[REPOST] EPPO – First ruling of the ECJ: a Solomon’s judgement on cross-border investigations

This month, we have the pleasure of re-posting a contribution by Clémence van Muylder, Senior Associate at Loyens&Loeff, Brussels. Have a pleasant read!

In its Grand Chamber judgment of 21 December 2023, the Court of Justice of the European Union rendered its very first decision on the functioning of the European Public Prosecutor’s Office (EPPO). The decision provides valuable guidance on the conditions for cross-border acquisition of evidence by the EPPO.

Facts: German EDP requests searches and attachments in Austria

A company and its two managers are suspected of having made false declarations to evade European customs regulations by importing American biodiesel into the EU. An investigation has been opened in Germany, on behalf of the European Public Prosecutor’s Office, by a German European Delegated Public Prosecutor (EDP) into large-scale tax fraud and membership of a criminal organization formed to commit tax offences. As part of the assistance provided to the investigation initiated in Germany, an Austrian Assisting European Delegated Public Prosecutor (AEDP) ordered searches and criminal attachments at the business premises of the company and its parent company, as well as at the homes of the two managing directors, all located in Austria. He also sought authorization for these measures from the competent Austrian courts, in accordance with the provisions of the Austrian Code of Criminal Procedure.

The investigation measures were duly authorized and subsequently carried out. They were however appealed by the suspects to the Vienna Higher Regional Court. In particular, the suspects argued that the measures ordered were neither necessary nor proportionate, and that the authorizations issued by the Austrian courts were insufficiently reasoned. Were the Austrian authorities competent to reason on necessity and proportionality, pursuant to Articles 31 and 32 of Regulation (EU) 2017/1939 on the European Public Prosecutor Office? Unsure, the Austrian court referred three questions to the Court of Justice of the European Union for a preliminary ruling.

Opinion of Advocate General

In her Opinion of 22 June 2023, Advocate General Ćapeta referred to two lines of thought on the topic : the first one advocated a full judicial review in the Member State of the assisting EDP (a view supported by Germany and Austria), while the second entailed a more limited review in that same situation, i.e., a review of the formal and procedural aspects relating to the execution of the assigned investigation measure (a view supported by the European Commission, the EPPO, Romania, and the Netherlands). After weighing the various arguments, the Advocate General concluded that the Court should choose the second approach, i.e., that the court approving a measure to be carried out in the Member State of the AEDP may assess only the aspects relating to the execution of an investigative measure and must accept the assessment by the handling EDP that the measure is justified, whether or not the latter is approved by prior judicial authorization of the court in the Member State of the handling EDP. In her view the second approach better responded to the objective of the EPPO Regulation to create an efficient system in the fight against crime affecting the EU’s financial interests.

Court decision: prior judicial review in the Member State of the EDP

The Court followed the opinion of Advocate General Ćapeta to the extent that the review of the judicial authorisation required under the law of the Member State of the AEDP may relate only to elements connected with enforcement of the investigation measure. However, the Court added that it is for the Member State of the handling EDP to provide for a prior judicial review of the conditions relating to the justification and adoption of an assigned investigation measure. By doing do, the Court is clearly obliging the Member State of the handling EDP to foresee prior judicial review of the justification and adoption of the investigation measure before it can be carried out in the Member State(s) of the assisting EDP. According to the Court, this is necessary “in the event of serious interference with the rights of the person concerned guaranteed by the Charter of Fundamental Rights of the EU” (e.g. searches of private homes, conservatory measures relating to personal property, and asset freezing).

It seems that, contrary to the Advocate General, the Court was not ready to accept the full implication of the second line of thought that it is up to the criminal procedural law of the Member State of the handling EDP to determine whether judicial control is to take place before the investigation measure is carried out in another Member State or during the trial stage of the case. It thus appears to be a compromise between the two lines of thought abovementioned.

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