NUNES AND DE MATOS
OPINION OF ADVOCATE GENERAL
JACOBS
delivered on 20 May 1999 *
1. The issue in this case, referred by the 4 a
Vara Criminal do Círculo do Porto (Fourth
Criminal Chamber of the Oporto District),
is what action may be taken by Member
States where individuals make improper
use of Community funds.
2. The questions were referred in the context of criminal proceedings against Mrs
Nunes and Mrs de Matos. The facts are not
set out in the order for reference; it appears
however from a brief description in the
annex to the order that both defendants are
charged with forgery and that Mrs Nunes
is additionally charged with embezzlement
of public funds. The charges, brought
under Portuguese law, 1concern events that
allegedly took place in 1986 and 1987 in
connection with grants for vocational training received from the European Social
Fund. Before the national court, Mrs Nunes
argued that Community legislation laid
down sanctions for the improper use of
Community funds by private individuals;
that those sanctions, being of a civil nature
* Original language: English.
1 — Article 228(1) and (3) and Article 424 of the Penal Code as
in force at the relevant time.
(refund of the sums advanced and nonpayment of the balance claimed), were
sufficient to safeguard the financial interests of the European Union; and that
therefore, in view of the primacy of Community law over national law, a Member
State could not classify the conduct covered
by the relevant Community legislation as a
criminal offence. The national court referred for a preliminary ruling the questions :
(1) whether the Community legislation in
force at the time of the acts imputed to
the defendants classified such conduct
as constituting a criminal offence; and
(2) whether a Member State is empowered
to impose criminal penalties for conduct which, being harmful only to
Community financial interests, attracts
only a sanction of a civil nature under
Community legislation.
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OPINION OF MR JACOBS — CASE C-186/98
3. Written observations have been submitted by Mrs Nunes, the Finnish and Portuguese Governments and the Commission.
In accordance with Article 104(4) of the
Rules of Procedure, the Court decided that
the procedure would not include a hearing.
4. The Community legal framework is set
by Council Decision 83/516/EEC of
17 October 1983 on the tasks of the
European Social Fund. 2 That decision
provides for general rules on the Fund
and is implemented by Council Regulation
(EEC) No 2950/83. 3Article 6(1) of Regulation No 2950/83 provides that 'when
fund assistance is not used in conformity
with the conditions set out in the decision
of approval, the Commission may suspend,
reduce or withdraw the aid after having
given the relevant Member State an opportunity to comment'. 4Article 6(2) provides
for the refund of sums not used in accordance with the conditions.
5. By prescribing those consequences where
funds are not used for the purposes inten2 — OJ 1983 L 289, p. 38.
3 — Regulation of 17 October 1983 on the implementation of
Decision 83/516/EEC on the tasks of the European Social
Fund, OJ 1983 L 289, p. 1.
4 — See further on Article 6(1) of Regulation No 2950/83 Case
T-142/97 Branco v Commission, judgment of 15 September
1998.
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ded, the Community legislation plainly
does not seek to lay down exhaustively
the sanctions which may be imposed by
Member States where the conduct of the
persons concerned constitutes a criminal
offence under national law. Whether Community legislation classifies such conduct as
constituting a criminal offence is therefore
not relevant to the essential issue before the
Court. The Finnish and Portuguese Governments and the Commission have stated
that the EC Treaty conferred no competence on the Community in criminal law.
As they recognise, however, that does not
preclude Member States from taking criminal proceedings in cases such as the
present. The definition of embezzlement
and other crimes as criminal offences, and
the range of penalties that may be imposed,
may be matters which do not currently fall
within the scope of Community law,
regardless of the nature of the funds
involved. But, as becomes clear from the
answer to the national court's second
question, Member States are required by
Community law to take all appropriate
measures to prevent and punish the misuse
of Community funds.
6. As to the second question, it is clear
from the case-law of the Court that a
Member State may impose criminal penalties for offences involving Community
funds: see for example Commission v
Greece, 5where the Court held that Greece
5 — Case C-68/88 [1989] ECR 2965.
NUNES AND DE MATOS
had infringed Article 5 of the EC Treaty
(now Article 10 EC) by failing to institute
criminal or disciplinary proceedings against
the persons involved in evading agricultural
levies which were payable to the Community budget. In its judgment, the Court
stated that:
'... where Community legislation does not
specifically provide any penalty for an
infringement or refers for that purpose to
national laws, regulations and administrative provisions, Article 5 of the Treaty
requires the Member States to take all
measures necessary to guarantee the application and effectiveness of Community law.
Community law, with the same diligence as
that which they bring to bear in implementing corresponding national laws.' 6.
7. That judgment was affirmed in Hansen, 7which concerned a Community regulation on road transport requiring Member States to take the measures necessary to
ensure compliance with its provisions. The
Court ruled that a Member State could
impose strict criminal liability for infringement and repeated the ruling of the Court
in Commission v Greece set out above.
For that purpose, whilst the choice of
penalties remains within their discretion,
they must ensure in particular that infringements of Community law are penalised
under conditions, both procedural and
substantive, which are analogous to those
applicable to infringements of national law
of a similar nature and importance and
which, in any event, make the penalty
effective, proportionate and dissuasive.
8. Those judgments to my mind resolve the
second question which has been referred to
the Court. They make it clear, moreover,
that Member States are not merely empow-
Moreover, the national authorities must
proceed, with respect to infringements of
6 — At paragraphs 23 to 25 of the judgment. See also paragraph
12 of the Opinion of Advocate General Tesauro.
7 — Case C-326/88 Anklagemyndigheden v Hansen & Søn
[1990] ECR I-2911, paragraph 17 of the judgment.
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OPINION OF MR JACOBS — CASE C-186/98
ered to impose criminal sanctions but are
obliged to take all effective measures,
which may include criminal sanctions. That
obligation flows from Article 5 of the EC
Treaty, which, as mentioned in Commission v Greece, requires the Member States
to take all measures necessary to guarantee
the application and effectiveness of Community law.
munities' financial interests. 8That Convention, based on Article K.3 of the Treaty
on European Union (Articles K to K.9 of
the Treaty on European Union have been
replaced by Articles 29 EU to 42 EU), is not
yet in force pending ratification by all the
Member States. However, it is none the less
of interest to note the reference in the
preamble to the Contracting Parties' conviction that 'protection of the European
Communities' financial interests calls for
the criminal prosecution of fraudulent
conduct injuring those interests' and to
'the need to make such conduct punishable
with effective, proportionate and dissuasive
criminal penalties', 9reflecting the formula
used by the Court in Commission v Greece.
9. The nature of the obligation imposed by
Article 5 of the EC Treaty is underlined by
the first paragraph of Article 209a of the
EC Treaty (now Article 280(2) EC), which
expressly requires Member States to take
the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting
their own financial interests. Although that
article was not in force at what appears to
have been the material time (it was introduced by the Maastricht Treaty), it none
the less serves to highlight the tenor of the
obligation in Article 5.
11. It may finally be noted that, according
to the Portuguese Government, the national
legislation is in conformity with the principles laid down by the Court in Commission
v Greece in that it treats in the same way
acts against the financial interests of the
Community and acts against the national
budget.
10. I would also mention the Convention
on the protection of the European ComI - 4888
8 — Convention drawn up on the basis of Article K.3 of the
Treaty on European Union, annexed to Council Act 95/C
316/03 of 26 July 1995, OJ 1995 C 316, p. 48.
9 — See the fourth and fifth recitals in the preamble.
NUNES AND DE MATOS
Conclusion
12. I accordingly consider that the questions referred by the 4 a Vara Criminal do
Círculo do Porto should be answered as follows:
(1) Community law does not classify acts of embezzlement or improper use of
Community public funds as criminal.
(2) Member States are required by Article 5 of the EC Treaty (now Article 10
EC) to take all effective measures to prevent and penalise such conduct, which
measures may include criminal sanctions; in that case the penalty provided
for must be similar to that imposed in the event of infringement of provisions
of national law of a similar nature and importance and be effective,
proportionate and dissuasive.
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