Taricco continues – between constitutional national identity and highest level of protection of fundamental rights, where does effectiveness of EU law stand?

Stone Tower Layered Cairn Stones Stacked Balance

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

In September 2015, and in the wake of the case-law set in Fransson, the European Court of Justice (ECJ) detailed in Taricco the scope of the Member States’ obligations to combat VAT fraud (see comment here). The ECJ is now faced with the repercussions of said judgment as the Corte costituzionale [the Italian Constitutional Court (ICC)] questions the compatibility of the solution established therein with supreme principles of the Italian constitutional order.

As is well known, the Taricco case called into question the Italian regime on limitation periods for criminal offenses. The national provisions in question were such that, given the complexity and duration of criminal proceedings, defendants accused of VAT evasion constituting serious fraud affecting the EU’s financial interests were likely to enjoy de facto impunity as a result of the expiration of the limitation period. Having established that the Italian regime in question was not in conformity with EU law, the ECJ interpreted Article 325 TFEU as having “the effect, in accordance with the principle of the precedence of EU law, in their relationship with the domestic law of the Member States, of rendering automatically inapplicable, merely by their entering into force, any conflicting provision of national law”. Therefore, national courts were to “ensure that EU law is given full effect, if need be by disapplying those provisions (…), without having to request or await the prior repeal of those articles by way of legislation or any other constitutional procedure”. The ECJ significantly added that, if a national court decides to disapply the national provisions at issue, “it must also ensure that the fundamental rights of the persons concerned are respected” as penalties might be applied to them, which, in all likelihood, would not have been imposed under those national provisions. In this regard, the ECJ did not consider that such a disapplication of national law would infringe the rights of the accused as guaranteed by Article 49 CFREU on the principles of legality and proportionality of criminal offences and penalties.

The Taricco judgment caused some stir within the Italian legal community. A few days after the delivery of the judgment, the Corte d’appello di Milano (Court of Appeal of Milan), instead of applying the solution formulated therein in a case pending before it concerning serious fraud in relation to VAT, stayed the proceedings to raise a question of constitutionality before the ICC, which would be followed months later by the Corte suprema di cassazione (Court of Cassation). Both courts have doubts as to the compatibility of the case-law established in Taricco with supreme principles of the Italian constitutional order and with the requirement to respect inalienable human rights as laid down by the Italian Constitution, with particular reference to the principle of legality in criminal matters [Article 25(2) of the Italian Constitution]. Hearing such concerns, the ICC sought a preliminary reference from the ECJ (here and here) according to an expedited procedure, the application of which was deferred (here). Advocate-General Yves Bot recently rendered its Opinion (here).

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