The Ups and Downs of Dual Citizenship – the CJEU on Dual Turkish/EU citizens and social rights

Professors: Elspeth Guild, Queen Mary University of London; Kees Groenendijk, Radboud University; and Steve Peers, University of Essex

In recent years, an increasing number of Turkish citizens residing in the EU have become dual citizens of Turkey and an EU Member State. Like other dual citizens of a Member State and a non-Member State, they can invoke EU free movement law to move and reside in another Member State (see the CJEU’s Micheletti judgment). But as a general rule, EU free movement law will not confer rights in their home Member State. So in that case, can they still rely upon their Turkish citizenship to claim rights under the EU/Turkey association agreement?

Back in 2012, in its judgment in Kahveci and Inan, the CJEU determined that dual Turkish/Dutch nationals were entitled to rely on their Turkish citizenship to enjoy the benefits of the EU/Turkey association agreement as regards family reunification and thus escape the stricter national legislation for own nationals’ family members. So until the recent decision earlier this month in Demirci, it looked as if Turkish citizens with a second passport from a Member State were more or less free to choose which one to rely on in order to benefit from EU law. But the Demirci judgment changes the rules slightly and provides a more elaborated legal reasoning to when dual nationals of Turkey and a Member State may use one or other of their citizenship.

The finding is rather ominous so we will start some background on the facts of the case and conclude with a rather optimistic analysis where we conclude that dual nationality is still a strong source of rights in EU law and that this judgment is perhaps the exception.

The Facts:

Mr Demirci and his fellow applicants are all former Turkish workers who had worked in the Netherlands for many years fulfilling the conditions of the secondary legislation of the EU/Turkey Association Agreement, Decision 1/80 of the EU/Turkey Association Council, which regulates aspects of the immigration status of Turkish workers and their family members. They had all naturalised as Dutch nationals but kept their Turkish citizenship. They all became disabled and incapacitated for work and thus permanently left the labour force. They received a Dutch social benefit designed to provide income for the incapacitated. But this benefit is rather low so they applied for a top up benefit to bring their income closer to that of the minimum wage. They were all awarded the top up benefit.

Then a series of things happened. The men retired with their families to Turkey. The Dutch Government began to change the rules on the top up benefit to exclude anyone not resident in the Netherlands (or the EU). Mr Demirci and his colleagues first had their top up benefit reduced then it was cut off altogether on the basis that they no longer lived in the Netherlands (or EU). They appealed, relying on their Turkish nationality, on the basis that this treatment was contrary to the EU/Turkey Association Agreement measure on social security – Association Council Decision 3/80. The argument went that the Dutch authorities may be able to cut off the top up benefit to their own nationals living outside the EU as this is a matter wholly internal to one Member State. But they cannot cut off the top up benefit to Turkish nationals who have fulfilled the conditions as workers in a Member State under Decision 1/80 as this is a matter of EU law (which does not permit such an act – Article 6(1) of Decision 3/80 protects Turkish workers who retire to Turkey as regards receipt of social benefits). Several years ago, the CJEU ruled in Akdas that such rules infringed Decision 3/80 as regards Turkish nationals who returned to Turkey. But could a dual citizen of Turkey and a Member State rely on that judgment, as a Turkish citizen – or would he or she be prevented from doing so, as a national of that Member State?  

The reasoning

The CJEU bluntly tells Mr Demirci and his colleagues that they cannot rely on Decision 3/80 to object to the residence requirement imposed by the Dutch authorities (para 52). This is because, according to the Court, the objectives of the Decision and the EU/Turkey regime is to ensure the progressive integration of Turkish workers into the territory of the host Member State. The social security provisions consolidate that objective.

The Court provides two main reasons for this position. First, because Mr Demirci and his colleagues had acquired Dutch nationality they are in a particular situation as regards the Agreement. Citizenship is ‘the most accomplished level of integration’ of a person into the host state (para 54). This new citizenship means that the former Turkish worker can now enter and reside freely in the Netherlands or indeed any other EU Member State where he or she might wish to go. Conversely, in Kahveci & Inan the Court did not accept the argument of the Dutch government that naturalisation is the pinnacle of integration. In that case AG Sharpston argued that naturalisation may be an indication that an immigrant is on his path to integration, but that is not the same as saying that he has become completely integrated. .

But as Turkish nationals, Mr Demirci and his friends could only live in Turkey or their host Member State (the Netherlands) and so they have no free movement rights. Further as such, they only benefit from certain rights in the host Member State. So, says the Court, for the purposes of paying them a benefit, it is reasonable for the national authorities to make this subject to the same rules as apply to all other Dutch nationals (para 57).   

Secondly, dual Turkish/Dutch nationals would be placed in a better position than other EU citizens if they were allowed to have the top up benefit even though they did not fulfil the residential requirement (para 58). The right to export to Turkey social benefits in Decision 3/80, according to the Court, is a sort of compensation for the fact that Turkish nationals will no longer be able to return to and live in the host Member State. As the CJEU held in Bozkurt, a Turkish national ceases to be a protected person under Decision 1/80 if he or she becomes totally and permanently incapacitated for work (para 64). So there is a justification for applying different rules to those who are exclusively Turkish nationals as they have a much less secure residence status in the host Member State and no free movement rights in EU law. They therefore need the extra protection of the export right. For dual Turkish/Dutch nationals, they can always move back to the EU and fulfil the residential requirements for the top up benefit (even if they would rather not) (para 65).

 Distinguishing Kahveci & Inan

As mentioned above, this judgment takes a different approach from the CJEU’s own jurisprudence in Kahveci & Inan where it held that dual Turkish/Dutch nationals were allowed to rely on their Turkish nationality for the purposes of the EU/Turkey family reunification rules, in order to benefit from the expulsion of Turkish workers’ family members, which are more favourable than the rules applying to the expulsion of the family members of Dutch citizens in the Netherlands. However, the CJEU is anxious to protect its ruling in Kahveci and goes to some lengths to explain why the finding in Kahveci is consistent with that which they were giving in Demirci (para 66). The argument goes like this. Family reunification enhances integration, for Turkish workers who are already legally integrated into the host Member State. Article 7 of Decision 1/80 deepens the last integration of a Turkish worker by granting to that worker’s family members, after three years residence, access to the labour force (para 67). So, acquisition of national citizenship could not be used as a reason to deprive the worker of the benefit of family reunification in Decision 1/80 (para 68). By contrast with the facts in Demirci, the family’s integration would be hindered if it was denied on the basis of dual citizenship. Further in Kahvecithe person was seeking to benefit family members who are also Turkish nationals (para 70). Presumably this reasoning means that dual Turkish/EU citizens can also invoke the ‘standstill’ clause in the EU/Turkey association agreement, as interpreted last year in the CJEU’s Doganjudgment (discussed here), to avoid stricter rules for family reunion that apply to a Member State’s own nationals.

But in the case of Mr Demirci he can always go back to the Netherlands (or the EU) to satisfy the residential requirement to get the top up (para 69). Further all he and his colleagues wanted was a top up benefit for themselves (para 71). Finally, the CJEU considered that if Mr Demirci could rely on Decision 1/80 to have the top up benefit while not fulfilling the residential requirement, this would put them in a better situation than that of other citizens of the Union (and thus contravene Article 59 of the Additional Protocol to the EU/Turkey association agreement, which rules out Turkish citizens being better off than EU citizens).

The Court’s approach seems to be that there is something inherently wrong about letting Mr Demirci and his colleagues have their cake and eat it too. The arguments may not be the most compelling in the world but they show a clear judicial line. The CJEU will favour Turkish nationals living in the EU even if they have taken a second citizenship so long as this improves their long lasting integration. But they cannot rely on their Turkish citizenship after naturalization when what they seek is a financial benefit which is subject to a residential requirement for EU citizens (and which they do not fulfil because they have left the EU).

The Court appears to implicitly return somewhat to its reasoning in the Mesbahjudgement of 1999, where it held that the Moroccan mother of a Belgian-Moroccan worker who was living with her son in Belgium could not rely on the clause prohibiting discrimination on grounds on nationality in the EEC-Morocco Association Agreement to claim a disablement allowance that under Belgian law was only granted to Belgian nationals. The Court in Demirci, however, does explicitly point to the difference with Kahveci & Inan: “[in] the present case, by contrast, the respondents in the main proceedings are relying on the provisions of Decision 1/80 on their own behalf and in their own interest” (para 70). The Court leaves the door open for the Turkish spouse of a Turkish/Dutch (ex-) worker to rely on Decision 3/80, because the spouse, not having Dutch nationality, would be unable to return to the Netherlands.

 

Conclusions

The most important thing to remember about the Demirci decision is that it does notundermine the Court’s judgment in favour of dual rights for dual citizens in Kahveci & Inan. Yes, Turkish nationals can rely on the EU/Turkey association agreement family reunion rules even after they have naturalized in their host Member State, provided they are allowed to have dual nationality (it isn’t yet clear if they could invoke the EU’s own family reunion Directive). But they cannot rely on their non-EU citizenship after they leave the EU to get around a national residential requirement for the export of a social benefit if such a requirement applies to nationals of the host Member State.

Barnard & Peers: chapter 13, chapter 26

Photo credit: www.dw.de

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Posting third-country workers within the EU: the ECJ squares the circle

Amedeo Arena, Assistant Professor of European Law - University of Naples "Federico II" School of Law

Judgment of the court (Second Chamber) of 11 September 2014, Essent Energie Productie BV v. Minister van SocialeZaken en Werkgelegenheid, Case C-91/13.

The ECJ has repeatedly held that, unlike workers from EU Member States, Turkish nationals are not entitled to freedom of movement within the European Union but can rely only on certain rights in the territory of the host Member State alone (Savas, para 59; Derin, para 66). The Essent judgment provides a recent and clear illustration of how, under certain circumstances, the EU internal market freedoms can be relied upon to overcome those limitations and, indirectly, to broaden the freedom of movement of Turkish and other third-country nationals.

Facts and legal background

Under Netherlands legislation, an employer is prohibited from having work carried out in the Netherlands by a foreign national who does not hold a work permit.

Essent, a company established in the Netherlands, had scaffolding at one of its branches in that Member State erected by a number of workers from Turkey and other non-EU countries. Essent, however, did not hire those workers: it entrusted the construction work to BIS, another Netherlands-based company, which in turn requested Ekinci, a company incorporated in Germany, to post the above workers to the Netherlands for the duration of the construction work.

As the Netherlands authorities had issued no work permit for the purposes of that posting, the Netherland Minister fined Essent EUR 264 000 for infringing Netherlands labour law.

In the ensuing litigation before the Netherlands Raad van State, two provisions came into play: Article 41(1) of the 1970 Additional Protocol to the EEC-Turkey Association Agreement and Article 13 of Decision no. 1/80 of the Association Council of 19 September 1980. Both are standstill clauses, prohibiting, respectively, new restrictions on the conditions of access to employment and on the freedom to provide services between Turkey and EU Member States. The Netherlands court thus resolved to stay proceedings and to seek guidance from the ECJ as to the interpretation of those provisions.

The Judgment

The ECJ first examined whether Article 41(1) of the Additional Protocol and Article 13 of Decision No 1/80 applied to a situation such as the one at issue in the main proceedings. After recalling that such provisions are directly applicable and can be relied upon to have incompatible national legislation set aside, the Court stressed that those provisions confer rights to Turkish nationals “in the territory of the host Member State alone”. In casu, the Court considered that the host Member State was Germany, where the Turkish workers were legally resident and employed, rather than the Netherlands, where the above workers were temporarily posted and whose labour market they had no intention to enter. Accordingly, the ECJ ruled that Article 13 of Decision 1/80 was not applicable to the present case.

The Court reached the same conclusion with reference to Article 41(1) of the Additional protocol. While a Turkish undertaking providing a service in a Member State could rely upon that provision, no such service provision occurred between Turkey and the Netherlands in the present case. The only link with Turkey was the presence of Turkish nationals among the workers posted by Ekinci to the Netherlands, a connecting element that the ECJ regarded as “not sufficient” to trigger the applicability of Article 41(1) of the Additional protocol.

The Court then turned to Articles 56 and 57 TFEU, which secure the freedom to provide services within the EU. It is worth noticing that the order for reference contained no preliminary question concerning those provisions, yet the Court considered that their interpretation could be useful to the referring court in adjudicating on the case pending before it.

Recalling Advocate General Bot’s Opinion, the Court noted that the posting of workers between undertakings established in different Member states (in this case Ekinci and BIS) fell within the scope of the free movement of services, in spite of the fact that some of those workers were not Union citizens. The Court also found that Articles 56 and 57 TFEU could be invoked not only by the recipient (BIS), but also by the end user of that service (Essent).

On those premises, the ECJ considered that the Netherlands work permit requirement, and the related administrative burdens, impeded the making available of foreign workers to a user undertaking established in the Netherlands by a service-providing undertaking established in another Member State.

As no harmonisation had been achieved in the area, the ECJ turned to the issue of possible justifications for the Netherlands measure. Whilst the Court acknowledged that the Netherlands Government’s desire to avoid disturbances on the labour market constituted an overriding reason in the public interest, it noted that posted workers do not seek to gain access to the host State labour market, as they return to their country of residence as soon as their work is over.

The Court also averred that Member States are entitled to check that an undertaking established in another Member State which posts foreign workers to its territory is not availing itself of the freedom to provide services for a purpose other than the performance of the service concerned. Nonetheless, the ECJ considered that the Netherlands work permit requirement was disproportionate to that aim, which could also be achieved through less-restrictive means. For instance, the service-providing undertaking could be required to show the Netherlands authorities that the situation of the workers concerned is lawful as regards matters such as residence, work permit and social coverage in the Member State in which that undertaking employs them. Similarly, the service-providing undertaking could be required to report beforehand to the Netherlands authorities the presence of posted workers, the anticipated duration of their presence and the provision of services justifying the posting.

Accordingly, the ECJ held that Articles 56 and 57 TFEU must be interpreted as precluding national legislation under which, when non-EU workers are posted by an undertaking established in a Member State to a user undertaking established in another Member State, such making available is conditional upon the latter Member State issuing work permits to those workers.

  

Comment

The present ruling highlights the somewhat peculiar situation of Turkish workers posted from one Member State to another in the aftermath of the ECJ ruling in Abatay. Those individuals can rely on Article 13 of Decision 1/80 against the Member State into whose labour market they seek to integrate through the pursuit of uninterrupted employment, but cannot invoke that provision against the Member State where they are posted for limited periods of time. By the same token, while a Turkish undertaking providing services in a Member State, as well as the Turkish employees of that undertaking, can invoke Article 41(1) of the Additional Protocol against that Member State, an EU undertaking employing Turkish nationals cannot rely on that provision to challenge national measures that restrict the movement of its Turkish employees.

In view of these incongruences and of the obvious trade-restrictive effects of the Netherlands work permit requirement, the ECJ’s willingness to expand the scope of the preliminary ruling to include Articles 56 and 57 TFEU is unsurprising. However, not too long ago, in Vicoplus, the ECJ had ruled that the freedom to provide services, read in connection with the 2003 Act of Accession, was no bar to the application of the Netherlands work permit requirement to Polish workers posted to the Netherlands during the transitional period provided in the Act of Accession. While AG Bot devoted several paragraphs of his Opinion to distinguish the factual and legal background in Vicoplus from that of the instant case, it is regrettable that the ECJ did not take the opportunity to account for what might be perceived as differential treatment between Turkish and Polish posted workers.

The ECJ only referred to Vicoplus to support its finding that the posting of workers between Ekinci and BIS, two undertakings established in different Member States, fell within the scope of the freedom to provide services. Neither Ekinci nor BIS, however, sought to rely on that freedom. Could Essent invoke Articles 56 and 57 TFEU against Netherlands labour legislation, even though that undertaking was not the direct recipient of the service?

In its Opinion, AG Bot first observed that, since the freedom to provide services pursues the public interest objective of establishing an internal market, persons “other than service providers and recipients” who, none the less, “have a material connection with a person who has that status” should be able to invoke that freedom against domestic restrictive measures. The Court had taken a  similar approach in respect of the free movement of workers in Las: “Article 45 TFEU may be relied on not only by workers themselves, but also by their employers. In order to be truly effective, the right of workers to be engaged and employed without discrimination necessarily entails as a corollary the employer’s entitlement to engage them in accordance with the rules governing freedom of movement for workers” (para 18).

The Advocate General then relied on an interesting twist of the abuse of rights doctrine. Since nowadays it is common to witness chains of several intermediaries between the principal contractor and the employees, to prevent circumvention of the work permit requirement, Netherlands legislation has adopted a broad notion of employer, making the principal contractor responsible for obtaining work permits for non-EU workers employed by its subcontractors. However, AG Bot argued that, to prevent circumvention of the ban on restrictions on the freedom to provide services, just as the principal contractor’s liability under national labour legislation expands, so should its ability to rely on Article 56 and 57 TFEU.

Unfortunately, the ECJ made no reference to the first argument, which could have provided some clarifications on the ability to invoke fundamental freedoms by persons who do not fall within the scope of such freedoms but have “a material connection” with others who did. In cases such as Carpenterand, more recently, Dogan, the ECJ had taken a different approach, by focusing on the impact on service providers of national measures (e.g. deportation orders, immigration requirements) addressed to persons connected to that provider (e.g. their spouses).

The ECJ, instead, only ran an abridged, three-paragraph version of AG Bot’s anti-circumvention argument, and found that, if Essent were denied the possibility of relying on Article 56 and 57 TFEU, the Netherlands could obstruct the freedom to provide services by enforcing its work permit requirement against the principal contractor. It is worth noticing that in earlier rulings the ECJ had relied on the abuse of rights argument to achieve the opposite result: to narrow the scope of EU provisions in cases where the conditions required to invoke those provisions had been artificially created contrary to the objectives pursued by EU law (Emsland-Stärke, paras 52-53).

Once the ECJ established a link between Essent and the freedom to provide services, the fate of the work permit requirement as a precondition for the posting of non-EU workers to the Netherlands was sealed. The conditions, deadlines and administrative burden involved in obtaining the work permit obviously hindered the making available of workers on a cross border basis. The ECJ rejected the Netherlands government’s argument that the measure was designed to avoid disturbances on its labour market, noting that posted workers do not seek to gain access to that market, “as they return to their country of origin or residence after the completion of their work”. The Court then conceded that a Member State may check that an undertaking established in another Member State which posts to its territory workers from a non-member country is not availing itself of the freedom to provide services for a purpose other than the performance of the service concerned, but engaged in a merciless proportionality assessment of the measure and provided not one, but two less restrictive alternatives to achieve the same aim.

Finally, it is worth highlighting that, unlike recent rulings (such as Dogan) that exclusively concern Turkish nationals, since neither Article 41(1) of the Additional Protocol nor Article 13 of Decision no. 1/80 were found to be applicable, the Essent holding applies to the posting of workers that are nationals of any non-EU country between undertakings established in different Member States.

Barnard & Peers: chapter 14

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Non-EU benefit claimants and implications for the EU's relations with Switzerland

Steve Peers

Even the most xenophobic of British tabloids is unlikely to greet today's judgment of the Court of Justice of the European Union (CJEU) with the headline, 'Scrounging Swiss'. Yet the judgment, concerning the correct legal base of an EU measure extending revised social security rules to Swiss citizens, raises interesting questions concerning the extension of social security rules to third states in general, and on the EU's relations with Switzerland in particular.

Background

This the second in a series of three cases (to date) in which the UK has challenged the 'legal base' of Council Decisions which establish the EU's position as regards the extension of revised EU rules on social security coordination to particular third countries. The first case (C-431/11, UK v Council) concerned the European Economic Area (EEA), a treaty extending the EU's internal market to Norway, Iceland and Liechtenstein. The UK lost that challenge in September 2013. This case (C-656/11, UK v Council) concerns the extension of those social security rules to Switzerland, pursuant to the EU's free movement agreement with that country. A third case, still pending (C-83/13, UK v Council) concerns the extension of those rules to Turkey.

In all these cases, the Council has taken the view that the correct 'legal base' for its decision is Article 48 TFEU, which concerns the coordination of social security for employed and self-employed workers within the EU. Since the Treaty of Lisbon, this has provided for a qualified majority vote, although a Member State can pull an 'emergency brake' on proposed legislation if it believes that 'important aspects' or the 'financial balance' of its social security system will be affected by the proposal in question. The UK, on the other hand, has argued that the correct 'legal base' for these measures is Article 79 TFEU, which concerns the EU's common immigration policy.

This provision gives the UK (along with Ireland and Denmark) an opt-out. The UK intended to use this opt-out to reduce the cost of the provision of foreign benefits, although the total amount of the benefits paid out is surely not enormous. It may even be less than the cost of bringing this litigation.

It should be noted that the Council has taken a number of other decisions regarding social security rules for associated countries, based on Article 79 TFEU as the UK has advocated. In the Commission's view, set out in an interesting communication on social security and third countries, Article 48 should be used where the EU has a particularly close association with the country concerned, but otherwise Article 79 should be used.

Judgment

In the previous judgment concerning the EEA, the Court ruled that Article 48 TFEU had to be used because: the EEA was a particularly close association between the EU and the countries concerned; the decision aimed to extend the whole EU internal market to those countries; the relevant provisions of the TFEU and EEA treaty were the same; the EEA has particular rules on the legal effect of EEA law; the decision also applied to EU citizens in the third countries concerned; the decision merely updated prior commitments; and it would be difficult to ensure free movement in the event of parallel regimes. Article 79 TFEU could not be used, because it was 'manifestly irreconcilable' with the context and objectives of the EEA.

Most of those points were unique to the EEA, and so the UK had hoped that the previous judgment could be confined to its facts. However, the CJEU extended this case law to cover the EU/Swiss decision as well. It reasons were that: Switzerland has a 'vast' number of treaties with the EU which aim to strengthen the EU/Swiss economic relationship, even though the Swiss had voted not to participate in the EU internal market, via means of the EEA; the EU/Swiss treaty has the same wording as Article 48 TFEU; and the decision simply extends the revised EU rules to the third country concerned. 

The CJEU also ruled that Article 48 TFEU can apply to third-country nationals where an association agreement (which was the basis for the approval for the 'package' of seven EU agreements with Switzerland, in 1999) has already extended EU social security rules to the country concerned, and the decision in question merely aims to update the references concerned. Finally, the CJEU rejected the UK's argument that Article 48 could not apply to the rules on social security for those Swiss citizens not exercising economic activities (who are outside the scope of Article 48), on the grounds that this aspect of the new decision was purely ancillary to the rules on employed and self-employed persons.

So Article 48 TFEU can apply even if the relationship is not as special as the EEA, does not extend the full internal market to the country concerned, and does not contain the particular rules on the legal effect of EEA law. The most recent judgment makes no reference to the complication of having parallel regimes either. Moreover, the UK's best argument - that third country nationals not exercising economic activities were beyond the scope of Article 48 TFEU - has now been shot down by the Court.

It is surely likely, by analogy with this judgment, that the UK will lose its challenge to the Council decision regarding social security for Turkish citizens. Moreover, the Coumcil's decisions relating to social security for other associated third countries, based on Article 79, might even be legally questionable. This is because the Court's judgment today could be understood to mean that the implementation of any specific aspects of the EU's association agreements involve the use of the relevant legal base relating to internal EU law - given that, as the CJEU has always held, all association agreements aim to extend aspects of the EU's internal law to the third country concerned (Case 12/86 Demirel).

Broader implications

The CJEU makes no reference to the recent Swiss referendum, which established a legal requirement for the Swiss government to renegotiate the free movement treaty with the EU within three years, to establish a possible quota on free movement. Of course, the judgment does not concern termination of the EU's treaties with Switzerland, but rather their implementation. But it implicitly rejects any argument that the Treaty provisions on association agreements (now Article 217 TFEU) must always be used for decisions relating to such agreements. The Advocate-General's opinion in the previous EEA social security case had argued that Article 217 had to be used, but the Court did not follow that view.

It is therefore arguable that the EU could decide to denounce one or all of the other treaties in the 1999 package based on the particular legal base for the treaty concerned - such as the transport legal base for the treaty on aviation, for instance. If this is correct, most or all of these decisions to denounce could be taken by a qualified majority vote, so this would strengthen the EU's negotiating position with Switzerland when it comes time to renegotiate the main treaty on free movement of persons. It cannot be forgotten that the EU and the Swiss agreed in 1999 that the seven agreements were a package - and that the denunciation of one treaty would mean the denunciation of all of them.


Barnard & Peers: chapter 24

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