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13th May 2022
Human Rights Tax

Analysis: “The reasonable foreseeability of criminal proceedings for tax evasion: Case BV (C-570/20)” by Luigi Lonardo

BV v Direction départementale des finances publiques de la Haute-Savoie C-570/20, delivered on 5 May 2022, is the latest addition to the case law on the ne bis in idem principle guaranteed by Article 50 of the EU Charter of Fundamental Rights. According to that provision, no one is to be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the EU in accordance with the law. The judgment was delivered in the context of criminal proceedings opened against an accountant, charged with tax evasion, after he had already been the subject of a tax adjustment procedure in respect of the same acts. The referring court (the French Court of Cassation) raised questions on whether a duplication of prosecutions and penalties of a criminal nature was sufficiently precise and foreseeable, when this precision and foreseeability derived from national law as interpreted (and this is the element of novelty of the case) by a national court (the French Constitutional Council). In BV, the Court of Justice held that the requirement of legality in the limitation of fundamental rights is satisfied when it is based on settled case law which establishes a restrictive interpretation of the legal provisions laying down the limiting conditions.

BV is an interesting follow up to the case law of Menci (C-524/15) and Garlsson Real Estate (C‑537/16). In Menci, the Court of Justice established that an individual may be subject to a duplication of prosecution and penalties of criminal nature only if the national legislation on which this is based satisfies the requirement of clarity and foreseeability. In Garlsson Real Estate, the      Court of Justice also specified that national legislation must provide for rules to ensure that the severity of all of the penalties imposed does not exceed the seriousness of the offence identified.

The Court’s reasoning in BV is in line with established case law. It considered that the duplication of prosecution and penalties of criminal nature is a limitation to ne bis in idem (Article 50 Charter). Therefore, since it is a limitation to a fundamental right must comply with the requirements of Article 52(1) Charter: it must be provided by law, it must not infringe the essence of the right, and it must be necessary and genuinely meet objectives of general interest recognised by the EU or the need to protect the rights and freedoms of others.

Is national legislation sufficiently ‘clear and precise’ (the Menci criteria) when the conditions required for a duplication of proceedings and penalties of a criminal nature derive not only from legislative provisions but also from their interpretation by national courts? The Court answered affirmatively: the necessary condition is that an individual ‘is in a position to ascertain from the wording of the relevant provision and, if need be, with the assistance of the courts’ interpretation of it, which acts and omissions may give rise to such a duplication of proceedings and penalties’ (BV, para 39). This is the case even when national legislation leaves a margin of discretion to the national court (para 40).

The judgment is likely to result in further litigation in Member States where national legislation leaves discretion to courts. The requirement that the principle of legality in the limitation of fundamental right permits ‘the gradual, case-by-case clarification of the rules of criminal liability by judicial interpretation, provided that the result was reasonably foreseeable at the time the offence was committed’ (BV para 41) is very open-ended. What is reasonable foreseeability, especially in national contexts where the case law is not uniform? The Court of Justice articulates some criteria to answer that question, but more case law is to be expected.

Luigi Lonardo is a Lecturer in EU law at University College Cork.

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