Text of Draft Reform Treaty

At the EU foreign ministers meeting yesterday in Brussels, the Portuguese Presidency presented the full draft version of the new Reform Treaty.

Link

Opinion in Case C-440/05, Commission v Council

>> AG Mazák: Court should annul Framework Decision 2005/667

If you need some interesting reading for the weekend, you might try yesterday's Opinion of AG Mazák (link), who advices the Court to annul Council Framework Decision 2005/667/JHA of 12 July 2005 to strengthen the criminal-law framework for the enforcement of the law against ship-source pollution.

C-467/05, Dell'Orto

>> Reference for preliminary ruling on Framework decision admissible even when not referring to Article 35 EU.

>> Court extends Article 234 case law to Article 35(2) EU

In this case, the Court was asked to clarify whether Council Framework Decision 2001/220/JHA of 15 March 2001 on the standing of victims in criminal proceedings in conjunction with Council Directive 2004/80/EC of 29 April 2004 relating to compensation to crime victims required funds embezzled from a public limited company which had suffered harm to be repaid in criminal proceedings.

In particular the question arose whether, contrary to the definition contained in Article 1(a), the concept of victim in the Framework Decision not only covered natural persons but should be extended to legal persons.

In this respect, the referring court relied on the directive, which did not contain any definition of victims.

In accordance with the Court’s findings in Pupino on the principle of the conformity of interpretation in relation to Framework Decisions, the national Court wished to interpret national law so as far as possible in the light of the wording and purpose of the Framework Decision in order to attain the result which it pursued and thus comply with Article 34(2)(b) EU.

However, several governments which had submitted observations questioned the admissibility of the reference for a preliminary ruling.

The United Kingdom Government, for instance, submitted that the reference for a preliminary ruling was inadmissible because it was based on Article 234 EC, whereas the interpretation sought concerned the Framework Decision, hence an act adopted under Title VI of the EU Treaty.

It argued that, in such a case, the reference should be based exclusively on Article 35(1) EU, whereas Article 234 EC was not applicable.

The Court, however, held that the system under Article 234 EC was capable of being applied to the Court’s jurisdiction to give preliminary rulings by virtue of Article 35 EU, subject to the conditions laid down by that provision. (see also Case C-105/03 Pupino [2005])

The fact that the order for reference did not mention Article 35 EU, but refered to Article 234 EC, could not of itself make the reference for preliminary ruling inadmissible.

The Court argued that this conclusion was reinforced by the fact that the Treaty on European Union neither expressly nor by implication laid down the form in which the national court must present its reference for a preliminary ruling.

The Netherlands Government questioned the admissibility of the reference for a preliminary ruling on the ground that the factual and legislative context was not defined sufficiently in the order for reference.

The Court, however, held that the presumption that questions referred by national courts for a preliminary ruling were relevant might be rebutted only in exceptional cases, namely where:

(1) the interpretation which was sought referred to in the questions bore no relation to the actual facts of the main action or to its purpose

(2) the problem was hypothetical

(3) the Court did not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it

The Court held that the need to provide an interpretation of Community law which would be of use to the national court presupposed that the latter set out the factual and legislative context of the questions it was asking or, at the very least, explained the factual circumstances on which those questions were based.

In that regard, it was essential that the national court should give at the very least some explanation of the reasons for the choice of the provisions of Union law which it required to be interpreted and on the link it established between those provisions and the national legislation applicable to the dispute (see, with regard to Article 234 EC, Case C-295/05 Asemfo [2007]).

Furthermore, the information provided in orders for reference must not only be such as to enable the Court to reply usefully but must also enable the governments of the Member States and other interested parties to submit observations pursuant to Article 23 of the Statute of the Court of Justice (see, inter alia, Case C-303/05 Advocaten voor de Wereld [2007]).

The Court held that the order for reference set out the underlying facts of the main action and the provisions of applicable national law which were directly relevant and it explained the reasons why the court making the reference was seeking an interpretation of the Framework Decision, and also the link between the latter and the national legislation applicable in the matter. The reference for a preliminary ruling was therefore admissible.

As to the substance of the case, the Court held that the Framework Decision must be interpreted as meaning that, in criminal proceedings and, in particular, in enforcement proceedings following a judgment which resulted in a final criminal conviction, such as those in the main action, the concept of ‘victim’ for the purposes of the Framework Decision did not include legal persons who had suffered harm directly caused by acts or omissions that were in violation of the criminal law of a Member State.

Text of Judgment

C-305/05, Ordre des barreaux francophones and germanophone

>> Obligation on lawyers to inform authorities of indication of money laundering not inconsistent with right to fair trial

Is it consistent with Community law and with the fundamental principles which it guarantees to impose on lawyers, as was provided for by Directive 2001/97 amending Directive 91/308, the obligation to inform the competent authorities of any fact of which they were aware which might be an indication of money laundering?

This question was referred to the Court in the context of actions brought by the Ordre des barreaux francophones et germanophone, the Ordre français des avocats du barreau de Bruxelles, the Ordre des barreaux flamands and by the Ordre néerlandais des avocats du barreau de Bruxelles, seeking the annulment of certain provisions of a Belgian Law transposing Directive 2001/97 into the national legal system.

Article 6(1) of that directive provides that the persons covered by the directive must cooperate fully with the authorities responsible for combating money laundering. They are obliged to inform those authorities, on their own initiative, of any fact which might be indicative of money laundering and by furnishing those authorities, at the request of the latter, with all necessary information, in accordance with the procedures established by the applicable legislation.

However, as regards lawyers, Directive 91/308 delimits the application of those obligations of information and cooperation in two ways.

First, under Article 2a(5), lawyers are subject to the obligations laid down in that directive – and, in particular, to the obligations of information and cooperation laid down in Article 6(1) thereof – only in so far as they participate, in the ways specified in Article 2a(5), in certain transactions listed exhaustively in that provision.

Secondly, Article 6(3) of the directive provides that the Member States are not obliged to impose the obligations of information and cooperation on lawyers as regards information which they have received from a client in the course of ascertaining the client’s legal position or in the course of performing their task of defending or representing that client in judicial proceedings.

The Court stated that Article 6(3) of Directive 91/308 might lend itself to several interpretations, and consequently the precise extent of the obligations of information and cooperation incumbent on lawyers was not entirely unambiguous.

It reiterated that if the wording of secondary Community law was open to more than one interpretation, preference should be given to the interpretation which rendered the provision consistent with the EC Treaty rather than to the interpretation which led to its being incompatible with the Treaty (see Case 218/82 Commission v Council [1983] and Case C‑135/93 Spain v Commission [1995]).

The Court held that Member States must not only interpret their national law in a manner consistent with Community law but also make sure they did not rely on an interpretation of wording of secondary legislation which would be in conflict with the fundamental rights protected by the Community legal order or with the other general principles of Community law (Case C‑101/01 Lindqvist [2003]).

According to the Court, lawyers would be unable to carry out satisfactorily their task of advising, defending and representing their clients, who would in consequence be deprived of the rights conferred on them by Article 6 of the ECHR, if lawyers were obliged, in the context of judicial proceedings or the preparation for such proceedings, to cooperate with the authorities by passing them information obtained in the course of related legal consultations.

The Court held that the requirements implied by the right to a fair trial presupposed, by definition, a link with judicial proceedings. In view of the fact that the second subparagraph of Article 6(3) of Directive 91/308 exempted lawyers, where their activities were characterised by such a link, from the obligations of information and cooperation laid down in Article 6(1) of the directive, those requirements were respected.

The Court thus concluded that the obligations of information and of cooperation with the authorities responsible for combating money laundering, account being taken of the aforementioned limitations, did not infringe the right to a fair trial as guaranteed by Article 6 of the ECHR and Article 6(2) EU.

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Case C-158/06, Stichting ROM-projecten

>> The Court today held that the principle of legal certainty can preclude repayment by beneficiary of financial assistance wrongly paid, provided that it is possible to establish the beneficiary’s good faith.

>> In such a case, the Member State concerned may be held financially liable for the amounts not recovered.

The main question in Case C-158/06 was whether Community law precluded a Member State from refraining from recovering financial aid, and relying for that purpose on the principle of legal certainty, when the material irregularity on the part of the beneficiary of the aid was based on a Community provision which was neither communicated to the beneficiary nor published.

The reference was made in the context of proceedings between a foundation established under Netherlands law, Stichting ROM-projecten and the Staatssecretaris van Economische Zaken (Secretary of State for Economic Affairs), concerning the cancellation and request for repayment of financial assistance granted within the framework of the Community initiative in favour of small and medium‑sized enterprises.

The Court held that, in the absence of provisions of Community law, disputes concerning the recovery of amounts wrongly paid under Community law must be decided by national courts in application of their own domestic law, subject to the limits imposed by Community law, on the basis that the rules and procedures laid down by domestic law must not have the effect of making it practically impossible or excessively difficult to recover the aid not due and that the national legislation must be applied in a manner which was not discriminatory as compared to procedures for deciding similar national disputes (see e.g. Joined Cases 205/82 to 215/82 Deutsche Milchkontor and Others [1983], Case C‑366/95 Steff-Houlberg Export and Others [1998], and Case C‑336/00 Huber [2002]).

Accordingly, it could not be regarded as contrary to Community law for national law, as far as the cancellation of administrative measures and the recovery of sums wrongly paid by public authorities were concerned, to take into account, in addition to the principle of legality, the principles of the protection of legitimate expectations and legal certainty, since those principles form part of the legal order of the Community.

The Court also reiterated that the principle of legal certainly required that Community rules enabled those concerned to know precisely the extent of the obligations which were imposed on them (see e.g. Case C‑255/02 Halifax and Others [2006]).

It held that individuals must be able to ascertain unequivocally what their rights and obligations were and take steps accordingly.

That imperative of legal certainty must be observed all the more strictly in the case of rules liable to have financial consequences (see Case C‑94/05 Emsland-Stärke [2006]).

The Court stated that in the present case, it was clear that the ultimate beneficiary of Community financial assistance was not in a position to ascertain unequivocally what its rights and obligations were.

In such a situation, characterised by the ultimate beneficiary’s lack of knowledge of the conditions laid down in the grant decision, the principle of legal certainly precluded reliance on those conditions against that beneficiary.

That beneficiary was, however, in a position to challenge the cancellation and request for repayment only if he acted in good faith as regards the regularity of the use to which the financial assistance was put. It was for the national court to consider whether that condition had been fulfilled (see, to that effect, Case C‑298/96 Oelmühle and Schmidt Söhne [1998]).

The Court concluded that in a situation such as that in the case in the main proceedings, where non‑repayment of the assistance by the beneficiary was due to the negligence of the national authorities, it followed from the principle of cooperation laid down in Article 10 EC that the Member State concerned might be held financially liable for the amounts not recovered in order to give effect to the Community’s right to obtain repayment of the amount of the assistance.

Text of Judgment