CELEX: 62000CJ0153
Freedom to provide services
Banking activities
Employee of a credit institution established in a Member State and canvassing for clients in another Member State
National legislation on banking secrecy
Refusal to answer questions and to give evidence in a judicial investigation

By order of 13 April 2000, received at the Court on 25 April 2000, the Onderzoeksrechter in de Rechtbank van eerste aanleg
te Turnhout (investigating judge at the Court of First Instance, Turnhout) (Belgium) referred to the Court for a preliminary
ruling under Article 234 EC four questions on the interpretation of Article 49 EC.
Those questions were raised in a judicial investigation seeking to determine the criminal liability of Mr der Weduwe, a Netherlands
national living in Luxembourg, who is employed by a bank also established in Luxembourg and is accused of a number of offences
through canvassing for clients in Belgium between October 1993 and May 1999.
Legal background
Provisions of Belgian law
Article 458 of the Belgian Criminal Code provides: ‘Medical practitioners, surgeons, health officers, apothecaries, midwives and all other persons who, by reason of their status
or profession, are guardians of secrets entrusted to them and who disclose them except where they are called to give evidence
in legal proceedings or where the law requires them to do so, shall be liable to imprisonment of between eight days and six
months and a fine ranging from one hundred to five hundred francs.’
According to the case-law of the Belgian courts, the requirement of professional secrecy laid down in Article 458 of the Criminal
Code does not apply to employees of credit institutions (Cass. 25 October 1978,
Pas.
, 1979, I, 237).
The hearing of witnesses by the investigating judge is governed by Articles 71 to 86 of the Belgian Code of Criminal Procedure.
Article 75 of that code provides that the witness is to swear an oath that he will tell the whole truth and nothing but the
truth. The refusal of a witness to answer certain questions, even where it has been established that his testimony would be
such as to incriminate himself or a third party, is treated as equivalent to a refusal to appear when summoned as a witness,
which is punishable under Article 80 of the code (Cass. 10 July 1916,
Pas.
, 1917, I, 195).
Provisions of Luxembourg law
Under Luxembourg law, professional secrecy is governed by Article 458 of the Luxembourg Criminal Code, the text of which is
analogous to Article 458 of the Belgian Criminal Code, save for the amount of the fine, which ranges from LUF 10 000 to 50 000.
Article 41 of the Law of 5 April 1993 on the financial sector (
Mémorial A
, 1993, p. 462), as amended, provides:
1.
Directors, members of the governing and supervisory boards, managers, employees and other persons employed by the credit
institutions and other professions of the financial sector mentioned in Part I hereof shall be required to maintain secrecy
in regard to information entrusted to them in the course of their professional business. Disclosure of such information is
an offence punishable under Article 458 of the Criminal Code.
2.
The duty to maintain secrecy shall cease when disclosure of information is authorised or required by or pursuant to a legislative
provision even if it predates the enactment hereof.
...
The main proceedings
The order for reference shows that Mr der Weduwe, a Netherlands national living in Luxembourg, successively employed by two
banks established in Luxembourg, namely Banque UCL and Rabobank, is alleged to have canvassed for clients in Belgium with
a view to persuading them to place money in deposits or negotiable securities with his employers. In the course of his activities,
in the period from October 1993 to May 1999, Mr der Weduwe allegedly collected money from Belgian clients and took it to Luxembourg.
He allegedly also took coupons pertaining to negotiable securities to Luxembourg on behalf of Belgian clients in order to
place the proceeds of those coupons with his employer.
The national court is conducting a judicial investigation concerning the offences of forgery, use of forged documents, fiscal
forgery, use of forged tax documents, money-laundering and failure to declare income as required by Articles 305 to 310 of
the Belgian law on income tax. In the course of the investigation, Mr der Weduwe, the defendant in the case, was questioned
by the national court on the manner in which he canvassed for clients in Belgium and the manner in which the negotiable securities
were moved to Luxembourg. Mr Marc Troch, a Belgian national living in Luxembourg, who worked for the Banque UCL, where he
was responsible for the arbitrage office, investment funds, international credits and private banking, was also questioned
as a witness by the Belgian police.
Both Mr der Weduwe and Mr Troch have refused to answer the questions put to them, invoking the obligation of professional
secrecy which Luxembourg law imposes on employees in the financial sector.
According to the national court, the Luxembourg provisions on banking secrecy seriously impede the collection of evidence
in judicial investigations into activities carried out in Belgium under the freedom to provide services. Employees of banks
established in Luxembourg which exercise their right to provide services freely in the territory of another Member State in
which a refusal to give evidence is a criminal offence, such as the Kingdom of Belgium, are faced with the dilemma of necessarily
having to breach either the laws of the host Member State or the Luxembourg provisions on banking secrecy. That conflict of
laws also results in unequal treatment of banks and their clients according to their nationality and place of establishment.
The national court points out that in Case C-384/93
Alpine Investments
[1995] ECR I-1141 the Court of Justice interpreted Article 59 of the EC Treaty (now, after amendment, Article 49 EC), to
the effect that a Member State may not maintain a national rule which impedes trade in services between Member States, unless
that rule satisfies all the conditions necessary for it to be deemed to be in the public  interest. The national court considers
that the extra-territorial application of Luxembourg provisions on banking secrecy constitutes an unreasonable impediment
to cross-border banking activities.
The questions submitted for a preliminary ruling
In those circumstances, taking the view that an interpretation of Article 49 EC was necessary to resolve the dispute before
it, the Onderzoeksrechter in de Rechtbank van eerste aanleg te Turnhout decided to stay proceedings and refer the following
questions to the Court of Justice for a preliminary ruling: Must Article 49 EC be interpreted to mean that, where a credit institution authorised in a Member State in which breaches
of banking secrecy are a criminal offence operates, under the freedom to provide services, in another Member State where there
is no analogous banking secrecy,
(1)
that provision of the Treaty does not preclude a legislative provision of the host Member State pursuant to which employees
of the credit institution concerned are required to
give evidence
in criminal proceedings concerning services provided by them, under the freedom to provide services, in the territory of
the host Member State in circumstances in which employees of credit institutions of the host Member State are under a like
obligation to give evidence as witnesses;
(2)
that provision does not preclude a legislative provision of the host Member State pursuant to which employees of the credit
institution concerned who, when interviewed as
suspects
, choose not to rely on their right to remain silent, may as suspects make a statement in criminal proceedings concerning
services provided by them, under the freedom to provide services, in the territory of the host Member State in circumstances
in which employees of credit institutions established in the host Member State have the same right to make a statement as
suspects, where they do not or do not wish to rely on their right to remain silent;
(3)
that provision precludes a legislative provision of the Member State of origin pursuant to which employees of the credit institution
concerned may be rendered criminally and civilly liable if, in the context of a criminal investigation conducted in a host
Member State (see the first and second questions) (in this case, the Kingdom of Belgium), they
give evidence
concerning services provided by them in the territory of the host Member State under the freedom to provide services;
(4)
that provision precludes a legislative provision of the Member State of origin pursuant to which employees of the credit institution
concerned may be rendered criminally and civilly liable if, in the context of a criminal investigation conducted in a host
Member State (see the first and second questions) (in this case, the Kingdom of Belgium), they make a statement as
suspects
concerning services provided by them in the territory of the host Member State (in this case the Kingdom of Belgium) under
the freedom to provide services, whilst at the same time not relying or not wishing to rely on the right to remain silent?
Preliminary observations
By its first and second questions, which can be taken together, the national court is asking essentially whether, where banks
established in one Member State have engaged in the cross-border provision of banking services on the territory of a second
Member State, Article 49 EC precludes the criminal law and criminal procedural law of the second Member State from, first,
requiring employees of those banks to give evidence, under threat of criminal sanctions, where they are called as witnesses
in criminal proceedings brought in that Member State in respect of events which occurred on its territory in relation to those
cross-border services, and, second, authorising them to disclose information if they are defendants in such criminal proceedings.
By its third and fourth questions, which can be taken together, the national court is asking essentially whether, where banks
established in one Member State have engaged in the cross-border provision of banking services on the territory of a second
Member State, Article 49 EC precludes the criminal law of the first Member State from prohibiting, under threat of criminal
prosecution, employees of those banks from breaching banking secrecy where they are heard as witnesses or defendants in criminal
proceedings brought in the second Member State in respect of events which occurred on the territory of that State in connection
with those cross-border services.
It is clear from the legal background given in the order for reference that, under Belgian law, Article 458 of the Belgian
Criminal Code, which provides that the breach of professional secrecy is a criminal offence, does not apply to the banking
sector. Conversely, under Luxembourg law, the criminal sanctions for breach of professional secrecy laid down in Article 458
of the Luxembourg Criminal Code also apply to the banking sector by virtue of Article 41 of the Luxembourg Law of 5 April
1993. Accordingly, unlike Belgian law, Luxembourg law makes the breach of banking secrecy a criminal offence.
Against that legal background, characterised by a difference in the laws on banking secrecy in the two Member States, the
obstacle encountered by the national court in the main proceedings is that both the defendant, who has not exercised his right
to silence, and the witness have refused to answer questions put to them in the course of the investigation, expressly invoking
their need to observe the provisions on professional secrecy applicable in Luxembourg in respect of banking matters. The national
court states that it is only the extra-territorial scope of the Luxembourg provisions on banking secrecy which constitutes
an impediment to the collection of evidence in the main proceedings.
In addition, the national court considers that the unequal treatment of banks and their clients according to their nationality
and place of establishment, which it regards as contrary to Article 49 EC, is likewise the result only of the extra-territorial
scope of the Luxembourg provisions in question. The national court maintains, more specifically, that those provisions prohibit
employees of banks established in Luxembourg from disclosing information covered by banking secrecy to the judicial authorities
of another Member State, by laying them open to criminal prosecution in Luxembourg. In that way, those provisions constitute
an unreasonable impediment to cross-border banking activities.
The national court therefore considers that it is the conflict between the extra-territorial scope of the Luxembourg provisions
on banking secrecy, as interpreted by it, and the provisions of the Belgian Criminal Code and Code of Criminal Procedure,
which alone are applicable in the main proceedings, which constitutes, first, an impediment to the collection of evidence
in its judicial investigation and, second, unequal treatment of banks and their clients according to their nationality and
place of establishment.
Accordingly, as regards, more specifically, the first and second questions, the national court is seeking to ascertain whether
Article 49 EC is incompatible with the obligation of a witness to give evidence and the possibility for a defendant to disclose
information, as provided for in the Belgian Criminal Code and Code of Criminal Procedure, only in cases where the witness
and the defendant actually risk prosecution in Luxembourg, by virtue of the extra-territorial scope of Luxembourg rules on
banking secrecy, on account of evidence given by them in judicial proceedings in Belgium. Similarly, as regards, more specifically,
the third and fourth questions the national court is seeking to ascertain whether Article 49 EC precludes the prohibition
on breaching banking secrecy laid down in the Luxembourg provisions only where that prohibition also applies, by virtue of
the extra-territorial scope of Luxembourg banking secrecy, to a witness or a defendant heard in judicial proceedings in another
Member State.
Whether the Luxembourg provisions on banking secrecy have extra-territorial scope depends upon the interpretation given to
them.
Admissibility
Observations submitted to the Court
According to Mr der Weduwe, the questions referred by the national court are inadmissible. He claims in particular that, in
its order for reference, the national court did not provide adequate concrete factual and legal information to allow the Court
to give a useful answer to the questions referred.
According to the Belgian Government, the third and fourth questions have a bearing on Community law only in so far as the
national court's interpretation of the Luxembourg provisions on banking secrecy is correct.
The Belgian Government observes that, according to the legal literature, there is as yet no Luxembourg case-law on the territorial
scope of the Luxembourg provisions on banking secrecy. It considers that those provisions are open to two possible interpretations.
On one interpretation, they have no extra-territorial scope. Disclosure of information outside Luxembourg territory is therefore
not punishable under Luxembourg law.
On the other interpretation, those provisions have extra-territorial scope. In that case, however, logic would dictate that
that extra-territorial scope should apply both to the principle of banking secrecy and to the exception for evidence given
in judicial proceedings, for which Luxembourg law also provides. Bank employees obliged to observe Luxembourg banking secrecy
would therefore be authorised to disclose information covered by that secrecy requirement to the judicial authorities of another
Member State.
The Belgian Government thus considers that the interpretation by the national court to the effect that Luxembourg banking
secrecy has extra-territorial scope but the exceptions provided for in Luxembourg law do not, is implausible. However, the
obstacle encountered by the national court in the main proceedings, and the difficulties which it might raise in relation
to Article 49 EC, exist only if such an interpretation were to be accepted.
At the hearing before the Court, the Luxembourg Government indicated that it shared Mr der Weduwe's doubts as to the admissibility
of the questions submitted for a preliminary ruling. It considers that the reasoning of the national court is based on a hypothetical
interpretation of Luxembourg law. Since that interpretation may not necessarily be the correct one, the questions submitted
to the Court are also hypothetical.
The Luxembourg Government explains in that regard that factual situations giving rise to the type of dispute in question are
too rare and too atypical to have come before the Luxembourg courts, which explains why the question of the extra-territorial
scope of the Luxembourg provisions on banking secrecy has not yet been resolved by those courts.
According to the Luxembourg Government those provisions do have extra-territorial scope. Moreover, the exemption from criminal
liability for witnesses giving evidence in judicial proceedings, provided for in the Luxembourg legal system, also has extra-territorial
scope. According to that government, the concept of judicial authority in Article 458 of the Luxembourg Criminal Code covers
not only Luxembourg judicial authorities but also those of other Member States. Likewise, a defendant is always entitled to
disclose information covered by banking secrecy where that disclosure is made in judicial proceedings.
Findings of the Court
It is settled case-law that, in the context of the cooperation between the Court of Justice and the national courts established
by Article 234 EC, it is solely for the national court before which the dispute has been brought, and which must assume responsibility
for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need
for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to
the Court. Consequently, where the questions submitted by the national court concern the interpretation of Community law,
the Court of Justice is, in principle, bound to give a ruling (see,
inter alia
, Case C-415/93
Bosman
[1995] ECR I-4921, paragraph 59; Case C-379/98
PreussenElektra
[2001] ECR I-2099, paragraph 38, and Case C-390/99
Canal Satélite Digital
[2002] ECR I-607, paragraph 18).
However, the Court has also held that, in exceptional circumstances, it can examine the conditions in which the case was referred
to it by the national court, in order to assess whether it has jurisdiction (
PreussenElektra
, paragraph 39, and
Canal Satélite Digital
, paragraph 19). The spirit of cooperation which must prevail in preliminary ruling proceedings requires the national court
for its part to have regard to the function entrusted to the Court of Justice, which is to contribute to the administration
of justice in the Member States and not to give opinions on general or hypothetical questions (
Bosman
, paragraph 60, and C-451/99
Cura Anlagen
[2002] ECR I-3193, paragraph 26).
Accordingly, the Court can decline to rule on a question submitted by a national court  where, for example, the problem is
hypothetical, or where the Court does not have before it the factual or legal material necessary to give a helpful answer
to the questions submitted to it (see to that effect,
PreussenElektra
, paragraph 39, and
Canal Satélite Digital
, paragraph 19).
Moreover, in order to enable the Court to give a useful interpretation of Community law, it is essential for the national
court to explain why it considers that an answer to its questions is necessary for resolving the dispute (see Joined Cases
98/85, 162/85 and 258/85
Bertini
[1986] ECR 1885, paragraph 6, and Case C-343/90
Lourenço Dias
[1992] ECR I-4673, paragraph 19).
As to the third and fourth questions, it should be noted, first, that, in the main proceedings, the national court must apply
the provisions of Belgian law, particularly those of Belgian criminal law and criminal procedure, and that the national court
invokes the Luxembourg provisions on banking secrecy only because it considers them to constitute an obstacle to its investigation.
Secondly, as the Belgian Government has correctly pointed out, it is only on the basis of an asymmetric interpretation of
the Luxembourg provisions on banking secrecy that the national court has discerned a potential obstacle which may, in its
view, be connected with Article 49 EC, and thus require an interpretation of that provision by the Court. On the one hand,
the national court assumes that the provisions, contained in Article 458 of the Luxembourg Criminal Code and Article 41(1)
of the Luxembourg Law of 5 April 1993, making the breach of banking secrecy a punishable offence, have extra-territorial scope.
On the other hand, it implicitly considers that the exemptions from criminal liability set out in Article 458 of that code
in respect of giving evidence in legal proceedings and in Article 41(2) of the Law of 5 April 1993 in respect of the more
general case where the authority or duty to disclose information covered by banking secrecy are laid down by law are, by contrast,
limited in scope to Luxembourg territory.
As the Advocate General correctly pointed out in paragraph 49 of his Opinion, the interpretation chosen by the national court
is hypothetical, since the Luxembourg courts have not ruled on the issue. It is not the only possible interpretation of those
provisions. Moreover, the Belgian Government has made it clear in its submissions to the Court that it regards the national
court's interpretation as implausible. That interpretation is further challenged by the Luxembourg Government itself, which
considers that the banking secrecy prescribed by Luxembourg law cannot be invoked against judicial authorities in other Member
States in investigations such as the one being conducted in the main proceedings.
The national court has not in any way explained why it considers the interpretation on which it relies to be the only one
possible. The fact that the relevance of the questions raised by the national court rests on a particular interpretation of
a national law other than its own made it particularly necessary to state the grounds for the order for reference on that
point.
In those circumstances, since the referring court has not provided the Court with all the necessary information to determine
whether an interpretation of Article 49 EC would serve a useful purpose in the main proceedings, the third and fourth questions
must be held inadmissible.
As regards the first and second questions, in the light of the finding in paragraph 20 of this judgment, and in the absence
of any specific reasoning in the order for reference as to why the national court asks whether Article 49 EC must be interpreted
as precluding the application of provisions of the Belgian Criminal Code and Code of Criminal Procedure, those questions are
also inadmissible.
Costs
The costs incurred by the Belgian and Luxembourg Governments and by the Commission, which have submitted observations to the
Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings
pending before the national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT,
in answer to the questions referred to it by the Onderzoeksrechter in de Rechtbank van eerste aanleg te Turnhout by order
of 13 April 2000, hereby rules:
Puissochet
Wathelet
Schintgen
Timmermans
Gulmann
Edward
La Pergola
Jann
Skouris
Macken
Colneric
von Bahr
Cunha Rodrigues
Delivered in open court in Luxembourg on 10 December 2002.
R. Grass
G.C. Rodríguez Iglesias
Registrar
President
–
Language of the case: Dutch.