by Alessandra Silveira, Editor 
 and Sophie Perez Fernandes, Junior Editor

▪

On 5 December 2017, the European Court of Justice (ECJ) ruled again on the Taricco saga. The interpretation set out in the judgment in Taricco I gave rise to heated debate, particularly within the Italian legal community, since the compatibility of the interpretative solution set out therein was called into question in the light of supreme principles of the Italian constitutional order, particularly the principle of legality in criminal matters [Article 25(2) of the Italian Constitution], the disregard of which would allegedly violate the constitutional identity of the Italian Republic.

At the origin of the judgment in M.A.S. and M.B. (or Taricco II) is thus the interpretation laid down in Taricco I regarding Article 325 TFEU, the provision concerning the obligations on Member States to combat fraud affecting the financial interests of the Union. In Taricco I, the ECJ held it to be incompatible with EU law, in particular with Article 325 TFEU, a national regime on limitation periods for criminal offenses which has the effect that facts constituting serious fraud affecting the financial interests of the Union would escape criminal punishment, in the framework of a de facto impunity.

The contentious point was that, within the Italian legal system, and with support of constitutional case-law, the legislation governing limitation periods of criminal offences is characterised as being substantive (rather than procedural) in character and is, therefore, subject to the principle of legality in criminal matters laid down by Article 25(2) of the Italian Constitution. Since the Italian constitutional order would ensure (according to the Italian Constitutional Court) a higher level of protection of fundamental rights than the one guaranteed under EU law, the Italian Constitutional Court held that both Article 4(3) TEU (respect for national constitutional identities) and Article 53 CFREU (principle of the highest level of protection of fundamental rights) would allow national courts not to comply with the obligation laid down by the ECJ in Taricco I (see commentary here).

In a paper published last August (in Portuguese) in a Brazilian legal journal (here), the Authors of this post presented their view on a solution for the Taricco saga.

First, the simultaneous invocation by the Italian Constitutional Court of respect for constitutional identity, on the one hand, and a highest level of protection of fundamental rights, on the other hand, lacked sense. The legal nature of the principles laid down in Article 4(3) TEU and Article 53 CFREU is distinct: each protect distinct legal “assets” and they both serve different purposes. In short, they are not to be confused – and may even lead to opposing results. It is thus important to distinguish (i) the consideration of specificities which form part of the substance of the constitutional identity of a Member States – and which, by their nature, correspond to particularities compatible with the pursuit of the obligations arising from the Treaties to the Member State concerned; and (ii) the consideration of the highest level of protection that a Member State wishes to guarantee to a certain fundamental right within the scope of application of EU law – that might be assimilated by the EU legal order and extendable, through EU law, to the other Member States.

In any event, the Italian Constitutional Court was right to draw the ECJ’s attention to the fact that, in addition to its non-retroactivity dimension, the principle of legality in criminal matters enshrined in Article 49 CFREU also includes requirements of foreseeability and precision – requirements common to the constitutional traditions of the Member States and therefore recognised as general principles of EU law. Even if the ECJ specified in Taricco I that Article 325 TFEU imposes on the Member States precise and unconditional obligations as to the result to be achieved, the ECJ also failed to indicate, in sufficient detail, the course of action which criminal courts must follow in order to achieve such result.

This opened up a window of opportunity for a “dialogue between one court and another” (Taricco II, para. 22) that should not have been wasted in solving the case – and fortunately was not. Having the delicate task at hand to reconcile the effectiveness of EU law with the good health of its dialogue with national constitutional courts, in Taricco II the ECJ (i) did not examine the ground founded on constitutional identity because it simply did not make sense; (ii) ensured the effectiveness of EU law by drawing the attention of the national legislator to act accordingly, and (iii) accommodated the highest level of protection of fundamental rights as demanded by the Italian Constitutional Court.

The ECJ upheld the interpretation of Article 325 TFEU laid down in Taricco I, that is, in criminal proceedings for infringements relating to VAT, national courts are required to disapply national provisions of substantive law regarding limitation periods which prevent the application of effective and deterrent criminal penalties in a significant number of cases of serious fraud affecting the financial interests of the Union (effectiveness). In Taricco II, the ECJ further specified that national courts were to ascertain whether disapplying such national provisions would lead to a situation of uncertainty in the national (Italian) legal order as regards the determination of the applicable limitation rules, entailing a breach of the principle that the applicable law must be precise. If that were to be the case, national courts would not be obliged to disapply the national provisions at issue (highest level of protection of fundamental rights).

In essence, what will surely remain of this paradigmatic ruling (see commentaries here, here and here) is the following: respect for the constitutional identities of the Member States [Article 4(2) TEU], for their common constitutional traditions [Article 6 (3) TEU], as well as for the highest level of protection of fundamental rights resulting from dialogue with the constitutional rules of the Member States (Article 53 CDFUE), is always a product of EU law – such provisions ought to be interpreted in the light of the EU legal order. That is to say, there is no “yielding” on the part of the principle of primacy of EU law to the constitutions of the Member States, since it is EU law itself which recognises and authorises respect for constitutional identities, common constitutional traditions and the highest levels of protection ensured under national constitutions.

When referring to the ECJ, the Italian Constitutional Court declined to unilaterally decide on the consequences for the EU legal order of its understanding of what integrates the constitutional identity of the Member State concerned – which, though erratically, should be recognised and valued. However, and as the Taricco saga demonstrates, the unlimited claim of a highest level of protection of fundamental rights, particularly on the basis of the constitutional identity of a given Member State, is likely to call into question the effectiveness of EU law. For this reason, it is for the ECJ to avoid the instrumentalisation of the principle of the highest level of protection of fundamental rights, that is to say, to prevent Member States from shielding themselves on the basis of this principle in order to escape their obligations arising from EU law and to unilaterally decide on the provisions to be adopted.

To that extent, respect for the constitutional identities of the Member States, for their common constitutional traditions, as well as for the highest levels of protection of fundamental rights ensured under national constitutions ought to be interpreted systematically so as not to undermine the foundations underlying the European integration process since the famous judgments of the ECJ of the 1960s, according to which Member States cannot hide behind their constitutional rules to escape from the application of a legal framework agreed on a reciprocal basis.

Within the EU we are in the position of developing a sophisticated model of protection of fundamental rights in which there are twenty-eight standards of protection operating alongside the ECHR and the CFREU, “which is to say a model in which standards of fundamental rights of different sources interact according to Article 6 TEU and are articulated in accordance with the principle of the highest level of protection of fundamental rights.”[i]

[i] See José Luís da Cruz Vilaça and Alessandra Silveira, “The European federalisation process and the dynamics of fundamental rights”, in EU citizenship and federalism – the role of rights, ed. Dimitry Kochenov (Cambridge University Press, 2017), 141.

Picture credits: Mural of Galileo Galilei by The Carouselambra Kid.