Commission of the European Communities v Hellenic Republic.
Date: 2007-06-07
31. It should be pointed out that in Case C-262/99 Louloudakis  [2001] ECR I‑5547 (in particular, paragraphs 20 to 25), the Court referred to the Greek legislation which permits the temporary importation, exempt from customs duties and other taxes, of means of transport for private use. That legislation is set out in paragraphs 11 to 16 of this judgment. It is apparent, inter alia, from that legislation that it defines the concept of ‘normal residence’ in terms substantially identical to those of Article 7(1) of the Directive; that the exemption is granted, as provided for in the Directive, for six months in a 12-month period; and that that legislation reproduces – either verbatim or in substantially identical terms – the provisions of Article 7(2) and (3) of the Directive, relating to proof of normal residence.
44. The Court has pointed out that the criteria for determining normal residence laid down in Article 7(1) of the Directive refer to a person’s occupational and personal ties with a particular place and to the duration of those ties, and has defined normal residence as the place where a person has established his permanent centre of interests ( Louloudakis , paragraph 51, and the case-law cited).
45. Thus, for the purposes of determining the place of normal residence, both the occupational and personal ties of the person concerned to a given place, as well as the duration of those ties, must be taken into consideration and, where those ties are not concentrated in a single Member State, the second subparagraph of Article 7(1) of the Directive gives primacy to personal ties over occupational ties. In assessing the personal and occupational ties of the person concerned, all the relevant facts must be taken into consideration, such as, in particular, his actual presence and that of the members of his family, availability of accommodation, the place where business is conducted and the place where his property interests are situated (see, to that effect, Louloudakis , paragraphs 52, 53 and 55).
50. So far as concerns the possibility of finding that there has been a failure to fulfil obligations on the basis of the administrative practice followed in a Member State, the Court has already established the applicable criteria. In those circumstances, the failure to fulfil obligations can be established only by means of sufficiently documented and detailed proof of the alleged practice; that administrative practice must be, to some degree, of a consistent and general nature; and, in order to find that there has been a general and consistent practice, the Commission may not rely on any presumption (Case C-441/02 Commission  v Germany  [2006] ECR I-3449, paragraphs 49, 50 and 99, and the case-law cited).
54. It must also be pointed out that the Court has taken into account the discretion which the competent national authorities have in that sensitive area which affects national powers concerning taxation, by holding that the duty of cooperation incumbent upon those authorities pursuant to Article 10(2) of the Directive does not require them to cooperate in each individual case in which the application of that directive raises difficulties ( Louloudakis , paragraph 59, and the case-law cited).
63. It should be noted at the outset that the second part of the Commission’s second complaint also relates (pages 9 to 12 of the application) to the penalties provided for in Law No 2960/2001 of 22 November 2001 on the Customs Code (FEK A 265), which contains amendments to the penalties provided for in Article 18 of Law No 2682/1999. However, Law No 2960/2001 was adopted after the expiry of the two-month period laid down in the reasoned opinion of 22 November 2000 and is not covered by the pre-litigation procedure set out in Article 226 EC. Moreover, it does not appear from the documents before the Court that that new legislation has maintained, in every respect, the system established by the legislation contested in the pre-litigation procedure or that the provisions of those two pieces of legislation are substantially identical (see, to that effect, Case C-98/03 Commission  v Germany  [2006] ECR I-53, paragraphs 27 and 28, and the case-law cited).
64. In accordance with its settled case-law, the Court may examine of its own motion whether the conditions imposed by Article 226 EC for the bringing of an action for failure to fulfil obligations are satisfied (Case C-199/04 Commission v United Kingdom  [2007] ECR I-0000, paragraph 20, and the case-law cited).
65. In that regard, the Court has always drawn a distinction between the pre-litigation and litigation stages of the procedure set out in Article 226 EC and has held that the purpose of the pre-litigation procedure is, inter alia, to define the subject-matter of the dispute with a view to the bringing of an action before the Court and to ensure that the contentious procedure will have as its subject-matter a clearly defined dispute (see, to that effect, Case C-230/99 Commission  v France  [2001] ECR I-1169, paragraph 31; Case C-1/00 Commission  v France  [2001] ECR I-9989, paragraphs 53 and 54; Case C-362/01 Commission  v Ireland  [2002] ECR I-11433, paragraphs 17 and 18; and Case C-145/01 Commission  v Italy  [2003] ECR I-5581, paragraph 17).
66. By the same token, it is also established case-law that the subject-matter of the proceedings thus defined at the pre-litigation stage can no longer be extended or altered by the form of order sought in the application at the litigation stage (see, to that effect, Case C-191/95 Commission  v Germany  [1998] ECR I-5449, paragraph 56; Case C‑365/97 Commission  v Italy  [1999] ECR I-7773, paragraph 25; and Case C-105/02 Commission  v Germany  [2006] ECR I-9659, paragraphs 47 and 48). Lastly, whether a Member State has failed to fulfil its o bligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion, and the Court cannot take account of any subsequent changes (see Case C-104/06 Commission  v Sweden  [2007] ECR I-0000, paragraph 28).
67. If the Court were to extend its review to legislation of the Member State concerned which was not covered by the pre-litigation procedure and was referred to for the first time in the form of order sought in the application – for the reasons of ease put forward by the Commission at the hearing – the procedure laid down by the authors of the Treaty in Article 226 EC would be rendered meaningless, which would constitute an abuse of that procedure. The Court’s examination will thus relate, in the present case, only to the provisions of the legislation in question which were in force at the time when the period laid down in the reasoned opinion expired and to the extent that they are set out in the application in a sufficiently clear manner to permit review by the Court (see, to that effect, Commission  v United Kingdom , paragraph 21).
71. Criminal punishment for particular behaviour, which is intended by the national legislature, is linked to the economic and social situation of the relevant Member State, and, in the present case, to the specific situation regarding the taxation of motor vehicles. It is common ground in this respect that registration fees in Greece are very high, which may induce some individuals to drive in that territory with cars registered in another Member State, while notionally seeking to establish any tie whatsoever in that other Member State. The requirements of enforcement and prevention, as well as the requirement that the fiscal interests of the relevant Member State be protected, make it justifiable for that Member State to provide for appropriate penalties (see, to that effect, Louloudakis , paragraph 70).
72. The mere fact that an abstract national rule categorises as a criminal offence conduct which consists in the evasion of the customs and tax provisions normally applicable cannot therefore constitute per se failure by a Member State to fulfil its obligations. The Court has held, as is clear from Louloudakis , paragraphs 69 and 70, that the requirements of enforcement and prevention may justify a Member State in setting penalties at a certain level of severity, but that it is nevertheless possible that those penalties may, in certain circumstances, prove to be disproportionate. Consequently, the question whether the penalties applied are proportionate or disproportionate has to be assessed on the basis of the level of the penalties actually applied in the individual case. An examination of the cases referred to in paragraph 48 of this judgment does not support the conclusion that the penalties actually imposed are disproportionate and the Commission has not put forward other evidence supporting a different conclusion.
76. According to settled case-law, the principle of effective judicial protection is a general principle of Community law and it is for the courts of the Member States to ensure judicial protection of an individual’s rights under Community law (see, to that effect, Case C‑432/05 Unibet  [2007] ECR I-0000, paragraphs 37 and 38, and the case-law cited). It is by applying that principle that the Court has acknowledged that it falls within the jurisdiction of the national courts to ensure that the Directive is applied and that the rights which individuals derive from it are protected by deciding upon, inter alia, the place of normal residence (see, to that effect, Louloudakis , paragraphs 57 and 70).
83. That measure may deny the beneficiary the use of his vehicle for a period of time which may be lengthy, in particular where the fines imposed are disputed in legal proceedings. The Court has already pointed out the importance which the right to drive a vehicle has on the actual exercise of the rights relating to the free movement of persons (Case C-193/94 Skanavi and Chryssanthakopoulos  [1996] ECR I-929, paragraph 36). That measure is therefore disproportionate in relation to the objective pursued, which is the collection of fines, an objective which can be attained by means more consistent with Community legislation, for example by the provision of a security. Those complaints are thus well founded.