Case C-496/25 [Lin III]
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:
21 July 2025
Referring court:
Înalta Curte de Casație și Justiție (Romania)
Date of the decision to refer:
18 July 2025
Appellants:
Parchetul de pe lângă Curtea de Apel București
D.S.N.
D.C.A.
S.R.
L.D.
I.L.
B.T.
B.M.
G.A.A.
A.D.
G.C.
A.D.
Respondents:
Statul român – Agenția națională de Administrare Fiscală
A.G.
Subject matter of the main proceedings
Appeals brought before the Înalta Curte de Casație și Justiție (High Court of Cassation and Justice, Romania) by the Parchetul de pe lângă Curtea de Apel București (Prosecutor’s Office attached to the Court of Appeal, Bucharest, Romania) and by 11 defendants against the criminal judgment by which the Curtea de Apel București (Court of Appeal, Bucharest, Romania) (i) acquitted the defendants on charges of conspiracy by a taxpayer to fraudulently evade taxes, and consequently having obtained, without being entitled to do so, sums of money by way of refund or set-off of VAT, an offence under Article 8(2) of Legea nr. 241/2005 (Law No 241/2005), and (ii) dismissed the criminal proceedings on the grounds that the criminal liability for the offence of tax fraud, which was the purpose of the conspiracy, had become time-barred.
Type and subject matter of the request
On the basis of Article 267 TFEU, the referring court is seeking an interpretation of Articles 2 and 4(2) and (3) TEU, Articles 2(2) and 325(1) TFEU, Articles 1(1) and 2 of the PIF Convention, and Articles 20, 49(1), 52(3) and 53 of the Charter of Fundamental Rights of the European Union.
Questions referred for a preliminary ruling
(1) When interpreting Article 325 TFEU and Articles 1(1) and 2(1) of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union on the protection of the European Communities’ financial interests (‘the PIF Convention’), can a conspiracy involving several persons for the purpose of committing VAT fraud be regarded as fraud or other illegal activities affecting the financial interests of the European Union, regardless of whether the fraud constituting the purpose of the conspiracy is actually committed?
(2) If the answer to the previous question is in the affirmative, should the provisions of Articles 2 and 4(2) and (3) TEU, Articles 2(2) and 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] Articles 20, 49(1), 52(3) and 53 of the Charter of Fundamental Rights of the European Union [‘the Charter’] be interpreted as meaning that, in criminal proceedings concerning offences relating to VAT and related offences, 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, according to which standard 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:
- the disapplication of that national standard is incompatible with the prohibition on applying lex tertia – a principle of constitutional rank;
- 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;
- 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’];
- 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?
Relevant legal provisions
Provisions of national law
Constituția României (Romanian Constitution), Article 20
‘(1) The constitutional provisions on citizens’ rights and freedoms shall be interpreted and applied in conformity with the Universal Declaration of Human Rights, and the agreements and other treaties to which Romania is a party.
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.’
Codul penal (Romanian Criminal Code), Article 5
‘(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 decree-laws 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.’
Codul de procedură penală (Romanian Code of Criminal Procedure), Article 471(1)
‘(1) In order to ensure the uniform interpretation and application of the law by all courts, … the colegii de conducere (administrative panels) of the Courts of Appeal … are required to refer to the High Court of Cassation and Justice for a ruling on questions of law that have been decided differently by the courts’.
Codul de procedură penală (Romanian Code of Criminal Procedure), Article 474(4)
‘(4) The interpretation of the points of law that have been adjudicated shall be binding on the courts from the date on which the decision is published in the Monitorul Oficial al României, Partea I (Official Gazette of Romania, Part I).’
Codul de procedură penală (Romanian Code of Criminal Procedure), Article 475
‘If, during the proceedings, a full panel of judges of the High Court of Cassation and Justice, the Court of Appeal or the tribunalul (Regional Court), seized of the case as the court of last instance, finds that there is a question of law on which the decision in the case depends and on which the High Court of Cassation and Justice has not ruled in a previous judgment or in an appeal in the interests of the law, and is not the subject of a pending appeal in the interests of the law, may request that the High Court of Cassation and Justice give a ruling resolving, in principle, the question of law referred to it’.
Codul de procedură penală (Romanian Code of Criminal Procedure), Article 477(3)
‘(3) The interpretation of the questions of law shall be binding on the courts from the date on which the decision is published in the Monitorul Oficial al României, Partea I (Official Gazette of Romania, Part I)’.
Legea nr. 241/2005 pentru prevenirea și combaterea evaziunii fiscale (Law No 241/2005 on the prevention and combating of tax evasion), Article 8.
‘(1) It is a criminal offence punishable by imprisonment for a term of between 3 and 10 years and by the deprivation of certain rights or by a financial penalty for a taxpayer to determine the amount of taxes, duties or contributions payable in bad faith, thereby obtaining, without being entitled to do so, sums of money by way of refunds or repayments from the consolidated general budget or set-offs against the consolidated general budget.
(2) Any conspiracy formed for the purpose of committing the offence referred to in paragraph (1) is a criminal offence punishable by imprisonment for a term of between 5 and 15 years and the deprivation of certain rights.
(3) Any attempts to commit the offences referred to in paragraphs (1) and (2) shall also be punishable’.
Provisions of EU law
Articles 2 and 4(2) and (3) TEU
Articles 2(2) and 325(1) TFEU
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, Articles 1(1) and 2.
Charter of Fundamental Rights of the European Union, Articles 20, 49(1), 52(3) and 53.
Provisions of international law
The European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), Article 7.
Relevant case-law
Case-law of the national courts
Decizia nr. 265 din 6 mai 2014 a Curții Constituționale (judgment No 265 of 6 May 2014 of the Curtea Constituțională (Constitutional Court)), which upheld the objection of unconstitutionality and found that the provisions of Article 5 of the Romanian Criminal Code are constitutional in so far as they do not allow the provisions of subsequent laws to be combined in determining and applying the most favourable criminal law. The Constitutional Court also ruled that the provisions of Article 5 of the Criminal Code, as interpreted to allow judges, when determining the most favourable criminal law, to combine the provisions of the 1969 Criminal Code with those of the current Criminal Code, are contrary to the constitutional provisions relating to the separation and balance of powers in the State, as well as to the role of Parliament as the sole legislative authority in the country.
Decizia nr. 37 din 17 iunie 2024 a Înaltei Curți de Casație și Justiție – Completul pentru dezlegarea unor chestiuni de drept (judgment No 37 of 17 June 2024 of the Înaltei Curți de Casație și Justiție – Completul pentru dezlegarea unor chestiuni de drept (High Court of Cassation and Justice, Section for the interpretation and resolution of questions of law))
By that judgment, the High Court of Cassation and Justice (‘the ICCJ’) 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.
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.
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 violation of the fundamental principle of the legality of criminal offences and penalties, as reflected in the national legal system, and a violation 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.
Finally, 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 violate the principle of legality of criminal offences and penalties, as guaranteed by Article 7 of the ECHR.
Decizia nr. 16 din 16 septembrie 2024 a Înaltei Curți de Casație și Justiție – Completul pentru soluționarea recursului în interesul legii (judgment No 16 of 16 September 2024 of the Înalta Curte de Casație și Justiție – Completul pentru soluționarea recursului în interesul legii (High Court of Cassation and Justice, Section for the resolution of appeals in the interests of the law))
By that judgment, the ICCJ established that procedural acts taking place before 25 June 2018 [date of publication in the Monitorul Oficial (Official Gazette of Romania) 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.
That 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.
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.
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.
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.
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.
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.
Finally, 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 violate the principle of legality of criminal offences and penalties, as guaranteed by Article 7 of the ECHR.
Case-law of the EU courts
Judgment of 24 July 2023, Lin, C-107/23 PPU
Case-law of international courts
Judgment of the European Court of Human Rights of 22 September 2015, Borcea v. Romania, CE:ECHR:2015:0922DEC005595914, § 65 Succinct presentation of the facts and procedure in the main proceedings
- By criminal judgment of 7 October 2024, the Court of Appeal of Bucharest, Romania, acquitted the defendants of the charge of having committed the offence referred to in Article 8(2) of Law No 241/2005 and dismissed the criminal proceedings on the grounds that the criminal liability for the offence of tax fraud, which was the purpose of the conspiracy, had become time-barred.
- Eleven defendants and the Prosecutor’s Office attached to the Court of Appeal, Bucharest, Romania, appealed that judgment to the ICCJ, the referring court.
- The appeal lodged by the Prosecutor’s Office attached to the Bucharest Court of Appeal concerns only the decision to acquit the defendant of the charge of conspiracy with the aim of committing tax fraud in order to obtain, without being entitled to do so, sums of money by way of refunds, repayments or set-off of VAT, an offence punishable under national law separately and independently from tax fraud.
- Noting that in the present case all the necessary conditions are met for finding that the defendants committed the offence of conspiracy with the aim of fraudulently evading VAT, the Prosecutor’s Office attached to the Bucharest Court of Appeal asks the referring court to also dismiss the criminal proceedings on that point, on the ground that the criminal liability has become time-barred.
- In fact, according to the Prosecutor’s Office attached to the Bucharest Court of Appeal, there was a long-standing agreement among the defendants to act in concert, in accordance with a pre-established plan, in order to obtain sums of money without being entitled to do so by way of reimbursement, refund or set-off of VAT.
- The criminal scheme involved the purchase of fictitious goods at low prices through commercial companies controlled by the defendants. These goods were then invoiced to other companies, also controlled by the defendants, at inflated prices, so that the VAT deductible on those fictitious transactions could ultimately be claimed as a refund by the defendants who controlled the latter companies.
- The commercial transactions described generated VAT, which the ‘buffer’ companies were required to pay to the State budget. However, this obligation was extinguished by the recording of fictitious expenses at other companies controlled by the defendants, which had the role of issuing invoices for that purpose. For their part, those companies discharged their obligation to pay the VAT levied following the issuance of invoices by recording fictitious expenses with other companies controlled by the defendants, and the transactions continued with the creation of fictitious commercial circuits.
- With regard to the offences of tax fraud in the strict sense committed through that criminal scheme, the court of first instance found that the criminal liability had become time-barred and that the total value of the damage caused by the acts RON 7 208 216, corresponding to the VAT refunded, since the decision had not been challenged by the Prosecutor’s Office attached to the Bucharest Court of Appeal in that regard.
- The judgment of the Bucharest Court of Appeal was delivered after the Lin Before referring the case to the referring court, the ICCJ, in the exercise of its judicial functions intended to ensure uniform judicial practice, delivered judgments No 37/2004 and No 16/2004.
Succinct presentation of the reasoning in the request for a preliminary ruling
10 By its first question, the referring court essentially asks whether Article 325 TFEU and Articles 1(1) and 2(1) of the PIF Convention, read in the light of the principle of legality of criminal offences and penalties enshrined in the Charter, should be interpreted as meaning that a conspiracy formed by several persons for the purpose of committing VAT fraud can be regarded as fraud or other illegal activity affecting the financial interests of the European Union, regardless of whether the fraud constituting the purpose of the conspiracy is actually committed.
11 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., C-42/17, EU:C:2017:936, paragraph 31).
12 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 2 May 2018, Scialdone, C-574/15, UE:C:2018:295, paragraphs 34 and 35, of 8 September 2015, Taricco and Others, C-105/14, EU:C:2015:555, paragraph 39; and of 24 July 2023, Lin, C-107/23 PPU, EU:C:2023:606, paragraph 84).
13 The Court has also held that even irregularities having no specific financial impact may be seriously prejudicial to the financial interests of the European Union. Accordingly, Article 325(1) TFEU can cover not only acts that actually cause a loss of own resources but also attempts to commit such acts (judgment of the Court of Justice of 21 December 2021, Euro Box Promotion and Others, C-357/19, C-379/19, C-547/19, C-811/19 and C-840/19, EU:C:2021:1034, paragraph 187).
14 By its second question, the referring court asks, in essence, whether the provisions of Articles 2 and 4(2) and (3) TEU, Articles 2(2) and 325(1) TFEU, and Article 2(1) of the PIF Convention, as interpreted by the Lin judgment, and the provisions of Articles 20, 49(1), 52(3) and 53 of the Charter, should 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 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.
15 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.
16 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).
17 Because 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).
18 The interpretation which the Court, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, gives to a rule of European Union 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).
19 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.
20 According to the principle of interpretation in conformity with 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.
21 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).
22 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).
23 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.
24 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.
25 On the other hand, this new legal situation explicitly 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.
26 According to the referring court, this new legal situation arising from national case-law raises several questions concerning the interpretation of EU law.
27 First, by making the interruption of the limitation period for procedural acts implemented before 25 June 2018 subject to the prior determination that the criminal law applicable during that period is more favourable, 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.
28 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.
29 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.
30 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.
31 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.
32 Fifth, the referring court considers it useful – for the purpose of answering the second question referred – to take into account, on the one hand, the existence of national case-law reflecting the application of the national standard of protection of the lex mitior as this results from those binding judgments of the ICCJ and, on the other hand, the extent to which the future disapplication of that national standard in pending criminal proceedings concerning facts falling within the scope of EU law would be contrary to the principle of equality enshrined in Article 20 of the Charter.
Opinion of the national court
33 According to the referring court, with regard to the provisions at issue in the first question, a conspiracy of several persons for the purpose of committing VAT fraud can be regarded as fraud or other illegal activity affecting the financial interests of the European Union, regardless of whether the fraud that is the purpose of the conspiracy is actually committed.
34 The expression ‘other illegal activities affecting the financial interests of the Union’ in Article 325(1) TFEU could include not only (completed) acts of VAT fraud, but also attempts to commit such acts and even preparatory acts, such as a conspiracy for the purpose of committing VAT fraud, provided that they are punishable under national law.
35 Therefore a conspiracy formed for the purpose of committing an offence contrary to the interests protected under Article 325(1) TFEU should be treated or even classified, from the point of view of the scope of EU law, as an offence involving fraud of the same kind actually committed. The fact that the perpetrator succeeded or failed to obtain the unlawful refund of VAT should not affect the scope of the concept of ‘other illegal activities’ within the meaning of Article 325(1) TFEU, which does not expressly require that damage actually occur.
36 Furthermore, Article 1(3) of the PIF Convention must also be taken into account. That article states that Member States are required to classify preparatory acts for offences affecting the financial interests of the Union as criminal offences.
37 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.
38 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.
39 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.
40 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).
41 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.
42 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.
43 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.
44 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 to 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.
45 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. The same applies to the question as to whether the disapplication of that national standard is in line with the principle enshrined in Article 20 of the Charter. In both cases, a definitive conclusion on this point requires the Court to interpret the provision in order to ensure the unity and effectiveness of EU law.
46 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.
47 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.
48 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.
49 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.
50 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.
51 The relevant national criminal law provisions in this regard stipulate 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.
52 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.
53 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).
54 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.
Request for an expedited procedure
55 In support of its request for an expedited procedure, the referring court notes, first, that a quick answer from the Court is needed to clear up the uncertainty of national courts about how to interpret and apply EU law in a large number of criminal cases. In so far as the request for a preliminary ruling seeks to clarify the operative part of the Lin judgment, a prompt response will ensure the uniformity and effective application of EU law in a sensitive area where differences in national case-law could undermine the rights of persons subject to criminal proceedings and the financial interests of the EU. On the other hand, in the specific context of this appeal case, the urgency is also justified by the need to clarify the legal situation of the defendants, who have been involved in criminal proceedings for a significant period of time, in order to avoid any risk of the proceedings being closed.
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