Abstract
This chapter focuses on the progressive watering down of the proposal for a Directive on the fight against fraud to the Union’s financial interests by means of criminal law (PIF directive). The result of negotiations, reflected in the (draft) directive as agreed by the Council and the European Parliament, is seen as quite unsatisfactory. The ECJ judgment in the Taricco case constitutes a decisive contribution to the negotiations. In particular, one of the most crucial issues of the case concerns the reasoning of the ECJ defining the legal context of the case and the reference made to Article 325(1) and (2) TFEU as the legal basis for obligations of the Member States in the field of PIF crimes. The ECJ thus sent a clear message to the Member States, inducing them to abandon their opposition to the formal recognition of VAT-related fraud as a PIF crime and thereby a crime within the material scope of the EPPO. The judgment also confers problematic obligations on the national judge, who is confronted with the incompatibility of national provisions with EU law in case these provisions inadequately protect EU interests. Furthermore, the impact of such an outcome on the legality principle as conceived in the Italian system, which was concerned in the Taricco case, is discussed. In conclusion, the unsatisfactory legal framework, combining provisions in the PIF directive with provisions in the EPPO regulation defining the conditions for exercising its competences, constitutes a substantial risk for the effectiveness of the EPPO.
Prof. Dr. Rosaria Sicurella is full professor at the University of Catania, LLM College of Europe, Brugge, vice-President of the Centro di Diritto Penale Europeo, Catania.
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Notes
- 1.
COM(2013) 534.
- 2.
In addition to the competence of the EPPO especially devoted to PIF offences, the Commission’s proposal, in its Article 13, also provided for an “ancillary competence”, aiming at satisfying “the interest of a good administration” that could require joined investigations and prosecutions with respect to any other criminal offence whenever “inextricably linked” with any of the PIF offences, provided that it is “based on identical facts” and that PIF offences are “preponderant”. Both these types of competence are now dealt with in Article 17 of the draft Regulation establishing the EPPO of 31 January 2017 (Council document 5766/17), which also includes the competence of the EPPO for “offences regarding participation in a criminal organization as defined in Framework Decision 2008/841/JHA as implemented in national law” if the focus of the criminal activity of such a criminal organisation is to commit PIF offences. This contribution only deals with the direct competence established in Article 17(1). On the ancillary competence, see Sitbon’s contribution in Chap. 8.
- 3.
COM(2012) 363/2.
- 4.
Council document 10729/13 of 10 June 2013.
- 5.
This conclusion is confirmed by Article 17 of the 31 January 2017 draft of the EPPO regulation (Council document 5766/17), since the offence of participating in a criminal organization only falls into the material scope of the EPPO “if the focus of the criminal activity of such a criminal organization is to commit offences referred to in paragraph 1”, that is to say offences provided for by the PIF directive. An extension of the EPPO scope of competence should be provided for only after evaluation of its functioning during a certain period of time, according to Klip 2012, pp. 370–371.
- 6.
- 7.
- 8.
- 9.
Sicurella 2013a, pp. 880–888.
- 10.
In particular, negotiations showed that there is much sensitivity regarding the relation between criminal investigations on the one hand and powers of inquiry belonging to fiscal authorities on the other hand. This relation can indeed be affected by the setting up of the EPPO.
- 11.
Case 105/14, Taricco et al. 2015.
- 12.
As the Court already did in the past when it considered that crucial issues of EU integration were at stake, for instance in the ECJ decision issued on the 13 September 2005 in the so-called environmental case (Case C-176/03). That decision was confirmed two years later by the decision in the so-called ‘ship source pollution’ case (Case C-440/05). Here, the Luxembourg Court established in fact the competence of the EU to adopt provisions binding the domestic legislature to introduce criminal sanctions. Such a competence was provided for by the Constitutional Treaty, which was abandoned after the referenda in France and The Netherlands. In doing so, the ECJ introduced one of the most essential novelties of that treaty. The same the ECJ did with its decision in the Pupino case (Case C-105/03) extending the scope of the obligation on the judge for a consistent interpretation of domestic law also with respect to provisions in Framework Decision. This decision resulted in eroding the distinction between the first and the third pillar, and anticipated the abolition of the pillar structure which is the most significant feature of the Lisbon Treaty.
- 13.
COM(2001) 272.
- 14.
OJ C 316, 27-11-1995.
- 15.
OJ C 313, 23-10-1996; OJ C 221, 1-7-1997.
- 16.
COM(2001) 139.
- 17.
COM(2003) 92.
- 18.
COM(2005) 276.
- 19.
Case C-176/03, Commission v Council, see also Case C-440/05, Commission v Council on the competence to impose criminal sanctions in the enforcement of measures against ship-source pollution.
- 20.
COM(2012) 363.
- 21.
For money laundering, see Directive 2005/60/EC, OJ L 309, 25-11-2005.
- 22.
This only matters with respect to the offences of fraud and misappropriation. Basic definitions of the remaining offences are considered to already cover the attempt.
- 23.
See Articles 5 and 6 of the Council Framework Decision (FD) 2003/568/JHA of 22 July 2003 on combating corruption in the private sector, OJ L 192/54. The concerned Articles 6 and 9 of the proposed PIF directive are virtually identical to those of the FD with the exception of omitting para 2 of Article 6 of the FD on the punishability of lack of supervision or control by authorities in charge of the legal person.
- 24.
Cf. among many others Case 68/88, Greek maize, pt. 24.
- 25.
This Article is the successor of Article 280 TCE, and before that of Article 209 A of the Maastricht Treaty, formalizing in a Treaty provision the main findings of the ECJ judgment on the Greek maize case.
- 26.
- 27.
Council document 10729/13 of 10 June 2013.
- 28.
In particular, the new offence in public procurements was erased, and additional requirements have been added to some of the proposed definitions, such as the infringement of an official duty in the definition of corruption, or the need for an actual damage to European funds in the definition of misappropriation.
- 29.
The absence of an explicit reference to VAT fraud in the Commission’s proposal—which simply refers to “any income, any expense and goods ….a) of the Union budget; and b) institutions …. – relates to the fact that VAT has expressly been recognised as a component of the EU own resources by the ECJ since its judgment in Case C-539/09 [2011], pts 71–72 et seq., confirmed in Case C-617/10 [2013], relying on the direct link between VAT revenue collection and availability to the EU budget of the corresponding VAT resource; therefore, VAT is included in the general reference to the entries/incomes of the EU budget.
- 30.
Opinion of the Legal Service 15309/12, 22 October 2012.
- 31.
European Parliament legislative resolution of 16 April 2014 on the proposal for a Directive of the European Parliament and of the Council on the fight against fraud to the Union’s financial interests by means of criminal law, A7-0251/2014.
- 32.
See the document of the Presidency 12686/1/16 REV1.
- 33.
E.g. frauds in public procurement or grant procedures and corruption with respect to the condition of the sanctioned behaviour not necessarily in breach of official obligations.
- 34.
Case C-105/14, Taricco, judgment of 8 September 2015, pt 58 and pt 1 of the operative part.
- 35.
An enormous number of commentaries have been issued on the ECJ judgement on the Taricco case. For an overall picture of the various positions expressed, please see the collective volume edited by Bernardi 2017. Among the few commentaries by non-Italian scholars, Billis 2016, p. 20 ff; Lassalle 2015; Peers 2015.
- 36.
Corte costituzionale 275/90; 393/2006; 324/2008; 23/13; 143/14; 45/15.
- 37.
For a quick but effective presentation of questions arising in the Italian legal order, see Giuffrida 2016, especially pp. 109–111.
- 38.
This critic mainly refers to the statement of the Court where it establishes the obligation on the national judge to disapply any conflicting national provision whenever “that national rule prevents the imposition of effective and dissuasive penalties in a significant number of cases of serious fraud affecting the financial interests of the European Union”.
- 39.
Ibidem, pts 54–57.
- 40.
See Court of Appel of Milano, II sezione penale, 18 September 2015.
- 41.
Corte Cassazione, III sezione penale, 30 March 2016. However, the same Court had previously judged differently, expressly excluding that an infringement of the principle of legality as established in Article 25 of the Italian Constitution occurred: Corte di Cassazione III sezione penale, 15 September 2015. See also Corte di Cassazione IV sezione penale, 25 January 2016.
- 42.
On the Italian counter-limits doctrine, see also Judge Ezio Perillo’s Foreword to this volume.
- 43.
Order 24/2017.
- 44.
- 45.
Ibidem, pts 52–53.
- 46.
Id. pt 53.
- 47.
Case C-387/02 [2003].
- 48.
According to the established CJEU case-law, neither a directive (Case C-80/86, Kolpinghuis Nijmegen, [1987]), nor a regulation when it empowers the Member States to adopt penalties to punish infringements of the regulation itself (Case C-60/02, X, [2004]) can of itself and independently of a national law adopted by a Member State for its implementation, have the effect of determining or aggravating the liability in criminal law of persons who act in contravention of its provisions. The same could be said in relation to provisions of the Treaties.
- 49.
Although guarantees are not the focus of the decision of the Court, the latter does have a significant impact on the way guarantees have to be considered and implemented in the dynamics of the relationship between European and domestic legal orders. Indeed, the ECJ’s decision in Taricco seems to confirm and develop the approach in Melloni (C-399/11) showing the most recent view of the Court which is less keen of derogating to the general principles regulating relationships between EU/domestic orders (even) when fundamental rights are at stake; and so because EU legal order now rests on a significantly developed system of protection of fundamental rights (which has raised much more solid and detailed contents than few decades ago when the above mentioned jurisprudence was established), implying that reference to national systems of protection became unnecessary. Finally, the principle of the better law, still among the fundamental ones, cannot be employed when a conflict arises between the two concurrent systems (European and national) of protection of fundamental rights. Article 53 Charter, indeed, when stating that “nothing in this Charter shall be interpreted as restricting or adversely affecting human rights and fundamental freedoms as recognized […] by Member States’ constitutions” expressly refers to “their respective field of application”; the same solution does not apply when the issue at stake falls in the scope of EU competence, as it was the case in Taricco and before that in Melloni. Generally speaking, here it is a conflict of competence which is at stake (not a conflict of values).
- 50.
Åklagaren v ÅkerbergFransson, Case C‑617/10.
- 51.
Case 617/10 [2013], pt. 25.
- 52.
Case C-539/09, Commission v Germany, judgment of 15 November 2011.
- 53.
Taricco, pt. 51. The words ‘not subject to any condition regarding the application of the rule’ refer to pt. 49 urging the national court to give full effect to EU law ‘without having to request or to await the prior repeal of those [provisions] by way of legislation or any other constitutional procedure’.
- 54.
Taricco, pt. 52.
- 55.
See also the position of the Advocate General Kokott in this respect, paras 94–98.
- 56.
Bin 2017, p. 291 ff.
- 57.
Ciampi 2015, p. 113 ff.
- 58.
Cannizzaro 2016, p. 46.
- 59.
Schütze 2015, p. 84 ff.
- 60.
The institutions are recognized, by consequence, with precise competences in the field.
- 61.
Cf. for instance the case law referred to in footnote 54.
- 62.
This reading can explain the fact that the same conclusion was drawn with respect to provisions in a regulation Case C-60/02, X, [2004].
- 63.
- 64.
Council document 6182/17 of 5 April 2017.
- 65.
In the text agreed between the Council and the Parliament, Article 83 TFEU was confirmed as the legal basis for the proposed Directive.
- 66.
As was the case in Commission v Council on 13 September 2005 (the so-called environmental case). Indeed, the Commission already expressed its intention to refer to the ECJ whenever the choice of Article 83 TFEU would have been confirmed in the final draft of the proposed PIF Directive. See the document of the General Secretariat of the Council 7929/17 ADD 1, Statements, Brussels 10 April 2017.
- 67.
For a useful presentation, see Giuffrida 2017b, para 4 ff.
- 68.
- 69.
Articles 3(a) and (c) concerning the conducts constituting EU fraud and Article 4(2) on corruption are based on Article 1(a) and (b) of the 1995 PIF Convention and Articles 2 and 3 of its First Protocol, respectively, while Article 4(1) on money laundering simply refers to the definition in the 2015 Directive on the same topic. The latter choice, relying on a direct reference to a specific piece of legislation, is to be criticized because it results in an ‘inflexibility’ of the text of the Directive with respect to upcoming developments with regard to money laundering.
- 70.
See also Vervaele 2014, 94.
- 71.
- 72.
Recital no. 7 of the text of the draft Regulation. See Council document 5766/17 of 31 January 2017.
- 73.
According to recital no. 51. The EPPO consequently has the right either to initiate investigations or to evoke a case, according to the conditions established in Article 22(a) of the draft Regulation, whenever investigations on PIF offences have been launched already by national authorities.
- 74.
- 75.
According to Article 17 of the draft Regulation, and in particular, concerning PIF, Article 17(1) referring to the PIF Directive. This means for the PIF sector that the situation in the case falls into the scope of the PIF Directive.
- 76.
Council document 5766/17 of 31 January 2017.
- 77.
In the event that such a criminal offence caused or is likely to cause damage to the Union’s financial interests of less than EUR 10 000.
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Sicurella, R. (2018). A Blunt Weapon for the EPPO? Taking the Edge Off the Proposed PIF Directive. In: Geelhoed, W., Erkelens, L., Meij, A. (eds) Shifting Perspectives on the European Public Prosecutor's Office. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-216-3_7
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