Communicated on 4 May 2016

FIFTH SECTION

Application no. 21698/08 Georgijs SOROCINSKIS against Latvia lodged on 14 January 2008

STATEMENT OF FACTS

1. The applicant, Mr Georgijs Sorocinskis , is a Latvian citizen who was born in 1938 and lives in Riga.

A. The circumstances of the case

2. The facts of the case, as submitted by the applicant, may be summarised as follows.

3. On 20 November 1998 the applicant requested a retirement pension, which was granted to him as of 18 November 1998. At that time the applicant had the status of permanently resident non-citizen of Latvia; thus, in accordance with paragraph 1 of the transitional provisions of the Law on State Pensions, the periods that he had spent in employment outside the territory of Latvia were not taken into account. Furthermore – under paragraph 13 of the transitional provisions of the Law on State Pensions – in view of the fact that the applicant had worked in Latvia for less than 30 years, his own average monthly “insurance wage” (that is to say, the wage from which he paid insurance ) (instead of the “State average monthly insurance wage” – that is to say, the average monthly insurance wage of all insured persons in any given calendar year) was taken into account for the purpose of calculating his pension. Accordingly, his monthly pension was set at 9.96 lats (LVL, approximately 14 euros (EUR)) . As this sum was lower than the minimum pension set by the Cabinet of Ministers, the applicant in fact received LVL 31 (approximately EUR 44).

4. On 11 June 1999 an agreement between Latvia and Ukraine on cooperation in the field of social security entered into force, and on 17 June 1999 the applicant requested the recalculation of his pension to take into account the periods during which he had worked in Ukraine. On 9 February 2000, on the basis of his having acquired citizenship of Latvia, the applicant requested a further recalculation to take account of the remaining periods during which he had worked abroad. The State Social Insurance Agency took into account the periods during which the applicant had worked abroad when determining his aggregate insurance period; however, as the employment periods accumulated in Latvia had not increased, his own and not the State average monthly insurance wage was again taken into account in the calculation of his pension. Even with those additions, the applicant ’ s pension was still below the level of the minimum pension, as set by the Cabinet of Ministers. Accordingly, even after the formal recalculation of his pension, the pension the applicant actually received did not increase.

5. The applicant continued working, and on 2 July 2003 he requested yet another recalculation of his pension on the basis of the insurance contributions he had made following his retirement. On 11 September 2003 the State Social Insurance Agency took those periods into account in determining the applicant ’ s aggregate “insurance period” (for a definition of “insurance period”, see paragraph 7 below). However, as the applicant ’ s employment period in Latvia still amounted to only about eighteen and a half years, the State average monthly insurance wage was not taken into account when his pension was determined. Thus, even following the addition of the new employment periods, the applicant ’ s accumulated pension rights still did not reach the minimum pension – for a total employment period of 41 years 11 months and 28 days it was set at LVL 25.09 (approximately EUR 35.60) per month. Therefore, the applicant continued to receive the minimum pension, which by then had been raised to LVL 46.04 (approximately EUR 65.50). As of 1 December 2003 it was further raised to LVL 54.61 (approximately EUR 77.69).

6. The applicant challenged the State Social Insurance Agency ’ s decision of 11 September 2003 before the administrative courts; however, by a final decision of 29 August 2007 the Senate of the Supreme Court dismissed his complaint.

B. Relevant domestic law and practice

7. The Law on State Pensions, which entered into force on 1 January 1996, provides that one of the components to be taken into account in the calculation and allocation of pensions is the “insurance period”. Under section 1 of the Law on State Pensions, the insurance period is the period of time over which a socially insured person has made social insurance contributions or such contributions have been made or should have been made on this person ’ s behalf. With regard to the time period prior to 1 January 1991 (when the social insurance system had not yet been established), paragraph 1 of the transitional provisions of the Law on State Pensions, as in force at time when it was applied to the applicant, provided:

“1. In the case of Latvian citizens, repatriated persons, and their family members and their descendants, periods of employment and periods treated as equivalent to employment that have been accrued within or outside Latvia prior to 1 January 1991 shall count towards the insurance period, which is necessary for the allocation (recalculation) of the State pension, irrespective of prior payment of social insurance contributions. In the case of foreign nationals and stateless persons who were resident in Latvia on 1 January 1991, the insurance period shall be composed of the periods of employment and the periods treated as equivalent to employment that have been accrued within Latvia, as well as the periods treated as equivalent to employment that have been accrued outside Latvia in the cases specified in sub-paragraphs (4), (5) and (10) of this paragraph. The following periods treated as equivalent to employment accrued up to 1 January 1991 ... shall be considered as counting towards the insurance period to be taken into account in calculating the pension:

...

(4) periods of study at higher-education institutions, and at other training institutions at post-secondary level;

(5) periods of doctoral study, ... postgraduate education or ongoing vocational training;

...

(10) time spent in places of detention by victims of political persecution ... in exile, and time spent escaping from such places, those periods to be multiplied by three, or by five in the case of time spent in the [Soviet] Far North and regions treated as equivalent. ...”

8. Under paragraph 13 of the transitional provisions of the Law on State Pensions, during the transitional period another component that is taken into account in the calculation of the pension is the person ’ s average monthly insurance wage within a specified time period. Thus, if a person retires in 1998, that person ’ s average monthly insurance wage over 24 months from 1996 until 1998 is taken into account. If, however, ( i ) the person ’ s insurance period in Latvia is not less than 30 years (save for politically persecuted persons, in relation to whom a different methodology applies) and if the person ’ s average monthly insurance wage for the last 24 months is below the State average monthly insurance wage in 1997 or (ii) the person has been officially unemployed, the State average monthly insurance wage in 1997 shall be taken into account in the calculation of his or her pension.

9. On 1 January 2002 the transitional provisions of the Law on State Pensions were supplemented with p aragraph 33, which provides that in calculating the pension payable to a person whose insurance period is no less than 30 years and whose average monthly insurance wage, as calculated in accordance with paragraph 13 of these transitional provisions, is lower than the State average monthly insurance wage in the period between 1 January 1996 and 31 December 1999, the State average monthly insurance wage over the said 48 months should be taken into account. The retrospective application of this provision was limited to pensions that had been granted after 1 January 2000.

10. On 20 February 2001, twenty members of parliament lodged an application with the Constitutional Court disputing the compatibility of paragraph 1 of the transitional provisions of the Law on State Pensions, in so far as it concerned foreign nationals and stateless persons, with the Constitution of Latvia and Article 14 of the Convention, read in conjunction with Article 1 of Protocol No. 1 to the Convention. By a judgment of 26 June 2001 the Constitutional Court held that the aforementioned provision was compatible both with the Constitution and the Convention. It reasoned:

“... the pension system which existed in Latvia until 1 January 1991 was based on the solidarity principle, entailing the responsibility of the community as a whole and not creating a direct link between contributions and the amount of the pension. Where the solidarity principle is applied, it is impossible to determine what share of the fund belongs to each of the participants. Accordingly, the right of property protected by Article 1 of Protocol No. 1 ... does not arise in this case. This system does not confer on each individual any entitlement to an identifiable share in the fund, but rather the expectation of receiving material assistance according to the circumstances prevailing at the time the pension is to be paid. Pensions under this system are based on the so-called principle of collective security and cannot be granted on the basis of [each person ’ s] individual contribution. It is true that an entitlement to the payment of a certain amount of benefit arises where the system remains continuously in force and the individual satisfies the relevant conditions. However, even in those circumstances there is no entitlement to a specific amount, since the amount is subject to fluctuations and to legal regulation.

Accordingly, the provision in issue does not concern the right of property and is not at variance with Article 1 of Protocol No. 1 ... The applicants ’ submission that the provision in issue infringes Article 14 of the Convention is therefore likewise unfounded.

With regard to foreign nationals and stateless persons who were resident in Latvia on 1 January 1991, periods of employment within the territory of Latvia prior to that date are taken into account in calculating their pension, in the same way as for Latvian citizens. Accordingly, the Latvian State is responsible for the periods of employment in Latvian territory of all permanent residents of Latvia, regardless of nationality.

The distinction made by the provision in issue is objectively justified by the nature and principles of the Latvian pension system. It cannot therefore be regarded as constituting discrimination within the meaning of the Constitution. ... The Constitutional Court considers that the question of aggregate periods of employment of foreign nationals and stateless persons outside Latvia before 1 January 1991 must be resolved by means of international agreements, and with due regard to the principles of fairness, proportionality, reciprocity and other general rules of law.”

11. In this judgment the Constitutional Court also indicated that permanently resident non-citizens of Latvia did not fall within the category of foreign nationals and stateless persons. Accordingly, the contested provision did not apply to permanently resident non-citizens of Latvia and their situation was not, in fact, covered by the legislation. Following this judgment, paragraph 1 of the transitional provisions of the Law on State Pensions was amended and permanently resident non-citizens of Latvia were listed alongside foreign nationals and stateless persons in relation to the calculation of their insurance periods accrued prior to 1 January 1991.

12. Following the Grand Chamber judgment in Andrejeva v. Latvia ([GC], no. 55707/00, ECHR 2009) another case was brought before the Constitutional Court disputing the compatibility of paragraph 1 of the transitional provisions of the Law on State Pensions (“the disputed provision”) with the Constitution of Latvia and Article 14 of the Convention, read in conjunction with Article 1 of Protocol No. 1 to the Convention. This time the provision was challenged in so far as it regulated the calculation of pensions for permanently resident non-citizens of Latvia. In a judgment of 17 February 2011 the Constitutional Court found no violation.

13. The Constitutional Court distinguished the case before it from Andrejeva ( cited above) , as Ms. Andrejeva had worked within the territory of Latvia, even though the company for which she had worked had been a USSR-based enterprise. The court agreed that the legislation had set out different principles in respect of Latvian citizens and permanently resident non-citizens of Latvia for calculating the employment period that should be taken into account. However, it noted that States enjoyed a wide margin of appreciation in creating their own social security systems. Further, the Constitutional Court emphasised that Latvia was not a successor State to the USSR and that, under the State continuity doctrine, Latvia had no duty to undertake any obligations that originated from the obligations of the occupying State. Citing the decision in Janković v. Croatia (( dec. ), no. 43440/98 , ECHR 2000 ‑ X), the Constitutional Court stated that a State was free to afford advantages to certain persons when it considered such preferential treatment to be necessary. It relied on Andrejeva (cited above) , Gaygusuz v. Austria (16 September 1996, Reports of Judgments and Decisions 1996 ‑ IV) and Koua Poirrez v. France (no. 40892/98, ECHR 2003 ‑ X) in stating that treatment which differed on the basis of citizenship could be compatible with the Convention, provided that there were weighty reasons justifying it. Lastly, it relied on the cases of Kjartan Ásmundsson v. Iceland (no. 60669/00, ECHR 2004 ‑ IX) and Jankovi ć (cited above) to conclude that the Convention did not guarantee a pension in a specific amount and that the determinative question was whether or not the essence of the right to receive a pension had been impaired. The Constitutional Court then continued:

“12.2. Since the restoration of its independence, Latvia has developed a social security system that applies to all persons residing in Latvia as at 1 January 1991.

The collapse of the USSR and the restoration of the State of Latvia gave rise to considerable difficulties. During the occupation, the State and social budgets were controlled by the USSR Public Bank. After the collapse of the USSR, those resources were not shared; they remained the property of the Russian Federation. Therefore, Latvia decided to ensure a minimum pension for all inhabitants of Latvia. Pursuant to the disputed provision, periods of work accrued within the territory of Latvia are taken into consideration when calculating pensions for citizens and non-citizens. The legislature selected that particular regulatory framework because, in fact, it was the same administrative territory with the same body of inhabitants that Latvia had “inherited” when restoring its independence. Moreover, it is arguable that during the periods up to 31 December 1991 in which they worked within the territory of Latvia, the inhabitants had contributed to the national economy and the development of Latvia.

12.3. When devising the new pension system, it was decided that, in addition to the minimum pension already awarded, periods of work which had been accrued outside the territory of Latvia would be included in everyone ’ s insurance period. Compared to non-citizens, aliens and stateless persons, citizens were credited with a broader range of periods of work accrued outside the territory of Latvia that would be included in the insurance period. When assessing what periods the legislature has selected to count towards the length of the insurance periods of non-citizens, it can be concluded that those are periods during which non-citizens underwent education or acquired qualifications in order that they could later contribute to the development of the Latvian national economy, as well as periods during which politically persecuted persons were held in custody or were resettled or underwent deportation due to the fact that they were regarded as opponents of the occupying regime. It follows that the State enjoyed freedom of discretion when creating the pension system and took into account the special link of its citizens with the State, as well as the contribution of their predecessors to the development of the national economy. Making certain periods of work accrued by non-citizens outside the territory of Latvia count towards the length of the insurance period can be regarded as a manifestation of good will by the restored State of Latvia (see also the judgment of 8 January 2008 of the ECHR in the case Epstein and Others v. Belgium , application no. 9717/05).

13. As a result of the USSR occupation that took place in June 1940, Latvia not only lost its independence but also experienced mass deportations, the killing of its inhabitants and an inflow of Russian-speaking immigrants. On 25 March 1949 2.3% of Latvia ’ s inhabitants were deported – that is to say, about three times as many people as in the 14 June 1941 deportation. After the Second World War mass immigration of USSR citizens into Latvia took place (see the judgment of 13 May 2005 of the Constitutional Court in case no. 2004-18-0106, paragraph 1 of the Concluding Part).

After the restoration of independence, the legislature had to decide how to establish a body of Latvian citizens. In view of the continuity of Latvia as an international legal subject, there was reason to constitute the citizenry of Latvia in the same way as it had been determined in the 1919 “Law on Citizenship”. Thus, Latvia did not grant citizenship to persons who had held it before the occupation of Latvia; instead, it renewed the right of these persons de facto (see Ziemele I. Starptautiskās tiesības un cilvēktiesības Latvijā : abstrakcija vai realitāte . – Rīga : Tiesu namu aģentūra , 2005, pp. 103 . ). Consequently, the continuity of Latvia as an entity subject to international law provided legal grounds for not granting the status of citizens to a certain group of persons, and it was necessary to grant a special legal status to those persons who immigrated into Latvia during the Soviet period without obtaining any other citizenship [other than their Soviet citizenship]. The granting of the status of resident non-citizens to a certain group of persons was the result of a complicated political compromise. Moreover, when enacting the Non-Citizen Law, Latvia also had to observe international human rights standards, which prohibit increasing the number of stateless persons (see the judgment of 7 March 2005 of the Constitutional Court in case no. 2004-15-0106, paragraphs 13 and 14).

The status of non-citizens of Latvia cannot be equated with the status of either stateless persons or aliens, as defined in international legal instruments, as the level of rights granted to non-citizens does not fully correspond to [those granted to persons of] any of those statuses . The status of non-citizen is not and cannot be regarded as a variety of Latvian citizenship (see judgment of 7 March 2005 of the Constitutional Court in case no. 2004-15-0106, paragraphs 15 and 17 ) .

The present case does not apply to long-term immigrants who came to the country pursuant to provisions of regulated immigration procedure, as currently implemented. The majority of Latvian non-citizens travelled to the territory of Latvia as a result of the immigration policy implemented by the USSR. When those persons undertook employment outside the territory of Latvia, they made no contribution to the improvement of the Latvian national economy and the development of the State. Those persons regarded the Latvian SSR as one of the corners of the USSR, where they could live and work for a certain period of time, thereby implementing part of the USSR Communist Party ’ s policy of the sovietisation and russification (see the partly dissenting opinion of Judge Ziemele in Andrejeva v. Latvia, paragraph 27).

The Constitutional Court recognises the legal ties of non-citizens with Latvia, from which certain mutual rights and duties derive. However, the context of State continuity is the determining factor and serves as a crucial reason for regarding differences in the procedure for calculating pensions of citizens and non-citizens as well-founded. A State that has been occupied as the result of aggression by another State does not have the duty to guarantee social security for persons who have travelled to its territory as the result of the occupying State ’ s immigration policy. This is especially so if the erga omnes duty not to recognise and justify breaches of international law is taken into account (see the judgment of 5 February 20170 of the International Court of Justice in the case Belgium v. Spain (Barcelona traction case), ICJ Reports 1970, No. 3, paragraph 33).

Even though the applicants do not regard this possibility as commensurate, non-citizens do have the possibility of obtaining citizenship of the Republic of Latvia. The legislature has expressed the view that the non-citizen status was devised as a temporary instrument, so that a person might obtain citizenship of Latvia or choose another State with which to establish legal ties (see the judgment of 7 March 2005 of the Constitutional Court in case no. 2004-15-0106, paragraph 17). After the acquisition of Latvian citizenship, periods of work accrued outside the territory of Latvia would also count towards the length of a person ’ s insurance period. Many non-citizens have taken advantage of this possibility as a means of obtaining the rights and duties stipulated in respect of citizens of the State. However, many non-citizens have not wished to take advantage of this possibility, for a variety of reasons.”

Consequently, the different approaches employed when calculating pensions for citizens and non-citizens of Latvia, have objective and reasonable grounds. ”

COMPLAINT

The applicant complains under Article 14 of the Convention, in essence, read in conjunction with Article 1 of Protocol No. 1 to the Convention, that in calculating his retirement pension the State discriminated against him on the grounds of the date on which he had obtained his Latvian citizenship.

QUESTIONS TO THE PARTIES

1. Has the applicant exhausted all effective domestic remedies, as required by Article 35 § 1 of the Convention?

In particular, did the applicant invoke before the national authorities, at least in substance, the rights under Article 14 of the Convention, read in conjunction with Article 1 of Protocol no. 1, on which he now wishes to rely before the Court?

In addition, would an application to the Constitutional Court have been an effective remedy, within the meaning of this provision, in respect of the applicant ’ s complaint?

2. Is paragraph 13 of the transitional provisions of the Law on State Pensions applied differently to citizens and permanently resident non-citizens ?

In particular, is the requirement that the insurance period of 30 years be acquired in Latvia in order for the State average monthly insurance wage to be taken into account when calculating pensions for those who retired in 1998 interpreted in light of paragraph 1 of the transitional provisions of the Law on State Pensions?

If so, is this difference maintained if a person acquires Latvian citizenship after his or her pension has already been allocated?

3. What were the reasons for adopting paragraph 33 of the transitional provisions of the Law on State Pensions and what was the legitimate aim and justification for limiting the retrospective application of this provision to pensions that had been granted after 1 January 2000?

4. Has the applicant suffered discrimination in the enjoyment of his Convention rights, contrary to Article 14 of the Convention, read in conjunction with Article 1 of Protocol No. 1 to the Convention?

The Government are requested to submit case-law examples of the application of paragraph 13 of the transitional provisions of the Law on State Pensions, in so far as this provision concerns the average wage to be taken into account in the calculation of pensions for persons who retired in 1998 with respect to both citizens and permanently resident non-citizens of Latvia, as well as with respect to both those who held Latvian citizenship at the time of the allocation of the pensions and those who acquired their Latvian citizenship only after the pensions had already been allocated.