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ECJ C-280/25 (Lin II) – Judgment – EU law defines serious fraud, overrides national leniency, respects res judicata

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On July 16, 2025, the ECJ issues the Judgment in the case C-280/25 (Lin II).

Context: Reference for a preliminary ruling — Protection of the financial interests of the European Union — Article 325(1) TFEU — Convention drawn up on the basis of Article K.3 of the Treaty on European Union on the protection of the European Communities’ financial interests — Article 2(1) — Obligation to combat fraud affecting the financial interests of the European Union by means of effective deterrent measures — Obligation to provide for criminal penalties — Serious fraud affecting the financial interests of the European Union — Concept — Limitation period for criminal liability — National standard of protection relating to the principle of the retroactive application of more favourable criminal law (principle of lex mitior) — Obligation on the courts of a Member State to disapply case-law of the supreme court of that Member State that is not consistent with EU law — Application of the judgment of 24 July 2023, Lin (C-107/23 PPU, EU:C:2023:606) — Constitutional prohibition on the application of a lex tertia — Limitation period already established — Foreseeability of the conditions laid down in that judgment — Compatibility of that judgment with Article 7 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950

Summary

  • Fact: M.G.D. was prosecuted for complicity in continuous tax evasion between 2012 and 2014, causing damage of approximately €59,304 and evading €36,142 in VAT. The Curtea de Apel Oradea (Court of Appeal, Oradea, Romania) closed the proceedings due to the expiry of the limitation period, applying a national lex mitior standard established by the Romanian Supreme Court’s (ICCJ) Decision No 67/2022. The Public Prosecutor’s Office appealed, arguing that the Lin judgment from the CJEU should override this national standard.
  • Issue: The core issue is the conflict between the EU’s obligation for Member States to protect its financial interests by ensuring effective and dissuasive penalties for serious fraud (Article 325(1) TFEU, PIF Convention) and a national lex mitior standard that, as interpreted by the ICCJ (Decision No 67/2022), retrospectively shortened limitation periods, potentially creating a systemic risk of impunity. Sub-issues include defining “serious fraud” in the absence of national thresholds, navigating a constitutional prohibition against applying lex tertia, and the impact of the Lin judgment on cases where limitation periods might have already expired or where national law lacks specific criteria for assessing systemic impunity risks.
  • Questions:
    1. How should “serious fraud affecting the financial interests of the Union” be defined when national law lacks a minimum amount, particularly for VAT fraud below €50,000 but involving aggravating circumstances?
    2. Are Romanian courts still obliged to disapply the national lex mitior standard (Decision No 67/2022), as interpreted by the Lin judgment, even if this conflicts with a constitutional principle against lex tertia, implies a lower level of fundamental rights protection compared to Article 7 ECHR, leads to differing treatment for EU-related vs. other fraud, or if national law lacks criteria to assess systemic impunity risks, especially if the limitation period would have expired before the Lin judgment?
  • Decision: The Court (Grand Chamber) ruled:
    1. Where national law does not establish a minimum amount for “serious fraud,” any fraud affecting the EU’s financial interests with a total amount greater than €50,000 must be classified as “serious fraud” (considering total damage, not just damage to the EU budget).
    2. Romanian courts must disapply the national lex mitior standard (ICCJ Decision No 67/2022) in criminal proceedings concerning serious fraud affecting the EU’s financial interests. This obligation applies despite constitutional prohibitions on lex tertia, the absence of national criteria for assessing systemic impunity risk (as Lin already established this risk), and situations where the limitation period might have expired before the Lin judgment. However, EU law does not require setting aside a res judicata decision that has definitively found a limitation period expired, unless national law allows for such a reopening.
  • Argumentation: The Court reiterated the direct effect of Article 325(1) TFEU and Article 2(1) of the PIF Convention, emphasizing the need for effective and dissuasive penalties to protect the EU’s financial interests. It clarified that the national lex mitior standard went beyond the minimum guarantees of fundamental rights (Article 49(1) of the Charter, Article 7 ECHR) by retroactively altering limitation periods, thereby creating a systemic risk of impunity. The Court stressed that the interpretation of these EU provisions, as provided in Lin, was sufficiently clear and foreseeable from the moment of their entry into force in Romania, and that the specific status given to the principle of legality of offenses and penalties in M.A.S. and M.B. did not extend to the lex mitior principle as applied in Decision No 67/2022. The Court also admonished the ICCJ for issuing binding decisions (37/2024 and 16/2024) that effectively disregarded the Lin judgment without making a preliminary reference, thereby creating legal uncertainty and undermining the effectiveness of EU law.

 

Questions

  • First Question: In interpreting and applying Article 325 TFEU, Article 1(1)(a), and Articles 2 and 9 of the PFI Convention, in the absence of a domestic law provision establishing a minimum amount for fraud affecting the EU’s financial interests to be considered serious, should fraud be classified as serious only if it involves an amount exceeding €50,000?
  • Second Question: If the answer to the first question is negative, should the provisions of EU law be interpreted as requiring national courts to disapply the national standard of protection regarding the retroactive application of the more lenient criminal law (lex mitior), especially in cases where procedural acts occurred before the invalidation of the national legislative provision governing the interruption of the limitation period for criminal liability? This includes considerations of:
    • The prohibition on applying lex tertia.
    • Whether the general limitation period had expired before the judgment in Lin I was delivered.
    • The potential for inadequate protection of fundamental rights compared to the ECHR.
    • The lack of specific criteria in national law to assess the systemic risk of impunity in serious fraud cases.

AG Opinion

First question:

Article 325(1) TFEU and Articles 1, 2 and 9 of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests, signed in Brussels on 26 July 1995 and annexed to the Council Act of 26 July 1995,

are to be interpreted as meaning that the Member States may classify fraud against the financial interests of the European Union as serious when the amount involved does not exceed EUR 50 000.

I also suggest to the Court that, in view of the decisions of the national courts of last instance, it should reconsider the pronouncements of the judgment of 24 July 2023, Lin (C‑107/23 PPU, EU:C:2023:606), with regard to the obligation to disapply the national standard of protection relating to the principle of the retroactive application of the more lenient criminal law and declare that:

Article 325(1) TFEU and Articles 1, 2 and 9 of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests, signed in Brussels on 26 July 1995 and annexed to the Council Act of 26 July 1995,

do not require final judgments in criminal matters, with the force of res judicata, to be reviewed, if, in such judgments, on the basis of the national standard of protection relating to the more lenient criminal law, it has been determined that the limitation period for criminal liability had expired before the judgment in Lin was given;

do not preclude the application of the national standard of protection relating to the more lenient criminal law to offences committed before the judgment in Lin was given, inasmuch as that judgment does not constitute a clear and foreseeable legal basis for reviving criminal liability where the Romanian courts have declared the limitation periods for the relevant offences to have expired, even where that declaration was not made in a final judgment.

If the Court maintains the pronouncements of the judgment in Lin in their entirety, the answer to the second question of the Criminal Division of the Înalta Curte de Casație și Justiție (High Court of Cassation and Justice) could be as follows:

The courts of a Member State are not at liberty to make decisions that are incompatible with the judgment in Lin.

Accordingly, those courts:

are required to disapply a standard of protection relating to the principle of the retroactive application of the more lenient criminal law, without that obligation changing by reason of a national rule prohibiting the application of a lex tertia;

must not ignore the fact that the judgment in Lin I has determined the existence of a systemic risk of impunity for serious fraud affecting the financial interests of the European Union, where the national standard of protection of the principle relating to the more lenient criminal law is applied, and, consequently, it is not essential for those courts to assess, in each case, the existence of such a risk.

Decision

1.      Article 2(1) of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests, signed in Brussels on 26 July 1995 and annexed to the Council Act of 26 July 1995, read in the light of Article 49 of the Charter of Fundamental Rights of the European Union,

must be interpreted as meaning that, where no provision of national legislation establishes an amount above which an instance of fraud affecting the financial interests of the Union is to be regarded as ‘serious’, such an instance of fraud must necessarily be so classified as soon as it concerns a total amount greater than EUR 50 000, irrespective of whether the damage suffered by the budget of the Union as a result of that instance of fraud also exceeds such an amount.

2.      Article 325(1) TFEU and Article 2(1) of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests, read in conjunction with Article 49(1), Article 52(3) and Article 53 of the Charter of Fundamental Rights,

must be interpreted as not requiring that a court decision which has the authority of res judicata and which has found that the limitation period for the criminal liability of perpetrators of instances of serious fraud affecting the financial interests of the Union has expired, pursuant to the national standard of protection, enshrined in Decision No 67 of 25 October 2022 of the Înalta Curte de Casaţie şi Justiţie (High Court of Cassation and Justice, Romania), relating to the retroactive application of the more lenient criminal law (lex mitior), be called into question.

By contrast, except in such a scenario, those provisions of EU law forbid the Romanian courts to apply that national standard of protection to criminal proceedings brought in respect of cases of serious fraud affecting the financial interests of the Union, notwithstanding the fact that (i) under a principle of constitutional rank prohibiting the application of lex tertia, those courts are forbidden to apply in part successive pieces of criminal legislation by combining some of the provisions of those pieces of legislation, (ii) their national law does not contain any criteria enabling them to determine whether the application of that national standard of protection entails a systemic risk of impunity with regard to such instances of fraud, and (iii) the limitation period for the criminal liability of the perpetrators of those instances of fraud would have expired before the delivery of the judgment of 24 July 2023, Lin (C‑107/23 PPU, EU:C:2023:606), if that period had been calculated by applying that national standard of protection.

Source

Reference to other ECJ Cases

In the ECJ case “Lin II” (Case C‑280/25), the judgment of 16 July 2026, delivered by the Grand Chamber, references several other ECJ cases. These references are made within the context of interpreting EU law concerning the protection of the Union’s financial interests, particularly in relation to serious fraud and limitation periods in criminal proceedings in Romania.

The key ECJ cases referenced are:

  • Lin (C‑107/23 PPU, EU:C:2023:606): This is the most central reference, as the current case (“Lin II”) directly concerns the application and interpretation of the previous “Lin” judgment. The referring court in “Lin II” is specifically asking for clarification on how to apply the findings of the “Lin” judgment regarding the disapplication of the Romanian national standard of protection concerning the lex mitior principle. Paragraphs 33, 39-40, 43, 46, 48, 54-55, 57, 59, 108, 110-111, 112-118, 119-121, 126-127, 131, 134-137, 147-149, 153-156, 158-160, 162-163, 165-168, 173, 175, 176, 180, 186, 194, 198-199, 207, 215-216, 224-225, 227, 229-230, 234, 236, and 238 explicitly refer to the “Lin” judgment.

Other ECJ cases cited for legal context or to support particular points include:

  • Taricco and Others (C‑105/14, EU:C:2015:555): Referenced for the definition of fraud affecting the EU’s financial interests and the requirement for effective and dissuasive criminal penalties. Paragraphs 69, 109, 190, 213, and 172 cite this case.
  • Scialdone (C‑574/15, EU:C:2018:295): Cited regarding the flexibility of Member States to adopt rules that go beyond the minimum requirements of the PFI Convention. Paragraph 71 refers to this case.
  • Åkerberg Fransson (C‑617/10, EU:C:2013:105): Referenced for the general principle that Member States must counter fraud affecting EU financial interests with effective deterrent measures, including criminal penalties for serious fraud. Paragraph 109 refers to this case.
  • M.A.S. and M.B. (C‑42/17, EU:C:2017:936): This case is significantly discussed in “Lin II” for differentiating the protection of principles like legality and foreseeability from the lex mitior principle regarding limitation periods. Paragraphs 109, 148, 169, 190, 214-219, 221, 223 refer to this case.
  • Kolev and Others (C‑612/15, EU:C:2018:392): Cited for the general obligation of Member States to ensure effective and dissuasive criminal penalties for serious fraud against EU financial interests. Paragraph 109 refers to this case.
  • 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): Referenced for the principle that an attempt to commit fraud affecting EU financial interests should be treated similarly to actual fraud, and for the need for national standards of protection of fundamental rights not to compromise the primacy, unity, and effectiveness of EU law. Paragraphs 95, 105, 109, 172, 213, and 220 cite this case.
  • Napfény-Toll (C‑615/21, EU:C:2023:573): Cited regarding the complex nature of calculating the EU’s own resources from VAT. Paragraph 87 refers to this case.
  • Commission v United Kingdom (Action to counter undervaluation fraud), (C‑213/19, EU:C:2022:167): Also cited in relation to the calculation of VAT assessment bases. Paragraph 88 refers to this case.
  • Simmenthal (106/77, EU:C:1978:49): A foundational case for the direct effect of EU law and the obligation of national courts to disapply conflicting national provisions. Paragraph 76 refers to this case.
  • RS (Effect of the decisions of a constitutional court), (C‑430/21, EU:C:2022:99): Cited for the obligation of national courts to give full effect to EU law, even if it means disapplying national rules. Paragraph 76 refers to this case.
  • Facebook Ireland and Schrems (C‑311/18, EU:C:2020:559): Referenced for the interpretation of Article 52(3) of the Charter regarding its relationship with the ECHR. Paragraph 104 refers to this case.
  • Alchaster (C‑202/24, EU:C:2024:649): Also cited for the interpretation of Article 52(3) of the Charter and the ECHR. Paragraph 104 refers to this case.
  • Clergeau and Others (C‑115/17, EU:C:2018:651): Referenced for the meaning of the lex mitior principle as understood in EU law (Article 49(1) of the Charter). Paragraph 122 refers to this case.
  • BAJI Trans (C‑544/23, EU:C:2025:614): Cited for the interpretation of the lex mitior principle and the concept of a “final” conviction. Paragraphs 122, 182-184 refer to this case.
  • Köbler (C‑224/01, EU:C:2003:513): Referenced for the importance of the principle of res judicata. Paragraph 178 refers to this case.
  • Profi Credit Polska (Reopening of proceedings concluded with a final judicial decision), (C‑582/21, EU:C:2024:282): Cited for the principle of res judicata and the conditions under which a national court might go back on a final decision. Paragraph 179 refers to this case.
  • Impresa Pizzarotti (C‑213/13, EU:C:2014:2067): Also cited for the principle of res judicata and national procedural rules. Paragraph 179 refers to this case.
  • Denkavit italiana (61/79, EU:C:1980:100): Referenced for the principle that the Court’s interpretation of EU law clarifies its meaning from the time of its entry into force. Paragraph 199 refers to this case.
  • Commissioner of An Garda Síochána and Others (C‑140/20, EU:C:2022:258): Also cited for the principle that the Court’s interpretation clarifies the meaning of EU law from its entry into force. Paragraph 199 refers to this case.
  • Advocaten voor de Wereld (C‑303/05, EU:C:2007:261): Referenced for the clarity and precision requirements for legal provisions to be foreseeable. Paragraph 206 refers to this case.
  • BV (C‑570/20, EU:C:2022:348): Also cited for the clarity and precision requirements for legal provisions. Paragraph 206 refers to this case.
  • Dansk Rørindustri and Others v Commission (C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408): Cited for the foreseeability of legal developments in case-law, particularly for professionals. Paragraphs 208 and 209 refer to this case.
  • AC-Treuhand v Commission (C‑194/14 P, EU:C:2015:717): Also cited for the foreseeability of legal developments in case-law. Paragraphs 208 and 209 refer to this case.
  • Servier and Others v Commission (C‑201/19 P, EU:C:2024:552): Also cited for the foreseeability of legal developments in case-law. Paragraphs 208 and 209 refer to this case.
  • Commission v Greece (68/88, EU:C:1989:339): Referenced for the principle of sincere cooperation and the need for effective, proportionate, and dissuasive penalties for EU law infringements. Paragraph 210 refers to this case.
  • Hansen (C‑326/88, EU:C:1990:291): Also cited for the principle of sincere cooperation. Paragraph 210 refers to this case.
  • Commission v United Kingdom (C‑382/92, EU:C:1994:233): Also cited for the principle of sincere cooperation. Paragraph 210 refers to this case.
  • Berlusconi and Others (C‑387/02, C‑391/02 and C‑403/02, EU:C:2005:270): Also cited for the principle of sincere cooperation. Paragraph 210 refers to this case.
  • Kaduna (C‑244/24 and C‑290/24, EU:C:2024:1038): Referenced for the principle of protection of legitimate expectations. Paragraph 226 refers to this case.
  • Consorzio Italian Management and Catania Multiservizi (C‑561/19, EU:C:2021:799): Cited for the obligation of national courts of last instance to refer questions to the ECJ under Article 267 TFEU. Paragraph 231 refers to this case.
  • KUBERA (C‑144/23, EU:C:2024:881): Also cited for the obligation of national courts of last instance to refer questions to the ECJ. Paragraph 231 refers to this case.
  • Air Transport Association of America and Others (C‑366/10, EU:C:2011:864): Referenced for the exclusive jurisdiction of the ECJ to declare EU acts invalid. Paragraph 232 refers to this case.
  • European Union Copper Task Force v Commission (C‑384/16 P, EU:C:2018:176): Also cited for the exclusive jurisdiction of the ECJ to declare EU acts invalid. Paragraph 232 refers to this case.
  • Agentsia ‘Patna infrastruktura’ (European funding of road infrastructure), (C‑471/22, EU:C:2024:99): Also cited for the exclusive jurisdiction of the ECJ to declare EU acts invalid. Paragraph 232 refers to this case.
  • Commission v Poland (Ultra vires review of the Court’s case-law – Primacy of EU law), (C‑448/23, EU:C:2025:975): Referenced for the autonomy and effectiveness of the EU legal order and the exclusive jurisdiction of the ECJ to interpret EU law. Paragraph 233 refers to this case.

These references highlight the complex interplay between national and EU law, particularly regarding the interpretation of fundamental rights and the protection of the Union’s financial interests. They also underscore the role of the ECJ in ensuring the uniform application and primacy of EU law across Member States.

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BRIEFING DOCUMENT: Judgment of the Court (Grand Chamber) in Case C‑280/25, Lin II (Provisional text)

Date: 16 July 2026 Case Reference: C‑280/25 (Lin II) Referring Court: Înalta Curte de Casaţie şi Justiţie (High Court of Cassation and Justice, Romania)

Executive Summary:

The “Lin II” judgment clarifies and reinforces the obligations of Romanian courts under EU law to combat fraud affecting the European Union’s financial interests. Building on the previous “Lin” judgment, the ECJ reiterates that Romanian courts must disapply national legal standards, specifically ICCJ Decision No 67/2022, which retroactively applied a more lenient criminal law (“lex mitior”) to procedural rules concerning limitation periods. This national standard was found to create a “systemic risk of impunity” for serious fraud.

Key takeaways include:

  • Serious Fraud Threshold: Fraud is classified as “serious” if the total amount of damage exceeds EUR 50,000, irrespective of the precise share affecting the EU budget.
  • Disapplication of National Lex Mitior Rule: Romanian courts are required to disapply ICCJ Decision No 67/2022. This obligation stands despite national constitutional principles (e.g., prohibition of “lex tertia”) and even if it means criminal liability is not extinguished as it would have been under national law before the “Lin” judgment.
  • Res Judicata Exception: EU law does not require the reopening of cases where a final judicial decision (res judicata) has already definitively found the limitation period expired. However, if national law allows reopening for national law compatibility, it must also allow it for EU law compatibility.
  • Foreseeability and ECHR: The ECJ affirms that its interpretation is foreseeable and compatible with Article 49 of the Charter of Fundamental Rights and Article 7 ECHR, distinguishing procedural rules (limitation periods) from substantive criminal law (offences and penalties).
  • Critique of Subsequent ICCJ Decisions: The ECJ implicitly criticizes subsequent ICCJ decisions (37/2024, 16/2024) for attempting to circumvent the “Lin” judgment without making a preliminary reference, thus undermining legal certainty and the primacy of EU law.
  1. Background to the Case:

The case involves criminal proceedings against M.G.D. for complicity in continuous tax evasion, causing damage of approximately EUR 59,304 (with EUR 36,142 VAT evaded). The Curtea de Apel Oradea (Court of Appeal, Oradea) closed the proceedings, relying on ICCJ Decision No 67/2022, which applied the “lex mitior” principle to limitation periods, deeming M.G.D.’s criminal liability expired. The Public Prosecutor’s Office appealed, citing the ECJ’s earlier “Lin” judgment, which required disapplication of ICCJ Decision No 67/2022. The ICCJ then referred further questions to the ECJ in “Lin II.”

This judgment is set against a backdrop of several key Romanian legal developments:

  • Romanian Constitutional Court Decisions (2018, 2022): These decisions declared Article 155(1) of the Criminal Code of 2009 (which previously provided for interruption of limitation periods by any procedural act) unconstitutional, particularly for lacking clarity and foreseeability regarding notification to the suspect. This created a period (25 June 2018 to 30 May 2022) during which no legal grounds for interrupting limitation periods existed under Romanian law.
  • OUG nr. 71/2022: A government emergency order (30 May 2022) reintroduced grounds for interruption, but only for procedural acts notified to the suspect/defendant.
  • ICCJ Decision No 67/2022: This decision (25 October 2022) held that rules on the interruption of limitation periods are substantive criminal law in Romania, meaning they are subject to the “lex mitior” principle (retroactive application of more lenient law). This implied that the period without interruption grounds (created by the Constitutional Court decisions) applied retroactively to older cases, significantly extending the systemic risk of impunity.
  • ECJ “Lin” Judgment (C-107/23 PPU, July 2023): This judgment distinguished between the Constitutional Court decisions (which Romanian courts were not required to disapply due to their emphasis on fundamental rights of clarity and foreseeability) and ICCJ Decision No 67/2022 (which Romanian courts were required to disapply due to the systemic risk of impunity it created, going beyond Article 49(1) of the Charter).
  • Subsequent ICCJ Decisions (37/2024, 16/2024): After the “Lin” judgment, other ICCJ panels questioned its applicability, citing concerns about lex tertia (combining different laws) and compatibility with Article 7 ECHR, suggesting that the “Lin” judgment could only be partially applied in Romania.
  1. Main Themes and Most Important Ideas/Facts:

Interpretation of “Serious Fraud” (First Question):

The ECJ addresses the threshold for classifying fraud affecting the EU’s financial interests as “serious” under Article 2(1) of the PFI Convention (Protection of the European Communities’ Financial Interests) when national law does not define a specific amount.

  • PFI Convention and Threshold: Article 2(1) of the PFI Convention requires Member States to impose “effective, proportionate and dissuasive criminal penalties, including, at least in cases of serious fraud, penalties involving deprivation of liberty,” for fraud affecting EU financial interests. It specifies that “serious fraud shall be considered to be fraud involving a minimum amount to be set in each Member State. This minimum amount may not be set at a sum exceeding [EUR] 50 000.”
  • Total Damage vs. EU-Specific Damage: The ECJ clarifies that the EUR 50,000 threshold refers to the total amount of damage caused by the fraud, not just the portion directly affecting the EU budget.
    • “Thus, without prejudice to the possibility provided for in Article 9 of the PFI Convention and to the extent that national law does not clarify the concept of ‘serious fraud affecting the financial interests of the Union’, the courts of the Member State concerned are required to classify an instance of fraud which is in an amount exceeding EUR 50 000 and which affects the financial interests of the Union as ‘serious fraud’.” (Para 78)
    • This interpretation is supported by the wording of Article 2(1) and (2) of the PFI Convention (which refers to “total amount” for minor fraud), the objective of vigorously combating fraud (Para 84), the difficulty in precisely quantifying the EU’s specific loss (especially for VAT fraud, where the EU’s share is complex to calculate and dependent on various factors, some unforeseeable at the time of the offence, Paras 85-89), and the principle of foreseeability in criminal law (Para 90).
  • Application to Case: In M.G.D.’s case, the total damage was RON 268,536 (approx. EUR 59,304), exceeding the EUR 50,000 threshold, thus classifying it as “serious fraud.”
  • Conclusion on First Question: “Article 2(1) of the PFI Convention… must be interpreted as meaning that, where no provision of national legislation establishes an amount above which an instance of fraud affecting the financial interests of the Union is to be regarded as ‘serious’, such an instance of fraud must necessarily be so classified as soon as it concerns a total amount greater than EUR 50 000, irrespective of whether the damage suffered by the budget of the Union as a result of that instance of fraud also exceeds such an amount.” (Para 96)

3. Application of the “Lin” Judgment and Romanian Legal Standards (Second Question):

The second question delves into the complex interplay between EU law (Article 325 TFEU, PFI Convention, Charter) and Romanian constitutional principles, especially concerning the “lex mitior” principle and the prohibition of “lex tertia.”

  • Admissibility of Second Question: The ECJ declared parts of the second question inadmissible (those referring to Article 2 TEU, Article 4(2) and (3) TEU, and Article 2(2) TFEU) due to lack of specific reasoning by the referring court (Para 101). However, questions concerning Article 325(1) TFEU, Article 49(1), Article 52(3), and Article 53 of the Charter, and Article 2(1) of the PFI Convention were deemed admissible.
  • Recap of “Lin” Judgment and the Distinction:
    • The “Lin” judgment held that Romanian courts were not required to disapply the Constitutional Court decisions of 2018 and 2022 (which established a period without interruption grounds) because those decisions upheld a “national standard of protection relating to the principle that offences and penalties must be defined by law which goes beyond the guarantees provided in the first sentence of Article 49(1) of the Charter” (Para 115). This national standard, emphasizing foreseeability and precision of criminal law (including limitation rules), was deemed of such importance as to outweigh the systemic risk of impunity it created (Para 118).
  • However, “Lin” required Romanian courts to disapply ICCJ Decision No 67/2022 (Para 119). This decision extended the lex mitior principle to procedural rules on limitation periods, retroactively applying the period of no interruption. The ECJ found this:
    • Beyond Article 49(1) Charter: The lex mitior principle under Article 49(1) of the Charter applies only to provisions defining offences and penalties, not to rules governing the calculation of limitation periods (Para 123). This is consistent with Article 7 ECHR case-law (Para 125).
    • Exacerbated Systemic Risk: ICCJ Decision No 67/2022 “exacerbated the systemic risk of impunity” by retroactively depriving procedural acts (even those before 2018) of their interrupting effect, thus potentially neutralizing interruption for virtually all serious fraud cases committed since Romania’s EU accession (Paras 136, 140-143). This severely undermined the effectiveness of Article 325 TFEU and the PFI Convention (Para 139).
  • Constitutional Principle Prohibiting “Lex Tertia”:
    • The Romanian ICCJ argued that applying the “Lin” judgment would force courts to create “lex tertia” (a new, hybrid law by combining elements of different successive laws), which is forbidden by a national constitutional principle.
    • The ECJ counters that its interpretation in “Lin” does not require creating lex tertia. It merely “precluded the Romanian courts… from applying Decision No 67/2022 of the ICCJ and, accordingly, granting retroactive effect, under the lex mitior principle, to the rules governing the grounds for interruption of the limitation period” (Para 153). It does not prevent courts from applying the rules on limitation periods that were in force at different times (e.g., Criminal Code of 1968, Criminal Code of 2009 before 2018, or after 2022).
    • Difference in Treatment: The ECJ acknowledges that requiring disapplication only for fraud affecting EU financial interests creates a difference in treatment compared to other types of fraud. However, this is “reasonably justified in light of such an objective” (effective protection of EU financial interests) and “is not in breach of the principle of equality and non-discrimination” (Para 160).
    • Conclusion on Lex Tertia: “Article 325(1) TFEU and Article 2(1) of the PFI Convention… must be interpreted as meaning that the Romanian courts are required to disapply the national standard of protection, enshrined in Decision No 67/2022 of the ICCJ… notwithstanding the fact that, under a principle of constitutional rank prohibiting the application of lex tertia, those courts are forbidden to apply in part successive pieces of criminal legislation by combining some of the provisions of those pieces of legislation.” (Para 163)
  • Systemic Risk of Impunity Without National Criteria:
    • The referring court questioned whether it must disapply Decision No 67/2022 when national law lacks specific criteria to assess “systemic risk of impunity.”
    • The ECJ firmly states that its finding in “Lin” (that Decision No 67/2022 entails a systemic risk) is binding. Romanian courts “are free from the obligation to examine whether Decision No 67/2022 of the ICCJ entails such a systemic risk of impunity and must, on the contrary, take it for granted that such is the case, in accordance with the binding effect of the case-law of the Court” (Para 168).
    • This finding was based on data (including Commission reports) showing the widespread impact of these national decisions (Para 166). The ECJ also affirms that its finding of systemic risk does not violate legal certainty (Paras 171-174).
    • Conclusion on Systemic Risk: “Article 325(1) TFEU and Article 2(1) of the PFI Convention… must be interpreted as meaning that the Romanian courts must disapply the national standard of protection, enshrined in Decision No 67/2022 of the ICCJ… despite the fact that, in their national law, there are no criteria enabling them to determine whether the application of that national standard of protection entails a systemic risk of impunity… given that it follows from the judgment in Lin, in a manner that is explicit and foreseeable, that that national standard of protection entails such a systemic risk.” (Para 175)
  • Time-Barred Cases and Res Judicata: This is a critical distinction made by the ECJ.
  • Principle of Res Judicata: The ECJ reaffirms the importance of res judicata (final judicial decisions) in both EU and national legal orders (Para 178).
  • Scenario 1: Cases with a Final Judicial Decision (Res Judicata): If a Romanian court has already issued a final, irreversible decision that the limitation period has expired (applying ICCJ Decision No 67/2022), EU law does not require the reopening of such a case (Para 180). This applies “regardless of whether the court decision finding, definitively, that the limitation period has expired was handed down before or after the delivery of the judgment in Lin” (Para 180). However, if national law provides conditions for reopening such decisions to ensure compatibility with national law, those same conditions must apply to ensure compatibility with EU law (Para 181).
  • Scenario 2: Cases Without a Final Judicial Decision (including M.G.D.’s case): For cases where the limitation period has not been found expired by a final decision (e.g., if an appeal is still pending), EU law forbids Romanian courts from applying ICCJ Decision No 67/2022, even if doing so would mean the limitation period had expired before the “Lin” judgment (Para 236).
    • Reasoning:Entry into Force of EU Law: Article 325(1) TFEU and Article 2(1) PFI Convention were in force in Romanian law well before any serious fraud cases could have become time-barred (Paras 195-197). The “Lin” judgment merely clarified their meaning and scope, which is applicable retroactively to the date of their entry into force (Paras 199-200).
    • Clarity and Foreseeability: These EU law provisions were sufficiently clear and foreseeable. The existing ECJ case-law (e.g., Taricco judgment 2015) already established that national provisions leading to systemic impunity for EU fraud must be disapplied (Paras 210-213). The “M.A.S. and M.B.” judgment (2017) did not alter this, as it concerned lex mitior applied to substantive law, not procedural rules on limitation periods (Paras 214-223). Thus, “perpetrators of instances of serious fraud affecting the financial interests of the Union were in a position to foresee the incompatibility of that decision [ICCJ 67/2022] with the requirements stemming from Article 325(1) TFEU and Article 2(1) of the PFI Convention” (Para 173).
    • No Reactivation of Expired Liability: Applying “Lin” to non-final cases does not “reactivate” definitively extinguished criminal liability contrary to Article 49(1) of the Charter or Article 7 ECHR (Paras 190-191). Rather, it prevents the expiry of a limitation period that, under EU law, should not have been allowed to expire in the first place.
    • Conclusion on Time-Barred Cases: “Article 325(1) TFEU and Article 2(1) of the PFI Convention… must be interpreted as not requiring that a court decision which has the authority of res judicata… be called into question. By contrast, those provisions of EU law must be interpreted as meaning that, except in such a scenario, they forbid the Romanian courts to apply that national standard of protection to criminal proceedings… including where the limitation period… would have expired before the delivery of the judgment in Lin if that period had been calculated by applying that national standard of protection.” (Para 236)
  • Compatibility with Article 7 ECHR:
  • The referring court asked if Romanian courts must apply ICCJ Decision No 67/2022 to avoid infringing Article 7 ECHR.
  • The ECJ reiterates that its interpretation of EU law “correspond[s] to the requirements of Article 49(1) of the Charter, which are at least equivalent to the guarantees derived from Article 7 ECHR” (Para 238). Thus, disapplying ICCJ Decision No 67/2022 does not infringe Article 7 ECHR.
  • Critique of ICCJ Decisions 37/2024 and 16/2024: The ECJ notes that the ICCJ adopted these decisions without making a preliminary reference, despite questioning the compatibility of “Lin” with ECHR and constitutional principles. This “not only failed to fulfil its obligations under Article 267 TFEU, but also contributed to creating a situation devoid of legal certainty by requiring, in breach of EU law, other Romanian courts to adopt an interpretation of their national law which is manifestly incompatible with the requirements stemming from the judgment in Lin.” (Para 234)
  1. Conclusions and Operative Part of the Judgment:

The Court (Grand Chamber) hereby rules:

  1. Serious Fraud Classification: Article 2(1) of the PFI Convention, read in light of Article 49 of the Charter, must be interpreted as meaning that, where national law lacks a specific amount, an instance of fraud affecting EU financial interests is necessarily classified as “serious” if it concerns a total amount greater than EUR 50,000, irrespective of whether the damage suffered by the EU budget itself exceeds this amount.
  2. Disapplication of National Lex Mitior Rule on Limitation Periods: Article 325(1) TFEU and Article 2(1) of the PFI Convention, read in conjunction with Article 49(1), Article 52(3), and Article 53 of the Charter, must be interpreted as:
    • Not requiring the questioning of a court decision that has the authority of res judicata (final judgment) and found the limitation period expired under ICCJ Decision No 67/2022.
  • Forbidding Romanian courts, except in the res judicata scenario, from applying ICCJ Decision No 67/2022 to criminal proceedings for serious fraud affecting EU financial interests. This prohibition applies even if:
    • A constitutional principle prohibits “lex tertia” (combining successive criminal laws).
    • National law lacks criteria for assessing systemic risk of impunity (as the ECJ has already established this risk).
  • The limitation period would have expired before the “Lin” judgment if calculated using ICCJ Decision No 67/2022.

 

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