Limiting the ne bis in idem principle for the protection of the financial interests of the EU and the financial markets thereof
In a recent set of judgments, the Court of Justice of the European Union established that the principle of ne bis in idem may be limited for the purpose of protecting the financial interests of the EU and the financial markets thereof, as long as such a limitation does not exceed what is strictly necessary to achieve these objectives. The legal principle, recognized both by the Charter of Fundamental Rights of the European Union and by the European Convention on Human Rights, states that a person cannot be criminally prosecuted or punished twice for the same offence. In the four cases at hand, the Court of Justice had to interpret this principle in the context of the VAT directive and the directive concerning financial markets.
In the four cases concerning Italian nationals, the Italian tax authorities and courts conducted administrative and criminal proceedings and imposed administrative and criminal penalties against the same person with respect to the same acts. The national courts requested the Court of Justice to give a preliminary ruling whether this duplication of proceedings and penalties can be considered compatible with the ne bis in idem principle.
The Court agreed that the aforementioned duplication of proceedings and penalties indeed constitutes a limitation of the ne bis in idem principle. The Court opined that such limitations require a justification, which is subject to requirements under EU law. According to the Court, the national legislation authorizing a duplication of proceedings and penalties of a criminal nature must:
- pursue an objective of general interest which is such as to justify a duplication of proceedings and penalties, it being necessary for those proceedings and penalties to pursue additional objectives;
- establish clear and precise rules allowing individuals to predict which acts or omissions are liable to be subject to such a duplication of proceedings and penalties;
- ensure that the proceedings are coordinated in order to limit to what is strictly necessary the additional disadvantage which results, for the persons concerned, from a duplication of proceedings,
- and ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.
Determining whether these conditions are met in a specific case and ensuring that the disadvantages resulting from the duplication of proceedings and penalties for the person concerned are not excessive are up to the national courts. In the cases at hand, however, the Court held that both the objective of ensuring the collection of all the VAT due in a certain member state and the objective of guaranteeing the integrity of the financial markets of the EU and public confidence in financial instruments are capable of justifying the duplication of criminal proceedings and penalties.
Dániel Szilágyi, PhD student