Case C-280/25 [Lin II]

Summary of the request for a preliminary ruling pursuant to Article 98(1) of the Rules of Procedure of the Court of Justice

Date lodged: 10 April 2025

Referring court: Înalta Curte de Casație și Justiție (Romania)

Date of the decision to refer: 13 March 202

Appellant: Parchetul de pe lângă Curtea de Apel Oradea

Respondent/Defendant: M.G.D.

Respondent in civil action: Statul român – Agenția Națională de Administrare Fiscală prin Direcția Generală Regională a Finanțelor Publice Cluj-Napoca, prin Administrația Județeană a Finanțelor Publice Satu Mare

Subject of the action in the main proceedings

Appeal on a point of law against a judgment by an appeal court ordering the discontinuation of criminal proceedings against M.G.D. following the expiry of the statute of limitations on that party’s criminal liability for tax evasion.

Subject matter and legal basis of the request

On the basis of Article 267 TFEU, the referring court seeks an interpretation of Article 2 and Article 4(2) and (3) TEU, Article 2(2) and Article 325(1) TFEU, Article 1(1)(a) and Articles 2 and 9 of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests (‘the PIF Convention’), and Article 49(1), Article 52(3) and Article 53 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

Questions referred for a preliminary ruling

(1) In interpreting and applying Article 325 [TFEU], Article 1(1)(a) and Articles 2 and 9 of the PIF Convention [and] Article 49 of the Charter, in the absence of a provision of domestic law establishing a minimum amount for a case of fraud affecting the financial interests of the European Union to be considered serious, must the provisions of EU law be interpreted as meaning that fraud is considered serious only if it involves an amount exceeding EUR 50 000?

(2) If the answer to the previous question is in the negative, must the provisions of Article 2 and Article 4(2) and (3) TEU, Article 2(2) and Article 325(1) TFEU and Article 2(1) of the PIF Convention, as interpreted by the judgment of the Court [of 24 July 2023, Lin, C-107/23 PPU, EU:C:2023:606; ‘the Lin judgment’], [and] of Article 49(1), Article 52(3) and Article 53 of the Charter be interpreted as meaning that, in criminal proceedings concerning offences relating to [value added tax (VAT)], the national court must disapply the national standard of protection relating to the principle of the retroactive application of the more lenient criminal law (lex mitior), as this emerges from the binding case-law of the highest court of that Member State, a standard according to which procedural acts taking place before the national legislative provision governing the causes of interruption of the limitation periods for criminal liability was invalidated do not have the effect of interrupting a limitation period, where:

1. the disapplication of that national standard is incompatible with the prohibition on applying lex tertia – a principle of constitutional rank;
2. in application of that national case-law, it can be considered that the general limitation period for criminal liability had expired before the Lin judgment was delivered;
3. the disapplication, on the basis of EU law, of that national standard results in a level of protection of the fundamental rights enshrined in the Charter that is not equivalent or comparable to the protection guaranteed by Article 7 of the European Convention on Human Rights [‘the ECHR’];
4. national law does not lay down specific criteria to be applied by the court of the Member State to assess, at a preliminary stage, the systemic risk of impunity arising from the application of that national standard in cases of serious fraud affecting the financial interests of the European Union?

Provisions of European Union law relied on

Article 2 TEU

‘The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.’

Article 4(2) and (3) TEU

‘2. The Union shall respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government. It shall respect their essential State functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. …

3. Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.

The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union.

The Member States shall facilitate the achievement of the Union’s tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives.’

Article 2(2) TFEU

‘When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.’

Article 325(1) TFEU

‘The Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union’s institutions, bodies, offices and agencies.’

Article 1(1)(a) of the PIF Convention

‘For the purposes of this Convention, fraud affecting the European Communities’ financial interests shall consist of:

(a)  in respect of expenditure, any intentional act or omission relating to:

– the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities,

– non-disclosure of information in violation of a specific obligation, with the same effect …’

Article 2 of the PIF Convention

‘1. Each Member State shall take the necessary measures to ensure that the conduct referred to in Article 1, and participating in, instigating, or attempting the conduct referred to in Article 1(1), are punishable by effective, proportionate and dissuasive criminal penalties, including, at least in cases of serious fraud, penalties involving deprivation of liberty which can give rise to extradition, it being understood that serious fraud shall be considered to be fraud involving a minimum amount to be set in each Member State. This minimum amount may not be set at a sum exceeding [EUR] 50 000.

2. However in cases of minor fraud involving a total amount of less than [EUR] 4 000 and not involving particularly serious circumstances under its laws, a Member State may provide for penalties of a different type from those laid down in paragraph 1.
3. The Council of the European Union, acting unanimously, may alter the amount referred to in paragraph 2.’

Article 9 of the PIF Convention

‘No provision in this Convention shall prevent Member States from adopting internal legal provisions which go beyond the obligations deriving from this Convention.’

Article 49(1) of the Charter

‘No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national law or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed. If, subsequent to the commission of a criminal offence, the law provides for a lighter penalty, that penalty shall be applicable.’

Article 52(3) of the Charter

‘In so far as this Charter contains rights which correspond to rights guaranteed by the [ECHR], the meaning and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.’

Article 53 of the Charter

‘Nothing in this Charter shall be interpreted as restricting or adversely affecting human rights and fundamental freedoms as recognised, in their respective fields of application, by Union law and international law and by international agreements to which the Union or all the Member States are party, including the [ECHR], and by the Member States’ constitutions.’

Provisions of national law relied on

Article 20(2) of the Constituția României (Romanian Constitution)

‘Where divergence exists between the agreements and treaties on fundamental human rights to which Romania is party, and national law, the international rules shall take precedence, unless the Constitution or domestic laws contain more favourable provisions.’

Article 5 of the Codul penal (Romanian Criminal Code)

‘(1) If, between the commission of an offence and the final judgment in the case, one or more criminal laws are passed, the more lenient law shall be applied.

(2) The provisions of paragraph 1 shall also apply to legislative acts or provisions thereof that have been declared unconstitutional, and to emergency orders approved by Parliament with amendments or additions or rejected, if – during the period in which they were in force – they contained more favourable criminal provisions.’

Article 438(1)(8) of the Codul de procedură penală (Romanian Code of Criminal Procedure)

‘Judgments shall be subject to appeal in the following cases: …

8. the criminal proceedings were wrongly discontinued.’

Article 9 of Legea nr. 241/2005 (Law No 241/2005) (published in the Monitorul Oficial, Part I, No 672 of 27 July 2005, amended by Legea nr. 50/2013 (Law No 50/2013), published in the Monitorul Oficial, Part I, No 146 of 19 March 2013) – version in force on 23 January 2014

‘(1) Commission of the following acts in order to avoid fulfilling tax obligations shall constitute tax evasion and shall be punishable by a prison term of two to eight years and the loss of certain rights: …

(c) the recording, in the accounts or in other legal documents, of expenditure which does not correspond to actual transactions or the recording of other fictitious transactions;

(2) If the acts referred to in paragraph 1 give rise to a loss of more than EUR 100 000, in the equivalent in national currency, the minimum and maximum penalties shall be increased by five years.

(3) If the acts referred to in paragraph 1 give rise to a loss of more than EUR 500 000, in the equivalent in national currency, the minimum and maximum penalties shall be increased by seven years.’

Article 9 of Law No 241/2005, amended by Law No 126/2024 (published in the Monitorul Oficial, Part I, No 437 of 13 May 2024) – version currently in force

‘(1) Commission of the following acts in order to avoid fulfilling tax obligations shall constitute tax evasion and shall be punishable by a prison term of 3 to 10 years and the loss of certain rights or the imposition of a fine: …

(c) the recording, in the accounts, in an electronic invoice or in other legal documents, of expenditure which does not correspond to actual transactions or the recording of other fictitious transactions;

(2) If the acts referred to in paragraph 1 give rise to a loss of more than EUR 500 000, in the equivalent in national currency, the minimum and maximum penalties shall be increased by three years.

(3) If the acts referred to in paragraph 1 give rise to a loss of more than EUR 1 000 000, in the equivalent in national currency, the minimum and maximum penalties shall be increased by five years.’

Succinct presentation of the facts and procedure in the main proceedings

1. By a judgment of 21 March 2024, the Curtea de Apel Oradea (Court of Appeal, Oradea, Romania) dismissed the criminal proceedings against M.G.D. on the ground that the limitation period for criminal liability for complicity in continuous tax evasion alleged against M.G.D, as provided for in Article 9(1)(c) of Law No 241/2005, had expired.
2. The criminal charge was that, between 3 May 2012 and 23 January 2014, M.G.D., in the capacity of director of two commercial companies and on the basis of a single criminal plan, repeatedly and knowingly made available to B.V., co- defendant in the case, 12 tax invoices relating to fictitious purchases, which were entered by the latter in the accounts of another commercial company, with the aim of reducing the taxable base and causing damage to the State budget. The damage caused to the State budget amounted to 268 536 Romanian lei [RON] (equivalent to EUR 59 304), on which the VAT amounted to RON 163 656 (equivalent to EUR 36 142).
3. The Parchetul de pe lângă Curtea de Apel Oradea (Public Prosecutor at the Oradea Court of Appeal) lodged an appeal on a point of law against the judgment of 21 March 2024, essentially arguing that that decision had wrongly discontinued the criminal proceedings against the defendant M.G.D., even though the Lin judgment was applicable to the case and, as such, the limitation period for that party’s criminal liability had not expired. The Public Prosecutor argued that the limitation period had not expired because procedural acts took place that interrupted that limitation period, both before 25 June 2018 (date of publication in the Monitorul Oficial of the judgment of the Curtea Constituțională (Romanian Constitutional Court) No 297/2018) and after 30 May 2022 (date of publication in the Monitorul Oficial of the judgment of the Constitutional Court No 358/2022).
4. Emphasising that it is not acceptable for there to be a conflict between, on the one hand, the two judgments of the Romanian Constitutional Court and, on the other, the Lin judgment, which held that the application of the lex mitior should not have any effect on procedural acts taking place before 25 June 2018, the Public Prosecutor at the Oradea Court of Appeal requested that the binding nature of the interpretation of EU law given in the Lin judgment be taken into account and, therefore, that the appeal be upheld.
5. That appeal on a point of law is the subject of the proceedings in which the questions referred for a preliminary ruling have been raised and in which the referring court is required to rule on the merits of the grounds asserted.

Essential arguments of the parties in the main proceedings

6. Both the Public Prosecutor and M.G.D. have argued that the EU law relied on is applicable to the main proceedings and that the divergent consequences resulting from the interpretations provided by the Court of Justice of the European Union (‘the Court’) on the one hand, and by the Înalta Curte de Casație și Justiție (High Court of Cassation and Justice, Romania; ‘the ICCJ’) on the other, require the Court to rule within the framework of the mechanism laid down in Article 267 TFEU.
7. The referring court notes on that point that, although it was delivered after the Lin judgment, the judgment against which the appeal on a point of law has been brought applies the national standard relating to the application of the more favourable criminal law, as set out in judgment No 67/2022 of the ICCJ – Completul pentru dezlegarea unor chestiuni de drept (ICCJ – Chamber with jurisdiction to rule on questions of law).
8. After the matter was referred to the referring court, the ICCJ delivered two further judgments on the matter, both of which are binding on national courts. Taking into account the interpretative parameters provided by the Court in the Lin judgment, those judgments ruled on the obligation of national courts to continue to apply the national standard of protection of fundamental rights represented by the retroactive application of the more favourable criminal law, as interpreted in ICCJ judgment No 67/2022.
9. Thus, through judgment No 37 of 17 June 2024 delivered by the Chamber with jurisdiction to rule on questions of law within the ICCJ, it was established that courts cannot disapply the interpretation of questions of law relating to the application of the lex mitior principle in matters dealing with the interruption of the limitation period for criminal liability, given in judgment No 67/2022 of the [ICCJ], within the limits resulting from the Lin judgment (limits set out in the operative part of the judgment in the second sentence of paragraph 1). The same judgment established that the interpretation given by judgment No 67/2022 of the [ICCJ] will also apply, under the conditions laid down in that judgment, to procedural acts taking place before 25 June 2018, the date of publication of judgment No 297/2018 of the Romanian Constitutional Court.
10. In the grounds for that judgment, the ICCJ essentially held that, under Romanian positive law, the limitation period for criminal liability – which cannot be separated from its interruption – is an institution of substantive law subject, inter alia, to the principle of lex mitior, as declared by that supreme court in its judgment No 67/2022. The national standard of protection relating to the principle of retroactive application of more favourable criminal law – including in relation to the interruption of the limitation period for criminal liability – gives concrete expression to the principle of legality of criminal offences and penalties, as governed by Article 7 of the ECHR and Article 49 of the Charter, and guarantees more extensive protection by requiring its application as a matter of priority.
11. It was also considered that the obligation imposed on national courts by the Lin judgment has the effect of ensuring a level of protection that is not equivalent or comparable to that guaranteed by Article 7 of the ECHR, since, in assessing the compatibility of domestic rules with EU law in the field of the protection of the EU’s financial interests, the Court took into account the information and explanations provided by the referring court, which reflected inadequately and, in some cases, incorrectly, the legal situation resulting from the national judgments relating to the principle of legality of criminal offences and penalties and the effects of the judgments of the Constitutional Court on pending cases. The disapplication of the interpretation given by [ICCJ] judgment No 67/2022 would therefore imply both a breach of the fundamental principle of the legality of criminal offences and penalties, as reflected in the national legal system, and a breach of legal certainty, creating the conditions for the differentiated application of the legal treatment of the concurrence of laws over time, depending on the type of offence, based on whether an offence affects the financial interests of the Union or is another type of offence.
12. Furthermore, judgment No 16 of 16 September 2024 given by the Chamber with jurisdiction to rule on questions of law within the ICCJ established that procedural acts taking place before 25 June 2018 (date of publication in the Monitorul Oficial of judgment No 297/2018 of the Romanian Constitutional Court) have the effect of interrupting the limitation period for criminal liability, regardless of the amount of damage, without it being necessary to assess in concrete terms a systemic risk of impunity, in all cases involving offences against the financial interests of the European Union and corruption-related offences, only if the more favourable criminal law established overall by judgment No 265 of 6 May 2014 of the Romanian Constitutional Court is the Criminal Code or special legislation containing criminal provisions, in the version in force between 1 February 2014 and 24 June 2018.
13. The abovementioned [ICCJ] judgment No 16/2024 also established that procedural acts for which there is a legal obligation to notify the suspect or defendant after 30 May 2022 interrupt the limitation period for criminal liability only in respect of acts committed on or after 30 May 2022 or, with regard to acts committed previously, only if the more favourable criminal law established overall by judgment No 265 of 6 May 2014 of the Romanian Constitutional Court is the Criminal Code or special legislation containing criminal provisions, in the version in force on 30 May 2022.
14. In the grounds for its judgment No 16/2024, the ICCJ essentially stated that, in accordance with the case-law of the European Court of Human Rights (‘the ECtHR’), it is for the courts to determine and apply the provisions of the ECHR and the relevant case-law in interpreting indefeasible rights where, in relation to those rights, there is a disparity between the standard of protection conferred by the Charter, as interpreted by the Court, on the one hand, and that conferred by the ECHR, on the other, in the sense that the former is inferior to the latter.
15. The principles of legality of criminal offences, retroactive application of more favourable criminal law and absence of retroactive application of more severe criminal law fall within the category of indefeasible rights, which are inherent in the constitutional traditions of the Member States.
16. As for how the more favourable criminal law is applied in national law, the Romanian Constitutional Court ruled in judgment No 265 of 6 May 2014 on the need for the comprehensive application of the more favourable criminal law, which implies the choice – between successive laws and applying the criterion of concrete assessment – of a single applicable criminal law, the one that is most favourable. Only in such circumstances is it possible to avoid imposing different legal treatment in the event of concurrent offences (for example, taking into account the existence of grounds for interruption of the limitation period for criminal liability in the case of VAT fraud, but at the same time the absence of such grounds in the case of corporate income tax fraud, which has no connection with the EU budget), or the creation of a double standard in relation to fundamental rights, resulting in the imposition of an unlawful penalty.
17. Consequently, even after the Lin judgment, in order to determine which procedural acts have the effect of interrupting the limitation period before 28 June 2018, Romanian courts must determine the more favourable criminal law overall and avoid applying a lex tertia.
18. [ICCJ] Judgment No 16/2024 also emphasised that, as an institution of substantive criminal law, the limitation period for criminal liability is one of the criteria to be taken into account for the overall application of the more favourable criminal law and must be assessed in the context of the mechanism created by judgment No 265 of 6 May 2014 of the Romanian Constitutional Court, in order to avoid lex tertia and in the light of the rules deriving from the lex mitior principle. Because, in the period between 28 June 2018 and 30 May 2022, the limitation periods for criminal liability expired without the possibility of interruption, disapplying the case-law of the Romanian Constitutional Court would have the effect of reactivating criminal liability after the expiry of the applicable limitation periods, by virtue of a subsequent more severe criminal law, thereby infringing Article 7(1) of the ECHR.
19. Lastly, the court noted that, in the absence of clear criteria to be used to assess the systemic risk of impunity by national courts, which are required under EU law to disapply national case-law, the application by those courts of such an abstract concept – which is not clarified by law – would be such as to infringe the principle of legality of criminal offences and penalties, as guaranteed by Article 7 of the ECHR.

Succinct presentation of the reasoning in the request for a preliminary ruling

20. By its first question, the referring court asks, in essence, whether Article 325 TFEU and Article 1(1) and Articles 2 and 9 of the PIF Convention, read in the light of the principle of legality of criminal offences and penalties enshrined in the Charter, must be interpreted as meaning that, in the absence of a provision of domestic law establishing a minimum amount for a case of fraud affecting the financial interests of the Union to be considered serious, VAT fraud must be considered serious only if it involves an amount exceeding EUR 50 000.
21. The referring court observes that, according to the settled case-law of the Court, Article 325(1) TFEU obliges the Member States to counter fraud and other illegal activities affecting the financial interests of the European Union through effective deterrent measures. Given that the European Union’s own resources include, among other things, revenue from application of a uniform rate to the harmonised VAT assessment bases determined according to European Union rules, there is a direct link between the collection of VAT revenue in compliance with the EU law applicable and the availability to the EU budget of the corresponding VAT resources, since any lacuna in the collection of the first potentially causes a reduction in the second (judgments of 26 February 2013, Akerberg Fransson, C-617/10, EU:C:2013:105, paragraph 26, and of 5 December 2017, M.A.S and M.B., C42/17, EU:C:2017:936, paragraph 31).
22. At the same time, it has been established that, in order to guarantee the collection of all VAT revenue and thus to ensure the protection of 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. However, Member States must ensure, pursuant to Article 325(1) TFEU, that cases of serious fraud or other serious illegal activities affecting the financial interests of the European Union are punishable by criminal penalties that are effective and that act as a deterrent (judgments of 8 September 2015, Taricco and Others, C-105/14, EU:C:2015:555, paragraph 39; of 2 May 2018, Scialdone, C-574/15, UE:C:2018:295, paragraphs 34 and 35; and of 24 July 2023, Lin, C-107/23 PPU, EU:C:2023:606, paragraph 84).
23. Furthermore, Member States’ freedom of choice is limited by the PIF Convention, which imposes criminal law obligations on them. As is clear from Articles 1 and 2 of that convention, Member States are required, first, to classify as criminal offences conduct constituting fraud affecting the financial interests of the Union and, second, to ensure that such conduct, including VAT fraud, is punishable by effective, proportionate and dissuasive criminal penalties, including, at least in cases of serious fraud – namely fraud involving a minimum amount which may not be set by the Member States at a sum exceeding EUR 50 000 – penalties involving deprivation of liberty (judgments of 2 May 2018, Scialdone, C-574/15, EU:C:2018:295, paragraph 36; of 13 October 2022, MC, C-1/21, EU:C:2022:788, paragraph 43; and of 24 July 2023, Lin, C-107/23 PPU, EU:C:2023:606, paragraph 85).
24. Similarly, in interpreting Article 325(1) TFEU, the Court has held that criminal proceedings for tax fraud involving an amount of less than EUR 50 000 constitute implementation of EU law (judgment of 26 February 2013, Akerberg Fransson, C-617/10, EU:C:2013:105, paragraph 27).
25. However, the Court has not had occasion to rule, in a situation such as that in the main proceedings, on the interpretation of Article 2(1) and Article 9 of the PIF Convention, provisions that the referring court considers particularly relevant, in particular with regard to the discretion enjoyed by Member States when adopting domestic provisions by which they fulfil their obligations under Article 2(1) of the PIF Convention.
26. In the light of the Court’s previous case-law on the interpretation of the provisions considered relevant by the referring court and in the light of the subject matter of the case and the relevant facts, the answer to the first question referred for a preliminary ruling is, therefore, necessary in order to determine whether, under Article 325(1) TFEU and Article 1(1) and Article 2(1) of the PIF Convention, in the absence of a provision of domestic law establishing a minimum amount for a case of fraud affecting the financial interests of the Union to be considered serious, VAT fraud such as that at issue in the main proceedings, committed in aggravating circumstances specific to a continuous offence but involving a VAT amount of RON 163 656 (equivalent to EUR 36 142), must be considered serious only if it involves an amount exceeding EUR 50 000.
27. If the Court finds that EU law precludes VAT fraud such as that alleged against M.G.D. from being regarded as serious only if it involves such a minimum amount, it will be for the referring court to identify and apply, as a whole, the relevant provisions of EU law, including those relating to the limitation period for criminal liability, the interpretation of which is the subject of the second question referred for a preliminary ruling.
28. By its second question, the referring court asks, in essence, whether the provisions of Article 2 and Article 4(2) and (3) TEU, Article 2(2) and Article 325(1) TFEU, and Article 2(1) of the PIF Convention, as interpreted by the Lin judgment, and the provisions of Article 49(1), Article 52(3) and Article 53 of the Charter, must be interpreted as meaning that, in criminal proceedings concerning VAT fraud, the national court must disapply the national standard of protection relating to the principle of lex mitior, as established in judgment No 37/2024 and judgment No 16/2024 of the highest Romanian court – both of which are binding for national courts. According to that standard, the recognition of the interruptive effect, on limitation, of procedural acts taking place before the national legislative provision governing the grounds for interruption of the limitation periods for criminal liability was invalidated is incompatible with the prohibition on applying lex tertia, a principle of constitutional rank, and would have the effect of guaranteeing a level of protection of the fundamental rights enshrined in the Charter that is not equivalent or comparable to the protection guaranteed by Article 7 of the ECHR.
29. The referring court also considers it necessary to interpret those provisions of EU law in the light of a possible obligation of the national court to disapply that national standard of protection even if, in accordance with the two binding judgments of the ICCJ, it can be considered, first, that the general limitation period for criminal liability expired before the Lin judgment was delivered and, second, that, in the absence of criteria laid down by the legislature to be used by the national courts to assess the systemic risk of impunity in a significant number of cases, any application of that concept by the courts would lead to a breach of the principle of legality of criminal offences and penalties guaranteed by Article 7 of the ECHR.
30. In accordance with the Court’s settled case-law, the principle of the primacy of EU law establishes the pre-eminence of EU law over the law of the Member States. That principle therefore requires all Member State bodies to give full effect to the various EU provisions, and the law of the Member States may not undermine the effect accorded to those various provisions in the territory of those States and, therefore, the unity and effectiveness of Union law. The effects of the principle of the primacy of EU law are binding on all the bodies of a Member State, without, inter alia, provisions of domestic law, including constitutional provisions, being able to prevent that (judgments of 18 May 2021, Asociația ‘Forumul Judecătorilor din România’, C-83/19, C-127/19, C-195/19, C-291/19, C-355/19 and C-397/19, EU:C:2021:393, paragraphs 244 and 245 and the case- law cited, and of 22 February 2022, RS, C-430/21, EU:C:2022:99, paragraph 51 and the case-law cited).
31. Since it has exclusive jurisdiction to give the definitive interpretation of EU law, it is for the Court, in the exercise of that jurisdiction, to clarify the scope of the principle of the primacy of EU law in the light of the relevant provisions of that law, with the result that that scope cannot turn on the interpretation of provisions of national law or on the interpretation of provisions of EU law by a national court which is at odds with that of the Court (judgment of 22 February 2022, RS, C-430/21, EU:C:2022:99, paragraph 52 and the case-law cited).
32. The interpretation which the Court, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, gives to a rule of EU law clarifies and defines, where necessary, the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its coming into force. The national court is bound by a preliminary ruling of the Court on the interpretation of EU law. The effectiveness of Article 267 TFEU would be impaired if the national court were prevented from forthwith applying EU law in accordance with the decision or the case-law of the Court (judgment of 5 April 2016, PFE, C-689/13, EU:C:2016:199, paragraph 38 and 39).
33. As regards the meaning to be given to Article 325(1) TFEU and Article 2(1) of the PIF Convention in the light of the national standard of protection relating to the principle of lex mitior in relation to the interruption of the limitation period, the Court ruled in the Lin judgment that, in proceedings seeking to impose criminal penalties for serious fraud affecting the financial interests of the Union, national courts cannot apply that national standard to call into question the interruption of the limitation period for criminal liability by procedural acts taking place before 25 June 2018, the date of publication of judgment No 297/2018 of the Romanian Constitutional Court, since otherwise the application of the national standard would undermine the primacy, unity and effectiveness of EU law.
34. According to the principle of interpretation in conformity of national law, which is inherent in the system of the Treaties, the national court is therefore required to interpret national law, as far as possible, in conformity with the requirements of EU law, as they result from the binding case-law of the Court, and to ensure, within the limits of its jurisdiction, the full effectiveness of EU law when it rules on the dispute before it.
35. However, according to the Court’s case-law, the principle of interpretation of national law in conformity with EU law has certain limits. The obligation on national courts to refer to the content of EU law when interpreting and applying the relevant rules of domestic law is limited by general principles of law and cannot serve as the basis for an interpretation of national law that is contra legem (judgment of 9 April 2024, FY, C-582/21, EU:C:2024:282, paragraph 63 and the case-law cited).
36. Furthermore, the requirement to interpret national law in conformity with EU law entails, in particular, the obligation for national courts and tribunals to change established case-law, where necessary, if it is based on an interpretation of national law that is incompatible with EU law. Consequently, a national court cannot validly consider that it is impossible for it to interpret a provision of national law in a manner that is consistent with EU law merely because that provision has consistently been interpreted in a manner that is incompatible with EU law (judgment of 9 April 2024, FY, C-582/21, EU:C:2024:282, paragraph 65 and the case-law cited).
37. The referring court argues that the legal situation resulting from the binding national case-law subsequent to the Lin judgment differs in two essential respects from the situation examined by the Court in that case and that those differences justify the referral of the present request for interpretation of EU law.
38. On the one hand, that legal situation, which is limited to a sector to which EU law applies, namely serious VAT fraud, raises the question of the extent to which EU law precludes the application of a national standard of protection relating to the principle of the retroactive application of the more favourable criminal law in relation to the interruption of the limitation period for criminal liability, in so far as concerns the overall application of the lex mitior, while avoiding the creation of a lex tertia, a standard as established in national case-law. This particular feature of the national standard was not examined by the Court in the Lin judgment, but was explicitly applied by the ICCJ in judgment No 16/2024, when it ruled with binding effect that, even after the Lin judgment, national courts must recognise the interruptive effect of procedural acts taking place before 25 June 2018, under the conditions laid down in judgment No 265/2014 of the Romanian Constitutional Court.
39. On the other hand, this new legal situation expressly raises the question of the compatibility of the standard of protection corresponding to the requirements of EU law, as interpreted by the Court in the Lin judgment (paragraph 123), with the standard laid down in Article 7 of the ECHR. Both judgment No 37/2024 and judgment No 16/2024 of the ICCJ reflect the conclusion that the obligations imposed on courts under EU law, in a field to which that law applies, will have the effect of not ensuring the protection of fundamental rights in a manner equivalent or comparable to the protection guaranteed by the ECHR.
40. According to the referring court, this new legal situation arising from national case-law raises several questions concerning the interpretation of EU law.
41. First, by making the interruption of the limitation period for procedural acts implemented before 25 June 2018 subject to the prior determination of the more favourable nature of the criminal law applicable during that period, the national case-law makes the application of EU law, as interpreted by the Lin judgment, subject to an additional requirement. Yet such an additional requirement has not been examined by the Court.
42. However, that requirement inherent in the national standard could render the interpretation of EU law given in the Lin judgment inapplicable in practice, since there is no concrete, foreseeable situation in which the criminal law in force before 25 June 2018 – which provided for the interruption of the limitation periods, with their expiry after a longer period of time – could be considered, overall, more favourable than the law applicable in the period between 25 June 2018 and 30 May 2022, during which there were no cases in positive law in which the limitation period for criminal liability was interrupted and the limitation period thus expired after a shorter period of time.
43. Second, in order to consider that the national standard of protection corresponding to the principle of retroactive application of the lex mitior corresponds to a higher standard, as guaranteed by Article 7 of the ECHR, the referring court should start from the premiss – explicitly drawn from national case-law – that the obligation imposed on national courts under EU law, as interpreted by the Lin judgment, does not guarantee a comparable or equivalent level of protection of fundamental rights. In such a situation, the question inevitably arises as to the scope of the right enshrined in Article 49(1) of the Charter and the meaning to be given to it in EU law (judgment of 5 December 2017, M.A.S. and M.B., C-42/17, EU:C:2017:936, paragraph 54), an area in which the Court has exclusive jurisdiction for interpretation.
44. Third, the referring court must also assess whether the expiry of the limitation period for criminal liability in the main proceedings – which, according to national case-law, could have occurred on 23 March 2022, before the Lin judgment – raises questions in the light of the principle of legality of criminal offences and penalties, as guaranteed by the Charter and the ECHR.
45. Fourth, it is for the referring court to assess, ultimately, whether, within the parameters for interpreting EU law provided by the Lin judgment, the fact that its obligation to give full effect to that law is subject to its own preliminary assessment of the systemic risk of impunity in the absence of legal criteria, as it results from national case-law, is compatible with EU law.

Opinion of the national court

46. According to the referring court, in the light of the rules at issue in the first question, in the absence of a provision of domestic law establishing a minimum amount for a case of fraud affecting the financial interests of the European Union to be considered serious, EU law precludes such VAT fraud from being considered serious only where it involves an amount exceeding EUR 50 000.
47. The fact that, in fulfilling its obligations under Article 2(1) of the PIF Convention, a Member State chooses to impose criminal penalties involving deprivation of liberty for VAT fraud, regardless of the amount of damage caused, cannot mean that all acts causing damage in an amount of less than EUR 50 000 are automatically excluded from the scope of EU law. This latter threshold does not reflect a single, strictly defined criterion for classifying VAT fraud as serious, but rather a maximum limit which Member States must take into account when, in fulfilling their obligations, they choose to lay down in their domestic legislation a minimum amount for determining that fraud is serious.
48. Before the harmonisation by the EU legislature of the legal regime applicable to fraud affecting the financial interests of the Union, criminal penalties for this category of fraud, regardless of the amount of damage caused, were left to the discretion of the Member States, given their freedom to choose the penalties applicable in the field of the protection of the Union’s financial interests and corresponding to the shared competence between the Union and the Member States in that field.
49. Consequently, in the absence of a provision of domestic law laying down a minimum amount, other circumstances may be taken into account. Depending on the law of the Member State, those circumstances may constitute aggravating causes or circumstances that, in concrete terms, mean that fraud committed before 6 July 2019 can be classified as serious, such as, for example, the continuous nature of the offence committed. It is for the national courts to determine the impact of such causes or circumstances laid down in national law in the disputes before them.
50. With regard to the rules requiring interpretation through the second question, the referring court considers that, in criminal proceedings concerning serious VAT fraud, EU law does not preclude the national court from disapplying a national standard of protection relating to the principle of lex mitior, as enshrined in the binding case-law of the highest court of that Member State, where, based on that standard, the prohibition on creating a lex tertia allows consideration of the interruption of the limitation period for procedural acts taking place before the national legislative provision governing the grounds for interruption of the limitation periods for criminal liability was invalidated only if it is established that the legislation serving as the basis for implementation of those procedural acts is, overall, more favourable.
51. In fact, according to the constitutional standard established by judgment No 265/2014 of the Romanian Constitutional Court (which applies the case-law of the ECtHR relating to Article 7(1) of the ECHR), the principle of retroactive application of the more favourable criminal law implies that, in the event of a succession of legal regimes, the court must choose and apply the law that, overall, guarantees a more favourable situation for the accused, without, however, allowing the favourable provisions of successive laws to be combined and a lex tertia to be created by the courts.
52. In the case of Member States, the concept of law includes not only domestic law but also Union law, which, as a result of accession, in the light of the case-law of the Court (judgment of 6 March 2018, Achmea, C-284/16, EU:C:2018:158, paragraph 41), must be considered an integral part of the law in force in each Member State, characterised by autonomy, primacy and direct effect.
53. In national law, the rules governing the limitation period for criminal liability for fraud affecting the financial interests of the Union have been incorporated into two legal regimes relevant to the main proceedings, namely:

– a first variant applicable until 25 June 2018, according to which procedural acts taking place during that period had the effect of interrupting the limitation period (this variant also incorporates the relevant EU law as interpreted in the judgments of 8 September 2015, Taricco and Others, C-105/14, EU:C:2015:555, and of 5 December 2017, M.A.S and M.B., C-42/2017, EU:C:2017:936), and

– a second variant applicable in the period between 25 June 2018 and 30 May 2022, according to which, following judgment No 297/2018 of the Romanian Constitutional Court, procedural acts did not have the effect of interrupting the limitation period (for this variant, EU law as interpreted in the Lin judgment is relevant).

54. According to the referring court, the retroactive application of the more favourable criminal law on the interruption of the limitation period for criminal liability for fraud affecting the interests of the Union does not imply a possible combination of the two regulatory options, but, on the contrary, requires the choice of one of them, the more favourable, as determined in concrete terms by the national court on the basis of the specific features of the case and the relevant criteria deriving also from EU law.
55. National courts are, therefore, free to determine whether the more favourable criminal law overall is the law in force until 25 June 2018 or, conversely, the law subsequent to that date. In exercising that prerogative, the national courts must nevertheless interpret the law applicable in the period between 25 June 2018 and 30 May 2022 in a manner consistent with EU law, as interpreted by the Court, in order to ensure the unity and effectiveness of that law.
56. From this latter perspective, the choice of the more favourable legal regime applicable to the limitation period for fraud affecting the financial interests of the Union does not, in itself, lead to the creation of a lex tertia.
57. According to the referring court, a hypothetical situation such as that highlighted in judgment No 16/2024 of the ICCJ – concerning a possible concurrence between offences affecting the financial interests of the Union and offences falling outside the scope of EU law – raises questions relating solely of the application of national law and can be examined in concrete terms only by the national courts. However, such a hypothetical situation should not affect the primacy and direct effect of EU law, since the recognition of the full effectiveness of that law cannot depend on the interpretation given to the applicable national legislation in areas subject to rules of domestic law.
58. As regards the extent to which EU law requires the national court to disapply the national standard of protection relating to the application of the more favourable criminal law, even if it can be considered, on the basis of national case-law, that the limitation period for criminal liability for fraud affecting the financial interests of the Union expired before the Lin judgment was delivered, the referring court submits that the answer to that question involves an assessment of the foreseeable and accessible nature of the interpretation of EU law provided by the Court before the Lin judgment. A definitive conclusion on this point requires the Court to interpret the provision in order to ensure the unity and effectiveness of EU law.
59. In any event, according to the referring court, the legal regime applicable to the limitation period for criminal liability for fraud affecting the financial interests of the Union – as this results from national legislation interpreted in accordance with EU law – cannot be regarded as reflecting a standard of protection relating to the principle of retroactive application of the more favourable criminal law that is not equivalent or comparable to the standard laid down in Article 7 of the ECHR.
60. The Court has held that the rules governing the limitation period for criminal liability do not fall within the scope of Article 49(1) of the Charter.
61. For its part, the ECtHR has held that rules on limitation periods are, in principle, procedural rules, and therefore Article 7 of the ECHR does not preclude the immediate application to pending proceedings of rules extending limitation periods, where the acts have never been time-barred. However, Article 7 prohibits the reinstatement of criminal penalties for acts for which the limitation period has expired under national law.
62. National law does not contain any express provisions that can be used as a basis for considering that the limitation period for criminal liability had expired, in respect of acts such as those at issue in the main proceedings, before the Lin judgment was delivered. Such a conclusion could only be drawn if it were accepted, as the sole effect of the application of binding national case-law and contrary to the Court’s ruling in the Lin judgment, that procedural acts taking place before 25 June 2018 do not have the effect of interrupting the limitation period.
63. Without forgetting that the mechanism established by Article 267 TFEU is based on a clear separation of functions between national courts and the Court, the referring court nevertheless asks the Court, when determining the meaning to be given to EU law, to take into account the following particular feature of the national standard relating to the application of the more favourable criminal law on limitation periods. While it is true that, traditionally, the limitation period for criminal liability has been classified as falling within substantive criminal law, Romanian criminal law has nevertheless gradually introduced, since 2012, a series of exceptions to the prohibition on the retroactive application of stricter rules in relation to the limitation period for criminal liability for certain serious offences.
64. The relevant national criminal law provisions in this regard provide that the limitation period does not preclude criminal liability for murder and intentional offences resulting in the death of the victim for which the limitation period had not expired on the date when those provisions entered into force.
65. In its judgment No 473 of 12 July 2018, the Romanian Constitutional Court held that these provisions are not contrary to the constitutional principle of retroactive application of the more favourable criminal law, even if they are more severe and apply retroactively to acts committed before they entered into force. According to the referring court, the position of the Constitutional Court reflects the primacy accorded, at constitutional level, to the procedural aspect of the legislation on limitation periods, since the consequence of that constitutional choice is the retroactive application of stricter rules to a specific category of serious offences.
66. The referring court also considers relevant the position taken by the ECtHR in a similar legal situation, arising from differences in case-law on how to apply criminal laws on limitation periods over time. The ECtHR ruled that there is no question of a violation of Article 7 of the ECHR by a provision that would have the effect of reinstating the possibility of punishing acts for which the limitation period has expired, where the person concerned was convicted for acts for which the right to prosecute had never been extinguished by the limitation period and had not suffered – as a result of the change in case-law on limitation periods – greater harm than that to which he or she was exposed at the time the offence was committed (Borcea v. Romania, 55959/14, CE:ECHR:2015:0922DEC005595914, § 65).
67. Finally, the referring court considers that, in accordance with its obligations under EU law, within the parameters provided by the Lin judgment (paragraph 91), its duty to give full effect to that law in criminal proceedings relating to serious VAT fraud cannot be made subject to a preliminary and separate analysis of the existence of a systemic risk of impunity for such fraud.

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