CASE-LAW OF THE COURT OF JUSTICE OF THE EUROPEAN UNION ON CRIMINAL ISSUES WITHIN MARKET ABUSE AT EUROPEAN LEVEL Текст научной статьи по специальности «Право»

10.2. Case-law of the Court of Justice of the European Union on Criminal Issues Within Market Abuse at European Level1

DOI: 10.33693/2541-8025-2020-16-6-237-255

©Libor Klimek Matej Bel University, Banska Bystrica, Slovak Republic e-mail: libor.klimek@umb.sk

Abstract. A set of legislative instruments regulating market abuse have been adopted by the European Union. As regards criminal law sanctions, the principal contemporary legislative instrument in this field, addressed to its Member States, is the Directive 2014/57/EU on criminal sanctions for market abuse. Legislation has been supplemented by the case-law of the Court of Justice of the European Union (formerly known as the Court of Justice of the European Communities). It is a key element for the development of legal practice in all Member States of the European Union. The assessment of case-law on criminal issues within market abuse is therefore needed. The paper analyses relevant cases. In each case at the outset a reference for a preliminary ruling is mentioned. Further, dispute in the main proceedings and the question(s) referred for a preliminary ruling are analysed. The most important parts of analyses are considerations by the Court of Justice and its rulings.

Keywords: market abuse at European level, criminal law sanctions, case-law, Court of Justice of the European Union, case C-537/16 -Garlsson Real Estate and Others, joined cases C-596/16 and C-597/16 - Enzo Di Puma & Antonio Zecca, case C-524/15 - Luca Menci, case C-617/10 - Hans Akerberg Fransson, sase C-486/14 - Piotr Kossowski.

For citation: Libor Klimek Case-law of the Court of Justice of the European Union on Criminal Issues Within Market Abuse at European Level // Economic problems and legal practice. 2020. Vol. 16. № 6. P. 237-255. (in Russ.) DOI: 10.33693/2541-8025-2020-16-6-237-255.

Прецеденты Суда Европейского Союза по уголовным делам в рамках злоупотребления рынком на европейском уровне

DOI: 10.33693/2541-8025-2020-16-6-237-255

©Либор Климек Университет Матея Бела, Банска-Бистрица, Словацкая Республика e-mail: libor.klimek@umb.sk

Аннотация. Европейский Союз принял ряд законодательных инструментов, регулирующих злоупотребления на рынке. В отношении уголовно-правовых санкций, основным современным законодательным инструментом в этой области, адресованным государствам-членам, является Директива 2014/57 / ЕС об уголовных санкциях за злоупотребления на коммерческом рынке. Законодательство было дополнено прецедентной практикой Суда Европейского Союза (ранее известного как Суд Европейских сообществ). Это ключевой элемент для развития юридической практики во всех государствах-членах Европейского Союза. Следовательно, необходима оценка прецедентного права по уголовным вопросам в рамках рыночных злоупотреблений. В статье анализируются соответствующие случаи. В каждом случае вначале упоминается ссылка на предварительное решение. Далее анализируются спор в основном производстве и вопросы, переданные для вынесения предварительного решения. Наиболее важными составляющими анализа являются решения Суда и его постановления.

Ключевые слова: злоупотребления на коммерческом рынке на европейском уровне, уголовные санкции, прецедентное право, Суд Европейского Союза, дело C - 537/16 - Garlsson Real Estate and Others, объединенные дела C - 596/16 и C - 597/16 - Энцо Ди Пума и Антонио Зекка, дело C-524/15 - Лука Менчи, дело C-617/10 - Ханс Окерберг Франссон, дело C - 486/14 - Петр Коссовски. Для цитирования: Либор Климек Прецеденты Суда Европейского Союза по уголовным делам в рамках злоупотребления рынком на европейском уровне // Проблемы экономики и юридической практики. 2020. Т. 16. № 6. С. 237-255. DOI: 10.33693/2541-80252020-16-6-237-255.

1 Продолжение статьи. Первая часть «Case-law of the Court of Justice of the European Union on Market Abuse at European Level» была опубликована в журнале «Проблемы экономики и юридической практики». 2020. Т. 16. №5. С. 294-313. DOI: 10.33693/2541-8025-2020-16-5-294-313.

INTRODUCTION

The principal legislative instrument regulating criminal sanctions for market abuse at the level of the European Union is the Directive 2014/57/EU on criminal sanctions for market abuse2. This Directive establishes minimum rules for criminal sanctions for insider dealing, for unlawful disclosure of inside information and for market manipulation to ensure the integrity of financial markets in the Union and to enhance investor protection and confidence in those markets.3 It is based the Treaty on the Functioning of the EU4.5

The Directive 2014/57/EU on criminal sanctions for market abuse is «the second most important» legislative instrument of the European Union in the area of market abuse, besides the Regulation No 596/2014 of the European Parliament and of the Council on market abuse6 (both of them were adopted on the same day). The Directive 2014/57/EU on criminal sanctions for market abuse has been supplemented by the case-law of the Court of Justice of the European Union (formerly known as the Court of Justice of the European Communities). The work analyses relevant cases, which have impact on legal practice.

Judgment of the Court of Justice of the European Union of 20 March 2018 - C-537/16 - Garlsson Real Estate and Others

Reference for a Preliminary Ruling. The request for a preliminary ruling concerns the interpretation of Article 50 of the Charter of Fundamental Rights of the European Union (hereinafter «Charter of Fundamental Rights») and of Article 4 of Protocol No. 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (hereinafter «Protocol No. 7 to the Convention»).

The request has been made in proceedings between Garlsson Real Estate SA, in liquidation, Mr Stefano Ricucci and Magiste International SA, on the one hand, and Italian National Companies and Stock Exchange Commission (Commissione Nazionale per le Società e la Borsa), on the other hand, concerning the legality of an administrative fine imposed on them as a result of breaches of the legislation on market manipulation.

Dispute in the Main Proceedings and the Questions Referred for a Preliminary Ruling. By decision of 9 September 2007, Consob imposed an administrative fine amounting to EUR 10.2 million on Mr Ricucci, Magiste International and Garlsson Real

2 Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse (market abuse directive). Official Journal of the European Union, L 173/179 of 12 June 2014.

3 Article 1 of the Directive 2014/57/EU on criminal sanctions for market abuse.

4 Treaty on the Functioning of the European Union as amended by the Treaty of Lisbon. Official Journal of the European Union, C 83/47 of 30 March 2010.

5 Under Article 83(2) of the Treaty on the Functioning of the European Union if the approximation of criminal laws and regulations of the Member States of the European Union proves essential to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures, directives may establish minimum rules with regard to the definition of criminal offences and sanctions in the area concerned.

6 Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC as amended by the Regulation (EU) 2016/1033. Official Journal of the European Union, L 173/1, 12 June 2014. Analysis of relevant case-law of the Court of Justice of the European Union see: Klimek, Libor: Case-law of the Court of Justice of the European Union on Market Abuse at European Level. In Economic problems and legal practice (Проблемы экономики и юридической практики). 2020. Vol. 16. №5. P. 294-313. DOI: 10.33693/2541-8025-2020-16-5-294-313.

Estate, who were jointly and severally liable for the payment of that sum.

According to that decision, during the period at issue in the main proceedings, Mr Ricucci engaged in manipulation with the objective of drawing attention to the securities of RCS Media-Group SpA and, thereby, to support the price of the securities with a view to personal gain. Consob considered that that conduct resulted in anomalous price movements in those securities and it consequently amounted to market manipulation within the meaning of Article 187b(3)(c) of the Treaty on the Functioning of the European Union.

The administrative fine at issue in the main proceedings was contested by Mr Ricucci, Magiste International and Garlsson Real Estate before the Court of Appeal in Roma (Corte d'appello di Roma). By judgment of 2 January 2009, that court partially upheld that action by reducing that administrative fine to EUR 5 million. All the parties to the dispute in the main proceedings appealed on a point of law against that judgment before the Court of Cassation (Corte suprema di cassazione).

The conduct described above also gave rise to criminal proceedings against Mr Ricucci, leading to his conviction and sentencing, by judgment of Italian District Court of Roma (Tribunale di Roma) of 10 December 2008, by means of negotiated procedure, to a term of imprisonment of four years and six months on the basis of Article 185 of the Treaty on the Functioning of the European Union. That sentence was subsequently reduced to three years, then extinguished as a result of a pardon. That judgment became final.

In that context, the referring court states that, in the Italian legal system, the ne bis in idem principle does not apply to links between criminal and administrative penalties.

That court nevertheless has doubts concerning the compatibility, following the judgment of the District Court of Roma (Tribunale di Roma) of 10 December 2008, of the proceedings for an administrative fine at issue in the main proceedings with Article 50 of the Charter of Fundamental Rights, read in the light of Article 4 of the Protocol No. 7 to the Convention.

According to that court, although, in the Italian legal system, that judgment is equivalent to a criminal conviction, the administrative fine at issue in the main proceedings imposed under Article 187b of the Treaty on the Functioning of the European Union is of a criminal nature for the purposes of Article 4 of the Protocol No. 7 to the Convention, as interpreted by the European Court of Human Rights in its judgment of 4 March 2014 in case of Grande Stevens and Others versus Italy. The referring court notes that the conduct ascribed to Mr Ricucci in the context of those administrative proceedings is the same as that for which the criminal penalty was imposed on him.

Since it considers that the application of Article 187b of the Treaty on the Functioning of the European Union to the main proceedings raises questions relating to the constitutionality of that provision, the referring court questioned Italian Constitutional Court (Corte costituzionale).

By judgment of 12 May 2016, the Constitutional Court (Corte costituzionale) declared the question relating to constitutionality to be inadmissible, on the ground that the referring court had not previously clarified the links between the ne bis in idem principle laid down in Article 4 of the Protocol No. 7 to the Convention, as interpreted by the European Court of Human Rights, and that principle as it applies in the context of market abuse under EU law. Moreover, the question arises whether the ne bis

in idem principle, as guaranteed under EU law, is directly applicable in the domestic system of a Member State.

In those circumstances, the Court of Cassation (Corte suprema di cassazione) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:7

1. Does Article 50 of the Charter of Fundamental Rights, interpreted in the light of Article 4 of the Protocol No. 7 to the Convention, the relevant case-law of the European Court of Human Rights and national legislation, preclude the possibility of conducting administrative proceedings in respect of an act (unlawful conduct consisting in market manipulation) for which the same person has been convicted by a decision that has the force of res judicata?

2. May the national court directly apply EU principles in connection with the ne bis in idem principle, on the basis of Article 50 of the Charter of Fundamental Rights, interpreted in the light of Article 4 of the Protocol No. 7 to the Convention, the relevant case-law of the European Court of Human Rights and national legislation?

Consideration8 by the Court of Justice: The First Question. By its first question, the referring court asks, in essence, whether Article 50 of the Charter of Fundamental Rights, read in the light of Article 4 of the Protocol No. 7 to the Convention, must be interpreted as precluding national legislation which permits the possibility of bringing administrative proceedings against a person in respect of unlawful conduct consisting in market manipulation for which the same person has already been finally convicted.

First of all, it should be noted that, under Article 14(1) of the Directive 2003/6/EC on insider dealing and market manipulation9 (hereinafter «Directive 2003/6/EC on market abuse»), read in conjunction with Article 5 thereof, Member States are to impose, without prejudice to their right to impose criminal penalties, effective, proportionate and dissuasive administrative measures or sanctions against the persons responsible for market manipulation.

According to the information in the order for reference, Article 187b of the Treaty on the Functioning of the European Union was adopted in order to transpose into Italian law those provisions of the Directive 2003/6/EC on market abuse. Therefore, the administrative procedure at issue in the main proceedings and the administrative fine provided for in Article 187b imposed on Mr Ricucci amount to an implementation of EU law within the meaning of Article 51(1) of the Charter of Fundamental Rights. As a result, they must among others re-

7 Request for a preliminary ruling from the Court of Cassation (Corte suprema di cassazione) (Italy) lodged on 24 October 2016 - Garlsson Real Estate SA, in liquidation, and Others versus National Companies and Stock Exchange Commission (Commissione Nazionale per le Società e la Borsa) (Italy) (Case C-537/16).

8 See also: Opinion of Advocate General Campos Sánchez-Bordona delivered on 12 September 2017 - Case C-537/16 - Garlsson Real Estate SA, in liquidation, Stefano Ricucci, Magiste International SA versus National Companies and Stock Exchange Commission (Commissione Nazionale per le Società e la Borsa) (Consob).

9 Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse). Official Journal of the European Union, L 96/16, 12 April 2003. This directive was replaced and repealed by the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC as amended by the Regulation (EU) 2016/1033. Official Journal of the European Union, L 173/1, 12 June 2014.

spect the fundamental right not to be tried or punished twice in criminal proceedings for the same criminal offence, guaranteed by Article 50 thereof.

Moreover, whilst, as Article 6(3) of the Treaty on European Union confirms, fundamental rights recognised by the Convention for the Protection of Human Rights and Fundamental Freedoms constitute general principles of EU law and whilst Article 52(3) of the Charter of Fundamental Rights provides that the rights contained in the Charter which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms are to have the same meaning and scope as those laid down by the Convention for the Protection of Human Rights and Fundamental Freedoms, the latter does not constitute, for as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into EU law (case C-617/10, Akerberg Fransson, para. 44, and case C-601/15 PPU, N., para. 45 and the case-law cited).

According to the explanations relating to Article 52 of the Charter of Fundamental Rights, Article 52(3) thereof is intended to ensure the necessary consistency between the Charter and the Convention for the Protection of Human Rights and Fundamental Freedoms, 'without thereby adversely affecting the autonomy of Union law and ... that of the Court of Justice of the European Union' (case C-601/15 PPU, N., para. 47, and case C-18/16, K., para. 50 and the case-law cited).

Therefore, the examination of the question referred must be undertaken in the light of the fundamental rights guaranteed by the Charter of Fundamental Rights and, in particular, of Article 50 thereof (see, to that effect, joined cases C-217/15 and C-350/15, Orsi and Baldetti, para. 15 and the case-law cited).

Article 50 of the Charter of Fundamental Rights provides that 'no one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law'. Therefore, the ne bis in idem principle prohibits a duplication both of proceedings and of penalties which are criminal in nature for the purposes of that article in respect of the same acts and against the same person (see, to that effect, case C-617/10, Akerberg Fransson, para. 34).

The Criminal Nature of the Proceedings and Penalties. As regards the assessment as to whether proceedings and penalties, such as those at issue in the main proceedings, are criminal in nature, it must be noted that, according to the Court's case-law, three criteria are relevant. The first criterion is the legal classification of the offence under national law, the second is the intrinsic nature of the offence, and the third is the degree of severity of the penalty that the person concerned is liable to incur (see, to that effect, case C-489/10, Bonda, para. 37, and case C-617/10, Akerberg Fransson, para. 35).

Although it is for the referring court to assess, in the light of those criteria, whether the criminal and administrative proceedings and penalties at issue in the main proceedings are criminal in nature for the purposes of Article 50 of the Charter of Fundamental Rights, the Court, when giving a preliminary ruling, may nevertheless provide clarification designed to give the national court guidance in its assessment (see, to that effect, case C-146/14 PPU, Mahdi, para. 79 and the case-law cited).

In this case, it should be noted at the outset that the classification as criminal, of the criminal proceedings and the term of imprisonment imposed on Mr Ricucci, is not at issue. The question arises, on the other hand, whether the administrative fine

and the administrative proceedings at issue in the main proceedings are criminal in nature, for the purposes of Article 50 of the Charter of Fundamental Rights.

In that regard, it is apparent from the case file before the Court that national law classifies the procedure giving rise to the imposition of that penalty as administrative proceedings.

Nevertheless, the application of Article 50 of the Charter of Fundamental Rights is not limited to proceedings and penalties which are classified as 'criminal' by national law, but extends regardless of such a classification to proceedings and penalties which must be considered to have a criminal nature on the basis of the two other criteria referred to in this judgment.

As regards the second criterion, relating to the very nature of the offence, it must be ascertained whether the purpose of the penalty at issue is punitive (see case C-489/10, Bonda, para. 39). It follows therefrom that a penalty with a punitive purpose is criminal in nature for the purposes of Article 50 of the Charter of Fundamental Rights, and that the mere fact that it also pursues a deterrence purpose does not mean that it cannot be characterised as a criminal penalty. It is of the very nature of criminal penalties that they seek both to punish and to deter unlawful conduct. By contrast, a measure which merely repairs the damage caused by the offence at issue is not criminal in nature.

In this case, Article 187b of the Treaty on the Functioning of the European Union provides that any person who has committed market manipulation is liable to an administrative fine of between EUR 20 000 and 5 000 000, and that penalty may, in certain circumstances, as follows from paragraph 5 of that article, be increased by up to 3 times its amount or up to an amount 10 times greater than the proceeds or profit obtained from the offence. Moreover, the Italian Government stated, in its observations submitted to the Court, that the application of that penalty always involves the confiscation of the product or the profit gained as a result of the offence and the goods used for the commission thereof. It appears therefore that that penalty is not only intended to repair the harm caused by the offence, but that it also pursues a punitive purpose, which moreover corresponds to the referring court's assessment and that it is therefore criminal in nature.

As regards the third criterion, it should be noted that an administrative fine which can be of an amount up to 10 times greater than the proceeds or profit obtained from the market manipulation has a high degree of severity which is liable to support the view that that penalty is criminal in nature for the purposes of Article 50 of the Charter of Fundamental Rights, which it is, however, for the referring court to determine.

The Existence of the Same Offence. It follows from the very wording of Article 50 of the Charter of Fundamental Rights that it prohibits the prosecution or the imposition of criminal penalties on the same person more than once for the same offence (see, to that effect, joined cases C-217/15 and C-350/15, Orsi and Baldetti, para. 18). As is stated by the referring court in its order for reference, the different proceedings and penalties of a criminal nature at issue in the main proceedings are directed against the same person, namely Mr Ricucci.

According to the Court's case-law, the relevant criterion for the purposes of assessing the existence of the same offence is identity of the material facts, understood as the existence of a set of concrete circumstances which are inextricably linked together and which resulted in the final acquittal or conviction of the person concerned (see, by analogy, case C-367/05, Kraai-jenbrink, para. 26 and the case-law cited, and C-261/09, Man-

tello, para. 39 and 40). Therefore, Article 50 of the Charter of Fundamental Rights prohibits the imposition, with respect to identical facts, of several criminal penalties at the conclusion of different proceedings brought for those purposes.

Moreover, the legal classification, under national law, of the facts and the legal interest protected are not relevant for the purposes of establishing the existence of the same offence, in so far as the scope of the protection conferred by Article 50 of the Charter of Fundamental Rights cannot vary from one Member State to another.

In this case, the referring court states that it is the same conduct, consisting in market manipulation intended to draw attention to the securities of RCS MediaGroup, which Mr Ricucci is alleged to have committed both in the criminal proceedings which led to his final criminal conviction and in the proceedings for an administrative fine of a criminal nature at issue in the main proceedings.

Although, as Consob contends in its written observations, the imposition of a criminal penalty following criminal proceedings, such as those at issue in the main proceedings, requires, unlike that administrative fine of a criminal nature, a subjective element, it must be noted that the fact that the imposition of that criminal penalty depends on an additional constituent element in relation to the administrative fine of a criminal nature is not, in itself, capable of calling into question the identity of the material facts at issue. Subject to verification by the referring court, the administrative fine of a criminal nature and the criminal proceedings at issue in the main proceedings appear therefore to relate to the same offence.

In those circumstances, it appears that the national legislation at issue in the main proceedings permits the possibility of bringing administrative proceedings of a criminal nature for the purposes of Article 50 of the Charter of Fundamental Rights against a person, such as Mr Ricucci, in respect of unlawful conduct consisting in market manipulation for which the same person has already been finally convicted. However, such a duplication of proceedings and penalties constitutes a limitation of the right guaranteed by Article 50 of the Charter of Fundamental Rights.

The justification for the limitation of the right guaranteed in Article 50 of the Charter of Fundamental Rights

It should be noted that, in its judgment of case C-129/14 PPU, Spasic (para. 55 and 56), the Court ruled that a limitation to the ne bis in idem principle guaranteed by Article 50 of the Charter of Fundamental Rights may be justified on the basis of Article 52(1) thereof.

In accordance with the first sentence of Article 52(1) of the Charter of Fundamental Rights, any limitation on the exercise of the rights and freedoms recognised by that Charter must be provided for by law and must respect the essence of those rights and freedoms. According to the second sentence of Article 52(1) thereof, subject to the principle of proportionality, limitations to those rights and freedoms may be made only if they are necessary and genuinely meet other objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others.

In this case, it is not disputed that the possibility of duplicating criminal proceedings and penalties and administrative proceedings and penalties of a criminal nature is provided for by the law.

Moreover, national legislation, such as that at issue in the main proceedings, respects the essential content of Article 50 of the Charter of Fundamental Rights, since it allows such a duplication of proceedings and penalties only under certain conditions which are

exhaustively defined, thereby ensuring that the right guaranteed by Article 50 is not called into question as such.

As regards the question whether the limitation of the ne bis in idem principle resulting from national legislation, such as that at issue in the main proceedings, meets an objective of general interest, it is apparent from the case file before the Court that that legislation seeks to protect the integrity of the financial markets of the European Union and public confidence in financial instruments. In the light of the importance that is given in the Court's case-law, for the purposes of achieving that objective, to combating infringements of the prohibition on market manipulation (see, to that effect, case C-45/08, Spector Photo Group and Van Raemdonck, para. 37 and 42), a duplication of criminal proceedings and penalties may be justified where those proceedings and penalties pursue, for the purpose of achieving such an objective, complementary aims relating, as the case may be, to different aspects of the same unlawful conduct at issue, which it is for the referring court to determine.

In that regard, concerning offences relating to market manipulation, it seems legitimate that a Member State might wish, first, to dissuade and punish any infringement, whether intentional or not, of the prohibition of market manipulation by imposing administrative penalties set, as the case may be, on a flat-rate basis and, secondly, to dissuade and punish serious infringements of such a prohibition, which have particularly negative effects on society and which justify the adoption of the most severe criminal penalties.

As regards compliance with the principle of proportionality, it requires that the duplication of proceedings and penalties provided for by national legislation, such as that at issue in the main proceedings, does not exceed what is appropriate and necessary in order to attain the objectives legitimately pursued by that legislation, it being understood that, when there is a choice between several appropriate measures, recourse must be had to the least onerous and the disadvantages caused must not be disproportionate to the aims pursued (see, to that effect, case C-562/08, Müller Fleisch, para. 43; joined cases C-379/08 and C-380/08, ERG and Others, para. 86; and case C-501/14, EL-EM-2001, para. 37 and 39 and the case-law cited).

In that regard, it should be noted that, under Article 14(1) of the Directive 2003/6/EC on market abuse, read in conjunction with Article 5 thereof, Member States are free to choose the penalties applicable to persons responsible for market manipulation (see, to that effect, case C-45/08, Spector Photo Group and Van Raemdonck, para. 71 and 72). In the absence of harmonisation of EU law in the matter, Member States therefore have the right to provide either for a system in which infringements of the prohibition of market manipulation may be subject to proceedings and penalties only once, or fora system allowing a duplication of proceedings and penalties. In those circumstances, the proportionality of national legislation, such as that at issue in the main proceedings, cannot be called into question by the mere fact that the Member State concerned chose to provide for the possibility of such a duplication, without which that Member State would be deprived of that freedom of choice.

That having been clarified, it must be noted that national legislation, such as that at issue in the main proceedings, which provides for such a possibility of duplication is capable of achieving the objective referred above.

With regard to its strict necessity, national legislation, such as that at issue in the main proceedings, must, first of all, provide for clear and precise rules allowing individuals to predict which

acts or omissions are liable to be subject to such a duplication of proceedings and penalties.

In this case, as is apparent from the information in the case file before the Court, the national legislation at issue in the main proceedings, in particular Article 187b of the Treaty on the Functioning of the European Union, provides for the conditions in accordance with which the dissemination of untrue statements and the employment of fictitious devices, capable of giving false or misleading information about financial instruments, can give rise to the imposition of an administrative fine of a criminal nature. In accordance with Article 187b of the Treaty on the Functioning of the European Union, and in the circumstances referred to in Article 185 thereof, such conduct can also, where it is liable to affect significantly the value of financial instruments, be subject to a term of imprisonment and a criminal fine.

It therefore appears, subject to verification by the referring court, that the national legislation at issue in the main proceedings clearly and precisely sets out the circumstances in which market manipulation can be subject to a duplication of proceedings and penalties of a criminal nature.

Next, national legislation, such as that at issue in the main proceedings, must ensure that the disadvantages resulting, for the persons concerned, from such a duplication are limited to what is strictly necessary in order to achieve the objective referred above.

As regards, first, the duplication of proceedings of a criminal nature which, as is apparent from the information in the case file, the requirement noted above implies the existence of rules ensuring coordination so as to reduce to what is strictly necessary the additional disadvantage associated with such a duplication for the persons concerned.

Secondly, the duplication of penalties of a criminal nature requires rules allowing it to be guaranteed that the severity of the sum of all of the penalties imposed corresponds with the seriousness of the offence concerned, that requirement resulting not only from Article 52(1) of the Charter of Fundamental Rights, but also from the principle of proportionality of penalties set out in Article 49(3) thereof. Those rules must provide for the obligation for the competent authorities, in the event of the imposition of a second penalty, to ensure that the severity of the sum of all of the penalties imposed does not exceed the seriousness of the offence identified.

In this case, admittedly, the obligation for cooperation and coordination between the prosecution service and Consob provided for in Article 187i of the Treaty on the Functioning of the European Union is liable to reduce the disadvantage resulting, for the person concerned, from the duplication of an administrative fine of a criminal nature and criminal proceedings due to unlawful conduct constituting market manipulation. However, it should be noted that, in the event of a criminal conviction under Article 185 of the Treaty on the Functioning of the European Union following criminal proceedings, the bringing of the proceedings relating to an administrative fine of a criminal nature exceeds what is strictly necessary in order to achieve the objective referred above, in so far as that criminal conviction is such as to punish the offence committed in an effective, proportionate and dissuasive manner.

In that regard, it is apparent from the information in the case file before the Court that market manipulation liable to be subject to a criminal conviction under Article 185 of the Treaty on the Functioning of the European Union must be of a certain seriousness and that the penalties liable to be imposed under

that provision include a prison sentence and a criminal fine in a range which corresponds to that provided for in respect of the administrative fine of a criminal nature referred to in Article 187b of the Treaty on the Functioning of the European Union.

In those circumstances, it seems that the act of bringing proceedings for an administrative fine of a criminal nature under Article 187b of the Treaty on the Functioning of the European Union exceeds what is strictly necessary in order to achieve the objective referred above, in so far as the final criminal conviction is, given the harm caused to the company by the offence committed, such as to punish that offence in an effective, proportionate and dissuasive manner, which it is for the referring court to determine.

It should be added, as regards the duplication of penalties authorised by the legislation at issue in the main proceedings, that the latter seems merely to provide in Article 187l of the Treaty on the Functioning of the European Union that, where, with respect to the same acts, a criminal fine and an administrative fine of a criminal nature have been imposed, recovery of the former is limited to the part exceeding the amount of the second. In so far as Article 187l of the Treaty on the Functioning of the European Union appears solely to apply to the duplication of pecuniary penalties and not to the duplication of an administrative fine of a criminal nature and a term of imprisonment, it appears that that article does not guarantee that the severity of all of the penalties imposed are limited to what is strictly necessary in relation to the seriousness of the offence concerned.

Therefore, it appears that national legislation, such as that at issue in the main proceedings, which authorises, after a final criminal conviction, under the conditions identified above, the bringing of proceedings for an administrative fine of a criminal nature, goes beyond what is strictly necessary in order to achieve the objective referred above, which it is however for the referring court to determine.

That conclusion is not called into question by the fact that the final sentence pronounced in accordance with Article 185 of the Treaty on the Functioning of the European Union can, where appropriate, subsequently be extinguished as a result of a pardon, as seems to have happened in the case in the main proceedings. It follows from Article 50 of the Charter that the protection conferred by the ne bis in idem principle must benefit persons who have already been finally acquitted or convicted, including, consequently, those who have been made subject, by such a conviction, to a criminal penalty which was subsequently extinguished as a result of a pardon. Therefore, such a circumstance is irrelevant for the purpose of assessing whether national legislation such as that at issue in the main proceedings is strictly necessary.

In the light of the foregoing considerations, the answer to the question referred is that Article 50 of the Charter of Fundamental Rights must be interpreted as precluding national legislation which permits the possibility of bringing administrative proceedings against a person in respect of unlawful conduct consisting in market manipulation for which the same person has already been finally convicted, in so far as that conviction is, given the harm caused to the company by the offence committed, such as to punish that offence in an effective, proportionate and dissuasive manner.

Consideration by the Court of Justice: The Second Question. By its second question, the referring court asks, in essence, whether the ne bis in idem principle provided for in Article 50 of the Charter of Fundamental Rights confers on individuals a

directly applicable right in the context of a dispute such as that at issue in the main proceedings.

In accordance with settled case-law, the provisions of primary law which impose precise and unconditional obligations, not requiring, for their application, any further action on the part of the EU or national authorities, create direct rights in respect of the individuals concerned (see, to that effect, joined cases 2/69 and 3/69, Brachfeld and Chougol Diamond, para. 22 and 23, and case C-390/98, Banks, para. 91).

The right that Article 50 of the Charter of Fundamental Rights confers on individuals is not subject, according to the very wording of that provision, to any conditions and is therefore directly applicable in the context of the dispute in the main proceedings.

In that regard, it should be noted that the Court has already recognised the direct effect of Article 50 of the Charter by concluding, in para. 45 of the judgment of case C-617/10, Akerberg Fransson, that, in the course of the assessment of the compatibility of provisions of domestic law with the rights guaranteed by the Charter, the national court which is called upon, within the exercise of its jurisdiction, to apply provisions of EU law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provision by legislative or other constitutional means.

Therefore, the answer to the second question is that the ne bis in idem principle guaranteed by Article 50 of the Charter of Fundamental Rights confers on individuals a right which is directly applicable in the context of a dispute such as that at issue in the main proceedings.

Rulings. The Court of Justice in answer to the questions referred to it rules:

1. Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as precluding national legislation which permits the possibility of bringing administrative proceedings against a person in respect of unlawful conduct consisting in market manipulation for which the same person has already been finally convicted, in so far as that conviction is, given the harm caused to the company by the offence committed, such as to punish that offence in an effective, proportionate and dissuasive manner.

2. The ne bis in idem principle guaranteed by Article 50 of the Charter of Fundamental Rights of the European Union confers on individuals a right which is directly applicable in the context of a dispute such as that at issue in the main proceedings.

Judgment of the Court of Justice of the European Union of 20 March 2018 - Joined Cases C-596/16 and C-597/16 - Enzo Di Puma (C-596/16) & Antonio Zecca (C-597/16)

References for Preliminary Rulings. These requests for a preliminary ruling concern the interpretation of Article 50 of the Charter of Fundamental Rights and of the Directive 2014/57/EU on criminal sanctions for market abuse.

The requests have been made in the context of two disputes, the first between Mr Enzo Di Puma and the National Companies and Stock Exchange Commission (hereinafter «Consob»; Com-missione Nazionale per le Societa e la Borsa), the second between Consob and Mr Antonio Zecca, concerning the legality of administrative fines imposed in relation to insider dealing.

Disputes in the Main Proceedings and the Questions Referred for a Preliminary Ruling. By decision of 7 November 2012, Consob imposed administrative fines on Mr Di Puma and

Mr Zecca in accordance with Article 187a(1) and (4) of the Treaty on the Functioning of the European Union.

According to that decision, Mr Di Puma and Mr Zecca participated, during 2008, in several cases of insider dealing. In particular, they acquired, on 14 and 17 October 2008, 2 375 shares in Permasteelisa SpA using insider information relating to the plan to take control of that company, information about which Mr Zecca was aware as a result of his employment and responsibilities within Deloitte Financial Advisory Services SpA and in respect of which Mr Di Puma could not have been unaware of its insider character.

Mr Di Puma and Mr Zecca contested that decision before Italian Court of Appeal in Milan (Corte d'appello di Milano). By judgments of 4 April and 23 August 2013, that court, respectively, dismissed the action brought by Mr Di Puma and upheld that brought by Mr Zecca.

Mr Di Puma and Consob brought an appeal in cassation against, respectively, the first and the second of those judgments before the Court of Cassation (Corte suprema di cassazione). Mr Di Puma claimed that he had been subject to criminal proceedings before the District Court in Milan (Tribunale di Milano) in respect of the same acts as those alleged against him by Consob and that that court, by a final judgment delivered after the judgments of the Court of Appeal in Milan (Corte d'appello di Milano), acquitted him, on the ground that the acts constituting the offence were not established. As regards Mr Zecca, who was the defendant in the proceedings relating to the appeal in cassation brought by Consob, he also relied on that judgment of acquittal.

After observing that that judgment of acquittal indeed related to the same acts as those in respect of which Consob imposed, by decision of 7 November 2012, the administrative fines at issue in the main proceedings, the referring court notes that, under Article 654 of Italian Code of Criminal Procedure (Codice diprocedura penale), the findings contained in that judgment of acquittal as regards the lack of an offence have res judicata effect with regard to administrative proceedings. It considers however that the disputes before it cannot be resolved solely on the basis of national legislation, in view of the primacy of Article 4 of the Protocol No. 7 to the Convention and of Article 50 of the Charter of Fundamental Rights over that legislation.

As regards Article 4 of the Protocol No. 7 to the Convention, the referring court considers that the fact that that insider dealing is subject, under Articles 184 and 187a of the Treaty on the Functioning of the European Union, both to criminal penalties and to administrative fines could lead to an infringement of the ne bis in idem principle guaranteed by Article 4 of the Protocol No. 7 to the Convention, as interpreted by the European Court of Human Rights, in particular in its judgment Grande Stevens and Others versus Italy. Such administrative fines are, in view of their legal classification under national law, their nature and their seriousness, criminal in nature. Moreover, the duplication of the criminal and administrative proceedings and penalties at issue in the main proceedings relates to the same offence, understood as referring to identical acts.

The referring court is unsure whether Article 50 of the Charter of Fundamental Rights precludes also such a duplication of proceedings and penalties. Under Article 14(1) of the Directive 2003/6/EC on market abuse, Member States are required to punish insider dealing with effective, proportionate and dissuasive administrative penalties. Therefore, according to that provision, the competent national authorities should assess the

effectiveness, proportionality and dissuasiveness of an administrative penalty together with a criminal penalty.

In its judgment of case C-617/10, Akerberg Fransson (para. 34 and 36), the Court held, first, that Article 50 of the Charter of Fundamental Rights precludes that, after the imposition of a final administrative penalty having a criminal nature for the purposes of that article, criminal proceedings in relation to the same acts be brought against the same person, but, secondly, that it is for a national court to determine whether the remaining penalties are effective, proportionate and dissuasive. In view of that case-law, the referring court asks whether Article 50 of the Charter must be interpreted as authorising proceedings for an administrative fine following a final criminal judgment, which has res judicata effect, holding that there was no offence, where those proceedings may appear necessary in order to comply with the obligation to provide for effective, proportionate and dissuasive penalties.

According to that court, although the effectiveness, primacy and unity of EU law are capable of justifying a duplication of proceedings and penalties, there is no such justification where the competent criminal court has finally held that the facts on which the existence of the two criminal and administrative offences at issue are based are not established. Moreover, the fact, in such a case, of bringing proceedings for an administrative fine involves the risk of a conflict of judgments and would, thus, be liable to call into question the res judicata effect of the final criminal judgment. However, the rules for the implementation of the principle of res judicata should respect the principle of effectiveness.

In those circumstances, the Court of Cassation (Corte suprema di cassazione) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:10

1. Is Article 50 of the Charter of Fundamental Rights to be interpreted as meaning that, where a court has delivered a final judgment finding a defendant not to have committed the criminal offence alleged, it precludes the initiation or prosecution of further proceedings based on the same facts with a view to the imposition of penalties which, on account of their nature and severity, may be regarded as criminal penalties, without it being necessary for the national court to make any further assessment?

2. In assessing the effectiveness, proportionality and dissua-siveness of penalties, in the context of determining whether there has been a breach of the ne bis in idem principle referred to in Article 50 of the Charter of Fundamental Rights, must a national court take into account the thresholds for sanctions laid down in Directive 2015/57?

By order of the President of the Court of Justice cases C-596/16 and C-597/16 were joined for the purposes of the written and oral procedure and the judgment.

Consideration11 of the Questions by the Court of Justice. First of all, it should be noted that, although the first question

10 Request for a preliminary ruling from the Corte suprema di cassazione (Italy) lodged on 23 November 2016 - Enzo Di Puma versus Commissione Nazionale per le Società e la Borsa (Consob) (Case C-596/16); Request for a preliminary ruling from the Corte suprema di cassazione (Italy) lodged on 23 November 2016 -Commissione Nazionale per le Società e la Borsa (Consob) versus Antonio Zecca (Case C-597/16).

11 See also: Opinion of Advocate General M. Campos Sánchez-Bordona delivered on 12 September 2017 - Joined cases C-596/16 and C-597/16 - Enzo Di Puma versus Commissione Nazionale per le Società e la Borsa (Consob) (C-596/16) and

concerns the interpretation of Article 50 of the Charter of Fundamental Rights, the referring court asks, in particular, about the compatibility of Article 654 of the Code of Criminal Procedure with Article 14(1) of the Directive 2003/6/EC on market abuse and the fundamental right guaranteed by Article 50 of the Charter. According to that court, an interpretation according to which Article 14(1) of that Directive requires, irrespective of the ne bis in idem principle, proceedings for an administrative fine to be brought even following a final criminal conviction which has res judicata effect, would be liable to call into question the principle of res judicata, contrary to what is provided for by Article 654 of the Code of Criminal Procedure.

In those circumstances, it is necessary to understand that, by its first question, the referring court asks, in essence, whether Article 14(1) of the Directive 2003/6/EC on market abuse, read in the light of Article 50 of the Charter of Fundamental Rights, must be interpreted as precluding national legislation in accordance with which proceedings for an administrative fine of a criminal nature may not be brought following a final criminal judgment of acquittal ruling that the acts capable of constituting a violation of the legislation relating to insider dealing, on the basis of which those proceedings had also been initiated, were not established.

In that regard, it must be noted that Article 14(1) of the Directive 2003/6/EC on market abuse, read in conjunction with Articles 2 and 3 thereof, requires Member States to have rules on effective, proportionate and dissuasive penalties for violations of the prohibition on insider dealing. Although the Court has held that Article 14(1) of that Directive merely requires Member States to provide administrative penalties presenting those characteristics, without requiring Member States also to lay down criminal sanctions against authors of insider dealing (see, to that effect, case C-45/08, Spector Photo Group and Van Raemdonck, para. 42), the fact remains that Member States are also entitled to provide for a duplication of criminal and administrative sanctions, complying, however, with the limits imposed by EU law and, in particular, those resulting from the ne bis in idem principle guaranteed by Article 50 of the Charter of Fundamental Rights, the latter applying, in accordance with Article 51(1) thereof, when implementing that law.

However, the application of effective, proportionate and dissuasive penalties provided for by Article 14(1) of the Directive 2003/6/EC on market abuse in the event of violations of the prohibition on insider dealing, assumes that the competent national authorities identify the facts establishing the existence, in the case concerned, of such dealing capable of justifying the imposition of an administrative penalty.

As is apparent from the order for reference, in the context of the disputes in the main proceedings, it was held, following adversarial criminal proceedings, by a final criminal judgment which has res judicata effect, that the factors constituting insider dealing were not established.

The question therefore arises, in that context, whether Article 14(1) of the Directive 2003/6/EC on market abuse precludes national legislation, such as Article 654 of the Code of Criminal Procedure, which extends to the proceedings for an administrative fine the res judicata effects of those factual conclusions, made in the context of the criminal proceedings.

Commissione Nazionale per le Società e la Borsa (Consob) versus Antonio Zecca (C-597/16).

In that regard, it should be noted that neither Article 14(1) nor any other provision of the Directive 2003/6/EC on market abuse states the effects of a final criminal judgment on proceedings for an administrative fine.

Moreover, in light of the importance of the principle of res judicata both in the legal order of the EU and in national legal orders, the Court has held that EU law does not preclude the application of national procedural rules conferring res judicata effects on a judicial decision (see, to that effect, as regards the principle of effectiveness, case C-213/13, Impresa Pizzarotti, para. 58 and 59, and case C-69/14, Tarsia, para. 28 and 29).

In this case, no particular circumstances of the cases in the main proceedings, as described in the case file before the Court, justify an approach different from that taken by the case-law referred to in the previous paragraph. In that regard, it should be noted that, although Article 654 of the Code of Criminal Procedure extends res judicata effects of criminal proceedings to proceedings for an administrative fine, it is apparent from the wording of that provision, as set out in the order for reference, that res judicata effects are limited to the factual conclusions reached by a criminal judgment delivered following adversarial proceedings.

According to Article 187j of the Treaty on the Functioning of the European Union, Consob is free to participate in criminal proceedings, in particular as a civil party, and is moreover required, under Article 187i of the Treaty on the Functioning of the European Union, to send to the judicial authorities the documents collected during the exercise of its supervision. In light of those rules, it appears that Consob can effectively ensure that a criminal conviction or, as in the case in the main proceedings, an acquittal is delivered taking into account all of the evidence at the disposal of those authorities for the purposes of imposing an administrative fine under Article 187a of the Treaty on the Functioning of the European Union.

Therefore, the res judicata effects which a national provision confers on the factual conclusions of such a criminal judgment in relation to proceedings for an administrative fine do not prevent the finding of violations of the legislation on insider dealing and that they be effectively punished, where, according to the terms of that judgment, the facts at issue are established.

Otherwise, the obligation, imposed on Member States by Article 14(1) of the Directive 2003/6/EC on market abuse, to provide for effective, proportionate and dissuasive penalties cannot, in view of what was noted above, result in disregarding the force of res judicata which a final criminal judgment of acquittal has, in accordance with a national provision such as Article 654 of the Code of Criminal Procedure, in relation to proceedings for an administrative penalty relating to the same facts as those which were held by the judgment not to be established. Such an assessment is without prejudice to the possibility, provided for in Article 4(2) of the Protocol No. 7 to the Convention, to reopen, where appropriate, criminal proceedings where there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the criminal judgment.

In those circumstances, Article 14(1) of the Directive 2003/6/EC on market abuse does not preclude national legislation, such as that at issue in the main proceedings.

That interpretation is confirmed by Article 50 of the Charter of Fundamental Rights.

In that regard, it is apparent from the order for reference that the acts of which Mr Di Puma and Mr Zecca are accused in the

context of the proceedings for an administrative fine at issue in the main proceedings are the same as those on the basis of which criminal proceedings were brought against them before the District Court in Milan (Tribunale di Milano). Moreover, the administrative fines at issue in the main proceedings can, according to the information in the case file before the Court, reach, in accordance with Article 187a of the Treaty on the Functioning of the European Union, an amount 10 times greater than the proceeds or profit derived from the offence. It thus appears that they are punitive in character and present a high degree of severity and, therefore, are criminal in nature for the purposes of Article 50 of the Charter of Fundamental Rights (see, to that effect, case C-537/16, Garlsson Real Estate, para. 34 and 35), which it is however for the referring court to determine.

It must be added that, according to the wording itself of Article 50 of the Charter of Fundamental Rights, the protection conferred by the ne bis in idem principle is not limited to situations in which the person concerned has been subject to a criminal conviction, but extends also to those in which that person is finally acquitted.

It appears therefore that the bringing of proceedings for an administrative fine of a criminal nature, based on the same facts, constitutes a limitation of the fundamental right guaranteed by Article 50 of the Charter of Fundamental Rights (see, by analogy, case C-524/15, Menci, para. 39, and case C-537/16, Garlsson Real Estate, para. 41).

Such a limitation of the ne bis in idem principle may however be justified on the basis of Article 52(1) of the Charter of Fundamental Rights (see, to that effect, case C-129/14 PPU, Spasic, para. 55 and 56; case C-524/15, Menci, para. 40, and case C-537/16, Garlsson Real Estate, para. 42).

In that regard, it should be pointed out that the objective of protecting the integrity of financial markets and public confidence in financial instruments is such as to justify a duplication of proceedings and penalties of a criminal nature such as that provided for by the national legislation at issue in the main proceedings, where those proceedings and penalties have, for the purpose of achieving such an objective, additional complementary objectives covering, as the case may be, different aspects of the same unlawful conduct at issue (see, to that effect, case C-537/16, Garlsson Real Estate, para. 46).

However, the bringing of proceedings for an administrative fine of a criminal nature, such as those at issue in the main proceedings, following the final conclusion of criminal proceedings, is subject to strict compliance with the principle of proportionality (see, to that effect, case C-537/16, Garlsson Real Estate, para. 48). In that regard, it should be noted that, unlike the situation leading to the judgment case C-617/10, Akerberg Fransson, in which the criminal proceedings had been brought after the imposition of a tax penalty, the cases in the main proceedings raise the question whether proceedings for an administrative fine of a criminal nature may be brought where a final criminal judgment of acquittal has concluded that the acts capable of constituting a violation of the legislation on insider dealing, on the basis of which those proceedings had also been initiated, were not established.

In a situation such as that at issue in the main proceedings, the bringing of proceedings for an administrative fine of a criminal nature clearly exceeds what is necessary in order to achieve the objective referred above, since there exists a judgment of acquittal holding that there are no factors constituting

an offence which Article 14(1) of the Directive 2003/6/EC on market abuse seeks to punish.

In light of such a conclusion, which has res judicata effect also in relation to such proceedings, the bringing of those proceedings seems to be devoid of any basis. Article 50 of the Charter of Fundamental Rights thus precludes, in such a situation, the bringing of proceedings for an administrative fine of a criminal nature, such as that at issue in the main proceedings, without prejudice to the possibility of reopening, where appropriate, criminal proceedings where there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the criminal judgment.

In view the foregoing considerations, the answer to the first question is that Article 14(1) of the Directive 2003/6/EC on market abuse, read in the light of Article 50 of the Charter of Fundamental Rights, must be interpreted as not precluding national legislation in accordance with which proceedings for an administrative fine of a criminal nature may not be brought following a final criminal judgment of acquittal ruling that the acts capable of constituting a violation of the legislation relating to insider dealing, on the basis of which those proceedings had also been initiated, were not established.

In the light of the answer to the first question, there is no need to answer the second question.

Rulings. The Court of Justice in answer to the question referred to it rules: Article 14(1) of the Directive 2003/6/EC on market abuse, read in the light of Article 50 of the Charter of Fundamental Rights of the European Union, must be interpreted as not precluding national legislation in accordance with which proceedings for an administrative fine of a criminal nature may not be brought following a final criminal judgment of acquittal ruling that the acts capable of constituting a violation of the legislation relating to insider dealing, on the basis of which those proceedings had also been initiated, were not established.

Judgment of the Court of Justice of the European Union of 20 March 2018 - Case C-524/15 - Luca Menci

Reference for a Preliminary Ruling. The request for a preliminary ruling concerns the interpretation of Article 50 of the Charter of Fundamental Rights and of Article 4 of the Protocol No. 7 to the Convention.

The request has been made in criminal proceedings against Mr Luca Menci concerning offences relating to value added tax (VAT).

Dispute in the Main Proceedings and the Question Referred for a Preliminary Ruling. Mr Menci was subject to administrative proceedings during which it was alleged that he had failed, in his capacity as proprietor of the sole trading business, to pay within the time limit stipulated by law, the VAT resulting from the annual tax return for the tax year 2011, amounting to a total of EUR 282 495.76.

Those proceedings gave rise to a decision of the Italian Tax authority (Amministrazione Finanziaria) by which that authority ordered Mr Menci to pay the VAT due and also imposed on him, on the basis of Article 13(1) of Legislative Decree No. 471/97, an administrative penalty of EUR 84 748.74, representing 30% of the tax debt. That decision has become final. Since the request made by Mr Menci to pay in instalments was accepted, the latter paid the first instalments.

After the final conclusion of those administrative proceedings, criminal proceedings were initiated with respect to the

same acts against Mr Menci before the District Court in Bergamo (Tribunale di Bergamo) pursuant to a prosecution brought by the Public Prosecutor (Procura della Repubblica), on the ground that that failure to pay VAT constituted the offence provided for and punished by Article 10a(1) and Article 10b(1) of Legislative Decree No. 74/2000.

The referring court states that, according to the provisions of Legislative Decree No. 74/2000, the criminal and administrative proceedings are to be conducted independently and come within the competence, respectively, of the judicial and administrative authorities. Neither of those two proceedings could be suspended pending the outcome of the other proceedings.

That court adds that Article 21(2) of that legislative decree, in accordance with which administrative penalties relating to tax offences imposed by the competent administrative authorities are not enforceable unless the criminal proceedings have been finally concluded by dismissal of the case, acquittal or termination of the proceedings, which excludes criminal liability, does not prevent a person, such as Mr Menci, from being subject to criminal proceedings after having had a final administrative penalty imposed on him.

In those circumstances, the District Court in Bergamo (Tribunale di Bergamo) decided to stay proceedings and to refer the following question to the Court for a preliminary ruling12 - Does Article 50 of the Charter of Fundamental Rights, interpreted in the light of Article 4 of the Protocol No. 7 to the Convention and the related case-law of the European Court of Human Rights, preclude the possibility of conducting criminal proceedings concerning an act (non-payment of VAT) for which a final administrative penalty has been imposed on the defendant?

Consideration13 of the Questions by the Court of Justice. By its question, the referring court asks, in essence, whether Article 50 of the Charter of Fundamental Rights, read in the light of Article 4 of the Protocol No. 7 to the Convention, must be interpreted as precluding national legislation in accordance with which criminal proceedings may be brought against a person for failing to pay VAT due within the time limit stipulated by law, although that person has already been made subject, in relation to the same acts, to a final administrative penalty.

First of all, it should be noted that, in relation to VAT, it follows, in particular, from Articles 2 and 273 of Directive 2006/112, read in conjunction with Article 4(3) of the Treaty on European Union, that Member States are obliged to take all legislative and administrative measures appropriate for ensuring collection of all the VAT due on their territory and for preventing fraud (see, to that effect, case C-617/10, Akerberg Fransson, para. 25 and the case-law cited).

Moreover, Article 325 of the Treaty on the Functioning of the European Union obliges the Member States to counter illegal activities affecting the financial interests of the European Union through effective deterrent measures and, in particular, obliges them to take the same measures to counter fraud affecting the financial interests of the European Union as they take to counter fraud affecting their own interests. The financial interests of the European Union include, in particular, revenue arising from

12 Request for a preliminary ruling from the District Court in Bergamo (Tribunale di Bergamo) (Italy) lodged on 1 October 2015 - Criminal proceedings against Luca Menci (Case C-524/15).

13 See also: Opinion of Advocate General Campos Sánchez-Bordona delivered on 12 September 2017 - Case C-524/15 - Luca Menci versus Procura della Repubblica.

VAT (see, to that effect, case C-42/17, M.A.S. and M.B., para. 30 and 31 and the case-law cited).

To ensure that all that revenue is collected and, thereby, to ensure the financial interests of the European Union, Member States are free to choose the applicable penalties, which may take the form of administrative penalties, criminal penalties or a combination of the two. Criminal penalties may nevertheless be essential to combat certain serious cases of VAT evasion in an effective and dissuasive manner (see, to that effect, C-42/17, M.A.S. and M.B., para. 33 and 34).

Since they seek to ensure the proper collection of VAT and to combat fraud, administrative penalties imposed by the national tax authorities and criminal proceedings initiated in respect of VAT offences, such as those at issue in the main proceedings, constitute implementation of Articles 2 and 273 of Directive 2006/112 and of Article 325 of the Treaty on the Functioning of the European Union and, therefore, of EU law for the purposes of Article 51(1) of the Charter of Fundamental Rights (see, to that effect, case C-617/10, Ákerberg Fransson, para. 27, and joined cases C-217/15 and C-350/15, Orsi and Baldetti, para. 16). Therefore, they must respect the fundamental right guaranteed by Article 50 of the Charter.

Moreover, although, as Article 6(3) of the Treaty on European Union confirms, the fundamental rights recognised by the Convention for the Protection of Human Rights and Fundamental Freedoms constitute general principles of EU law and although Article 52(3) of the Charter of Fundamental Rights provides that the rights contained in the Charter which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms are to have the same meaning and scope as those laid down by that convention, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into EU law (case C-617/10, Ákerberg Fransson, para. 44, and case C-601/15 PPU, N., para. 45 and the case-law cited).

According to the explanations relating to Article 52 of the Charter of Fundamental Rights, paragraph 3 of that article is intended to ensure the necessary consistency between the Charter and the Convention for the Protection of Human Rights and Fundamental Freedoms, 'without thereby adversely affecting the autonomy of Union law and... that of the Court of Justice of the European Union' (case C-601/15 PPU, N., para. 47, and case C-18/16, K., para. 50 and the case-law cited).

Therefore, examination of the question referred must be undertaken in the light of the fundamental rights guaranteed by the Charter of Fundamental Rights and, in particular, Article 50 thereof (see, to that effect, joined cases C-217/15 and C-350/15, Orsi and Baldetti, para. 15 and the case-law cited).

Article 50 of the Charter of Fundamental Rights provides that 'no one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law'. Therefore, the ne bis in idem principle prohibits a duplication both of proceedings and of penalties of a criminal nature for the purposes of that article for the same acts and against the same person (see, to that effect, case C-617/10, Ákerberg Fransson, para. 34).

The Criminal Nature of the Proceedings and Penalties. As regards assessing whether proceedings and penalties, such as those at issue in the main proceedings, are criminal in nature, it must be noted that, according to the Court's case-law, three criteria are relevant. The first criterion is the legal classification

of the offence under national law, the second is the intrinsic nature of the offence, and the third is the degree of severity of the penalty that the person concerned is liable to incur (see, to that effect, case C-489/10, Bonda, para. 37, and case C-617/10, Akerberg Fransson, para. 35).

Although it is for the referring court to assess, in the light of those criteria, whether the criminal and administrative proceedings and penalties at issue in the main proceedings are criminal in nature for the purposes of Article 50 of the Charter of Fundamental Rights, the Court, when giving a preliminary ruling, may nevertheless provide clarification designed to give the national court guidance in its assessment (see, to that effect, case C-146/14 PPU, Mahdi, para. 79 and the case-law cited).

In this case, it should be noted at the outset that the classification as criminal, in the light of the criteria noted above, of the criminal proceedings at issue in the main proceedings and the penalties that are liable to result therefrom, is not at issue. The question arises, on the other hand, whether the administrative procedure involving Mr Menci and the final administrative penalty imposed on him following that procedure are criminal in nature, for the purposes of Article 50 of the Charter of Fundamental Rights.

In that regard, it is apparent from the case file before the Court that national law classifies the procedure giving rise to the imposition of that penalty as an administrative procedure.

Nevertheless, the application of Article 50 of the Charter of Fundamental Rights is not limited to proceedings and penalties which are classified as 'criminal' by national law, but extends regardless of such a classification to proceedings and penalties which must be considered to have a criminal nature on the basis of the two other criteria referred above.

As regards the second criterion, relating to the intrinsic nature of the offence, it must be ascertained whether the purpose of the penalty at issue is punitive (see case C-489/10, Bonda, para. 39). It follows therefrom that a penalty with a punitive purpose is criminal in nature for the purposes of Article 50 of the Charter of Fundamental Rights, and that the mere fact that it also pursues a deterrence purpose does not mean that it cannot be characterised as a criminal penalty. It is of the intrinsic nature of criminal penalties that they seek both to punish and to deter unlawful conduct. By contrast, a measure which merely repairs the damage caused by the offence at issue is not criminal in nature.

In this case, Article 13(1) of Legislative Decree No. 471/97 provides, in the event of a failure to pay VAT due, for an administrative penalty which is added to the amount of VAT to be paid by the taxable person. Although that penalty is, as is contended by the Italian Government in its written observations, reduced where the tax is actually paid within a certain time limit after the failure to pay, the fact remains that the late payment of VAT due is punished by that penalty. It thus appears, which moreover corresponds with the referring court's assessment, that that penalty has a punitive purpose, which is the hallmark of a penalty of a criminal nature for the purposes of Article 50 of the Charter of Fundamental Rights.

As regards the third criterion, it should be noted that the administrative penalty at issue in the main proceedings consists, in accordance with Article 13(1) of Legislative Decree No. 471/97, of a fine of 30% of the VAT due which is added to the payment of that tax, and, without that being contested by the parties to the main proceedings, has a high degree of severity which is liable to support the view that that penalty is of a criminal nature for the

purposes of Article 50 of the Charter of Fundamental Rights, which it is however for the referring court to determine.

The Existence of the Same Offence. It follows from the very wording of Article 50 of the Charter of Fundamental Rights that it prohibits prosecuting or imposing criminal sanctions on the same person more than once for the same offence (see, to that effect, joined cases C-217/15 and C-350/15, Orsi and Baldetti, para. 18). As is stated by the referring court in its order for reference, the different proceedings and penalties of a criminal nature at issue in the main proceedings are directed against the same person, namely Mr Menci.

According to the Court's case-law, the relevant criterion for the purposes of assessing the existence of the same offence is identity of the material facts, understood as the existence of a set of concrete circumstances which are inextricably linked together which resulted in the final acquittal or conviction of the person concerned (see, by analogy, case C-367/05, Kraai-jenbrink, para. 26 and the case-law cited, and case C-261/09, Mantello, para. 39 and 40). Therefore, Article 50 of the Charter of Fundamental Rights prohibits the imposition, with respect to identical facts, of several criminal penalties as a result of different proceedings brought for those purposes.

Moreover, the legal classification, under national law, of the facts and the legal interest protected are not relevant for the purposes of establishing the existence of the same offence, in so far as the scope of the protection conferred by Article 50 of the Charter of Fundamental Rights cannot vary from one Member State to another.

In this case, it is apparent from the information in the order for reference that Mr Menci was made subject to a final administrative penalty of a criminal nature for having failed to pay, within the time limit stipulated by law, the VAT resulting from the annual tax return for the tax year 2011 and that the criminal proceedings at issue in the main proceedings relate to that omission.

Although, as the Italian Government contends in its written observations, the imposition of a criminal penalty following criminal proceedings, such as those at issue in the main proceedings, requires, unlike that pecuniary administrative penalty of a criminal nature, a subjective element, it must nevertheless be noted that the fact that the imposition of that criminal penalty depends on an additional constituent element in relation to the pecuniary administrative penalty of a criminal nature is not, in itself, capable of calling into question the identity of the material facts at issue. Subject to verification by the referring court, the pecuniary administrative penalty of a criminal nature and the criminal proceedings at issue in the main proceedings appear therefore to relate to the same offence.

In those circumstances, it appears that the national legislation at issue in the main proceedings allows criminal proceedings to be brought against a person, such as Mr Menci, in respect of an offence consisting in the failure to pay VAT due on the basis of the tax return for a tax year, after the imposition on that person, in respect of the same acts, of a final administrative penalty of a criminal nature for the purposes of Article 50 of the Charter of Fundamental Rights. Such a duplication of proceedings and penalties constitutes a limitation of the fundamental right guaranteed by that article.

The Justification for the Limitation of the Right Guaranteed in Article 50 of the Charter. It should be noted that, in its judgment of case C-129/14 PPU, Spasic (para. 55 and 56), the Court ruled that a limitation to the ne bis in idem principle guaran-

teed by Article 50 of the Charter of Fundamental Rights may be justified on the basis of Article 52(1) thereof.

In accordance with the first sentence of Article 52(1) of the Charter of Fundamental Rights, any limitation on the exercise of the rights and freedoms recognised by that Charter must be provided for by law and respect the essence of those rights and freedoms. According to the second sentence of Article 52(1) thereof, subject to the principle of proportionality, limitations to those rights and freedoms may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.

In this case, it is not disputed that the possibility of duplicating criminal proceedings and penalties and administrative proceedings and penalties of a criminal nature is provided for by the law.

Moreover, national legislation, such as that at issue in the main proceedings, respects the essential content of Article 50 of the Charter of Fundamental Rights, since, according to the information in the case file before the Court, it allows such a duplication of proceedings and penalties only under conditions which are exhaustively defined, thereby ensuring that the right guaranteed by Article 50 is not called into question as such.

As regards the question whether the limitation of the ne bis in idem principle resulting from national legislation, such as that at issue in the main proceedings, meets an objective of general interest, it is apparent from the case file before the Court that that legislation seeks to ensure the collection of all the VAT due. In the light of the importance that is given in the Court's case-law, for the purposes of achieving that objective, to combating VAT offences (see, to that effect, C-42/17, M.A.S. and M.B., para. 34 and the case-law cited), a duplication of criminal proceedings and penalties may be justified where those proceedings and penalties pursue, for the purpose of achieving such an objective, complementary aims relating, as the case may be, to different aspects of the same unlawful conduct at issue, which it is for the referring court to determine.

In that regard, in relation to VAT offences, it appears legitimate for a Member State to seek, first, to deter and punish any violation, whether intentional or not, of the rules relating to VAT returns and collection by imposing fixed administrative penalties, where appropriate, on a flat-rate basis and, secondly, to deter and punish serious violations of those rules, which are particularly damaging for society and which justify the adoption of more severe criminal penalties.

As regards compliance with the principle of proportionality, it requires that the duplication of proceedings and penalties provided for by national legislation, such as that at issue in the main proceedings, does not exceed what is appropriate and necessary in order to attain the objectives legitimately pursued by that legislation, it being understood that, when there is a choice between several appropriate measures, recourse must be had to the least onerous and the disadvantages caused must not be disproportionate to the aims pursued (see, to that effect, case C-562/08, Müller Fleisch, para. 43; joined cases C-379/08 and C-380/08, ERG and Others, para. 86; and case C-501/14, EL-EM-2001, para. 37 and 39 and the case-law cited).

In that regard, it must be noted that Member States are free to choose the applicable penalties in order to ensure that all VAT revenue is collected. In the absence of harmonisation of EU law in the matter, the Member States have therefore the right to provide either for a system in which VAT offences may be subject to proceedings and penalties only once, or fora sys-

tem authorising the duplication of proceedings and penalties. In those circumstances, the proportionality of national legislation, such as that at issue in the main proceedings, cannot be called into question by the mere fact that the Member State concerned made the choice to provide for the possibility of such a duplication, as otherwise that Member State would be deprived of that freedom of choice.

That having been clarified, it must be noted that national legislation, such as that at issue in the main proceedings, which provides for such a possibility of duplication is capable of achieving the objective referred above.

With regard to its strict necessity, national legislation, such as that at issue in the main proceedings, must, first of all, provide for clear and precise rules allowing individuals to predict which acts or omissions are liable to be subject to such a duplication of proceedings and penalties.

In this case, as is apparent from the information in the case file before the Court, the national legislation at issue in the main proceedings, in particular Article 13(1) of Legislative Decree No. 471/97, provides for the conditions according to which the failure to pay VAT due within the time limits prescribed by law may give rise to the imposition of an administrative penalty of a criminal nature. In accordance with Article 13(1), and under the conditions referred to in Article 10a(1) and Article 10b(1) of Legislative Decree No. 74/2000, such a failure may also, if it relates to an annual tax return covering an amount of VAT greater than EUR 50 000, be subject to a term of imprisonment of between six months and two years.

It thus appears, subject to verification by the referring court, that the national legislation at issue in the main proceedings clearly and precisely lays down the circumstances in which the failure to pay VAT due may be subject to a duplication of proceedings and penalties of a criminal nature.

Next, national legislation, such as that at issue in the main proceedings, must ensure that the disadvantages resulting, for the persons concerned, from such a duplication are limited to what is strictly necessary in order to achieve the objective referred above.

As regards, first, the duplication of proceedings of a criminal nature which, as is apparent from the information in the case file, the requirement noted in the above paragraph implies the existence of rules ensuring coordination so as to reduce to what is strictly necessary the additional disadvantage associated with such a duplication for the persons concerned.

In this case, although the national legislation at issue in the main proceedings allows criminal proceedings to be brought even after the imposition of an administrative penalty of a criminal nature finally concluding the administrative proceedings, it is apparent from the information in the case file that that legislation appears to limit criminal penalties to offences which are particularly serious, namely offences relating to an amount of unpaid VAT which exceeds EUR 50 000, in relation to which the national legislature has provided for a term of imprisonment, the severity of which appears to justify the need to initiate, in order to impose such a sentence, infringement proceedings which are independent of the administrative proceedings of a criminal nature.

Secondly, the duplication of penalties of a criminal nature requires rules allowing it to be guaranteed that the severity of all of the penalties imposed corresponds with the seriousness of the offence concerned, that requirement resulting not only from Article 52(1) of the Charter of Fundamental Rights, but

also from the principle of proportionality of penalties set out in Article 49(3) thereof. Those rules must provide for the obligation for the competent authorities, in the event of the imposition of a second penalty, to ensure that the severity of all of the penalties imposed does not exceed the seriousness of the offence identified.

In this case, it appears to follow from Article 21 of Legislative Decree No. 74/2000 that the latter is not limited to providing for the suspension of the enforcement of administrative penalties of a criminal nature during the criminal proceedings, but that it definitively prevents that enforcement after the criminal conviction of the person concerned. Moreover, according to the information in the order for reference, the voluntary payment of the tax debt, in so far as it covers also the administrative penalty imposed on the person concerned, constitutes a special mitigating factor to be taken into account in the context of the criminal proceedings. It thus appears that the national legislation at issue in the main proceedings provides for the conditions appropriate for ensuring that the competent authorities limit the severity of all of the penalties imposed to what is strictly necessary in relation to the seriousness of the offence committed.

Therefore, it appears, subject to verification by the referring court, that national legislation, such as that at issue in the main proceedings, makes it possible to ensure that the duplication of proceedings and penalties which it authorises does not exceed what is strictly necessary in order to achieve the objective referred above.

It is, ultimately, for the referring court to assess the proportionality of the practical application of that legislation in the context of the main proceedings, by balancing, on the one hand, the seriousness of the tax offence at issue and, on the other hand, the actual disadvantage resulting for the person concerned from the duplication of proceedings and penalties at issue in the main proceedings.

Finally, in so far as the Charter of Fundamental Rights contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, Article 52(3) of the Charter provides that their meaning and scope are the same as those laid down by that convention. It is therefore necessary to take account of Article 4 of the Protocol No. 7 to the Convention for the purpose of interpreting Article 50 of the Charter (see, to that effect, case C-601/15 PPU, N., para. 77, and joined cases C-217/15 and C-350/15, Orsi and Baldetti, para. 24).

In that regard, the European Court of Human Rights has held that a duplication of tax and criminal proceedings and penalties punishing the same violation of the tax law does not infringe the ne bis in idem principle enshrined in Article 4 of the Protocol No. 7 to the Convention, where the tax and criminal proceedings at issue have a sufficiently close connection in substance and time (judgment A and B versus Norway, § 132).

Therefore, the conditions to which Article 50 of the Charter of Fundamental Rights, read in conjunction with Article 52(1) thereof, subjects a possible duplication of criminal proceedings and penalties and of administrative proceedings and penalties of a criminal nature, ensure a level of protection of the ne bis in idem principle which is not in conflict with that guaranteed by Article 4 of the Protocol No. 7 to the Convention, as interpreted by the European Court of Human Rights.

Rulings. The Court of Justice in answer to the question referred to it rules:

1. Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as not precluding national legislation in accordance with which criminal proceedings may be brought against a person for failing to pay value added tax due within the time limits stipulated by law, although that person has already been made subject, in relation to the same acts, to a final administrative penalty of criminal nature for the purposes of Article 50 of the Charter, on condition that that legislation:

- pursues an objective of general interest which is such as to justify such a duplication of proceedings and penalties, namely combating value added tax offences, it being necessary for those proceedings and penalties to pursue additional objectives,

- contains rules ensuring coordination which limits to what is strictly necessary the additional disadvantage which results, for the persons concerned, from a duplication of proceedings, and

- provides for rules making it possible to ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.

2. It is for the national court to ensure, taking into account all of the circumstances in the main proceedings, that the actual disadvantage resulting for the person concerned from the application of the national legislation at issue in the main proceedings and from the duplication of the proceedings and penalties that that legislation authorises is not excessive in relation to the seriousness of the offence committed.

Judgment of the Court of Justice of the European Union 26 February 2013 - Case C-617/10 - Hans Akerberg Fransson

Reference for a Preliminary Ruling. The request for a preliminary ruling concerns the interpretation of the ne bis in idem principle in European Union law.

The request has been made in the context of a dispute between Swedish Public Prosecutor's Office (Aklagaren) and Mr Akerberg Fransson concerning proceedings brought by the Public Prosecutor's Office for serious tax offences.

Dispute in the Main Proceedings and the Questions Referred for a Preliminary Ruling. Mr Akerberg Fransson was summoned to appear before the Haparanda District Court (Haparanda tings-ratt) on 9 June 2009, in particular on charges of serious tax offences. He was accused of having provided, in his tax returns for 2004 and 2005, false information which exposed the national exchequer to a loss of revenue linked to the levying of income tax and value added tax ('VAT'), amounting to SEK 319 143 for 2004, of which SEK 60 000 was in respect of VAT, and to SEK 307 633 for 2005, of which SEK 87 550 was in respect of VAT. Mr Akerberg Fransson was also prosecuted for failing to declare employers' contributions for the accounting periods from October 2004 and October 2005, which exposed the social security bodies to a loss of revenue amounting to SEK 35 690 and SEK 35 862 respectively. According to the indictment, the offences were to be regarded as serious, first, because they related to very large amounts and, second, because they formed part of a criminal activity committed systematically on a large scale.

By decision of 24 May 2007, the Skatteverket had ordered Mr Akerberg Fransson to pay, for the 2004 tax year, a tax surcharge of SEK 35 542 in respect of income from his economic activity, of SEK 4 872 in respect of VAT and of SEK 7 138 in respect of employers' contributions. By the same decision it had also imposed for the 2005 tax year a tax surcharge of SEK 54 240 in respect of income from his economic activity, of SEK 3 255 in respect of VAT and of SEK 7 172 in respect of employers' contributions. Interest was payable on those penalties. Pro-

ceedings challenging the penalties were not brought before the administrative courts, the period prescribed for this purpose expiring on 31 December 2010 in relation to the 2004 tax year and on 31 December 2011 in relation to the 2005 tax year. The decision imposing the penalties was based on the same acts of providing false information as those relied upon by the Public Prosecutor's Office in the criminal proceedings.

Before the referring court, the question arises as to whether the charges brought against Mr Akerberg Fransson must be dismissed on the ground that he has already been punished for the same acts in other proceedings, as the prohibition on being punished twice laid down by Article 4 of the Protocol No. 7 to the Convention and Article 50 of the Charter of Fundamental Rights would be infringed.

It is in those circumstances that the Haparanda District Court (Haparanda tingsratt) decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:14

1. Under Swedish law there must be clear support in the Convention for the Protection of Human Rights and Fundamental Freedoms or the case-law of the European Court of Human Rights for a national court to be able to disapply national provisions which may be suspected of infringing the ne bis in idem principle under Article 4 of the Protocol No. 7 to the Convention and may also therefore be suspected of infringing Article 50 of the Charter of Fundamental Rights. Is such a condition under national law for disapplying national provisions compatible with European Union law and in particular its general principles, including the primacy and direct effect of European Union law?

2. Does the admissibility of a charge of tax offences come under the ne bis in idem principle under Article 4 of the Protocol No. 7 to the Convention and Article 50 of the Charter of Fundamental Rights where a certain financial penalty (tax surcharge) was previously imposed on the defendant in administrative proceedings by reason of the same act of providing false information?

3. Is the answer to Question 2 affected by the fact that there must be coordination of these sanctions in such a way that ordinary courts are able to reduce the penalty in the criminal proceedings because a tax surcharge has also been imposed on the defendant by reason of the same act of providing false information?

4. Under certain circumstances it may be permitted, within the scope of the ne bis in idem principle ..., to order further sanctions in fresh proceedings in respect of the same conduct which was examined and led to a decision to impose sanctions on the individual. If Question 2 is answered in the affirmative, are the conditions under the ne bis in idem principle for the imposition of several sanctions in separate proceedings satisfied where in the later proceedings there is an examination of the circumstances of the case which is fresh and independent of the earlier proceedings?

5. The Swedish system of imposing tax surcharges and examining liability for tax offences in separate proceedings is motivated by a number of reasons of general interest ... If Question 2 is answered in the affirmative, is a system like the Swedish one compatible with the ne bis in idem principle when it would be possible to establish a system which would

14 Reference for a preliminary ruling from the Haparanda District Court (Haparan-da tingsratt) (Sweden) lodged on 27 December 2010 - Public Prosecutor's Office (Áklagaren) (Sweden) versus Hans Akerberg Fransson (Case C-617/10).

not come under the ne bis in idem principle without it being necessary to refrain from either imposing tax surcharges or ruling on liability for tax offences by, if liability for tax offences is relevant, transferring the decision on the imposition of tax surcharges from the Skatteverket and, where appropriate, administrative courts to ordinary courts in connection with their examination of the charge of tax offences?

Consideration15 by the Court of Justice: The Second, the Third and the Fourth Questions. By these questions, to which it is appropriate to give a joint reply, the Haparanda District Court (Haparanda tingsratt) asks the Court, in essence, whether the ne bis in idem principle laid down in Article 50 of the Charter of Fundamental Rights should be interpreted as precluding criminal proceedings for tax evasion from being brought against a defendant where a tax penalty has already been imposed upon him for the same acts of providing false information.

Application of the ne bis in idem principle laid down in Article 50 of the Charter of Fundamental Rights to a prosecution for tax evasion such as that which is the subject of the main proceedings presupposes that the measures which have already been adopted against the defendant by means of a decision that has become final are of a criminal nature.

In this connection, it is to be noted first of all that Article 50 of the Charter of Fundamental Rights does not preclude a Member State from imposing, for the same acts of non-compliance with declaration obligations in the field of VAT, a combination of tax penalties and criminal penalties. In order to ensure that all VAT revenue is collected and, in so doing, that the financial interests of the European Union are protected, the Member States have freedom to choose the applicable penalties (see, to this effect, case 68/88, Commission versus Greece, para. 24; case C-213/99, de Andrade, para. 19; and case C-91/02, Hannl-Hofstetter, para. 17). These penalties may therefore take the form of administrative penalties, criminal penalties or a combination of the two. It is only if the tax penalty is criminal in nature for the purposes of Article 50 of the Charter and has become final that that provision precludes criminal proceedings in respect of the same acts from being brought against the same person.

Next, three criteria are relevant for the purpose of assessing whether tax penalties are criminal in nature. The first criterion is the legal classification of the offence under national law, the second is the very nature of the offence, and the third is the nature and degree of severity of the penalty that the person concerned is liable to incur (case C-489/10, Bonda, para. 37).

It is for the referring court to determine, in the light of those criteria, whether the combining of tax penalties and criminal penalties that is provided for by national law should be examined in relation to the national standards, which could lead it, as the case may be, to regard their combination as contrary to those standards, as long as the remaining penalties are effective, proportionate and dissuasive (see, to this effect, among others case 68/88, Commission versus Greece, para. 24; case C-326/88, Hansen, para. 17; case C-167/01, Inspire Art, para. 62; case C-230/01, Penycoed, para. 36; and joined cases C-387/02, C-391/02 and C-403/02, Berlusconi and Others, para. 65).

It follows from the foregoing considerations that the answer to the second, third and fourth questions is that the ne bis in

15 See also: Opinion of Advocate General Cruz Villalón delivered on 12 June 2012 - Case C-617/10 - Public Prosecutor's Office (Áklagaren) (Sweden) versus Hans Akerberg Fransson.

idem principle laid down in Article 50 of the Charter of Fundamental Rights does not preclude a Member State from imposing successively, for the same acts of non-compliance with declaration obligations in the field of VAT, a tax penalty and a criminal penalty in so far as the first penalty is not criminal in nature, a matter which is for the national court to determine.

Consideration by the Court of Justice: The Fifth Question. By its fifth question, the Haparanda District Court (Haparanda tingsratt) asks the Court, in essence, whether national legislation which allows the same court to impose tax penalties in combination with criminal penalties in the event of tax evasion is compatible with the ne bis in idem principle guaranteed by Article 50 of the Charter of Fundamental Rights.

It should be recalled at the outset that, in proceedings under Article 267 of the Treaty on the Functioning of the European Union, 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 concern the interpretation of European Union law, the Court is in principle bound to give a ruling (see, among others, joined cases C-78/08 to C-80/08, Paint Graphos and Others, para. 30 and the case-law cited).

The presumption that questions referred by national courts for a preliminary ruling are relevant may be rebutted only in exceptional cases, where it is quite obvious that the interpretation of European Union law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, to this effect, among others joined cases C-78/08 to C-80/08, Paint Graphos and Others, para. 31 and the case-law cited).

Here, it is apparent from the order for reference that the national legislation to which the Haparanda District Court (Haparanda tingsratt) makes reference is not the legislation applicable to the dispute in the main proceedings and currently does not exist in Swedish law.

The fifth question must therefore be declared inadmissible, as the function entrusted to the Court within the framework of Article 267 of the Treaty on the Functioning of the European Union is to contribute to the administration of justice in the Member States and not to deliver advisory opinions on general or hypothetical questions (see, among others, joined cases C-78/08 to C-80/08, Paint Graphos and Others, para. 32 and the case-law cited).

Consideration by the Court of Justice: The First Question. By its first question, the Haparanda District Court (Haparanda tingsratt) asks the Court, in essence, whether a national judicial practice is compatible with European Union law if it makes the obligation for a national court to disapply any provision contrary to a fundamental right guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms and by the Charter of Fundamental Rights conditional upon that infringement being clear from the instruments concerned or the case-law relating to them.

As regards, first, the conclusions to be drawn by a national court from a conflict between national law and the Convention for the Protection of Human Rights and Fundamental Freedoms, it is to be remembered that whilst, as Article 6(3) of the Treaty on European Union confirms, fundamental rights recog-

nised by the Convention for the Protection of Human Rights and Fundamental Freedoms constitute general principles of the European Union's law and whilst Article 52(3) of the Charter of Fundamental Rights requires rights contained in the Charter which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms to be given the same meaning and scope as those laid down by the Convention, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into European Union law. Consequently, European Union law does not govern the relations between the Convention for the Protection of Human Rights and Fundamental Freedoms and the legal systems of the Member States, nor does it determine the conclusions to be drawn by a national court in the event of conflict between the rights guaranteed by that convention and a rule of national law (see, to this effect, Case C-571/10, Kamberaj, para. 62).

As regards, next, the conclusions to be drawn by a national court from a conflict between provisions of domestic law and rights guaranteed by the Charter of Fundamental Rights, it is settled case-law that a national court which is called upon, within the exercise of its jurisdiction, to apply provisions of European Union law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such a provision by legislative or other constitutional means (case 106/77, Simmenthal, para. 21 and 24; case C-314/08, Filipiak, para. 81; and joined cases C-188/10 and C-189/10, Melki and Abdeli, para. 43).

Any provision of a national legal system and any legislative, administrative or judicial practice which might impair the effectiveness of European Union law by withholding from the national court having jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions which might prevent European Union rules from having full force and effect are incompatible with those requirements, which are the very essence of European Union law (joined cases C-188/10 and C-189/10, Melki and Abdeli, para. 44 and the case-law cited).

Furthermore, in accordance with Article 267 of the Treaty on the Functioning of the European Union, a national court hearing a case concerning European Union law the meaning or scope of which is not clear to it may or, in certain circumstances, must refer to the Court questions on the interpretation of the provision of European Union law at issue (see, to this effect, case 283/81, Cilfit and Others.

It follows that European Union law precludes a judicial practice which makes the obligation for a national court to disapply any provision contrary to a fundamental right guaranteed by the Charter of Fundamental Rights conditional upon that infringement being clear from the text of the Charter or the case-law relating to it, since it withholds from the national court the power to assess fully, with, as the case may be, the cooperation of the Court of Justice, whether that provision is compatible with the Charter.

Rulings. The Court of Justice in answer to the questions referred to it rules:

1. The ne bis in idem principle laid down in Article 50 of the Charter of Fundamental Rights of the European Union does not preclude a Member State from imposing successively, for the same acts of non-compliance with declaration obligations in

the field of value added tax, a tax penalty and a criminal penalty in so far as the first penalty is not criminal in nature, a matter which is for the national court to determine. 2. European Union law does not govern the relations between the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and the legal systems of the Member States, nor does it determine the conclusions to be drawn by a national court in the event of conflict between the rights guaranteed by that convention and a rule of national law.

European Union law precludes a judicial practice which makes the obligation for a national court to disapply any provision contrary to a fundamental right guaranteed by the Charter of Fundamental Rights of the European Union conditional upon that infringement being clear from the text of the Charter or the case-law relating to it, since it withholds from the national court the power to assess fully, with, as the case may be, the cooperation of the Court of Justice of the European Union, whether that provision is compatible with the Charter.

Judgment of the Court of Justice of the European Union of 29 June 2016 - Case C-486/14 - Piotr Kossowski

Reference for a Preliminary Ruling. The request for a preliminary ruling concerns the interpretation of Articles 54 and 55 of the Convention Implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders, which was signed in Schengen (Luxembourg) on 19 June 1990 and entered into force on 26 March 1995 (hereinafter «Convention Implementing the Schengen Agreement»), and of Articles 50 and 52(1) of the Charter of Fundamental Rights.

The request has been made in criminal proceedings brought in Germany against Mr Piotr Kossowski (hereinafter «the accused») who is alleged to have committed, in Germany on 2 October 2005, acts classified as extortion with aggravating factors.

Dispute in the Main Proceedings and the Questions Referred for a Preliminary Ruling. According to the order for reference, the Public Prosecutor's Office in Hamburg (Staatsanwaltschaft Hamburg) alleges that the accused, on 2 October 2005 in Hamburg (Germany), committed acts which, under German criminal law, are classified as extortion with aggravating factors. At the time of the crime, the accused fled in the vehicle belonging to the victim in the main proceedings. A criminal investigation was initiated against the accused in Hamburg.

On 20 October 2005 the Polish authorities stopped a car driven by the accused in the course of a roadside check in Kotobrzeg (Poland) and arrested him with a view to the enforcement of a term of imprisonment to which he had been sentenced in Poland in a different case. After making enquiries about the vehicle driven by the accused, the District Public Prosecutor's Office in Kotobrzeg (Prokuratura Rejonowa w Kotobrzegu) opened an investigation procedure against him, accusing him of extortion with aggravating factors, as laid down in Article 282 of the Polish Criminal Code, on account of his actions in Hamburg on 2 October 2005.

As a matter of mutual legal assistance, the Regional Public Prosecutor's Office in Koszalin (Prokuratura Okrqgowa w Koszalinie) requested copies of the investigation file from the Hamburg Public Prosecutor's Office. Those copies were provided in August 2006.

In December 2006, the Kotobrzeg District Public Prosecutor's Office sent to the Hamburg Public Prosecutor's Office its decision of 22 December 2006 terminating, for lack of sufficient evidence, the criminal proceedings against the accused.

It is common ground that the reasons for that decision were that the accused had refused to give a statement and that the victim in the main proceedings and a hearsay witness were living in Germany, so that it had not been possible to interview them in the course of the investigation and had therefore not been possible to verify the statements made by the victim, which were, in parts, vague and contradictory.

The referring court adds that, according to the appeal guidance enclosed with the decision terminating the criminal proceedings, the persons concerned had a right to appeal against that decision within a period of seven days from service of the decision. The victim in the main proceedings does not appear to have brought such an appeal.

On 24 July 2009 the Hamburg Public Prosecutor's Office issued a European arrest warrant against the accused, having already obtained a national arrest warrant against him from the District Court in Hamburg (Amtsgericht Hamburg) on 9 January 2006. By letter dated 4 September 2009 the Republic of Poland was requested to surrender the accused to the Federal Republic of Germany. Execution of the European arrest warrant was refused by decision of the Regional Court in Koszalin (Sqd Okrqgowy w Koszalinie) of 17 September 2009, in view of the decision of the Kotobrzeg District Public Prosecutor's Office terminating the criminal proceedings, which that court classified as final for the purposes of the Polish Criminal Procedure Code.

On 7 February 2014, the accused, who was still wanted in Germany, was arrested in Berlin (Germany). The Hamburg Public Prosecutor's Office brought charges against him on 17 March 2014. The Regional Court in Hamburg (Landgericht Hamburg) refused to open trial proceedings, basing its decision on the fact that further prosecution had been barred, for the purposes of Article 54 of the Convention Implementing the Schengen Agreement, by the decision of the Kotobrzeg District Public Prosecutor's Office terminating the criminal proceedings. Consequently, the Regional Court in Hamburg, by decision of 4 April 2014, discharged the arrest warrant and the accused, who had been remanded in custody, was then released.

The referring court, hearing an appeal brought by the Hamburg Public Prosecutor's Office against that decision, takes the view that, under the German law applicable in this regard, the evidence against the accused is sufficient to justify the opening of trial proceedings before the Regional Court in Hamburg (Landgericht Hamburg) and the acceptance of the indictment for the purposes of those proceedings, unless the principle of ne bis in idem laid down in Article 54 of the Convention Implementing the Schengen Agreement and Article 50 of the Charter of Fundamental Rights is a bar to that.

In that regard, the referring court is uncertain whether the reservation made by the Federal Republic of Germany under Article 55(1)(a) of the Convention Implementing the Schengen Agreement remains valid. If that were the case, the ne bis in idem principle would not apply in the present case as the acts which the accused is alleged to have committed took place on German territory and the German law enforcement authorities did not request the Polish authorities to bring the prosecution in accordance with Article 55(4) of the Convention Implementing the Schengen Agreement.

In the event of that reservation not being valid, the referring court is uncertain whether, since the acts giving rise to prosecution in Germany and Poland are the same, the accused may, as a result of the decision of the Kotobrzeg District Public Prosecutor's Office, be regarded as a person whose trial has been 'finally disposed of' within the meaning of Article 54 of the Convention Implementing the Schengen Agreement or who has been 'finally acquitted' within the meaning of Article 50 of the Charter of Fundamental Rights. It takes the view that the case before it can be distinguished from the case which gave rise to the judgment of case C-398/12, M., owing to the fact that no detailed investigation was carried out prior to the decision of 22 December 2006 terminating the criminal proceedings. The referring court also has doubts as to whether, for such a decision to be final, certain obligations imposed to penalise the unlawful conduct must have been performed.

In those circumstances, the Higher Regional Court in Hamburg (Hanseatisches Oberlandesgericht Hamburg) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:16

1. Do the reservations declared at the time of ratification by the contracting parties to the Convention Implementing the Schengen Agreement pursuant to Article 55(1)(a) of the Convention Implementing the Schengen Agreement - specifically, the reservation [relating to Article 54 of the Convention Implementing the Schengen Agreement] - continue in force following the integration of the Schengen acquis into the legal framework of the European Union by [Protocol (No 2) integrating the Schengen acquis into the framework of the European Union], as preserved by [Protocol (No .19) to the Schengen acquis integrated into the framework of the European Union]? Are these exceptions proportionate limitations on Article 50 of the Charter of Fundamental Rights, within the meaning of Article 52(1) of the Charter?

2. If that is not the case, are the prohibitions on double punishment and double prosecution laid down by Article 54 of the Convention Implementing the Schengen Agreement and Article 50 of the Charter of Fundamental Rights to be interpreted as prohibiting prosecution of an accused person in one Member State - in the present case, Germany -where his prosecution in another Member State - in the present case, Poland - has been discontinued by the public prosecutor's office, without any obligations imposed by way of penalty having been fulfilled and without any detailed investigation, for factual reasons in the absence of sufficient evidence for a probable conviction, and can be reopened only if essential circumstances previously unknown come to light, where such new circumstances have not in fact emerged?

Consideration17 of the Question by the Court of Justice. By its questions, the referring court asks, in essence (i) whether the declaration made by the Federal Republic of Germany under Article 55(1)(a) of the Convention Implementing the Schengen Agreement remains valid and (ii) if Question 1 is answered in the negative, whether the accused's case has been 'finally disposed of', for the purposes of Article 54 of the Con-

16 Request for a preliminary ruling from the Hanseatisches Oberlandesgericht Hamburg (Germany) lodged on 4 November 2014 - Criminal proceedings against Piotr Kossowski (Case C-486/14).

17 See also: Opinion of Advocate General Bot delivered on 15 December 2015 -Case C-486/14 - Criminal proceedings against Piotr Kossowski.

vention Implementing the Schengen Agreement and Article 50 of the Charter of Fundamental Rights, in circumstances such as those at issue in the main proceedings.

Since the question of the possible applicability of the exception in Article 55(1)(a) of the Convention Implementing the Schengen Agreement to the ne bis in idem rule will arise only when, in circumstances such as those in issue in the main proceedings, that rule applies because a person's trial has been 'finally disposed of' within the meaning of Article 54 of the Convention Implementing the Schengen Agreement, it is appropriate to start by answering Question 2.

It should be recalled at the outset that the Court has already held - at paragraph 35 of the judgment of 5 June 2014 in case C-398/12, M. - that, since the right not to be tried or punished twice in criminal proceedings for the same offence is set out both in Article 54 of the Convention Implementing the Schengen Agreement and in Article 50 of the Charter of Fundamental Rights, Article 54 must be interpreted in the light of Article 50.

The Court therefore considers that, by Question 2, the referring court is essentially asking whether the ne bis in idem principle laid down in Article 54 of the Convention Implementing the Schengen Agreement, read in the light of Article 50 of the Charter, must be interpreted as meaning that a decision of the public prosecutor terminating criminal proceedings and finally closing the investigation procedure against a person - albeit with the possibility of its being reopened or annulled, without any penalties having been imposed, may be characterised as a final decision for the purposes of those articles, when that procedure was closed without a detailed investigation having been carried out.

As is clear from the wording of Article 54 of the Convention Implementing the Schengen Agreement, no one may be prosecuted in a Contracting State for the same acts as those in respect of which his trial has been 'finally disposed of' in another Contracting State.

For a person to be regarded as someone whose trial has been 'finally disposed of' within the meaning of Article 54 of the Convention Implementing the Schengen Agreement, in relation to the acts which he is alleged to have committed, it is necessary, in the first place, that further prosecution has been definitively barred (see, to that effect, case C-398/12, M., para. 31 and the case-law cited).

That first condition must be assessed on the basis of the law of the Contracting State in which the criminal-law decision in question has been taken. A decision which does not, under the law of the Contracting State which instituted criminal proceedings against a person, definitively bar further prosecution at national level cannot, in principle, constitute a procedural obstacle to the opening or continuation of criminal proceedings in respect of the same acts against that person in another Contracting State (see, to that effect, case C-491/07, Turansky, para. 36, and case C-398/12, M., para. 32 and 36).

The order for reference indicates that, in the case in the main proceedings, under Polish law the decision of the Kotobrzeg District Public Prosecutor's Office terminating the criminal proceedings precludes any further prosecution in Poland.

It also appears from the documents before the Court that neither (i) the possibility, provided for in Article 327(2) of the Criminal Procedure Code, of reopening the investigation procedure where essential facts or evidence, which were not known during the previous procedure, come to light nor (ii) the right of the Principal Public Prosecutor, under Article 328 of that code, to annul a final decision closing the investigation procedure

where he finds that the closure of the procedure was unfounded, calls into question, under Polish law, the fact that further prosecution is definitively precluded.

As regards the fact that (/') the decision at issue in the main proceedings was taken by the Kotobrzeg District Public Prosecutor's Office in its capacity as a prosecuting authority and (ii) no penalty was enforced, neither of those factors is decisive for the purpose of ascertaining whether that decision definitively bars prosecution.

Article 54 of the Convention Implementing the Schengen Agreement is also applicable where an authority responsible for administering criminal justice in the national legal system concerned, such as the Kotobrzeg District Public Prosecutor's Office, issues decisions definitively discontinuing criminal proceedings in a Member State, although such decisions are adopted without the involvement of a court and do not take the form of a judicial decision (see, to that effect, joined cases C-187/01 and C-385/01, Gözütok and Brügge, para. 28 and 38).

As regards the absence of a penalty, the Court observes that it is only where a penalty has been imposed that Article 54 of the Convention Implementing the Schengen Agreement lays down the condition that the penalty has been enforced, is actually in the process of being enforced or can no longer be enforced under the laws of the Contracting State of origin.

The reference to a penalty cannot therefore be interpreted in such a way that the application of Article 54 of the Convention Implementing the Schengen Agreement is - other than in a case in which a penalty has been imposed - subject to an additional condition.

In order to determine whether a decision such as that at issue in the main proceedings constitutes a decision finally disposing of the case against a person for the purposes of Article 54 of the Convention Implementing the Schengen Agreement, it is necessary, in the second place, to be satisfied that that decision was given after a determination had been made as to the merits of the case (see, to that effect, judgments of 10 March 2005 in case C-469/03, Mi-raglia, para. 30, and case C-398/12, M., para. 28).

It is necessary, for that purpose, to take into account both the objective of the rules of which Article 54 of the Convention Implementing the Schengen Agreement forms part and the context in which it occurs (see, to that effect, case C-605/12, Welmory, para. 41 and the case-law cited).

In that regard, it is clear from the Court's case-law that the ne bis in idem principle in Article 54 of the Convention Implementing the Schengen Agreement is intended, on the one hand, to ensure, in the area of freedom, security and justice, that a person whose trial has been finally disposed of is not prosecuted in several Contracting States for the same acts on account of his having exercised his right to freedom of movement, the aim being to ensure legal certainty - in the absence of harmonisation or approximation of the criminal laws of the Member States - through respect for decisions of public bodies which have become final (see, to that effect, case C-467/04, Gasparini and Others, para. 27; case C-491/07, Turansky, para. 41; and case C-129/14 PPU, Spasic, para. 77).

On the other hand, however, whilst Article 54 of the Convention Implementing the Schengen Agreement aims to ensure that a person, once he has been found guilty and served his sentence, or, as the case may be, been acquitted by a final judgment in a Contracting State, may travel within the Schengen area without fear of being prosecuted in another Contracting State for the same acts, it is not intended to pro-

tect a suspect from having to submit to investigations that may be undertaken successively, in respect of the same acts, in several Contracting States (case C-491/07, Turansky, para. 44).

Article 54 of the Convention Implementing the Schengen Agreement should in this respect be interpreted in the light of Article 3(2) of the Treaty on European Union, which states that the European Union is to offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with regard to, amongst other matters, the prevention and combating of crime.

Therefore, the interpretation of the final nature, for the purposes of Article 54 of the Convention Implementing the Schengen Agreement, of a decision in criminal proceedings in a Member State must be undertaken in the light not only of the need to ensure the free movement of persons but also of the need to promote the prevention and combating of crime within the area of freedom, security and justice.

In view of the foregoing considerations, a decision terminating criminal proceedings, such as the decision in issue before the referring court - which was adopted in a situation in which the prosecuting authority, without a more detailed investigation having been undertaken for the purpose of gathering and examining evidence, did not proceed with the prosecution solely because the accused had refused to give a statement and the victim and a hearsay witness were living in Germany, so that it had not been possible to interview them in the course of the investigation and had therefore not been possible to verify statements made by the victim - does not constitute a decision given after a determination has been made as to the merits of the case.

The consequence of applying Article 54 of the Convention Implementing the Schengen Agreement to such a decision would be to make it more difficult, indeed impossible, actually to penalise in the Member States concerned the unlawful conduct alleged against the accused. First, that decision to terminate proceedings was adopted by the judicial authorities of a Member State when there had been no detailed assessment whatsoever of the unlawful conduct alleged against the accused. Second, the bringing of criminal proceedings in another Member State in respect of the same acts would be jeopardised. Such a consequence would clearly run counter to the very purpose of Article 3(2) of the Treaty on European Union (see, to that effect, C-469/03, Miraglia, para. 33 and 34).

Finally, as the Court has already stated, Article 54 of the Convention Implementing the Schengen Agreement necessarily implies that the Contracting States have mutual trust in their criminal justice systems and that each of them recognises the criminal law in force in the other Contracting States even when the outcome would be different if its own national law were applied (case C-297/07, Bourquain, para. 37 and the case-law cited).

That mutual trust requires that the relevant competent authorities of the second Contracting State accept at face value a final decision communicated to them which has been given in the first Contracting State.

However, that mutual trust can prosper only if the second Contracting State is in a position to satisfy itself, on the basis of the documents provided by the first Contracting State, that the decision of the competent authorities of that first State does indeed constitute a final decision including a determination as to the merits of the case.

Therefore, a decision of the prosecuting authorities terminating criminal proceedings and closing the investigation proce-

dure, such as the decision in issue in the main proceedings, cannot be held to have been given after a determination as to the merits of the case and, accordingly, cannot be characterised as a final decision for the purposes of Article 54 of the Convention Implementing the Schengen Agreement when it is clear from the reasons actually stated in that decision that there was no detailed investigation, as otherwise the mutual trust between the Member States could be undermined. In that regard, the fact that neither the victim nor a potential witness was interviewed is an indication that no detailed investigation was undertaken in the case in the main proceedings.

In the light of the foregoing, the answer to Question 2 is that the principle of ne bis in idem laid down in Article 54 of the Convention Implementing the Schengen Agreement, read in the light of Article 50 of the Charter of Fundamental Rights, must be interpreted as meaning that a decision of the public prosecutor terminating criminal proceedings and finally closing the investigation procedure against a person, albeit with the possibility of its being reopened or annulled, without any penalties having been imposed, cannot be characterised as a final decision for the purposes of those articles when it is clear from the statement of reasons for that decision that the procedure was closed without a detailed investigation having been carried out; in that regard, the fact that neither the victim nor a potential witness was interviewed is an indication that no such investigation took place.

In view of the answer to the second question, it is no longer necessary to reply to the first question.

Rulings. The Court of Justice in answer to the questions referred to it rules: The principle of ne bis in idem laid down in Article 54 of the Convention Implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders, which was signed in Schengen (Luxembourg) on 19 June 1990, read in the light of Article 50 of the Charter of Fundamental Rights of the European Union, must be interpreted as meaning that a decision of the public prosecutor terminating criminal proceedings and finally closing the investigation procedure against a person, albeit with the possibility of its being reopened or annulled, without any penalties having been imposed, cannot be characterised as a final decision for the purposes of those articles when it is clear from the statement of reasons for that decision that the procedure was closed without a detailed investigation having been carried out; in that regard, the fact that neither the victim nor a potential witness was interviewed is an indication that no such investigation took place.

Статья проверена программой «Антиплагиат».

Статья поступила в редакцию 12.11.2020, принята к публикации 05.12.2020 The article was received on 12.11.2020, accepted for publication 05.12.2020

INFORMATION ABOUT THE AUTHOR

Libor Klimek, Associate Professor at the Department of Criminal Law, Criminology, Criminalistics and Forensic Disciplines and director of the Criminology and Criminalistics Research Centre at the Faculty of Law, Matej Bel University, Banska Bystrica in Slovak Republic. He is Visiting Professor at the Faculty of Law, Leipzig University in Germany. He is advisor of the Constitutional Court of the Slovak Republic, Scopus Author ID: 55620115400; http://orcid.org/0000-0003-3826-475X, e-mail: libor.klimek@umb.sk

ИНФОРМАЦИЯ ОБ АВТОРЕ

Либор Климек, адъюнкт-профессор кафедры уголовного права, криминологии, криминалистики и криминалистических дисциплин и директором Исследовательского центра криминологии и криминалистики юридического факультета Университета Матея Бела в Банска-Бистрице Словацкой Республики; приглашенный профессор юридического факультета Лейпцигского университета в Германии; советник Конституционного суда Словацкой Республики, Scopus Author ID: 55620115400; http://orcid.org/0000-0003-3826-475X, e-mail: libor.klimek@umb.sk