Case C-617/10, Åkerberg Fransson

Court defines scope of application of Charter of Fundamental Rights, reiterating EU law not governing relationship between ECHR and legal systems of Member States.

>> Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’), provides

‘No one shall be liable to be tried or punished again in criminal proceedings for an offense for which he or she has already been finally acquitted or convicted within the Union in accordance with the law.’

Article 51 defines the Charter’s field of application in the following terms:

‘1.      The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law. They shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers and respecting the limits of the powers of the Union as conferred on it in the Treaties.

2.      The Charter does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks as defined in the Treaties.’
The Swedish tax authorities accused Mr Åkerberg Fransson of having infringed his declaration obligations with regard to tax in 2004 and 2005, which resulted in a loss of revenue from various taxes. By decision of 24 May 2007, the Swedish tax authorities imposed tax penalties upon Mr Åkerberg Fransson for the 2004 and 2005 tax years. 

In 2009 criminal proceedings were brought against Mr Åkerberg Fransson in the Haparanda tingsrätt. The Public Prosecutor’s Office accused him of having committed an offense of tax evasion (in respect of 2004 and 2005) punishable, under Swedish law, by a term of imprisonment of up to six years.

The Swedish court wondered whether the criminal charges against Mr Åkerberg Fransson must be dismissed on the ground that he had already been punished for the same acts, as a result of the  Swedish system of imposing tax surcharges and examining liability for tax offenses in separate proceedings.

The Court reiterated that the Charter’s field of application so far as concerned action of the Member States was defined in Article 51(1) thereof (on this provision, see also this article in the Common Market Law Review I wrote in 2005).

The Court stressed that the fundamental rights guaranteed in the legal order of the European Union were applicable in all situations governed by European Union law, but not outside such situations.

The Court reiterated that it had no power to examine the compatibility with the Charter of national legislation lying outside the scope of European Union law. The Court held that, on the other hand, if such legislation fell within the scope of European Union law, it must, when requested to give a preliminary ruling, provide all the guidance as to interpretation needed in order for the national court to determine whether that legislation was compatible with the fundamental rights the observance of which the Court ensured (see inter alia, Case C‑260/89 ERT [1991]; Case C‑299/95 Kremzow [1997] ; Case C-309/96 Annibaldi [2007]; Case C-94/00 Roquette Frères [2002] ; Case C-349/07 Sopropé [2008] ; and Case C-256/11 Dereci and Others [2011] ; and see Case C-27/11 Vinkov [2012] , on which I wrote this post).

The Court held that the fundamental rights guaranteed by the Charter must therefore be complied with where national legislation fell within the scope of European Union law, situations could not exist which were covered in that way by European Union law without those fundamental rights being applicable. The applicability of European Union law entailed applicability of the fundamental rights guaranteed by the Charter. Where, on the other hand, a legal situation did not come within the scope of European Union law, the Court did not have jurisdiction to rule on it and any provisions of the Charter relied upon could not, of themselves, form the basis for such jurisdiction (see the order in Case C-466/11 Currà and Others [2012] ).

The Court referred in this respect to the considerations underlying Article 6(1) TEU, according to which the provisions of the Charter were not to extend in any way the competences of the European Union as defined in the Treaties. Likewise, the Charter, pursuant to Article 51(2) thereof, does not extend the field of application of European Union law beyond the powers of the European Union or establish any new power or task for the European Union, or modify powers and tasks as defined in the Treaties.

The Court found that tax penalties and criminal proceedings for tax evasion, such as those to which the defendant in the main proceedings had been or was subject because the information concerning VAT that was provided was false, constitute implementation of Articles 2, 250(1) and 273 of Directive 2006/112 (previously Articles 2 and 22 of the Sixth Directive) and of Article 325 TFEU and, therefore, of European Union law, for the purposes of Article 51(1) of the Charter.

The Court held that the fact that the national legislation upon which those tax penalties and criminal proceedings were founded had not been adopted to transpose Directive 2006/112 could not call that conclusion into question, since its application was designed to penalize an infringement of that directive and was therefore intended to implement the obligation imposed on the Member States by the Treaty to impose effective penalties for conduct prejudicial to the financial interests of the European Union.

The Court however stressed that where a court of a Member State was called upon to review whether fundamental rights were complied with by a national provision or measure which, in a situation where action of the Member States was not entirely determined by European Union law, implemented the latter for the purposes of Article 51(1) of the Charter, national authorities and courts remained free to apply national standards of protection of fundamental rights, provided that the level of protection provided for by the Charter, as interpreted by the Court, and the primacy, unity and effectiveness of European Union law were not thereby compromised (see, in relation to the latter aspect, Case C-399/11 Melloni [2013], on which I wrote this post).

The Court thus found that it had jurisdiction to answer the questions referred and to provide all the guidance as to interpretation needed in order for the referring court to determine whether the national legislation was compatible with the ne bis in idem principle laid down in Article 50 of the Charter.

The Court inter alia held that the ne bis in idem principle laid down in Article 50 of the Charter did not preclude a Member State from imposing successively, for the same acts of non-compliance with declaration obligations in the field of VAT, a tax penalty and a criminal penalty in so far as the first penalty was not criminal in nature, a matter which was for the national court to determine.

The referring Court also asked the Court whether a national judicial practice was compatible with European Union law if it made the obligation for a national court to disapply any provision contrary to a fundamental right guaranteed by the ECHR and by the Charter conditional upon that infringement being clear from the instruments concerned or the case-law relating to them.

The Court held that as regards the conclusions to be drawn by a national court from a conflict between national law and the ECHR, it was to be remembered that whilst, as Article 6(3) TEU confirmed, fundamental rights recognized by the ECHR constituted general principles of the European Union’s law and whilst Article 52(3) of the Charter required rights contained in the Charter which corresponded to rights guaranteed by the ECHR to be given the same meaning and scope as those laid down by the ECHR, the latter did not constitute, as long as the European Union had not acceded to it, a legal instrument which had been formally incorporated into European Union law.

Consequently, the Court reiterated that European Union law did not govern the relations between the ECHR and the legal systems of the Member States, nor did it determine the conclusions to be drawn by a national court in the event of conflict between the rights guaranteed by that convention and a rule of national law (see Case C-571/10 Kamberaj [2012], on which I wrote this post)

The Court held that, as regards, next, the conclusions to be drawn by a national court from a conflict between provisions of domestic law and rights guaranteed by the Charter,  a national court which was called upon, within the exercise of its jurisdiction, to apply provisions of European Union law was under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it was not necessary for the court to request or await the prior setting aside of such a provision by legislative or other constitutional means (Case 106/77 Simmenthal [1978]; Case C-314/08 Filipiak [2009]; and Joined Cases C-188/10 and C-189/10 Melki and Abdeli [2010]).

The Court held that European Union law precluded a judicial practice which made the obligation for a national court to disapply any provision contrary to a fundamental right guaranteed by the Charter conditional upon that infringement being clear from the text of the Charter or the case-law relating to it, since it withheld from the national court the power to assess fully, with, as the case may be, the cooperation of the Court of Justice, whether that provision was compatible with the Charter.