(April 30, 2015)
On April 30, 2015 the opinion of Advocate General Kokott in Case C‑105/14 Ivo Taricco and Others (ECLI:EU:C:2015:293) was published on the website of the European Court of Justice (CJEU).
· In so far as it provides for the limitation period to be extended by only a quarter following interruption and, therefore, allows crimes to become time barred, resulting in impunity, even though criminal proceedings were brought in good time, has the amendment to the last subparagraph of Article 160 of the Italian Criminal Code made by Law No 251 of 2005 led to infringement of the provision protecting competition in Article 101 TFEU?
· Has the Italian State, in amending by Law No 251 of 2005 the last subparagraph of Article 160 of the Italian Criminal Code, in so far as this provides for the limitation period to be extended by only a quarter following interruption, which means therefore that there are no penal consequences for crimes committed by unscrupulous economic operators, unlawfully introduced a form of aid prohibited by Article 107 TFEU?
· Has the Italian State, in amending by Law No 251 of 2005 the last subparagraph of Article 160 of the Italian Criminal Code, in so far as this provides for the limitation period to be extended by only a quarter following interruption, thus conferring impunity on those who exploit the Community directive, unlawfully added a further exemption to those exhaustively listed by Article 158 of Council Directive 2006/112/EC of 28 November 2006?
· In so far as it provides for the limitation period to be extended by only a quarter following interruption and, therefore, fails to penalise conduct that deprives the State of the resources necessary in order to meet its obligations to the European Union also, has the amendment to the last subparagraph of Article 160 of the Italian Criminal Code made by Law No 251 of 2005 led to breach of the principle of sound public finances laid down by Article 119 TFEU?
The dispute in the main proceedings and the questions referred for a preliminary ruling
· Mr Ivo Taricco and a number of other persons (also referred to as ‘the accused’) are charged with having established a criminal organisation or having participated as a member in such an organisation in the period from 2005 to 2009. The purpose of that criminal organisation is said to have been the commission of the criminal offences of producing false invoices and submitting fraudulent VAT returns through the use of false invoices.
· The false invoices, which amounted in total to several million euros, related to commercial transactions involving champagne. It is alleged that, on the basis of agreements between the accused, domestic sales of champagne were, with the assistance of a number of undertakings each statutorily represented by persons from among the accused, falsely recorded as intra-Community supplies.
· At the centre of those activities was the company Planet Srl. It knowingly took receipt of false invoices from a number of other undertakings (so-called ‘missing traders’) which in turn acted as purported importers of champagne. Planet entered those invoices in its accounts, deducting the VAT recorded in each of them as input tax and, subsequently, submitting false annual VAT returns. In this way, Planet was able to procure champagne at costs far below the market price and, ultimately, to distort competition. As for the ‘missing traders’, some of them did not submit any annual VAT returns at all, while others submitted returns but did not actually pay the corresponding VAT.
· On completion of the preliminary investigations, charges were brought against the defendants. The application to commit the defendants for trial was initially made to the Tribunale di Mondovì (District Court, Mondovì). Following a series of objections raised by the defendants’ lawyers at the preliminary hearing, as a result of which the proceedings were put back to the preliminary investigation stage, the criminal proceedings are again at the stage of the preliminary hearing, now pending before the Tribunale di Cuneo (District Court, Cuneo), the referring court. At this point in the proceedings, the judge conducting the preliminary hearing has to determine whether, on the basis of the results of the investigations, there are grounds for committing the defendants for trial and fixing a date for the trial.
· The referring court states that, under the Italian provisions on the limitation period for proceedings, the prosecution of all the tax offences with which the defendants are charged will — even taking into account the statutory extension of the limitation period on account of various measures which have caused that period to be interrupted — become time-barred on 8 February 2018 at the latest. Indeed, the prosecution of one of the defendants, Mr Anakiev, has been time-barred since 11 May 2013.
· As the referring court points out, it is ‘quite likely’ that the prosecution of all the defendants in the present case will become time-barred before a final judgment is given. As the referring court says, that state of affairs is not peculiar to the present case but is found in many criminal proceedings brought in Italy, particularly those relating to economic offences, which, by their very nature, often require particularly extensive investigations and are highly complex.
· In the light of the foregoing, the referring court expresses the concern that the limitation regime in Italy — contrary to the purpose it is actually intended to serve — is in reality becoming a ‘guarantee of impunity’ for economic criminals and that Italy is effectively neglecting its obligations under EU law. It attributes this primarily to Law No 251/2005, under which limitation periods which are interrupted are now extended by only a quarter, whereas they were previously extended by half.
· By order of 17 January 2014, received on 5 March 2014, the Tribunale di Cuneo referred the following questions to the Court for a preliminary ruling:
1. In so far as it provides for the limitation period to be extended by only a quarter following interruption and, therefore, allows crimes to become time barred, resulting in impunity, even though criminal proceedings were brought in good time, has the amendment to the last subparagraph of Article 160 of the Italian Criminal Code made by Law No 251 of 2005 led to infringement of the provision protecting competition in Article 101 TFEU?
2. Has the Italian State, in amending by Law No 251 of 2005 the last subparagraph of Article 160 of the Italian Criminal Code, in so far as this provides for the limitation period to be extended by only a quarter following interruption, which means therefore that there are no penal consequences for crimes committed by unscrupulous economic operators, unlawfully introduced a form of aid prohibited by Article 107 TFEU?
3. Has the Italian State, in amending by Law No 251 of 2005 the last subparagraph of Article 160 of the Italian Criminal Code, in so far as this provides for the limitation period to be extended by only a quarter following interruption, thus conferring impunity on those who exploit the Community directive, unlawfully added a further exemption to those exhaustively listed by Article 158 of Council Directive 2006/112/EC of 28 November 2006?
4. In so far as it provides for the limitation period to be extended by only a quarter following interruption and, therefore, fails to penalise conduct that deprives the State of the resources necessary in order to meet its obligations to the European Union also, has the amendment to the last subparagraph of Article 160 of the Italian Criminal Code made by Law No 251 of 2005 led to breach of the principle of sound public finances laid down by Article 119 TFEU?
· Mr Anakiev was the only one of the accused in the dispute in the main proceedings to take part in the preliminary ruling procedure by submitting written pleadings. The Italian, German and Polish Governments and the European Commission also took part in the written procedure. With the exception of Mr Anakiev and the Polish Government, the same parties were also represented at the hearing on 3 March 2015.
In the opinion the Advocate proposes the following reply to the questions referred by the Tribunale di Cuneo:
(1) Articles 4(3) TEU and 325 TFEU, Regulation (EC, Euratom) No 2988/95 and Directive 2006/112/EC are to be interpreted as meaning that they require the Member States to provide for effective, proportionate and dissuasive penalties for irregularities in matters of VAT.
(2) Article 2(1) of the Convention on the protection of the European Communities’ financial interests, signed in Luxembourg on 26 July 1995, requires the Member States to punish fraud in matters of VAT by means of effective, proportionate and dissuasive criminal penalties which must, in serious cases of fraud at least, also include penalties involving deprivation of liberty.
(3) A provision of national law on limitation periods for proceedings which, for reasons relating to the scheme of that provision, has the effect in many cases of exempting from punishment the perpetrators of fraud in matters of VAT is incompatible with the aforementioned provisions of EU law. In pending criminal proceedings, the national courts must refrain from applying such a provision.
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