Bank BGŻ BNP Paribas

On 4 March 2020, the First Chamber of the Court of Justice delivered its judgment in Case C-183/18, which concerns the interpretation of Framework Decision 2005/214/JHA on the application of the principle of mutual recognition to financial penalties. The request for a preliminary ruling was lodged by a Polish court, which received from Dutch authorities a request for recognition and enforcement of a Dutch decision issued on 25 November 2016. That decision imposed a fine for a road traffic offence on the driver of a vehicle belonging to Bank BGŻ BNP Paribas Gdańsk, a legal entity that is based in Gdańsk (Poland). The Polish legislation that implements the Framework Decision uses the term ‘offender’ to define the scope ratione personae of the transposing legislation. In the Code of Criminal Procedure, however, that term includes only natural persons whereas, under Articles 1 and 9 of the Framework Decision, that Framework Decision also applies to decisions imposing financial penalties on legal persons. The referring court therefore asks, first, whether it shall disapply the national rule that runs afoul of the Framework Decision provisions or replace it with the rule contained in the Framework Decision.

Second, the referring court seeks clarification on the concept of ‘legal persons’ by asking, on the one hand, whether this is an autonomous concept of EU law (or whether it shall be instead interpreted according to the law of the issuing or executing Member State) and, on the other, whether it also covers a branch of a legal person notwithstanding the fact that that branch does not have legal personality in the executing State. This second limb of the second question is linked with the fact that, according to Polish law, Bank BGŻ BNP Paribas Gdańsk has no legal personality (i.e. no capacity to act as a party in judicial proceedings) separate from that of Bank BGŻ BNP Paribas S.A., whose seat is in Warsaw.

The Court addresses the second question first. As for its first limb – that is, whether or not the notion of ‘legal person’ shall be construed as an autonomous concept of EU law – the Court argues that the structure and rationale of the Framework Decision make it clear that the definition of crimes and the components of criminal liability are defined by the law of the issuing Member States. It is therefore according to such legislation that the notion of ‘legal person’ shall be interpreted, with the further consequence that a decision imposing a financial penalty on a legal person shall be recognised and executed in the executing Member State even if the latter’s legislation does not contemplate corporate criminal liability. This is coherent with the purpose of Framework Decision 2005/214/JHA, which does not aim to harmonise national criminal legislation but rather to facilitate the mutual recognition of decisions that impose financial penalties. As for the second limb of the question, the Court argues that it is Bank BGŻ BNP Paribas Warsaw that should be regarded as the entity legally liable for Bank BGŻ BNP Paribas Gdańsk, since the former has legal personality and in fact it forms a single entity with the latter.

The CJEU therefore concludes that, for the purposes of Framework Decision 2005/214/JHA, the concept of ‘legal person’ must be interpreted in the light of the law of the issuing Member State.

Moving on to the first question, the Court restates some principles that it had already singled out in previous cases, including Pupino and Popławski. Since framework decisions do not have direct effect, national law that is incompatible with them cannot be disapplied. However, their binding nature requires that national authorities shall interpret national legislation in conformity with framework decisions. Such interpretation shall neither lead to the criminal liability of individuals being aggravated or determined on the basis of a framework decision alone (i.e. without any national implementing measure) nor to an interpretation of national law that is contra legem. However, national authorities cannot claim that they are prevented from interpreting national provisions in conformity with a given framework decision only because the established interpretation of such national provisions by courts and scholars is not consistent with EU law. Against this backdrop, the Court makes some considerations to help the referring court in its task to determine whether national law (Polish law, in this case) can be interpreted in a way that is compatible with EU law.

First, the notion of ‘offender’, which is used in Polish implementing legislation, can refer to both natural and legal persons, as was also claimed by the Polish government. Second, as the Advocate General had argued, in these circumstances there is no need to interpret the notion of ‘author’ in the same way as in substantive criminal law, that is, in a way that would make it impossible to impose a financial penalty on legal persons. Third, the Court adds that the case file suggests that a number of Polish judges have already executed Dutch decisions imposing financial penalties on legal persons for road traffic offences. Finally, such an interpretation of Polish legislation would not aggravate the liability of legal persons: in the main proceedings, such liability follows from Dutch legislation, so that the issues to be addressed in Poland only concerns the enforcement of the penalty.

On the first question, the Court therefore concludes that the provisions of Framework Decision 2005/214/JHA must be interpreted as meaning that they do not oblige national courts to disapply incompatible national legislation since they do not enjoy direct effect. However, the competent executing authority has to interpret national law to the greatest extent possible in conformity with those provisions in order to ensure a result that is compatible with objective sought by that Framework Decision.