Judgment — ECLI:EU:C:2018:357
Date: 2018-05-31
Language of the case: Spanish
Court formation: First Chamber
Subject matter: Free movement of capital;Approximation of laws
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - inadmissible
Origin: Spain

Summary — Judgment of the Court (First Chamber), 31 May 2018 1. Free movement of capital and liberalisation of payments — Controls of cash entering or leaving the European Union — Regulation No 1889/2005 — Obligation to declare — Scope — Possibility, for Member States, to carry out national controls on movements of cash within the EU — Lawfulness (Art. 65 TFEU; European Parliament and Council Regulation No 1889/2005, Arts 1(2), and 3(1)) 2. Free movement of capital — Restrictions — Obligation to declare significant sums of cash entering or leaving the territory of a Member State — National legislation providing for the imposition of a fine of up to double the undeclared amount in the event of a breach of that obligation — Breach of the principle of proportionality — Unlawful (Art. 63 and 65 TFEU; European Parliament and Council Regulation No 1889/2005, Art. 9) 1. See the text of the decision. (see paras 29, 31, 33, 34) 2. Articles 63 and 65 TFEU must be interpreted to the effect that they preclude legislation of a Member State, such as that at issue in the main proceedings, which provides that the failure to comply with an obligation to declare significant sums of cash entering or leaving the territory of that State is punishable with a fine which may be up to double the undeclared amount. In that regard, it must be recalled that the Court held that, even though under Article 9(1) of Regulation No 1889/2005 Member States enjoy a margin of discretion concerning the choice of penalties which they adopt in order to ensure compliance with the obligation to declare laid down in Article 3 of that regulation, a fine corresponding to 60% of the undeclared cash sum, where that sum is greater than EUR 50 000, incurred for breach of that obligation, does not appear to be proportionate having regard to the nature of the infringement concerned. The Court held that such a fine goes beyond what is necessary in order to ensure compliance with that obligation and the fulfilment of the objectives pursued by that regulation, given that the penalty provided for in Article 9 does not seek to penalise possible fraudulent or unlawful activities, but solely a breach of that obligation (judgment of 16 July 2015, Chmielewski, C‑255/14, EU:C:2015:475, paragraphs 29 to 31). In addition, even if such a fine is calculated by taking into account certain aggravating circumstances, provided they comply with the principle of proportionality, the fact that the amount of the fine may be up to double the undeclared cash sum and that, in any event, as in the present case, the fine may be set at an amount corresponding to nearly 100% of that sum goes beyond what is necessary in order to ensure compliance with the obligation to declare. (see paras 43, 45, 46, operative part)