Source: https://www.faronline.se/dokument/skattenytt/2019/nr_07/skattenytt_2019_a0559/?q=isa&_t_id=1B2M2Y8AsgTpgAmY7PhCfg%3D%3D&_t_ip=34.204.200.241&_t_q=isa&_t_tags=andquerymatch%2Clanguage%3Asv%2Csiteid%3A2d0126f6-8f11-4b52-8c5b-2c31a7cbf4ad&_t_hit.id=FarOnline_ContentTypes_Pages_XmlDocumentPage/_df332c52-deab-4ecf-a0ec-0bf67b577ccc_sv&_t_hit.pos=2
Timestamp: 2019-08-22 03:53:57
Document Index: 370957728

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The EU Charter and the protection of the financial interests of the EU (s. 559) | FAR Online
2 THE DZIVEV CASE
4 ANALYSIS OF THE RULING
4.1 The primacy of the protection of the financial interests of the EU
4.2 The EU Charter
Skattenytt nr 7-8 2019 s. 559
The EU Charter and the protection of the financial interests of the EU
This article discusses the Court of Justice of the European Union’s Dzivev case dealing with the exclusion of evidence requiring prior judicial authorisation from prosecution in a VAT-related EU case. Authorization to collect evidence was initially given by a national court lacking jurisdiction. Requests to clarify whether or not such evidence could be used during the criminal proceedings led the Court of Justice of the European Union to state that the obligation for EU Member states to ensure the effective collection of European Union’s resources by means of tax revenue does not exonerate national courts from the implementation of the principle of legality and of the rule of law, as these are fundamental pillars on which the European Union is founded. The ruling finds its rationale on a joint interpretation of the TFEU, of the Convention of the Treaty on European Union on the protection of the European Communities’ financial interests, and of the EU Charter of Fundamental Rights. The article concludes that the Court’s judgment is commendable and represents a necessary development in establishing the EU Charter of Fundamental Rights as a fundamental element in the broader EU VAT discourses.
Tax fraud in the different EU Member states is one of the main taxation problems for both the European economy and for individual national economies. Such fraud does not only result in consistent revenue losses, but also in breaches to the principle of equitable taxation and in the distortion of fair tax competition.
From a European perspective, fraud also hinders the functioning of the internal market. [1] Tax fraud and evasion [2] are obstacles to the ability of EU Member states to collect revenues, as well as to implement their economic policies. The Commission reports that approximately fifty billion euros were lost to frauds in 2015, representing 12.8% of the total VAT liability. [3]
In 2017, the Commission’s annual report on the Protection of the European Union’s Financial Interests [4] outlined how, according to art. 325 of the Treaty on the Functioning of the European Union (TFEU), [5] the EU and its Member states share responsibility in the protection of the EU’s financial interests and in fighting fraud. [6] Close and regular cooperation is necessary, [7] as no single EU Member state can address the situation in isolation. [8] Similar conclusions can be found in a 2012 Resolution of the European Parliament. [9]
It is in this context that the Court of Justice of the European Union (CJEU) Petar Dzivev case, C-310/16 (Dzivev case), [10] has to be situated. On the one hand, the necessity and duty for EU Member states to fight VAT frauds, collaboratively; on the other, the necessity to respect the values and principles of the EU. This article discusses the Dzivev case in detail. In its ruling, the Court established that acquired evidence requiring prior and proper judicial authorization should be excluded from the prosecution process. [11] The Member states’ obligation to efficiently and effectively collect revenue does not exonerate national courts from the implementation of the principle of legality and of the rule of law, as these are fundamental values of the Union. Such conclusions are based on a joint interpretation of three sources: the TFEU; the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests (PFI Convention), [12] and the EU Charter of Fundamental Rights (EU Charter). [13]
This article argues that the CJEU’s final decision is not only commendable, but that the Court’s reliance on the EU Charter in a VAT fraud case represents a fundamental step forward. The paper first describes the facts pertaining to the Dzivev case and then discusses relevant prior CJEU rulings to contextualize it. [14] Conclusions are drawn at the end to establish its importance in the EU VAT discourse.
Mr Dzivev, Mrs Angelova, Mr Dimov and Mr Velkov were charged for tax crimes committed by means of a company established in Bulgaria. Mr Dzivev was also charged with directing a criminal organization involving the other three defendants. [15]
During the preliminary investigation, the General Directorate for combating organised crime in Bulgaria submitted several applications requesting authorization to intercept the telecommunications among the four defendants. The Sofia District Court then issued such authorization between November 2011 and February 2012. The prosecutor was authorized by the Specialized Criminal Court to proceed with additional interceptions of the defendants’ telecommunications after the criminal proceedings had started. [16]
The Court states that none of these authorizations was legitimate, and that those granted between November 2011 and January 2012 “did not indicate, in particular, whether the President or the Vice-President of the Sofiyski gradski sad (Sofia District Court) had acted”. [17] The Court also noted that “systemic errors” were made and subsequently uncovered in the issuing of authorizations for said interceptions. [18]
In the case of Mr Dzivev, only those interceptions obtained on the basis of authorizations granted by a court lacking jurisdiction established a link between the charges and Mr Dzivev. The other defendants could be instead convicted on the basis of lawful proofs. [19]
The Specialized Criminal Court decided to refer to the CJEU for a preliminary ruling, asking whether a EU Member state is permitted to use evidence, such as the recordings of the telephone conversations, authorized by a court lacking jurisdiction, considering that this unlawfully obtained evidence alone could prove that VAT-related crimes had been committed. [20] The European Court deemed the interceptions to be in breach of art. 52(1) [21] of the EU Charter. [22] It also explained that art. 325(1) TFEU and art. 1(1)(b) and 2(1) of the PIF Convention, “read in conjunction with the Charter” and “in the light of the principle of effectiveness of the prosecution of VAT offences”, have to be interpreted to
not preclude a national court from applying a national provision excluding, from a prosecution, evidence such as the interception of telecommunications requiring prior judicial authorisation, where that authorisation was given by a court that lacked jurisdiction,
even when “that evidence alone is capable of proving that the offences in question were committed”. [23] Having to collect revenue in a fair, effective manner does not exonerate national courts from the respect of the fundamental rights guaranteed by the EU Charter and of the general principles of EU law. The Dzivev case deals with criminal charges in relation to VAT offences, and hence with the implementation of EU law: therefore art. 51(1) of the EU Charter applies, and it applies to both preliminary investigations and court proceedings. [24]
Article 325(1) TFEU, and Article 1(1)(b) and Article 2(1) of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests, signed in Luxembourg on 26 July 1995, read in conjunction with the Charter of Fundamental Rights of the European Union, must be interpreted to the effect that, in the light of the principle of effectiveness of the prosecution of value added tax (VAT) offences, they do not preclude a national court from applying a national provision excluding, from a prosecution, evidence such as the interception of telecommunications requiring prior judicial authorisation, where that authorisation was given by a court that lacked jurisdiction, in a situation in which that evidence alone is capable of proving that the offences in question were committed. [25]
The protection of the financial interest of the EU has an important role within the EU legal system. This is clearly visible not only in recent case law, such as the Dzivev case, but also in EU legislation. In 2017, the Directive on the fight against fraud to the Union’s financial interests by means of criminal law (PFI Directive) was adopted. [26] Its art. 3(d) positively includes “fraud in respect of revenue arising from VAT own resources” under the heading dealing with “fraud affecting the Union’s financial interests”. [27] The PIF Directive replaces the PIF Convention. The PIF Directive should be implemented by the beginning of July 6, 2019. [28]
In order to fully understand the Dzivev ruling it is necessary to consider previous CJEU cases in the area, and specifically the Taricco case. [29]
In the 2015 Taricco case, the CJEU held that the financial interest of the EU must be considered first and that there is an obligation, for national courts, to disapply any provision of national law liable to undermine the fulfilment of a Member state’s obligations under EU law. [30] Member states have an obligation to counter those activities that may affect the collection of VAT on national soil, such as evasion or fraud, and have an obligation to counter illegal activities affecting the financial interests of the European Union. [31] The Taricco case ruling also clarified how art. 325(2) TFEU introduces the concept of assimilation of domestic interest to that of the EU. [32]
(I)t must be emphasised that the Member States’ obligation to counter illegal activities affecting the financial interests of the European Union through dissuasive and effective measures, and their obligation to take the same measures to counter fraud affecting those interests as they take to counter fraud affecting their own financial interests, are obligations imposed, inter alia, by EU primary law, namely Article 325(1) and (2) TFEU. [33]
Because of the primacy of EU law, the provisions of art. 325(1) and (2) TFEU automatically make any national provisions in conflict with them inapplicable. In the Taricco case, the CJEU established that the primacy of art. 325 TFEU over national provisions implied the disapplication of the shorter general limitation period in a situation of pending criminal proceedings, and consequently to legally allow “the effective prosecution of the alleged crimes” which would otherwise not be possible according to national law. [34] In such a context, national provisions prescribing a shorter timespan for limitation periods are liable to go against the obligations of EU Member states under art. 325(1) (2) TFEU. [35]
The CJEU concluded that in the Taricco case the rights of the accused, as per art. 49 of the EU Charter protecting the principle of legality and proportionality of criminal offences and penalties, [36] had not been breached: this is probably the weakest element in the Court’s judgment. In the context of pending criminal proceedings, where the rule of law is upheld, limitation periods are put in place for the protection of the defendant against boundless criminal prosecution. [36] Nevertheless, the protection of the financial interests of the EU is the only criterion followed in the Taricco case, and one that does not find a counter in the principles introduced by the EU Charter. The national judiciary is required to ensure the primacy and direct effect [37] of art. 325 TFEU, effectively disapplying all and any national rules in conflict with the European provision as not compliant with EU law. [38] The CJEU maintains there is a direct link between the collection of VAT revenue and the availability of corresponding VAT resources in the EU budget, meaning that any failings during the VAT collection phase causes a corresponding reduction in the budget.
Since the European Union’s own resources include, inter alia, as provided in Article 2(1) of Decision 2007/436, revenue from application of a uniform rate to the harmonised VAT assessment bases determined according to EU rules, there is thus a direct link between the collection of VAT revenue in compliance with the EU law applicable and the availability to the EU budget of the corresponding VAT resources, since any lacuna in the collection of the first potentially causes a reduction in the second. [39]
The principle of sincere cooperation laid down in art. 4(3) TEU [40] can also be considered legal ground for the disapplication of national provisions in conflict with art. 325 TFUE. EU Member States are required to ensure the application of EU law, and have to take appropriate measures for the fulfilment of the obligations contained in the Treaties. Such EU duties also apply to national courts, whose role is essential in ensuring the effectiveness of EU law. [41]
The necessity to reconcile the protection of the financial interests of the EU as per art. 325 TFEU with the EU Charter emerges very clearly in the Dzivev case, even though the CJEU has used the EU Charter as a canon of interpretation in cases dealing with VAT fraud before, for example in the Åkerberg Fransson Case. [42] This is a 2013 landmark decision maintaining that the EU Charter can be used when EU Member states act within the scope of EU law: the influence of the Charter in the jurisprudence of the CJEU has since constantly expanded. [43]
The most salient part of the ruling in the Dzivev case, a clear step forward if compared to the Taricco case, is that a Member state’s duty to ensure the protection of the financial interest of the EU does not exonerate national courts from the respect of the fundamental rights contained in the EU Charter and other general principles of EU law. [44] Doctrine states that in the Taricco case the
immediate and absolute effect of (primary, precise, and unconditional) EU legislation in all national criminal proceedings is herewith, in essence, recognized. [36]
The CJEU rectified the Taricco ruling [38] in the M.A.S. and M.B case, [45] before the Dzivev case was discussed. The case establishes that if the protection of the financial interests of the Union produces uncertainty, national courts are not required to disapply the national provisions. [46] This mitigation of the Taricco ruling in the light of the principle of legality [47] is particularly significant in its intention to balance out the reaffirmed primacy and direct effect of art. 325(1) and (2) TFEU and their obligations, [48] with specific limits to ensure that the articles do not compromise the rights of any involved party. When the protection of those rights cannot be ensured, EU law can be disregarded. [49] This is coherent with art. 49 of the EU Charter [50] which states that the principle of legality,
as enshrined in Article 49 of the Charter, must be observed by the Member States when they implement EU law, in accordance with Article 51(1) of the Charter, which is the case where, in the context of their obligations under Article 325 TFEU, they provide for the application of criminal penalties for infringements relating to VAT. [51]
This balancing paved the way for the Dzivev case ruling and the casting of the EU Charter as a primary counter against unconstrained extensions of European law when they are unfavorable to the taxpayer. The Dzivev case is also remarkable as its interpretation of the case also rests on the principle of the rule of law, one of the primary EU values as per art. 2 TEU. [52] As EU fundamental rights have to be protected thoroughly when Member states implement EU law or act within the scope of EU law, the Dzivev case, a criminal proceedings case related to VAT offences which fall within the sphere of implementation of EU law, receives direct protection from art. 51(1) of the EU Charter. [53] Member states which limit one or more of the principles enshrined in the Treaties still have to comply with the EU Charter. [54]
Doctrine refers to this situation as agency: the Member state is acting as an agent of the EU, and acts on its behalf. In this context the limitations which are applicable to the original body are applicable also to its agent. If acts of the EU Member states are directly or indirectly referable to the EU, the EU fundamental rights bear all the weight they have for the EU. [55] Hence, when Member states implement EU law they carry a particular responsibility, since they are de facto acting as agents of EU law. These conclusions are echoed in the Opinion of Mr Advocate General Jacobs in Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft:
implementation of Community law by the Member States, since it appears to me self-evident that when acting in pursuance of powers granted under Community law, Member States must be subject to the same constraints, in any event in relation to the principle of respect for fundamental rights, as the Community legislator. [56]
The principle stands for the field of VAT as well. [57] In the Åkerberg Fransson case, the CJEU maintains that the applicability of European law entails the applicability of the fundamental rights guaranteed by the EU Charter. [58] This means that prosecution of VAT related crimes and the upholding of EU Charter principles are both part of the process. [59] Additionally, since the EU Charter is primary legislation, prosecution of VAT related crimes has to be carried out in respect of the EU Charter’s aim. [60]
The Dzivev case clarifies the boundaries of the obligation for EU Member states to secure the effective collection of national VAT as part of their contribution towards the EU budget, in respect of the principle of legality and of the rule of law, which are primary EU values: [52] human rights and fundamental rights have now become a fully functional element in the protection of the financial interests of the EU. This is in line with the current European legal framework that deals with human rights and considers them a core EU value. [61] Art. 4(2) of the TEU maintains that
the Union shall respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government. [62]
Additionally, art. 67(1) [63] TFEU states that the EU is an Area of Freedom, Security and Justice (AFSJ) in respect to fundamental rights, making the same Treaty that calls on EU measures in that area that are respectful of fundamental rights. [64] Art. 6(1) TEU states that
This provision acknowledges that fundamental rights, as they are recognized in the EU Charter, are now essential canon for the interpretation of human rights standards in EU law. [65]
Table 1 below presents the evolution of the CJEU case law from the Åkerberg Fransson case, to the Taricco case, to the M.A.S. and M.B case, and finally to the Dzivev case. It is clearly possible to see how the EU Charter, and the rule of law, progressively become a core instrument for the interpretation of EU legislation in the area of VAT related crimes, thus outlining the close link between tax law and fundamental rights. [66]
Table 1 – Evolution of CJEU case law in matters of VAT related crimes
Åkerberg Fransson case Taricco case
Primacy of the observance of fundamental rights guaranteed by the EU Charter Primacy of the financial interest of the EU
The applicability of European law entails the applicability of the fundamental rights guaranteed by the EU Charter. Obligation, for the national court, to disapply any provision of national law liable to undermine the fulfilment of the EU Member States’ obligations under EU law.
Para. 29
Where a court of a Member State is called upon to review whether fundamental rights are complied with by a national provision or measure which, in a situation where action of the Member States is not entirely determined by European Union law, implements the latter for the purposes of Article 51(1) of the Charter, national authorities and courts remain free to apply national standards of protection of fundamental rights, provided that the level of protection provided for by the Charter, as interpreted by the Court, and the primacy, unity and effectiveness of European Union law are not thereby compromised. Paras. 49–51–55
In the event that the national court concludes that the national provisions at issue do not satisfy the requirement of EU law that measures to counter VAT evasion be effective and dissuasive, that court would have to ensure that EU law is given full effect, if need be by disapplying those provisions and thereby neutralising the consequence (...).
Those provisions of EU primary law [(Article 325(1) and (2) TFEU) brackets author’s additions] impose on Member States a precise obligation as to the result to be achieved that is not subject to any condition regarding application of the rule, noted in the previous paragraph, which they lay down.
However, subject to verification by the national court, the sole effect of the disapplication of the national provisions at issue would be to not shorten the general limitation period in the context of pending criminal proceedings, to allow the effective prosecution of the alleged crimes, and to ensure, if necessary, that penalties intended to protect the financial interests of the European Union (...). Such a disapplication of national law would not infringe the rights of the accused, as guaranteed by Article 49 of the Charter.
M.A.S. and M.B case Dzivev case
Primacy of the financial interest of the EU Primacy of the observance of fundamental rights guaranteed by the EU Charter in the effective collection of the European Union’s resources
Unless this leads to a situation of uncertainty which would be in breach of the principle that the applicable law must be precise. If that is indeed the case, the national court is not obliged to disapply the provisions of the Criminal Code at issue. The protection of the effective collection of the European Union’s resources has a specific limit in the necessary observance of the fundamental rights guaranteed by the EU Charter.
Para. 62
Having regard to the above considerations, the answer to Questions 1 and 2 is that Article 325(1) and (2) TFEU must be interpreted as requiring the national court, in criminal proceedings for infringements relating to VAT, to disapply national provisions on limitation, forming part of national substantive law, which prevent the application of effective and deterrent criminal penalties in a significant number of cases of serious fraud affecting the financial interests of the Union, or which lay down shorter limitation periods for cases of serious fraud affecting those interests than for those affecting the financial interests of the Member State concerned, unless that disapplication entails a breach of the principle that offences and penalties must be defined by law because of the lack of precision of the applicable law or because of the retroactive application of legislation imposing conditions of criminal liability stricter than those in force at the time the infringement was committed Paras. 32–33–34
The Court has held that it is for the national courts to give full effect to the obligations under Article 325(1) TFEU and to disapply national provisions which, in connection with proceedings concerning serious VAT infringements.
However, the obligation to ensure the effective collection of the European Union’s resources does not dispense national courts from the necessary observance of the fundamental rights guaranteed by the Charter and of the general principles of EU law, given that the criminal proceedings instigated for VAT offences amount to an implementation of EU law, within the meaning of Article 51(1) of the Charter.
Thus, the obligation to ensure the effective collection of the European Union’s resources does not dispense national courts from the necessary observance of the principle of legality and the rule of law which is one of the primary values on which the European Union is founded, as is indicated in Article 2 TEU.
In the current political setup, taxation is a one of the foundational elements in the building of a democratic society. In pure fiscal terms, states have to ensure that collection of revenue is fair and effective; in terms of first principles, states have to be respectful of the citizen’s fundamental rights.
In this context, the Dzivev case is a key moment in the discourse concerned with the interplay between the protection of the financial interests of the EU, the fiscal side, and the protection and effectiveness of fundamental rights of the taxpayer, the principles side. [67]
The Åkerberg Fransson case introduced the principle of the applicability of the EU Charter to what is regulated by the EU VAT Directive; [68] the Taricco case displays a more market-oriented perspective in which the financial interests of the EU occupy a position of primacy; the M.A.S. and M.B. case ulteriorly specifies what protecting the financial interests of the EU while preserving the principle of legality actually entails. [69]
The Dzivev case clearly marks a transition: the EU Charter and the principle of legality become a counter that needs to be considered when dealing with tax-related crimes, making the protection of the fundamental rights of individuals across the EU a necessary legislative and judiciary concern. The Dzivev case loosens the tensions introduced with the more market-oriented interpretation of art. 325 TFEU operated in the Taricco case by clearly setting countering limits by means of the EU Charter. The rule of law is here a decisive canon of interpretation to balance the necessity to counter tax fraud on one hand, and to ensure the protection of fundamental rights of individuals on the other.
The CJEU also emphasized the role of national judges as part of the European legal order: within the national systems, the judiciary has to both ensure the upholding of EU law and the protection of fundamental rights deriving from the EU Charter. Such rights receive exhaustive attention at the EU level: the Dzivev case shows how the framework in the area is developing into the direction also to consider the interplay between the European and the national systems a central issue for the Union.
The role of the EU Charter in interpreting EU legislation is fundamental. After the entry into force of the Lisbon Treaty, the Charter has become a binding instrument, [70] and one that both the national judiciaries and the CJEU need to consider. [43] The mere fact that the PIF Convention did not include in its text any mentions to the protection of individual rights, while the PIF Directive explicitly does, even in connection to tax-related crimes, is then a sign of positive changes in EU legislation.
Table 2 shows legislative changes in the area of EU legislation concerned with the protection of the EU financial interests. Recital no. 28 of the PIF Directive explicitly explains how countering fraud, including VAT fraud, does not exonerate sates from observing and respecting the fundamental rights and the principles recognized in the EU Charter. Previous legislation, including the PIF Convention, did not contain any such concern.
Table 2 – From the PIF Convention to the PIF Directive
PIF Convention PIF Directive, Recital 28
Mentions of any protection of individual rights are absent “This Directive respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union (...) the principles of the legality and proportionality of criminal offences and sanctions (...). This Directive seeks to ensure full respect for those rights and principles and must be implemented accordingly”
No connection between the VAT Directive and the EU Charter has currently been established. While it is auspicable that future revisions of the Directive itself will make the link clearer and self-evident, [71] it seems reasonable to conclude that the direction indicated by the CJEU in the Dzivev case is in the meantime to adhere to the combined disposition of already existing EU legislation, shifting the discourse away from simple, unencumbered revenue accumulation and closer to revenue accumulation that stays true to the principles of the EU Charter and holds the fundamental rights at its very heart. [72]
Cristina Trenta is an associate Professor, Docent i rättsvetenskap, Örebro University, Sweden.
Lejeune, I. Vermeire, L., The influence of the EU Charter of Fundamental Rights on CJEU case law on the international exchange of information, European taxation, Vol. 57, no. 4, 2017, p. 157–162.
The European Commission defines tax fraud and evasion respectively as “a form of deliberate evasion of tax which is generally punishable under criminal law. The term includes situations in which deliberately false statements are submitted or fake documents are produced” and “illegal arrangements where liability to tax is hidden or ignored, i.e. the taxpayer pays less tax than he is legally obligated to pay by hiding income or information from the tax authorities”. COM(2012) 351 final, Communication from the Commission to the European Parliament and the Council on concrete ways to reinforce the fight against tax fraud and tax evasion including in relation to third countries. Brussels, 2012.06.27, p. 2.
COM(2017) 566 final, Communication from the Commission to the European parliament, the Council and the European economic and social committee, On the follow-up to the Action Plan on VAT, Towards a single EU VAT area – Time to act. Brussels, 2017.10.04. Para. 1, p. 3. See also European Commission, Fair Taxation: Commission proposes new tools to combat VAT fraud, 2017. http://europa.eu/rapid/press-release_IP-17-4946_en.htm.
COM(2018) 553 final, Report from the Commission to the European Parliament and the Council, 29th Annual Report on the Protection of the European Union’s financial interests, Fight against fraud, 2017. Brussels, 2018.09.03.
Consolidated Version of the Treaty on the Functioning of the European Union (TFEU), OJ C 326/47, 2012.10.26, art. 325 states that “The Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union’s institutions, bodies, offices and agencies.”
COM(2018) 553 final, Ibid. Para. 1, p. 7.
EU Parliament, Combating fraud and protecting the EU’s financial interests, Fact Sheets on the European Union, 2019.
COM(2012) 722 final, Communication from the Commission to the European parliament and the Council, An Action Plan to strengthen the fight against tax fraud and tax evasion. Brussels, 2012.12.06.
European Parliament resolution of 19 April 2012 on the call for concrete ways to combat tax fraud and tax evasion (2012/2599(RSP)). Strasbourg, 2012.04.19.
Case C-310/16, Criminal proceedings against Petar Dzivev and Others. ECLI:EU:C:2019:30.
In the Dzivev case, evidence had been collected after authorization by a court which did not have jurisdiction.
Convention drawn upon the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests. OJ C 316, 1995.11.27, p. 49–57.
Charter of Fundamental Rights of the European Union (EUCFR), OJ C 326, 26.10.2012, p. 391–407.
Following Schmidt, S. K., The European Court of Justice and the Policy Process: The Shadow of Case Law. Oxford University Press, 2018, p. 7–8. “If the Court’s power lies in the influence of its case law, it is necessary to understand how this case law develops and how actors integrate it within their strategies. Case law development needs to proceed incrementally in a case-specific way and emphasizing precedent, as courts are not legitimate to set general rules in the way a legislature is”.
Case C-310/16, para. 14.
Case C-310/16, para. 15.
Case C-310/16, para. 16.
Case C-310/16, para. 17.
Case C-310/16, para. 19.
Case C-310/16, para. 23.
EUCFR, art. 52(1), “Rights recognised by this Charter which are based on the Community Treaties or the Treaty on European Union shall be exercised under the conditions and within the limits defined by those Treaties”.
Case C-310/16, para. 37.
Case C-310/16, para. 41.
Case C-310/16, para. 33.
Case C-310/16, para. 42.
Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law. OJ L 198, 2017.07.28, p. 29–41. See also Recital no. 4: “the notion of serious offences against the common system of value added tax (’VAT’) as established by Council Directive 2006/112/EC (the ’common VAT system’) refers to the most serious forms of VAT fraud, in particular carrousel fraud, VAT fraud through missing traders, and VAT fraud committed within a criminal organisation, which create serious threats to the common VAT system and thus to the Union budget. Offences against the common VAT system should be considered to be serious where they are connected with the territory of two or more Member States”.
The PIF Directive is applicable only in cases of serious offenses against the common VAT system. As per art. 2(2), “in respect of revenue arising from VAT own resources, this Directive shall apply only in cases of serious offences against the common VAT system. For the purposes of this Directive, offences against the common VAT system shall be considered to be serious where the intentional acts or omissions defined in point (d) of Article 3(2) are connected with the territory of two or more Member States of the Union and involve a total damage of at least EUR 10 000 000”.
PIF Directive, art. 16, “Replacement of the Convention on the protection of the European Communities’ financial interests”: “The Convention on the protection of the European Communities’ financial interests of 26 July 1995, including the Protocols thereto of 27 September 1996, of 29 November 1996 and of 19 June 1997, is hereby replaced by this Directive for the Member States bound by it, with effect from 6 July 2019”. See also art. 17, “Transposition”, “Member States shall adopt and publish, by 6 July 2019, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall immediately communicate the text of those measures to the Commission. They shall apply those measures from 6 July 2019”.
Case C-105/14, Criminal proceedings against Ivo Taricco and Others. ECLI:EU:C:2015:555. Rodríguez-Bereijo, M, The CJEU’s Taricco Saga on VAT Fraud: The More There Is of Mine, the Less There Is of Yours?, International VAT Monitor, Vol. 30, no. 2, 2019. See also Grisostolo, F. Scarcella, L., Trouble always comes in threes: the Taricco case saga and the Italian limitation period in VAT fraud, Intertax, Vol. 45, no. 11, 2017, p. 701–713; Giuffrida, F., The Limitation Period of Crimes: Same Old Italian Story, New Intriguing European Answers: Case Note on C-105/14, Taricco, New Journal of European Criminal Law, 7(1), 2016, p. 100–112; Timmerman, M., Balancing effective criminal sanctions with effective fundamental rights protection in cases of VAT fraud: Taricco, Common Market Law Review, 53(3), 2016, p. 779–796.
Case C-105/14, para. 49.
Case C-105/14, paras. 36 and 37. See also Lucifora, A., The role of national courts between EU obligations and national standards of protection of fundamental rights, New Journal of European Criminal Law, 9(2), 2018, p. 216–228.
Midassi, E., Attuazione e tutela dell’interesse finanziario dell’UE nel diritto tributario europeo: percorsi giurisprudenziali e prospettive di evoluzione, PhD Dissertation, Alma Mater Studiorum – Università di Bologna, 2018.
Case C-105/14, para. 50. See also Case C-617/10, Åklagaren v Hans Åkerberg Fransson. ECLI:EU:C:2013:105, para. 26.
Case C-105/14, para. 55.
Billis, E., The European Court of Justice: A “Quasi-Constitutional Court” in Criminal Matters? The Taricco Judgment and Its Shortcomings, New Journal of European Criminal Law, 7(1), 2016, p. 20–38. See also Caianiello, M., Criminal process and limitation period’s provisions in the EU jurisprudence framework. Dialogue between systems or identity conflict?, Revista Brasileira de Direito Processual Penal, 3(3), 2017, p. 967–1006.
Billis, E., ibid.
See Case 26–62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration. ECLI:EU:C:1963:1; Case 106/77, Amministrazione delle Finanze dello Stato v Simmenthal SpA. ECLI:EU:C:1978:49, para. 17; Case C-357/06, Frigerio Luigi & C. Snc v Comune di Triuggio. ECLI:EU:C:2007:818, para. 28, “Suffice it to note in that regard that, according to established case-law, it is for the national court, to the full extent of its discretion under national law, to interpret and apply national law in conformity with the requirements of Community law. Where such an application is not possible, the national court must apply Community law in its entirety and protect rights which the latter confers on individuals, disapplying, if necessary, any contrary provision of domestic law”.
Rodríguez-Bereijo, M, The CJEU’s Taricco Saga on VAT Fraud: The More There Is of Mine, the Less There Is of Yours?, International VAT Monitor, Vol. 30, no. 2, 2019.
Case C-105/14, para. 38.
Consolidated Version of the Treaty on European Union (TEU), OJ C 326/13, 2012.10. 26. Art. 4(3), “Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties”.
Lucifora, A., The role of national courts between EU obligations and national standards of protection of fundamental rights, New Journal of European Criminal Law, 9(2), 2018, p. 216–228.
Case C-617/10, Åklagaren v Hans Åkerberg Fransson, ECLI:EU:C:2013:105. The case is referred to in the text as the Åkerberg Fransson case, as it is commonly called in Sweden.
Case C-310/16, paras. 32–34.
Case C-42/17, Criminal proceedings against M.A.S. and M.B. ECLI:EU:C:2017:936.
Case C-42/17, para. 59.
Centore, P., Liedholm, P., E., Frodi IVA: l’influenza (relativa) del diritto unionale nelle disposizioni interne, L’IVA, no. 2, 2018, p. 7. Gallo, D., La Corte costituzionale chiude la “saga Taricco”: tra riserva di legge, opposizione de facto del controlimite e implicita negazione dell’effetto diretto, European Papers, Vol. 3, no. 2, 2018, p. 885–895.
Vitale, G., L’attesa sentenza “Taricco bis”: brevi riflessioni, European Papers, Vol. 3, no. 1, 2018, p. 445–458.
Vitale, G., ibid.
Mastroianni, R., Da Taricco a Bolognesi, passando per la ceramica Sant’Agostino: il difficile cammino verso una nuova sistemazione del rapporto tra Carte e Corti, Osservatorio fonti, 1/2018.
Case C-42/17, para. 52.
Case C-310/16, para. 34.
Case C-310/16, para. 33. See also Addante, E., Gaeta, G., L’inutilizzabilità degli atti di prova assunti dal giudice non competente: dalla “regola delle eccezioni” a un cogente principio di diritto, Repertorio di giurisprudenza Europea, Archivio penale 2019, no. 1, p. 1–6.
Spaventa, E., Fundamental rights in the European Union. In Barnard, C., Peers, S. (eds.), European union law. Oxford University Press, 2014, p. 226–254.
Fontanelli, F., The Implementation of European Union Law by Member States Under Article 51 (1) of the Charter of Fundamental Rights, Columbia Journal of European law, 20, 2013, p. 193–247.
Case 5/88, Opinion of Mr Advocate General Jacobs, Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft. ECLI:EU:C:1989:179, para. 22. See also Spaventa, E., The interpretation of Article 51 of the EU Charter of Fundamental Rights: the dilemma of stricter or broader application of the Charter to national measures, Project Report, European Parliament, Brussels, 2016. p. 11.
Case C-576/15, ET “Maya Marinova” v Direktor na Direktsia “Obzhalvane i danachno-osiguritelna praktika” Veliko Tarnovo pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite. ECLI:EU:C:2016:740, para. 41. The CJEU also quoted Case C-144/14, Cabinet Medical Veterinar Dr. Tomoiaga Andrei v Direc?ia Generala Regionala a Finan?elor Publice Cluj Napoca prin Administratia Judeteana a Finantelor Publice Maramure?, ECLI:EU:C:2015:452, para. 25.
Case C-617/10, para. 21.
Wattel, P., Ne bis in idem in tax offences in EU law and ECHR law, in Bas van Bockel (Editor), Ne Bis in Idem in EU Law, Cambridge University Press, 2016, p. 201.
Trenta, C., Human organ transplants, Supply of goods or inalienable fundamental right. In Olsson, S., Kristoffersson, E., Rendahl, P. (Editors) Festskrift till Björn Westberg, Iustus, Sweden, 2016, p. 187–207.
Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing the European Community, OJ C 306/01, 2007.12.13.
Doctrine argues that the article can be interpreted to support the inviolability of the fundamental constitutional principles of each EU Member state. See Cuppelli, C., Il caso Taricco e il controlimite della riserva di legge in material penale. In A. Bernardi (Editor) I controlimiti. Primato delle norme europee e difesa dei principi costituzionali, Università di Ferrara, 2017, p. 347.
TFEU, art. 67(1), “The Union shall constitute an area of freedom, security and justice with respect for fundamental rights and the different legal systems and traditions of the Member States”.
Leczykiewicz, D., Human Rights and the Area of Freedom, Security and Justice. In Fletcher, M., Herlin-Karnell, E., Matera, C. (Editors), The European Union as an Area of Freedom, Security and Justice. Routledge, 2016.
Leczykiewicz, D., ibid.
De Giorgi, D., Il diritto tributario d’Europa e i diritti fondamentali: una tutela multi level per il contribuente, Il fisco, no. 30, 2013.
Addante, E., Gaeta, G., Ibid.
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax OJ L 347, 11.12.2006, p. 1–118.
Amalfitano, C., Rapporti di forza tra Corti, sconfinamento di competenze e complessivo indebolimento del sistema UE?, La legislazione penale, 2019.02.04.
For the legal status of the EU Charter, see European Parliament, Fact Sheets on the European Union, Respect for fundamental rights in the European Union, PE 600.415, 2018.
Kosta, V., Fundamental Rights in EU Internal Market Legislation, Bloomsbury Publishing, 2015.
Charter of the Fundamental rights, Preamble. “Conscious of its spiritual and moral heritage, the Union is founded on the indivisible, universal values of human dignity, freedom, equality and solidarity; it is based on the principles of democracy and the rule of law. It places the individual at the heart of its activities, by establishing the citizenship of the Union and by creating an area of freedom, security and justice.” For a broader perspective on current related phenomena, see also Trenta, C., VAT and the Refugee Crisis: Human Rights, Gender, EU VAT Gap, and EU Tax Policies. In Egholm Elgaard K. K., Ramsdahl Jensen D., Stensgaard, H., Momsloven 50 år: Festskrift i anledning af 50 års jubilæet for Danmarks første momslov, Ex Tuto Publishing. 2017, p. 85–104.