If, in court proceedings against individuals accused of serious fraud against value-added tax (VAT), a national judge considers that the obligation to apply the 'Taricco' judgment on the protection of the financial interests of the European Union is in conflict with the principle of the legality of crimes and sentences, he or she is not under any obligation to comply with this obligation, the Court of Justice of the EU states in a judgment returned in the framework of an accelerated procedure, on Tuesday 5 December (case C-42/17).
Moreover, this principle applies even if complying with the obligation to protect the financial interests of the EU by respecting the 'Taricco' judgment would remedy a national situation that is incompatible with Community law.
The Italian courts must take position on criminal proceedings against two persons who have been accused of serious VAT fraud and who could go unpunished if the statute of limitations of the Italian Criminal Code were applied. These proceedings could lead to sentencing if the statute of limitations was not applied, on the basis of the 'Taricco' judgment (case C-105/14) of 2005, which was returned after the crimes in this case were committed.
In this judgment, the Court asks the national judge to give full effect to article 325 of the Treaty on the Functioning of the European Union concerning the fight against any activity that could infringe the financial interests of the EU. The EU budget is funded by VAT, amongst other sources. And, according to the European judge, the Italian law on the statute of limitations in VAT matters could be in breach of article 325 TFEU if it sets a longer statute of limitations for cases of fraud against the national financial interests than those damaging the financial interests of the EU.
The Court of Justice, to which the matter was referred by the Italian Constitutional Court, rejects the reasoning of Advocate General Bot (see EUROPE 11832). It notes that the principle of the legality of crimes and sentences, which is set out in the Charter of Fundamental Rights, is essential in the member states - it is enshrined in the Italian Constitution - and in the legal order of the EU. Furthermore, under Italian law, the statute of limitations is still subject to the principle of the legality of crimes and sentences. Requirements of predictability, precision and non-retroactivity of criminal law stem from this.
Consequently, the obligation to guarantee an effective levying of EU resources, based on article 325 TFEU, may not be used to counter the principle of the legality of crimes and sentences, in the view of the Court. (Original version in French by Mathieu Bion)