Week 4 - Eurocrimes

2 Limbs of criminal law competence (the Criminal Law article of the EU)

• Article 83(1) = (SECURITIZED) EU competence to establish via directives, minimum rules concerning the definition of criminal offences and sanctions in the areas of particularly serious crimes with a cross-border dimension resulting from the nature or impact of such offences or from a special need to combat them on a common basis

→ securitized because justified on the basis that certain aspects of criminality must be/are necessary to be combatted

• Article 83(2) = (FUNCTIONALIZED) codification of Court's interpretation of Union criminal law competence Env Crime + Ship Source cases; EU competence to approximate national crriminal laws and regulations if such approximation proves essential to ensure the effective implementation of a Union policy in an area which has been subject to harmonization measures → make directives that establish minimum rules w/r/t the definition of criminal offences and sanctions in the areas concerned

→ functionalized because crim law seen as a means to an end, where the end is effective implementation of other EU policies

needs to be 1) essential to achieve effectiveness and 2) essential to ensure effective implementation of union policy in an area previously subject to harmonization measures

• Substantive criminal law making competences through directives

• "minimum rules concerning the definition of criminal offences and sanctions in the areas of particularly serious crimes with a cross-border dimension resulting from the nature or impact of such offences or from a special need to combat them on a common basis”

• Areas of crime exhaustively listen: terrorism, trafficking in human beings and sexual exploitation of women/children, illicit drug trafficking; money laundering; corruption; counterfeiting; compute crime; organized crime

• Want to create another area: Council Decision (Unanimity + Parliament consent)

  • currently one in process regarding the: violation of Union restrictive measures

• Annex/Ancillary criminal competence

• “minimum rules w/r/t the definition of criminal offences and sanctions” ~ “approximation of criminal laws & regulations of MS essential to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures”

  • codifies ECJ case law regarding (EC) ‘ancillary’ CL competence (Env legislation case & ship source pollution case)

  • No ‘implied powers’ -> tight provision, delineates provisions only “previously harmonized”, scope is limited (min rules and sanctions) → No legal imagination

• criminal competence w/r/t/ EU fraud against the EU financial interests

• “EP and Cn, acting [under OLP], after consulting the Court of Auditors, shall adopt the necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Union with a view to affording effective and equivalent protection in MS & in all the Union's institutions…”

Special & novel legal basis; cf. Art 280 EC excluded national CL measures

• Not yet used for CL approximation:

→ Directive (EU) 2017/1371 of 5 July 2017 on the fight against fraud to the Union's financial interests by means of criminal law was adopted under Art 83(2) TFEU

→ Competition between different legal bases -> controversial, because many believed it to be adopted under special legal basis of EU fraud, but that didn’t happen, it was adopted under 83(2)

Council FDs being recast as EU Directives

• Lisbonisation→ take what was under P3 and change into EU directives → process of converting old instruments into new

• arms trade

• corruption

• organized crime

• Directive 2014/57/EU on criminal sanctions for market abuse (->Complementing Regulation (EU) No 596/2014 on market abuse)

• Directive 2017/1371 on the fight against fraud to the Union's financial interests by means of criminal law (PIF Directive)

  • Controversy regarding legal basis –Art 325(4) TFEU lex specialis to Art 83(2))!

    • That proposal was based on 325(4), so special legal basis that would make more sense, but during negotiations legal basis was changed to 83(2), because they said all provisions related to crim law should be legislated under same basis -> EU parliament just went along with it & EU commission didn’t challenge the legal basis as it was expected to do -> so adopted under 83(2) (Scholars say it was an unfortunate precedent)

    • Means that nature of legislative measure as relating to crim law would be more important than specific goal (e.g. goal being to protect financial interest EU -> difficult to adopt subsequent directives under 325(4) & removal of limitations had to effect whatsoever -> no instruments might ever be adopted under this provision that would concern criminal law, so provision not used to full potential)

• Threshold high, too many obstacles, MS no appetite

• So may be proposal EU commission, why it is necessary to update directives, but then legislators are not acting on it

  • Because some concerns whether or not such an action is necessary

  • Rigidity crim law competence & MS recourse to it and to let EU legislate in these areas (not seen as a priority)

• PIF Directive (2017/1371 → fight against fraud to EU's Financial Institutions, by means of criminal law)

• replaced 1995 Convention on protection EU's FI

  • EU FI = revenue, expenditure, assets covered by/due to EU bodies budget (Art 2(1))

Types of fraud

1. Fraud affecting EU FI (Art 3): intentional acts/omissions in respect of

   1. (non-)procurement-related expenditure; revenue (other than revenue) arising from VAT own resources*

      1. Fraud related to expenditure, such as fraud involving EU funds, grants, loans or procurement contracts;

      2. Fraud related to revenue, such as non-payment or incorrect payment of EU customs duties, VAT or other taxes;

      3. Fraud related to financial instruments, such as misuse of EU financial instruments or aid;

      4. Corruption, which includes bribery, trading in influence, and other corrupt practices that impact EU funds or policies;

      5. Money laundering, which involves the conversion of proceeds from criminal activities into legitimate assets, including EU funds or assets.

2. Other crimes affecting EU FI (Art 4)

   1. Money laundering

   2. Passive & active corruption

   3. Misappropriation (public officials)

General Provisions

• Art 5: incitement, aiding and abetting, and attempt is punishible

• Penalties (effective, proportionate, dissuasive)

  • natural persons: 4 yrs imprisonment

  • LPs: non-crim fines + exclusion fom public benefits etc

• Kolpinghuis & Nijmegen: legality -> directives do not have direct effect unless implemented

• De Salo: legality -> directives do not have direct effect unless implemented

  • Legal basis: 83(2) TFEU, but could have been 325(4)

Directive (EU) 2017/541 on combatting terrorism

• Basis: Art 83(1); Replacing Council FD 2002/475/JHA; amending Decision 2005/671/JHA

Article 3: Offences = intentional acts seriously damaging a country

1. Terrorist offences (Art 3): “Member States shall take the necessary measures to ensure that the following intentional acts, as defined as offences under national law, which, given their nature or context, may seriously damage a country or an international organisation, are defined as terrorist offences…aims para 2”

• (1)(a)-(j): Attacks upon a person’s life, physical integrity

  • e.g. Kidnapping, Extensive destruction to public facility/infrastructure/system/property, seizure aircraft etc.

·      (2) aims: seriously intimidating population, unduly compelling a gov’tor IO to perform or abstain from any act, seriously destabilising/destroying fundamental political, constitutional, economic or social structures of a country/IO.

2. Offences related to terrorist groups (Art 4)

• (a) directing

• (b) participating

3. Art 5-12: offences related to terrorist activities (e.g. recruitment, providing training, financing etc)

Definition: Art 2(3) → Terrorist Group = a structured group of >2 persons, established for a period of time and acting in concert to commit terrorist offences;

• ‘structured group’ = a group that is not randomly formed for the immediate commission of an offence and that does not need to have formally defined roles for its members, continuity of its membership or a developed structure.

• TG offences: no actual commission of TO is required;

• TA crimes (Art 5-10, 12): no link to another specific offence is required

MoL: aiding/abetting (arts 3-8, 11-12); inciting (art 3-12); attempting (Art 3(1) except (f) possession and(j) threatening; arts 6-7; 9(1), (2)(a); 11-12)

Penalties:

• Natural persons: min-max 15 years

  • (Art 4(a)); 8 years(Art 4(b)); 8 years (where Art 3(1)(j) offence is committed by person directing G)

• Mitigation (art 16): renouncing terrorist activity; providing authorities info helping prevent/mitigate effects, identify offenders, find evidence, prevent offences

• Legal persons: same formula/sanctions as for Fraud+ the TO-enabling ‘lack of supervision/control’ (Art 17)

→ Art 21: prompt removal/blocking of online content/public provocation to commit a terrorist offence

FD 2008/913/JHA on combating certain forms & expressions of R&X by means of CL

• Not a Euro-crime! Basis: Art 34(2)(b) EU (~ 67(3) TFEU). Precursor Joint Action (repealed)

• Value-led initiative: “direct violations of the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law, upon which EU is founded and which are common to MS” (FD, recital 1)

Art 1(1) → Offences concerning racism & xenophobia(Art 1(1)

a. publicly inciting to violence or hatred directed against a group of persons or a member of such a group defined by…race, colour, religion, descent or national or ethnic origin;

b. commission of an act (a) by public dissemination/distribution of tracts, pictures etc;

c-d. publicly condoning, denying or grossly trivialising crimes [c: Art 6-8 ICC; d: Art 6 IMT] directed against a group/member, defined by reference to race, colour, religion, descent or national or ethnic origin when the conduct is carried out in a manner likely to incite to violence or hatred against such a group or a member of such a group.

• Instigating conduct Art 1(1)(c)-(d) and aiding/abetting Art 1 acts punishable

• Min-max penalties: NPs1-3 years; LPs fines+ exclusion public benefits; disqualification commercial activities, placing under judicial supervision

1.     sCL: Where to from here?

• 2011 EU Comm Communication on EU criminal policy:

• → “vision for a coherent and consistent EU Criminal Policy by 2020”. …So?

• Lisbonised areas: most Euro-crimes; market abuse, EU fraud

• Soon-to-be lisbonised: environmental crimes, violations of EU sanctions

• Other areas proposed by EuComm not yet acted on: transport, data protection, customs, fisheries, corruption/fraud in public procurement

• Violence against women: accession to the Istanbul Convention; dedicated Directive; adding as a Euro-crime?

• “Future of EU Substantive criminal law” (Romanian Presidency, 2019) MS: little appetite for further ‘Lisbonisation’ -> may be changing

  • Little appetite for the ‘general part’

  • Greater emphasis on effective implementation of existing EU CL

  • Need/feasibility assessment re: further minimum rules for definitions & sanctions for environmental crime, manipulation of elections, identity fraud, AI crimes

→(Slow) progress likely but: bases are limited; Cn and MS hold the key

→Cracks in 83 art are limited, basis for legislation strictly regulated, Council and MS still hold the key; MS retain all the say on these matters

• 83(1) different substance, very defined, and serious crimes with cross-border dimension

  • 83(1) is always ordinary legislative procedure

  • is exhaustive list

• 83 (2) annex competence can extend to any annex crime that relates to prior harmonization

  • can also be special procedure (only adopt procedure that has already been adopted for harmonization

  • requires prior harmonization

• → mostly difference in substance -> depends on the crime and the purpose of the crim law measures themselves

• Main similarities:

  • Both impose min rules for EU member states

    • ONLY legislate through minimum rules regarding definitions of offences and penalties of serious crimes, and then min ruloes with regard to penalties and sanction union policy that have previously been harmonized

→ By passing 83(1) and (2), Lisbon treaty recognized and codified much of the CJEU case law that had acknowledged powers and competences powers EU in crim law sphere

• One hand: express recognition (implied) competences union (that came from the cases)

  • E.g. env legislation and ship source pollution cases

• Other hand: express legal basis, almost as if union cannot go much beyond that

→ Through clarification, scope was narrowed

Was Lisbon treaty big achievement for Eu crim law?

• Well it codified and clarified a lot of these competences, but it really narrowed it

• With such express legal basis, CJEU is a lot more limited in its expansive interpretation of treaty law; doesn’t have to rely on unwritten implied powers (so expansive interpretation in Env Leg or Ship Source is not really possible anymore)

• 83(2) is translation into treaty law of these CJEU case law (Env Leg and Ship Source)

• Reduction rather than elimination

  SUMMARY

  • Post-lisbon; express codification Eu competences crim law via 83(1) and (2), got express legal basis to legislate in this area; no longer have to read implied powers into treaty law to get EU to legislate→ means that express competences have been laid out and are limited

• PIF directive -> Against fraud to EU FI (financial interests)

• Legal basis used was Art 83(2), when it could have been 325(4).

  • 325(4) is special competence for EU fraud against EU financial interests

• Lower threshold.

• Wording “shall adopt”

• Wider scope of competence than 83(2) -> only min rules in 83(2), and here it is “any necessary measures

→ So 83(2) means you are restricting how far the union can go in legislation

• Parliament agreed, commission did not object

• Controversy:  325(4) emptied of its purpose, directive did not go as far as it could have