ECJ C-321/25 (Gidzhinov) – AG Opinion – National limitations and higher “agreement” penalties for fraud don’t breach EU law

On April 23, 2026, the EC issued the AG Opinion in the case C-321/25 (Gidzhinov).

Context: Preliminary ruling proceedings – Area of freedom, security and justice – Judicial cooperation in criminal matters – Combatting organised crime – Protection of the financial interests of the European Union – Article 325(1) TFEU – PFI Convention – Framework Decision 2008/841/JHA – Obligation to combat fraud affecting the financial interests of the European Union through effective deterrent measures – Obligation to provide for criminal penalties – Serious VAT fraud – Maximum penalties – Principle of proportionality – Limitation period

Summary

Facts: Bulgarian criminal proceedings were initiated in 2015 against five individuals for VAT fraud and participating in/running a criminal organization (formed between 2011-2012) involved in this fraud. The fraud amounted to approximately EUR 4,000,000. Due to judicial changes (new judges and assessors), the proceedings had to be restarted multiple times, leading to significant delays. The referring court anticipates that the absolute limitation period for most offenses (except for leading the criminal organization) will expire before a final judgment can be reached across all three judicial levels. The penalties for running the organization range from 5 to 15 years, for participation from 3 to 10 years, and for the tax fraud itself from 3 to 8 years.
Issue: The Sofia City Court referred two questions:
- Whether EU law (Article 325 TFEU and PFI Convention) precludes a national law that sets an absolute limitation period for prosecuting fraud against EU financial interests based solely on the maximum potential penalty, without considering case complexity or the need to restart proceedings, potentially leading to impunity.
- Whether EU law (Article 3(1)(b) of Framework Decision 2008/841/JHA) precludes a national law where an agreement to commit an offense (Article 2(b) of the Decision) is punishable by a higher maximum term of imprisonment than the actual offense itself.
AG Opinion – Question 1: Advocate General Campos Sánchez-Bordona proposes that Article 325 TFEU and Article 2(1) of the PFI Convention do not preclude a national law setting an absolute limitation period of 15 years for acts punishable by more than 10 years’ imprisonment and 10 years for acts punishable by more than 3 years’ imprisonment, even if it’s determined solely by the maximum penalty. He argues that, in abstract, these periods are reasonable and sufficient, and there is no evidence of a systemic risk of impunity across Bulgarian courts, despite the specific delays in the present case being due to “systemic inefficiency” of the referring court.
AG Opinion – Question 2: The AG proposes that Article 3(1)(b) of Framework Decision 2008/841/JHA does not preclude a national law that punishes an agreement to pursue an activity (leading to an offense) with a higher maximum custodial sentence than that laid down for the actual commission of one of those offenses. He acknowledges the convoluted phrasing of the Framework Decision regarding “maximum term of imprisonment of at least between two and five years” but concludes that it allows Member States to set higher maximum penalties.
AG Argumentation:
- Limitation Period (Question 1): While Member States are responsible for setting limitation periods, they must ensure effectiveness and deterrence. An absolute limitation period is not inherently problematic, as shown by Regulation No 2988/95. The 10-15 year periods under Bulgarian law are considered reasonable in abstract and exceed minimums in Directive 2017/1371. The AG emphasizes that the issue of impunity in this specific case appears to stem from particular problems (judicial changes, delays) of the referring court, not a systemic flaw in the Bulgarian limitation rules generally leading to widespread impunity for EU financial interests offenses.
- Penalties for Agreement vs. Offense (Question 2): The AG argues that Framework Decision 2008/841 aims to combat organized crime. In this context, the creation or running of a criminal organization (even if framed as an “agreement” under Article 2(b)) warrants more severe punishment than isolated instances of the underlying offenses. The agreement to establish a structured association for systematic criminal activities is distinct from and can be considered more serious than the actual execution of a single offense within that structure. The national legislature has the right to determine the proportionality of such penalties unless it clearly exceeds rationality. The AG interprets the phrasing “at least between two and five years” as permitting Member States to set maximum penalties higher than five years. He also notes that a Framework Decision without direct effect does not require a national court to disapply national law.

Questions

Do Article 325 of the Treaty on the Functioning of the European Union and Article 2(1) of the Convention on the protection of the European Communities’ financial interests preclude a national law which provides for criminal prosecution to become time-barred in respect of acts directed against the EU’s financial interests and for which the limitation period is determined solely by reference to the maximum potential penalty applicable to an offence and not by reference to the factual and legal complexity of the case, and which takes no account of the possibility of a coincidental occurrence making it necessary to restart the criminal proceedings anew, such that the application of national law may lead to impunity?

Does Article 3(1)(b) of Council Framework Decision 2008/841 preclude a national law under which the offence referred to in Article 2(b) is punishable by a higher maximum term of imprisonment than the offence which the agreement referred to in Article 2(b) concerns?

AG Opinion

1) Article 325 TFEU and Article 2(1) of the Convention on the protection of the European Communities’ financial interests

must be interpreted as meaning that they do not preclude a national law which lays down an absolute limitation period for the prosecution of crimes against the European Union’s financial interests, which is determined solely by the maximum penalty laid down for the offence in question, with the result that that limitation period is fifteen years for acts punishable by a custodial sentence of more than ten years and ten years for acts punishable by a custodial sentence of more than three years.

2) Article 3(1)(b) of Council Framework Decision 2008/841/JHA of 24 October 2008 on the fight against organised crime

must be interpreted as meaning that it does not preclude a national law pursuant to which conduct by a person consisting in an agreement to pursue an activity which, if carried out, would amount to the commission of offences referred to in Article 1 of that framework decision is punishable by a maximum custodial sentence higher than that laid down for the commission of one of those offences.’

Source

Curia

Other ECJ Cases referred to

For Question 1 (Limitation Period):

Judgment of 26 February 2019, Rimšēvičs and ECB v Latvia (C‑202/18 and C‑238/18; EU:C:2019:139, paragraph 57):
- Relevance: Cited to establish the principle that while Member States have competence in areas not harmonized by EU law (like setting limitation periods), they must still respect their obligations under EU law when exercising that power.
Judgment of 21 December 2021, Euro Box Promotion and Others (C‑357/19, C‑379/19, C‑547/19, C‑811/19 and C‑840/19; EU:C:2021:1034, paragraph 181 and the case-law cited):
- Relevance: Used to underscore the requirement under Article 325(1) TFEU for Member States to counter fraud affecting the EU’s financial interests with effective and deterrent measures.
Judgment of 5 December 2017, M. A. S. and M. B. (C‑42/17, ‘the judgment in M. A. S. and M. B.’, EU:C:2017:936, paragraphs 31, 32, and 41 and the case-law cited):
- Relevance:
- Confirms the Member States’ obligation to ensure effective collection of own resources, including VAT revenue, and protection of the EU’s financial interests.
- Crucially, this judgment is cited for the principle that “the national rules on limitation in criminal matters do not lead to impunity in a significant number of cases of serious VAT fraud.” This sets the high bar for when national limitation periods might be deemed incompatible with EU law.
Judgment of 8 September 2015, Taricco and Others (C‑105/14, ‘the judgment in Taricco’, EU:C:2015:555, paragraph 39 and 47 and the case-law cited):
- Relevance:
- Emphasizes that criminal penalties can be essential for effectively and dissuasively combating serious VAT evasion.
- Also reinforces the idea that the effectiveness and deterrent effect of measures depend not only on penalty severity but also on applicable limitation periods. It explicitly states that measures might be ineffective or non-dissuasive if offenses are “usually time-barred before the criminal penalty laid down by law can be imposed by a final judicial decision.”
Judgment of 21 January 2021, Whiteland Import Export (C‑308/19, ‘the judgment in Whiteland Import Export’, EU:C:2021:47, paragraphs 48, 49, 50, and 51):
- Relevance: Cited for the general principles regarding the setting of reasonable limitation periods by national authorities when fields fall within EU law. The Court held that:
- National limitation rules must balance legal certainty and reasonable timeframes with the effective application of EU law.
- All elements of these rules (start date, duration, suspension/interruption rules) must be considered.
- The complexity of the case analysis can also be an important element.
Judgment of 6 February 2025, Emporiki Serron – Emporias kai Diathesis Agrotikon Proionton (C‑42/24, EU:C:2025:56, paragraph 40 and the case-law cited):
- Relevance: Cited to show that an “absolute limitation period” is a recognized concept in EU law, specifically mentioning Regulation (EC, Euratom) No 2988/95 on the protection of the European Union’s financial interests, which includes such a period to reinforce legal certainty.

For Question 2 (Penalties for Agreement vs. Offense):

Judgment of 28 November 2024, PT (Agreement concluded between the prosecutor and the perpetrator of an offence) (C‑432/22, EU:C:2024:987, paragraph 38):
- Relevance: Cited to establish that Framework Decision 2008/841 is an act adopted under former Article 31(1) TEU (now largely Article 83(1) TFEU) and contains minimum provisions on penalties for organized crime.
Judgment of 6 July 2023, Staatssecretaris van Justitie en Veiligheid (Particularly serious crime) (C‑402/22, EU:C:2023:543, paragraph 38):
- Relevance: Cited for the principle that the assessment of the seriousness of a crime, given the lack of general harmonization in Member States’ criminal law, must be made within the framework of the Member State’s own criminal system and its choices regarding crimes that most seriously undermine the legal order.
Judgment of 24 June 2019, Poplawski (C‑573/17, EU:C:2019:530, point 2 of the operative part):
- Relevance: Cited to confirm the well-established case-law that a national court is not required to disapply a provision of national law that is incompatible with provisions of a framework decision that do not have direct effect. This is a crucial point regarding the enforceability of Framework Decision provisions in national courts.

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Article

Case Overview

This briefing summarizes the Opinion of Advocate General (AG) Campos Sánchez-Bordona delivered on April 23, 2026, in response to a preliminary ruling requested by the Sofiyski gradski sad (Sofia City Court, Bulgaria). The case concerns criminal proceedings against five individuals (A, B, V, G, D) accused of operating or participating in a criminal organisation engaged in serious Value Added Tax (VAT) fraud, affecting the financial interests of the European Union.

The Sofia City Court posed two distinct questions to the Court of Justice of the European Union (CJEU):

Whether national laws on absolute limitation periods for criminal prosecutions of EU financial interest fraud are compatible with EU law, particularly when these periods are determined solely by the maximum potential penalty and do not account for factual/legal complexity or procedural restarts, potentially leading to impunity.
Whether EU law precludes national law that punishes the agreement to commit an offence within an organised crime context more severely than the actual commission of that offence, raising concerns about proportionality.

Background: Facts of the Main Proceedings

Criminal proceedings were initiated in Bulgaria in 2015 against the five accused for various VAT-related crimes.

Charges:A. and B. were accused of running a criminal organisation between March 2011 and November 2012, punishable by a custodial sentence of 5 to 15 years under Bulgarian law (Article 321(3) Criminal Code).
V., G., and D. were accused of participating in this organisation during the same period, punishable by 3 to 10 years.
All accused faced additional charges for specific tax fraud offences, including false VAT declarations (€633,525), false invoices (€1,130,568), tax evasion (€1,022,583), and unlawful deductions (€1,244,274), punishable by 3 to 8 years’ imprisonment (Article 255(3) Criminal Code). The total alleged fraud amounts to approximately EUR 4 million.
Procedural Delays: The proceedings have been significantly delayed.
The case was initially assigned to a court that held 48 hearings between 2015 and 2021.
Due to the first judge’s departure, proceedings had to recommence in 2021 with a new judge.
The second court held 18 hearings between 2022 and 2025, largely marked by postponements and a lack of evidence-gathering.
The proceedings were re-allocated a third time due to the second judge’s retirement, leading to the current referring court.
Referring Court’s Concerns: The Sofia City Court noted that it is “objectively impossible to complete criminal proceedings at three levels of jurisdiction before the dates when the absolute limitation period for prosecuting most of the offences expires.” While the limitation period for the leaders of the criminal organisation (22.5 years, expiring 2035) might suffice, other charges face earlier expiry, raising the specter of impunity. The court also questioned the proportionality of punishing the agreement to commit an offence more severely than the offence itself.

III. Legal Framework

European Union Law

Article 325(1) TFEU: Requires Member States to “counter fraud and any other illegal activity affecting the financial interests of the Union through effective deterrent measures.”

PFI Convention (Protection of the European Communities’ financial interests):Article 1(1)(b): Defines fraud affecting EU financial interests in respect of revenue, including intentional acts/omissions leading to illegal diminution of EU resources (e.g., false statements, non-disclosure, misapplication of benefits).
Article 2(1): Requires Member States to ensure such conduct is “punishable by effective, proportionate and dissuasive criminal penalties,” including deprivation of liberty for “serious fraud” (e.g., involving amounts exceeding EUR 50,000).
Framework Decision 2008/841/JHA (Combatting organised crime):Article 1: Defines “criminal organisation” (structured association of more than two persons, established over time, committing offences punishable by ≥4 years deprivation of liberty, to obtain financial/material benefit) and “structured association.”
Article 2: Requires Member States to criminalise active participation in a criminal organisation (Art. 2(a)) or “an agreement with one or more persons that an activity should be pursued, which if carried out, would amount to the commission of offences” (Art. 2(b)).
Article 3(1): Sets minimum maximum penalties:
Art. 2(a) offence: maximum imprisonment of “at least between two and five years.”
Art. 2(b) offence: “the same maximum term of imprisonment as the offence at which the agreement is aimed, or by a maximum term of imprisonment of at least between two and five years.”

Bulgarian Law

Criminal Code (Nakazatelen kodeks):Article 80: Establishes limitation periods for prosecution based on the maximum custodial sentence (e.g., 15 years for sentences >10 years; 10 years for sentences >3 years).
Article 81: Details rules for suspension and interruption, but stipulates that “Notwithstanding the suspension or interruption of the limitation period, criminal prosecution is time-barred where a period has elapsed which exceeds half of that provided for in the preceding article.”
Article 93(20): Defines “organised crime group” consistent with EU Framework Decision.
Article 255(1), (3): Punishes tax evasion/VAT fraud, with serious cases carrying 3 to 8 years’ imprisonment.
Article 321(1), (2), (3): Criminalises creation/running of an organised crime group (3-10 years, or 5-15 years if for enrichment) and participation (1-6 years, or 3-10 years if for enrichment).
Code of Criminal Procedure (Nakazatelno protsesualen kodeks):Article 24(1)(3): Provides for discontinuance of proceedings if criminal liability has lapsed due to expiry of the limitation period.
Article 258(2): Requires examination to “recommence from the beginning” if a court member is replaced, as happened repeatedly in this case.

Advocate General’s Analysis and Proposed Answers
Question 1: Absolute Limitation Periods for EU Financial Interests Fraud

The referring court questioned whether the Bulgarian absolute limitation period, which relies solely on the maximum penalty and ignores case complexity or procedural restarts, is compatible with Article 325 TFEU and the PFI Convention, especially if it leads to impunity.

AG’s Analysis:

National Competence & EU Obligations: Member States are primarily responsible for setting limitation periods, but must ensure they meet EU law obligations, particularly Article 325(1) TFEU’s requirement for “effective deterrent measures.” VAT fraud significantly affects EU financial interests (in this case, ~EUR 4 million fraud well exceeds the PFI Convention’s “serious fraud” threshold of EUR 50,000).
CJEU Case-Law: The CJEU has held that effectiveness depends not only on penalty severity but also on limitation periods. National rules must balance legal certainty with the effective application of EU law, considering factors like the duration, suspension, and interruption rules, and the complexity of the case.
Validity of Absolute Limitation: The AG confirms that “EU law is not infringed merely by the absence from the national law of a rule making the applicability of the absolute limitation period for prosecution conditional on the complexity of the legal proceedings.” Absolute limitation periods are found even in EU regulations (e.g., Regulation No 2988/95).
Reasonableness of Bulgarian Periods: The AG deems a 15-year absolute limitation period (as for offences with max sentences >10 years) “reasonable and sufficient” in the abstract, considering it covers all levels of jurisdiction and is longer than periods in Directive 2017/1371.
Systemic Impunity Test: Crucially, the AG applies the CJEU’s “M.A.S. and M.B.” judgment criterion: whether the national limitation rules “lead to impunity in a significant number of cases of serious VAT fraud.”
The AG finds “nothing to suggest that the limitation period at issue in these proceedings usually leads to effective impunity in a considerable number of criminal prosecutions conducted before the Bulgarian courts.”
Instead, the delays in this specific case are attributed to “particular factors, associated with circumstantial problems and difficulties affecting the referring court itself,” described as “systemic inefficiency.” The AG emphasizes that “There is no information in the case file suggesting that… a significant number of such courts find the limitation rules… a systemic obstacle.”
Proposed Answer 1: Article 325 TFEU and Article 2(1) of the PFI Convention do not preclude a national law that provides for an absolute limitation period for crimes against EU financial interests, determined solely by the maximum penalty, even if it does not explicitly consider case complexity or procedural restarts, provided it does not lead to systemic impunity in a considerable number of cases.

Question 2: Penalties for Organised Crime Agreements vs. Offences

The referring court queried whether Article 3(1)(b) of Framework Decision 2008/841 precludes a national law (like Bulgaria’s) that punishes an agreement to commit an offence more severely (up to 15 years for running a criminal organisation) than the actual underlying offence (3-8 years for tax fraud).

AG’s Analysis:

Interpretation of Framework Decision 2008/841, Article 3(1)(b): This provision allows Member States to punish the “agreement” referred to in Article 2(b) either “by the same maximum term of imprisonment as the offence at which the agreement is aimed,” or “by a maximum term of imprisonment of at least between two and five years.”
The AG addresses the “convoluted” phrasing “maximum term of imprisonment of at least between two and five years.” He interprets this in line with the EU’s “minimum approximation” approach to criminal law, meaning Member States are free to establish higher maximum penalties than those minimum thresholds specified. This preserves national legal coherence.
Proportionality in Organised Crime: While an agreement preparatory to a single offence might typically warrant a lesser penalty, the AG highlights the context of organised crime as covered by Framework Decision 2008/841.
The AG states: “it is reasonable that the creation of organisational structures aimed at the systematic pursuit of criminal activities should receive the most severe punishment.”
He distinguishes an “isolated agreement to commit a single offence” from an “agreement to commit, on a permanent, organised basis, criminal acts by means of a structured association.” The latter, by creating a structure enabling effective crime, can justify a higher penalty than specific individual acts committed under its cover.
The AG concludes that “an agreement to create a criminal organisation may warrant a higher penalty than that imposed for the commission of specific offences within the sphere of that organisation.”
The determination of the precise penalty is for the national legislature, subject to not “clearly exceed[ing] the limits of rationality.” The national court must assess proportionality in the specific circumstances, considering the characteristics of the organisation and its role in enabling the crimes.
Proposed Answer 2: Article 3(1)(b) of Council Framework Decision 2008/841/JHA does not preclude a national law pursuant to which conduct by a person consisting in an agreement to pursue an activity which, if carried out, would amount to the commission of offences, is punishable by a maximum custodial sentence higher than that laid down for the commission of one of those offences.

Conclusion / Key Takeaways

The Advocate General advises the CJEU to rule in favour of the compatibility of the Bulgarian legal provisions with EU law, based on the following key arguments:

Limitation Periods: While national limitation periods must ensure effective protection of EU financial interests, an absolute limitation period itself is not automatically precluded. The crucial test is whether it leads to systemic impunity in a “considerable number of cases,” which the AG finds is not demonstrated in the Bulgarian context, despite specific “systemic inefficiency” observed in the referring court’s handling of this particular case.
Organised Crime Penalties: In the fight against organised crime, punishing the establishment or running of a criminal organisation more severely than the specific crimes it enables is considered proportionate and within the discretion of Member States, as the creation of such a structure represents a distinct and severe threat. The EU Framework Decision allows for flexibility in setting maximum penalties above minimum thresholds.

This opinion provides guidance to the CJEU on the interpretation of EU provisions concerning the protection of the Union’s financial interests and the fight against organised crime, particularly regarding the balance between national procedural autonomy and the effectiveness of EU law.