The first request for a preliminary ruling on the EPPO Regulation submitted to the EU Court of Justice
The Court of Justice of the European Union received the first request for interpretation of EU Regulation n.2017/1939 which establishes the European Public Prosecutor’s Office. Since June
1st 2021, this European Authority has exercised its criminal investigative powers to investigate crimes affecting the financial interests of the Union. The merits of this first request for preliminary ruling n.C-281/22 reached the Court of Appeal of Vienna, Austria, wherein the EU Court was requested to interpret Articles 31 and 32 of the EPPO Regulation. Such two Articles regulate the investigative measures ordered by a ‘handling’ European Delegated Prosecutor (EDP) of a Member State, i.e., the EDP in charge of the criminal investigation, but which must be carried out in another Member State by an assisting EDP. The possibility of carrying out “crossborder investigations” through the network of EDPs operating throughout the territory of the Union represents the primary “added value” of the new European investigative authority.
The request for interpretation of Articles 31 and 32 of the EPPO Regulation resulted from an investigation on biodiesel imports from Bosnia-Herzegovina into Germany and Austria conducted by an EDP in Munich. The importing company had evaded payment of customs duties amounting to EUR 1,295,000 by making false customs declarations. As a result, the German EDP ordered a search and seizure of the accounting documents at the premises of the Austrian company and its director, which was the final recipient of the imported biodiesel. The search and seizure order was ordered in accordance with the German Procedure Code by the preliminary investigations judge of Munich and was based on the crime evidence presented by the handling EDP. Subsequently, the Austrian assisting EDP ordered the search of the premises of the Defendant company and its director and requested authorisation for such an investigative measure in accordance with the Austrian Criminal Procedure Code, which the competent Austrian judge granted. The Defendants challenged this decision before the Vienna Court of Appeal on the grounds of lack of sufficient evidence and the lack of necessity and proportionality requirements of such investigative measures.
In view of deciding on the Defendants’ application, the Austrian Court of Appeal requested the Court of Justice to rule on the following interpretative question: if the law of the Member State
of the assisting EDP requires court approval for an investigative measure requested by the handling EDP of another Member State, is such a court required for the above purpose, to also
examine the substantive requirements justifying such an investigative measure, such as sufficient evidence, degree of responsibility of the Defendants in the infringement and the
necessity and proportionality of the investigative measure itself?
The issue in the case at hand appears even more complex since the admissibility of the search and seizure order had already
been submitted to prior judicial authorisation in the Member State of the handling EDP (Germany). In such circumstances, the Vienna Court of Appeal sought to determine the content
of the approval decision to be delivered by the court of the Member State where the investigative measure is to be executed.
The provisions of the EPPO Regulations governing this issue are extremely ambiguous. Article 32(2) provides that the law of the Member State of the handling EDP shall govern the justification and adoption of such measures. However, Article 32(3) provides that if judicial authorisation for the measure is required under the law of the Member State of the assisting EDP, the assisting EDP “shall obtain that authorisation in accordance with the law of that Member State.” Article 32 then provides that the measures shall be carried out in accordance with the law of the Member State of the assisting EDP, but must observe ‘the formalities and procedures expressly indicated by the handling EDP”.
The Austrian judges have highlighted in the same order of reference that a re-examination of the admissibility of an investigative measure based on substantive requirements by courts of the
Member State of execution would result in “a huge step backwards” in respect of the provisions of Directive 2014/41/EU on the European Investigation Order in criminal Matters (EIO). This
directive regulates investigation measures ordered by National Prosecutors (NP) and aimed at obtaining evidence in another Member State. Article 9 of this directive provides that the
executing NP shall recognise an EIO transmitted by an NP of another Member State, “without any further formality being required” and ensure its execution as if it were a purely domestic measure.
Another significant drawback resulting from a review of the substantive requirements of the investigative measure by the judge of the Member State where such a measure is to be executed
is the need of transmitting to such a judge all the case files (including translations!) from the handling EDP Member State. This second judicial review of the justification of the investigative measure would result in an enormous delay in the execution of the investigative measure and would therefore be in contradiction with the primary objective of the EPPO Regulation, which is to ‘enable swift and efficient decision-making in the conduct of investigations and prosecutors involving several Member States’ (recital n. 20 of EPPO Regulation).
The only possible solution to this crucial problem would therefore seem to limit the criteria for examining the admissibility of the investigative measure to be applied by the courts of the assisting EDP in compliance with purely procedural rules governing the execution of the investigative measure. Thus, the courts of the assisting EDP would be precluded from reviewing the substantive requirements which justified the adoption of the investigative measures by the handling EDP and its approval by the competent judge of that Member State.
In conclusion, the Court of Justice will have to outline in its judgement a rational ‘division of labour’ between the courts of all Member States involved in cross-border investigations related to offences falling within the jurisdiction of the European Public Prosecutor’s Office, in particular, customs offences, which is the subject of this first preliminary ruling., VAT fraud exceeding 10 Million and fraud in EU subsidies.
Enrico Traversa