High Court contradicted by CJEU in the scandal of the prescription of major frauds

The Court of Justice of the European Union established, yesterday, that the courts in Romania cannot apply the interpretation of the High Court of Cassation and Justice regarding the prescription when it creates a systemic risk of impunity for serious frauds affecting the financial interests of the European Union. The decision of the Luxembourg court, however, does not reopen the cases that have been finally resolved and does not remove, as a whole, the principle of applying the more favorable criminal law, but rather targets cases that are still pending or likely to be appealed in cassation, in which the total value of the fraud exceeds 50,000 euros.

The decision reignites one of the most sensitive legal controversies in Romania in recent years, after the application of the decisions of the Constitutional Court and the Supreme Court regarding the interruption of the prescription period led to the closure of thousands of criminal trials and the impossibility of recovering damages estimated, in the files of the National Anticorruption Directorate alone, at almost 200 million euros.

The decision delivered yesterday by the CJEU represents the continuation of the dispute that began in 2023, when the same court delivered a similar decision regarding several Romanian citizens sentenced to prison for tax evasion. They had challenged the convictions by invoking the principle of the retroactive application of the more favourable criminal law, known as "lex mitior”, and claiming that their criminal liability had become statute-barred. Their arguments were based both on the decisions of the Constitutional Court in 2018 and 2022, which invalidated the provisions on the interruption of the limitation period, and on Decision no. 67 of 2022 of the ÎCCJ, which established that the rules on the interruption of the limitation period are in the nature of provisions of substantive criminal law and may fall under the incidence of the more favourable criminal law.

The effect of this succession of decisions was that, for a period of almost four years, between the decision of the CCR in 2018 and the legislative intervention in 2022, Romanian law no longer provided for a valid cause for the interruption of the limitation period. By applying the more favourable criminal law retroactively, the consequences were extended to crimes committed since 2014, the year the new Criminal Code entered into force. Numerous procedural acts carried out by prosecutors and courts, which according to the initial regulation interrupted the running of the limitation period, no longer had this effect, and the period was considered to run without interruption. The result was the cessation of criminal proceedings in thousands of cases, including major corruption, tax evasion and fraud cases. In the first judgment, of 24 July 2023, the CJEU indicated that Member States must adopt and apply limitation rules that allow for the effective sanctioning of fraud against the financial interests of the Union. The European Court concluded that Romanian judges must leave the national standard regarding the more favourable criminal law, as enshrined in the 2022 decision of the CJEU, unapplied when its application generates a systemic risk of impunity for serious fraud affecting the European budget. However, the CJEU considered the 2018 and 2022 decisions of the CCR compatible with EU law, since they implemented the principle of legality of criminalisation and punishment, and the risk of impunity produced by them was less extensive than that resulting from the extension operated by the supreme court.

The conflict of interpretation did not end in 2023. The following year, the CJEU established that Romanian courts cannot remove its 2022 decision without affecting the principle of legality in criminal matters and the prohibition of the creation of a "lex tertia”, i.e. a third law resulting from the combination by the judge of provisions belonging to successive regulations. The new referral to the CJEU aimed precisely to clarify the compatibility of this position with Union law.

The specific case that generated yesterday's decision concerns the administrator of two commercial companies, accused of issuing fictitious tax invoices so that a third company could reduce its tax base. The total damage caused to the Romanian state budget was calculated at 268,536 lei, the equivalent of approximately 59,304 euros, of which evaded VAT in the amount of 163,656 lei, approximately 36,142 euros. The person tried for complicity in tax evasion escaped conviction after the court found that criminal liability was time-barred, a solution confirmed on 21 March 2024 by the Oradea Court of Appeal. The Prosecutor's Office attached to the Oradea Court of Appeal appealed the decision on 9 April 2024, claiming that the criminal proceedings had been terminated by applying the national standard derived from the 2022 ÎCCJ decision, without respecting the 2023 CJEU decision. Having reached the Supreme Court, the case led the panel of judges to request clarification from the CJEU both on the application of the 2023 decision and on the European notion of "serious fraud”.

The CJEU's response introduces an important financial delimitation. In the absence of a national provision establishing its own threshold, fraud affecting the financial interests of the Union must automatically be considered serious if its total value exceeds 50,000 euros. The qualification applies regardless of whether the damage actually suffered by the Union budget is lower than this threshold. In the case at hand, although the evaded VAT was valued at approximately 36,142 euros, the total value of the fraud exceeded 50,000 euros, which allows it to be classified as serious fraud.

The European court also stated that the Romanian principle of the more favourable criminal law does not, in itself, contravene EU law. The national standard can offer broader protection than the guarantees provided for in Article 49 of the EU Charter of Fundamental Rights. The incompatibility arises only when this standard is applied, in the form enshrined by the CJEU in 2022, to serious fraud affecting the financial interests of the Union and considerably amplifying the systemic risk of impunity.

At the same time, the CJEU confirmed that the authority of res judicata must be respected, so that trials definitively closed as a result of the limitation period will not be reopened. However, the Court makes a distinction with regard to judgments appealed on points of law: these cannot, in principle, be considered to already have the force of res judicata that would prevent the application of Union law.

The High Court, headed by Lia Savonea, reacted shortly after the ruling, stating that it "has always applied European law in good faith as a whole”, by simultaneously making use of EU law, the case law of the CJEU, the European Convention on Human Rights and the case law of the Strasbourg Court. The supreme court argues that Union law prevails when it enshrines a higher standard of protection and explains that the interpretation of Article 49 of the Charter was made in the light of Article 7 of the European Convention on Human Rights, considered the minimum standard of protection imposed by European law.

Different interpretations emerged in the legal space yesterday on the concrete effects of the judgment. The President of the National Union of Bars of Romania, Traian Briciu, believes that the CJEU decision strengthens the authority of res judicata and confirms that final solutions can no longer be changed. In his opinion, the situation is less clear in cases that have not yet been finally resolved, and the principle of the more favorable criminal law, enshrined in Articles 15 and 20 of the Constitution, continues to represent an essential national standard for the protection of fundamental rights.

Lawyer Adrian Toni Neacşu, a former member of the Superior Council of Magistracy, interprets the decision as confirmation that the rules established by the ÎCCJ remain applicable in most criminal cases. According to him, the exception resulting from the new CJEU decision concerns serious frauds, over 50,000 euros, that affect the financial interests of the Union and are still pending or can be challenged with an appeal in cassation. This category would include, in particular, frauds regarding European funds, certain acts of tax evasion related to VAT and related crimes.

Beyond the legal dispute, the financial and criminal stakes of the controversy are considerable. Since 2022, thousands of trials have been closed by finding that the statute of limitations has expired. According to data available on the Rejust jurisprudence portal, between 2022 and 2025, 10,579 solutions to terminate the criminal trial were registered, with the statute of limitations being invoked in 7,124 cases. However, not all of these solutions had as their sole basis the controversies generated by the decisions of the CCR and the ÎCCJ, and a complete official statistic has not been published. The DNA announced that the total damages from its own cases closed in this context amount to 896,312,705 lei, the equivalent of almost 200 million euros.