Opinion of the Advocate-General
I - Legislative and factual background of the main proceedings
1. By an order of 24 April 1997 of the High Court of Justice, England and Wales, Queen's Bench Division, registered at the Court of Justice on 16 February 1998, this Court is called upon for the first time to interpret the rules governing the EC-Turkey Association with regard to freedom of establishment. The questions referred for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) are as follows:
1. Is the Agreement establishing an Association between the European Economic Community and Turkey, signed at Ankara on 12 September 1963 ("the Agreement") together with the Additional Protocol to the Agreement signed at Brussels on 23 November 1970 ("the Additional Protocol") to be interpreted as conferring benefits on a Turkish national who has (a) entered or (b) remained in the territory of a Member State in breach of the immigration law of that Member State?
2. If the answer to either part of the first question is "yes" does (a) Article 13 of the Agreement or (b) Article 41 of the Additional Protocol have direct effect within the national legal systems of Member States?
3. Does the Agreement together with the Additional Protocol prohibit the application by a Member State of a provision in its national law which refuses that Turkish national leave to remain on the territory of that Member State on the sole ground that his leave to enter or remain in the territory has expired?
4. Where, despite the provisions of its national law, the competent authority in a Member State considers, in the exercise of its discretion, an application by a Turkish national to remain in its territory, is that competent authority obliged to take into account the existence of the Agreement together with the Additional Protocol?
5. If the answer to question four is "yes", is the competent authority in the Member State required to have regard to the principle of proportionality in exercising its discretion?
6. If the answer to question five is "yes", what factors are to be taken into account by the competent national authority in determining whether deportation is proportionate?
2. The Agreement was concluded, approved and confirmed on behalf of the Community by Council Decision 64/732/EEC of 23 December 1963. Its aim is to promote the continuous and balanced strengthening of trade and economic relations between the Parties, while taking full account of the need to ensure an accelerated development of the Turkish economy and to improve the level of employment and the living conditions of the Turkish people, [so as to facilitate] the accession of Turkey to the Community at a later date. In pursuit of those objectives, the Association established by the Agreement involves: (i) a preparatory stage to enable Turkey to strengthen its economy with aid from the Community; (ii) a transitional stage for the progressive establishment of a customs union and for the alignment of the economic policies of the contracting parties; and (iii) a final stage based on the customs union and entailing closer coordination of those economic policies. The rules for applying the final stage were laid down by Decision No 1/95 of the EC-Turkey Association Council.
Article 13 of the Agreement, cited in the order for reference, appears in Chapter 3 (Other economic provisions) under Title II (Implementation of the transitional stage) of the Agreement and provides: The Contracting Parties agree to be guided by Articles 52 to 56 and Article 58 of the Treaty establishing the Community [now Articles 43, 44, 45, 46 and 48 EC ] for the purpose of abolishing restrictions on freedom of establishment between them.
3. The Additional Protocol - whereby the intention of the parties was to lay down the conditions, arrangements and timetables for the implementation of the transitional stage provided for in the Agreement (see point 2 above) and which replaced the protocols originally annexed thereto - was approved on behalf of the Community by Council Regulation (EEC) No 2760/72 of 19 December 1972. In accordance with Articles 62 and 63(2) of the Additional Protocol, the latter with its annexes constitutes an integral part of the Agreement and entered into force on 1 January 1973 (the day on which the United Kingdom joined the Community).
Article 41 of the Additional Protocol, the second Community provision cited by the national court, appears in Chapter II (Right of establishment, services and transport) under Title II (Movement of persons and services) and provides:
1. The Contracting Parties shall refrain from introducing between themselves any new restrictions on the freedom of establishment and the freedom to provide services.
2. The Council of Association shall, in accordance with the principles set out in Articles 13 and 14 of the Agreement of Association, determine the timetable and rules for the progressive abolition by the Contracting Parties, between themselves, of restrictions on freedom of establishment and on freedom to provide services. The Council of Association shall, when determining such timetable and rules for the various classes of activity, take into account corresponding measures already adopted by the Community in these fields and also the special economic and social circumstances of Turkey. Priority shall be given to activities making a particular contribution to the development of production and trade.
The Association Council has not so far adopted any measures on the basis of Article 41(2) of the Additional Protocol.
4. These proceedings arise from the application by Mr Savas, a Turkish national, for judicial review by the High Court of Justice of (i) the decision by the Secretary of State for the Home Department (the Secretary of State) to refuse him leave to remain in the United Kingdom as a self-employed person, and (ii) the decision to enforce the deportation orders previously made against him and his wife, Mrs Savas.
5. Mr and Mrs Savas entered the United Kingdom on 22 December 1984 on a regular tourist visa valid for one month, expressly subject to a condition prohibiting them from working, in either an employed or self-employed capacity. According to the national court, it is unclear precisely how Mr and Mrs Savas occupied and maintained themselves between 21 January 1985, when the entry visa expired, and the opening by Mr Savas of a shirt factory in November 1989. Mr and Mrs Savas first took action to regularise their stay in the United Kingdom in 1991. By letters of 31 January and 29 May 1991, sent to the Immigration and Nationality Department of the Home Office (IND), through their solicitors they applied for leave to remain in the United Kingdom on the basis of the relevant provisions of national law. On 1 July 1991, the IND asked the couple for information on their financial situation. However, owing to an administrative error, the IND did not promptly examine subsequent correspondence from Mr and Mrs Savas. After Mr Savas had opened a fast food business in December 1992, the IND resumed contact on 21 July 1993 with the couple's representatives, who supplied further information on several occasions at the request of the IND and the Secretary of State.
6. On 21 March 1994, the Secretary of State refused the leave requested by Mr and Mrs Savas and served the couple with notice of intention to deport them. In the exercise of his discretionary powers, the Secretary of State considered the couple's application on the basis of the long residence concession, whereby a person with 10 years or more of continuous lawful residence in the United Kingdom, or 14 years' continuous residence, whether lawful or not, may be granted indefinite leave to remain depending on the particular circumstances of his case. In the Secretary of State's view, however, Mr and Mrs Savas did not meet either of those criteria, nor could they point to any other relevant circumstances justifying the exercise of his discretion in their favour, such as special ties with the host State or possible humanitarian grounds.
The couple's appeal against the decision to make a deportation order was dismissed by the Immigration Adjudicator by a determination of 13 December 1994. A subsequent application by Mr Savas for leave to appeal against that determination before the Immigration Appeal Tribunal was rejected as out of time. Meanwhile, in September 1994, he had begun to operate his second fast food business. On 31 August 1995, deportation orders were served on Mr and Mrs Savas, the effect of which, once implemented, is to prohibit them from re-entering the United Kingdom for at least three years (save in the event of revocation of the deportation orders on strong humanitarian grounds).
7. On 30 October 1995, Mr Savas's representatives invoked Article 41 of the Additional Protocol for the first time in support of the application for leave to remain. They argued that that provision, having direct effect, prevented the United Kingdom from imposing further restrictions on the right of Turkish nationals to establish themselves in its territory beyond those already in force on 1 January 1973, the date of that country's accession to the Community, and contained in HC 510, the domestic provision which at that time governed control of immigration subsequent to the entry of foreigners on to national territory. On 1 May 1996, the Secretary of State adopted the decision against which these proceedings have been instituted. It follows from that decision that, even if Mr Savas's interpretation of Article 41 were correct, it would not assist him in any event. At the time of his application to remain as a businessman, Mr Savas no longer had leave to remain in the United Kingdom, and could not therefore derive any rights from HC 510.
8. In the proceedings before the national court, Mr Savas argued that Article 41 of the Additional Protocol required the Secretary of State to consider his application under paragraph 21 of HC 510, applicable to all persons admitted to the United Kingdom as visitors at any time, whatever their status for immigration purposes at the time of legal proceedings. In the alternative, he argued that, even if paragraph 21 of HC 510 were deemed not to apply to him, his application for leave to remain should have been examined on the basis of the preamble to and Article 13 of the Association Agreement and Article 41 of the Additional Protocol. That examination would have led to the conclusion that, in the circumstances of the case, deportation would be a disproportionate penalty for the alleged breach of the national immigration rules.
9. In reply, the Secretary of State has stated that the Agreement cannot be relied upon by persons who are not lawfully present in a Member State or otherwise entitled by national law to apply to enter its territory. Furthermore, persons in Mr Savas's position cannot in any event invoke the Agreement on the strength of Article 41 of the Additional Protocol, since that provision is without direct effect and cannot require the United Kingdom to apply the rules on freedom of establishment for Turkish nationals in force on 1 January 1973. In the alternative, the Secretary of State argues that Mr Savas's claim is unfounded, the wording of paragraph 21 of HC 510 applying only to persons who at the time of the application were lawfully present in the United Kingdom as visitors. Moreover, under paragraph 4 of HC 510, failure to observe the time-limit on his entry visa precluded the applicant in any event from being able to obtain a variation of the initial leave to remain. Finally, deportation could not be a disproportionate penalty for a foreigner who has overstayed the duration of his leave to remain for as long as Mr Savas.
II - Legal analysis
10. I believe it is appropriate to begin the examination of this case, as the Commission suggests, with the second question referred for a preliminary ruling, in which the national court asks whether Article 13 of the Agreement and Article 41 of the Additional Protocol have direct effect. Clearly, Mr Savas's claim would fail if the provisions invoked by him in the proceedings before the High Court of Justice did not have direct effect or were in any event incapable of directly regulating the position of individuals. It is settled case-law that a provision in an agreement concluded by the Community with a non-member country must be regarded as being directly effective, and thus immediately applicable, when, regard being had to its wording and to the purpose and nature of the agreement itself, the provision contains a clear and precise obligation which is not subject, in regard to its implementation or its effects, to the adoption of any subsequent measure.
11. First of all, I agree with the Commission and all the governments which have intervened in the proceedings before the Court that Article 13 of the Agreement (see point 2 above) is essentially in the nature of a programme. That provision is confined to setting out the principles by which Turkey, the Member States and the Community have agreed to be guided in bringing about, on a gradual and reciprocal basis, freedom of establishment for Community and Turkish citizens. It is no accident that, in Demirel, the Court held that Article 12 of the Agreement - which concerns the free movement of workers and the text of which is modelled precisely on Article 13 (see footnote 17 below) - does not have direct effect in the legal systems of the Member States.
12. As for Article 41 of the Additional Protocol, paragraph (2) thereof is also merely in the nature of a programme, in that it merely provides that the Association Council has the power to establish, in accordance with the principles set out in Article 13 of the Agreement and for each category of activity, the timetable and rules whereby the contracting parties are to provide for the progressive abolition of restrictions on freedom of establishment. Moreover, no time-limit is fixed for the exercise of that power by the Association Council.
By contrast, Article 41(1) of the Additional Protocol (see point 3 above) constitutes a standstill clause (also concerning the freedom to provide services) which is entirely comparable to that contained in Article 53 of the EC Treaty, inserted (prior to its repeal by the Treaty of Amsterdam) under Chapter 2 of Title III, concerning the right of establishment. Concerning that provision, the Court observed in Costa v ENEL: The obligation thus entered into by the States simply amounts legally to a duty not to act, which is neither subject to any conditions, nor, as regards its execution or effect, to the adoption of any measure either by the States or by the Commission. It is therefore legally complete in itself and is consequently capable of producing direct effects on the relations between Member States and individuals. Such an express prohibition which came into force with the Treaty throughout the Community, and thus became an integral part of the legal system of the Member States, forms part of the law of those States and directly concerns their nationals, in whose favour it has created individual rights which national courts must protect. In my view, similar considerations apply to Article 41(1) of the Additional Protocol. That rule, in truth, also constitutes a clear and precise obligation to produce a result. By its nature, therefore, it can be relied upon in proceedings before the national courts by any person concerned in order to challenge the lawfulness, and thus the application, of legislation adopted by any Member State which makes the establishment of Turkish citizens in its territory subject to further restrictions, in addition to those existing on 1 January 1973.
13. The finding that Article 41(1) may directly govern the position of individuals does not appear to be contradicted by consideration of the purpose and nature of the Agreement of which it forms part. The purpose of the Agreement is to establish an association to promote and develop trade and economic relations between the contracting parties - in the field of self-employment as well, through the progressive elimination of restrictions on freedom of establishment - with a view to improving the standard of living of the Turkish people and facilitating the accession of Turkey to the Community at a later date (see point 2 above). Moreover, the fact that the Agreement is intended essentially to promote the economic development of Turkey and therefore involves an imbalance in the obligations assumed by the Community towards that country is not such as to prevent certain of its provisions from being directly applicable. I therefore conclude, in relation to the second question referred, that Article 41(1) of the Additional Protocol - unlike Article 13 of the Agreement - lays down a sufficiently precise and unconditional rule for the national courts to be able to apply it immediately as being suited to regulating the legal position of individuals.
14. I now turn to the first and third questions referred by the High Court of Justice, and set out above (point 1), which I suggest this Court should examine together. They require definition of the content of the rights on which a person in Mr Savas's position may lawfully rely pursuant to Article 41(1) of the Additional Protocol. According to the applicant, Article 41(1) refers en bloc to the rules laid down in Article 52 of the EC Treaty and subsequently defined in the case-law of the Court of Justice. The applicant, in my view, seems to be arguing that the position of Turkish nationals is fully assimilated, as regards the benefit of freedom of establishment in the Member States and the right to receive the same treatment as nationals, to that of Community citizens. Since exercise of the freedom at issue in the proceedings necessarily involves the right of residence for a Turkish migrant in the territory of the country of establishment, Mr Savas claims that he (and indirectly his wife as well) cannot be made subject to any deportation measure, even if on the grounds - as in this case - of failure to comply with the time-limit on the validity of the entry visa or the prohibition therein on taking up employment. He therefore maintains that the Court should give an affirmative answer to the first and third questions.
15. However, I am not swayed by Mr Savas's arguments. Article 41(1) of the Additional Protocol does not directly confer on Turkish nationals a perfect and unconditional right to take up and pursue activities as self-employed persons or to establish and run undertakings in member countries, on the conditions laid down by the legislation of the host State in relation to its own citizens. The fact remains that, in the context of the measures governing the EC-Turkey Association, there is no provision corresponding to Article 52 in the system established by the Treaty. It is true that the contracting parties have undertaken to achieve freedom of establishment between themselves, taking as their basis for that purpose the relevant provisions of the Treaty. The Association Council has however omitted, in contrast to the position in relation to the free movement of workers, to lay down timetables and rules for the planned progressive abolition of restrictions on the freedom in question, in implementation of the programme-setting provision in the Agreement (see Article 41(2) of the Additional Protocol). The provision having direct effect, to be found in Article 41(1), cannot therefore provide any basis for Mr Savas's claim that the treatment of Turkish professional practitioners and businessmen is to be brought fully into line with the principles laid down by the Treaty with regard to the right of establishment.
16. There is also a further aspect which cannot be overlooked. Although, in the matter of freedom of movement for workers, the treatment accorded to migrant Turkish nationals must, in accordance with the case-law of the Court of Justice, be based as far as possible on the principles arising under Articles 48, 49 and 50 of the Treaty, the only workers who may benefit from those rules, and thus from the rights modelled on those laid down by the Treaty, are those who satisfy the requirements laid down by Decision No 1/80 (i.e. those duly registered as belonging to the labour force of the host Member State who have been lawfully employed for a certain period). The Court of Justice has stated in that respect that in contrast to nationals of Member States, Turkish workers are ... not entitled to move freely within the Community but benefit only from certain rights in the host Member State whose territory they have lawfully entered and where they have been in legal employment for a specified period. In other words, it is undisputed that, by virtue of the Agreement, the position of Turkish workers undoubtedly differs from that of citizens of other non-member countries. But that still does not mean, in the matter under consideration, that the Agreement was intended to equate their position with that of Community workers, especially for the purposes of access to the territory of a Member State and the right to remain there, to obtain renewal of a work permit and freely to take up any form of employment. By the same token, the Court of Justice has frequently held that the rules concerning the EC-Turkey Association do not affect the power of Member States to regulate the entry of Turkish citizens to their territory and the conditions of their first employment.
The crucial factor for the purposes of this Opinion is that the principle of non-equivalence which applies to Turkish workers must apply a fortiori, for the reasons given above (point 15), to Turkish citizens intending to migrate to the Community in order to pursue an activity as self-employed persons. It is true that Article 41(1) of the Additional Protocol, which has direct effect, protects self-employed Turkish migrants. However, it does so only in the sense that it prohibits Member States from introducing any new provisions, after the entry into force of the Additional Protocol, whereby the establishment of Turkish professional practitioners and businessmen is made subject to rules less favourable than the treatment previously provided for. By concluding the Agreement and the Additional Protocol, therefore, the contracting parties did not encroach upon the restrictions on the freedom in question which already existed on 1 January 1973 (save for the possible impact in this area of the general principle of non-discrimination laid down in Article 9 of the Agreement; see paragraphs 18-20 below). They merely undertook to abolish them gradually, although the undertaking was not implemented. In the matter of establishment, therefore, the Member States have, in my opinion, maintained their essentially unconditional power to regulate the entry and residence of Turkish nationals on their territory, the rules for their inclusion in the national labour market (see footnote 21 above), and the position of Turkish workers already lawfully active in that market in their capacity as professional practitioners or businessmen. I therefore conclude that Mr Savas cannot rely on the direct effect of Article 41(1) of the Additional Protocol in support of his own alleged right of establishment (and, as an obvious corollary, residence) in British territory.
17. The Commission argues that a person in Mr Savas's position would not be able to claim any rights under Article 41(1), even if his presence in the host Member State were lawful under national law. I would endorse that point of view. I cannot share the unanimous conclusions reached on that point by the national governments in this case. In their view, if a Turkish worker resides in the host Member State by virtue of a legitimate entitlement under national law, that is relevant for the purpose of assessing the lawfulness of his employment, on which the enjoyment by Turkish migrants of the specific rights granted by Article 6(1) of Decision No 1/80 depends. However, that reasoning applies to the case of employed workers; as we have seen, the Association Council has not implemented the Agreement's rules on freedom of establishment, which are in the nature of a programme, and in the face of such inaction it does not seem to me to be possible to apply to a self-employed worker the principle that informs the rules on the free movement of workers under the system established by the EC-Turkey Association, whereby the lawfulness of a migrant's employment in the host country entails his precise subjective legal rights, which constitute rights worthy of protection, being unconditionally recognised. In other words, the result of the interpretation of Article 41(1) of the Additional Protocol which I am proposing to the Court would not, logically, be different even if Mr and Mrs Savas had applied to the British authorities for leave to remain in the United Kingdom before the expiry of their entry visa, while they still enjoyed a legal right of residence.
18. That said, I would like for the sake of completeness to add a few reflections on an aspect of the case which I have not hitherto mentioned. Might an individual in the applicant's position be able to rely on the general principle of non-discrimination on the basis of nationality, laid down by Article 9 of the Agreement, in support of his claim to establish himself and reside in the host Member State, even without the need for individual leave granted by the Secretary of State under paragraph 21 of HC 510? Article 9, under Title II of the Agreement (headed Implementation of the transitional stage) states: The Contracting Parties recognise that within the scope of this Agreement and without prejudice to any special provisions which may be laid down pursuant to Article 8, any discrimination on grounds of nationality shall be prohibited in accordance with the principle laid down in Article 7 of the Treaty [subsequently Article 6 of the EC Treaty, now, after amendment, Article 12 EC].
At first sight, those provisions might be thought capable of being applied in the present case for a number of reasons. First of all, the principle of equal treatment laid down in general terms by the Agreement has the status of an instrumental rather than a substantive rule. It is therefore by reference to Member States' application of other legislative provisions to situations provided for and governed by conventional law that Article 9 of the Agreement requires them, in the absence of adequate and logical justification, not to treat their own citizens and Turkish citizens resident in the national territory differently. Moreover, freedom of establishment, which is at issue in the main proceedings, comes within the scope of the Agreement. Finally, paragraph 21 of HC 510 is to be interpreted as subjecting to official authorisation by the Secretary of State the establishment in the United Kingdom for business purposes only of persons who are citizens of a non-member country, admitted under a tourist visa. It would seem, therefore, that Mr Savas's situation falls within an area in which the obligation of equal treatment may operate directly. The rights of establishment and residence relied on by him are said to flow from the combined application of the principle of non-discrimination and British immigration legislation, which appears to allow British and Community citizens to set up and run businesses without the need for appropriate authorisation. Recognition of the direct effect of Article 9 of the Agreement would therefore be sufficient to grant Mr Savas effective legal protection, as long, of course, as the application of the relevant British legislation gives rise to overt discrimination on grounds of citizenship to the detriment of Turkish citizens.
Moreover, examination of the question of discrimination - which I have set out above in hypothetical terms - is not precluded by the fact that neither the national court nor Mr Savas has referred to Article 9. According to the case-law, the Court of Justice has the power, when giving judgment under Article 177 of the Treaty, also to take into account provisions of Community law other than those raised by the national court in its questions but which appear relevant for the purposes of resolving the dispute in the main proceedings.
19. In my additional Opinion in Sürül, subsequent to the closure of the written stage of these proceedings, I explained that Article 9 of the Agreement has direct effect in the legal systems of the Member States. I then suggested that it should be interpreted, in conjunction with Articles 37 and 39 of the Additional Protocol, as precluding a Member State from requiring a Turkish citizen in Mrs Sürül's position, as a condition for the grant of a family benefit such as the dependent child allowance and additional amount provided for by German law, to hold a specific type of residence permit allowing the person concerned to remain in the national territory on a stable basis, where no such document is required of its own citizens residing in the national territory.
20. In contrast to Sürül, however, I consider that applying the general prohibition of discrimination on grounds of citizenship, imposed by the Agreement upon the Member States and Turkey, cannot entail acceptance of Mr Savas's claim for the grant of leave to remain as if he were a British, or at any rate a Community, citizen. That does not mean that the rights of establishment and residence cannot in principle fall within the scope of the prohibition of discrimination on grounds of citizenship. I maintain, however, that - in assessing whether the differentiated treatment accorded by British legislation to a person in Mr Savas's situation constitutes discrimination on grounds of nationality within the meaning of Article 9 of the Agreement - it is necessary not to lose sight of a fundamental principle to which I have already referred a number of times; the overall position in which the Agreement places Turkish citizens cannot be assumed to be generally equivalent to that enjoyed by Community citizens under the Treaty. To enable each Member State to retain control over migrant flows entering its own territory, the requirements for entry of Turkish migrant workers are determined solely by national law, and the possibility of the persons concerned obtaining work permits depends exclusively on the lawfulness of their position with regard to the right of residence. The criterion in question was elicited by the Court when interpreting Article 6 of Decision No 1/80 (see footnote 18 above), but which cannot fail to apply to freedom of establishment as well. As the British authorities have correctly observed, under the system established by the EC-Turkey Association the rights granted to Turkish citizens are accorded for the sole purpose of allowing those migrants who are already legally present in its territory as workers (whether employed or self-employed) the better to integrate into the socio-economic fabric of the host Member State. That is clearly not the case with Mr Savas, who has opted for concealed de facto establishment and subsequent regularisation of his position on the strength of a fait accompli. In my opinion, therefore, a Turkish citizen - who, like Mr Savas, has been permitted to enter and remain in the territory of a Member State for a brief period in his capacity as a tourist, subject to an absolute prohibition on working, and who has instead remained there in secret, long enough to set up and run businesses there - should not be permitted to avail himself of Article 9 of the Agreement in order to obtain the right of establishment in a Member State without the prior official authorisation prescribed by national law.
21. Finally, in view of the negative answer which I suggest that the Court should give to the first and third questions referred by the national court, I need scarcely add that there is no need to examine the remaining questions.
III - Conclusion
For the reasons given above, I propose that the Court should reply to the questions referred by the High Court of Justice, Queen's Bench Division, as follows:
Article 13 of the Agreement establishing an Association between the European Economic Community and Turkey, signed at Ankara on 12 September 1963 by the Republic of Turkey, of the one part, and by the Member States of the EEC and the Community, of the other part, does not constitute a rule having direct effect in the internal legal systems of the Member States. Article 41(1) of the Additional Protocol, signed by the contracting parties in Brussels on 23 November 1970 and annexed to that Agreement, imposes on Member States a clear, precise and unconditional obligation not to introduce new restrictions on the freedom of establishment of Turkish citizens compared with those existing on 1 January 1973. Article 41(1) does not confer either a right of establishment or a right of residence on a Turkish citizen who has remained in the territory of a Member State after expiry of the validity of a lawful tourist entry visa, in breach of the national immigration legislation of that State, and who has worked there as a self-employed person. In those circumstances, therefore, the provision in question does not preclude the competent authorities of the host Member State from refusing, on the basis of the relevant legislation in force on 1 January 1973, to allow the Turkish migrant worker to remain in its territory.
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