C-186/98
ECLI:EU:C:1999:264
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NUNES AND DE MATOS
OPINION OF ADVOCATE GENERAL JACOBS delivered on 20 May 1999 *
1. The issue in this case, referred by the 4 a (refund of the sums advanced and non- Vara Criminal do Círculo do Porto (Fourth payment of the balance claimed), were Criminal Chamber of the Oporto District), sufficient to safeguard the financial inter- is what action may be taken by Member ests of the European Union; and that States where individuals make improper therefore, in view of the primacy of Com- use of Community funds. munity law over national law, a Member State could not classify the conduct covered by the relevant Community legislation as a criminal offence. The national court refer- red for a preliminary ruling the questions :
2. The questions were referred in the con- text of criminal proceedings against Mrs Nunes and Mrs de Matos. The facts are not (1) whether the Community legislation in set out in the order for reference; it appears force at the time of the acts imputed to however from a brief description in the the defendants classified such conduct annex to the order that both defendants are as constituting a criminal offence; and charged with forgery and that Mrs Nunes is additionally charged with embezzlement of public funds. The charges, brought under Portuguese law, 1concern events that allegedly took place in 1986 and 1987 in connection with grants for vocational train- ing received from the European Social Fund. Before the national court, Mrs Nunes argued that Community legislation laid down sanctions for the improper use of Community funds by private individuals; (2) whether a Member State is empowered that those sanctions, being of a civil nature to impose criminal penalties for con- duct which, being harmful only to Community financial interests, attracts * Original language: English. only a sanction of a civil nature under 1 — Article 228(1) and (3) and Article 424 of the Penal Code as in force at the relevant time. Community legislation.
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3. Written observations have been submit- ded, the Community legislation plainly ted by Mrs Nunes, the Finnish and Portu- does not seek to lay down exhaustively guese Governments and the Commission. the sanctions which may be imposed by In accordance with Article 104(4) of the Member States where the conduct of the Rules of Procedure, the Court decided that persons concerned constitutes a criminal the procedure would not include a hearing. offence under national law. Whether Com- munity legislation classifies such conduct as constituting a criminal offence is therefore not relevant to the essential issue before the Court. The Finnish and Portuguese Gov- ernments and the Commission have stated that the EC Treaty conferred no compe- tence on the Community in criminal law. As they recognise, however, that does not preclude Member States from taking crim- 4. The Community legal framework is set inal proceedings in cases such as the by Council Decision 83/516/EEC of present. The definition of embezzlement 17 October 1983 on the tasks of the and other crimes as criminal offences, and European Social Fund. 2 That decision the range of penalties that may be imposed, provides for general rules on the Fund may be matters which do not currently fall and is implemented by Council Regulation within the scope of Community law, (EEC) No 2950/83. 3Article 6(1) of Reg- regardless of the nature of the funds ulation No 2950/83 provides that 'when involved. But, as becomes clear from the fund assistance is not used in conformity answer to the national court's second with the conditions set out in the decision question, Member States are required by of approval, the Commission may suspend, Community law to take all appropriate reduce or withdraw the aid after having measures to prevent and punish the misuse given the relevant Member State an oppor- of Community funds. tunity to comment'. 4Article 6(2) provides for the refund of sums not used in accor- dance with the conditions.
5. By prescribing those consequences where 6. As to the second question, it is clear funds are not used for the purposes inten- from the case-law of the Court that a Member State may impose criminal penal- ties for offences involving Community 2 — OJ 1983 L 289, p. 38. funds: see for example Commission v 3 — Regulation of 17 October 1983 on the implementation of Greece, 5where the Court held that Greece Decision 83/516/EEC on the tasks of the European Social Fund, OJ 1983 L 289, p. 1. 4 — See further on Article 6(1) of Regulation No 2950/83 Case T-142/97 Branco v Commission, judgment of 15 September 1998. 5 — Case C-68/88 [1989] ECR 2965.
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had infringed Article 5 of the EC Treaty Community law, with the same diligence as (now Article 10 EC) by failing to institute that which they bring to bear in imple- criminal or disciplinary proceedings against menting corresponding national laws.' 6. the persons involved in evading agricultural levies which were payable to the Commu- nity budget. In its judgment, the Court stated that:
'... where Community legislation does not specifically provide any penalty for an infringement or refers for that purpose to 7. That judgment was affirmed in Han- national laws, regulations and administra- sen, 7which concerned a Community reg- tive provisions, Article 5 of the Treaty ulation on road transport requiring Mem- requires the Member States to take all ber States to take the measures necessary to measures necessary to guarantee the appli- ensure compliance with its provisions. The cation and effectiveness of Community law. Court ruled that a Member State could impose strict criminal liability for infringe- ment and repeated the ruling of the Court in Commission v Greece set out above.
For that purpose, whilst the choice of penalties remains within their discretion, they must ensure in particular that infrin- gements of Community law are penalised under conditions, both procedural and substantive, which are analogous to those applicable to infringements of national law of a similar nature and importance and which, in any event, make the penalty effective, proportionate and dissuasive. 8. Those judgments to my mind resolve the second question which has been referred to the Court. They make it clear, moreover, that Member States are not merely empow-
6 — At paragraphs 23 to 25 of the judgment. See also paragraph 12 of the Opinion of Advocate General Tesauro. Moreover, the national authorities must 7 — Case C-326/88 Anklagemyndigheden v Hansen & Søn proceed, with respect to infringements of [1990] ECR I-2911, paragraph 17 of the judgment.
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ered to impose criminal sanctions but are munities' financial interests. 8That Con- obliged to take all effective measures, vention, based on Article K.3 of the Treaty which may include criminal sanctions. That on European Union (Articles K to K.9 of obligation flows from Article 5 of the EC the Treaty on European Union have been Treaty, which, as mentioned in Commis- replaced by Articles 29 EU to 42 EU), is not sion v Greece, requires the Member States yet in force pending ratification by all the to take all measures necessary to guarantee Member States. However, it is none the less the application and effectiveness of Com- of interest to note the reference in the munity law. preamble to the Contracting Parties' con- viction that 'protection of the European Communities' financial interests calls for the criminal prosecution of fraudulent conduct injuring those interests' and to 'the need to make such conduct punishable with effective, proportionate and dissuasive criminal penalties', 9reflecting the formula used by the Court in Commission v Greece.
9. The nature of the obligation imposed by Article 5 of the EC Treaty is underlined by the first paragraph of Article 209a of the EC Treaty (now Article 280(2) EC), which expressly requires Member States to take the same measures to counter fraud affect- ing the financial interests of the Commu- nity as they take to counter fraud affecting their own financial interests. Although that article was not in force at what appears to have been the material time (it was intro- duced by the Maastricht Treaty), it none the less serves to highlight the tenor of the obligation in Article 5.
11. It may finally be noted that, according to the Portuguese Government, the national legislation is in conformity with the princi- ples laid down by the Court in Commission v Greece in that it treats in the same way acts against the financial interests of the Community and acts against the national budget.
8 — Convention drawn up on the basis of Article K.3 of the 10. I would also mention the Convention Treaty on European Union, annexed to Council Act 95/C 316/03 of 26 July 1995, OJ 1995 C 316, p. 48. on the protection of the European Com- 9 — See the fourth and fifth recitals in the preamble.
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Conclusion
12. I accordingly consider that the questions referred by the 4 a Vara Criminal do Círculo do Porto should be answered as follows:
(1) Community law does not classify acts of embezzlement or improper use of Community public funds as criminal.
(2) Member States are required by Article 5 of the EC Treaty (now Article 10 EC) to take all effective measures to prevent and penalise such conduct, which measures may include criminal sanctions; in that case the penalty provided for must be similar to that imposed in the event of infringement of provisions of national law of a similar nature and importance and be effective, proportionate and dissuasive.
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