payable to foreigners only where reciprocal international agreements have been signed.
4 Article 3(1) of Regulation (EEC) No 1408/71 provides that subject to the special provisions of that regulation, persons resident in the territory of one of the Member States to whom the regulation applies are to be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of that State.
5 Under Article 4(1), the regulation applies to all legislation concerning inter alia the branches of social security covering invalidity benefits and old-age benefits. Article 4(4) provides that the regulation does not apply to social assistance.
6 By letter of 4 December 1985, the Commission asked the French Government for its observations on the compatibility of the abovementioned provisions of the CSS with Community law. By letter of 7 March 1986, the French authorities contended that the supplementary allowance did not fall under Regulation No 1408/71 as it was social assistance.
7 The Commission issued a reasoned opinion pursuant to Article 169 of the EEC Treaty on 14 October 1987 and called on the French Government to comply with it within 30 days. By letters of 26 November 1987 and 6 June 1988, the French authorities informed the Commission, first, that the existence of a reciprocal international agreement for citizens of other Member States was no longer a requirement for the grant of the supplementary allowance, and, secondly, that the implementing decrees referred to in Article L 815-2 of the CSS had never been adopted.
8 As the French Government did not notify it of any legislative measures brought into force to terminate the alleged infringement, the Commission initiated the present proceedings.
9 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
10 It should be stated at the outset that the Court has consistently held that legislation such as that at issue, in so far as it confers a right to supplementary benefits designed to increase the amount of pensions paid by way of social security, without any assessment of individual needs or circumstances, which is a characteristic of assistance, comes within the social security scheme within the meaning of Regulation No 1408/71.
11 Articles L 815-2 and L 815-5 of the CSS are incompatible with the principle of equal treatment laid down in Article 3(1) of Regulation No 1408/71 inasmuch as they subject the grant of the allowances in question to nationals of other Member States living in France regarding the signature of reciprocal international agreements between those States and France, and the prior residence of the person concerned on French territory.
12 It is apparent from the documents before the Court that the French Government is no longer disputing that the legislation at issue is incompatible with Community law. It maintains, however, that, by virtue of Ministerial Circular No 1370 of 5 November 1987 and following a ministerial instruction given to the competent administrative authorities, Article L 815-5 of the CSS is, in practice no longer applied to Community nationals and Article L 815-2 of the CSS is in fact not being applied as no implementing decrees exist.
13 The Court has held that the maintenance of national legislation which is in itself incompatible with Community law, even if the Member State concerned acts in accordance with Community law, gives rise to an ambiguous state of affairs by maintaining, as regards those subject to the law who are concerned, a state of uncertainty as to the possibilities available to them of relying on Community law. This uncertainty can only be reinforced by the internal character of the purely administrative directions to waive the application of the national law (see the judgment in Case 167/73 Commission v French Republic [1974] ECR 359, paragraphs 41 and 42).
14 Consequently, it must be held that, by imposing on nationals of other Member States who reside in France and come within the scope of Regulation No 1408/71 two conditions regarding the signature of reciprocal international agreements with those States and the prior residence of the person concerned on French territory in order for him to receive the social security benefit provided for in Articles L 815-2 and L 815-3 of the new French Social Security Code, the French Republic has failed to fulfil its obligations under Article 3(1) of Regulation No 1408/71.