The Court of Justice of the European Union (CJEU) has issued its second ruling in the “Lin” series, clarifying that Romanian courts must disregard national interpretations that effectively create a systemic risk of impunity for serious fraud against EU financial interests. According to the CJEU, national provisions that prevent the prosecution of such crimes—specifically those relying on the retroactive application of a more lenient criminal law (lex mitior)—are incompatible with EU law when applied to pending cases.
The Legal Conflict: Lin I vs. Lin II
The latest ruling, known as Lin II, addresses the friction between Romanian judicial decisions and EU requirements for effective fraud prosecution. The original Lin I case, decided on July 24, 2023, established that Romania must ensure its statutes of limitations allow for the effective punishment of financial crimes. Following that ruling, the High Court of Cassation and Justice (ÎCCJ) in Romania issued a 2024 decision suggesting that local courts could not ignore its previous 2022 ruling on prescription without violating national principles against the retroactive application of lex tertia.
The CJEU’s new ruling explicitly rejects this approach. According to the court, the Lin I judgment did not require Romanian judges to create new legal regimes, but rather to prioritize EU obligations when handling “serious” fraud. By failing to account for the risk of impunity, the ÎCCJ’s 2024 position conflicted with established EU case law.
Did you know?
The CJEU defined “serious” fraud as any case involving a total value exceeding 50,000 euros. This threshold applies automatically under the PIF Convention (Convention on the protection of the European Union’s financial interests) when national law fails to specify a threshold for defining “serious” fraud.
Defining “Serious” Fraud and Impunity Risks
The CJEU clarified that its previous rulings were not intended to dismantle the entirety of Romania’s criminal law protections. Instead, the court focused on specific, systemic failures. The 2018 and 2022 decisions by the Romanian Constitutional Court, which invalidated provisions on prescription, created a nearly four-year window where no interruption of the prescription period was possible.
The CJEU determined that applying the lex mitior standard from the ÎCCJ’s 2022 decision to this window significantly increased the risk of impunity. While the CJEU respects the principle of res judicata (finality of judgments), it clarified that cases currently under appeal or pending in cassation do not benefit from this protection. Consequently, ongoing criminal proceedings for serious fraud cannot be terminated based solely on the 2022 ÎCCJ interpretation.
Future Trends in EU-National Judicial Relations
By explicitly stating that the CJEU’s previous jurisprudence was “predictable,” the court has signaled to national judiciaries that they cannot rely on internal procedural arguments to bypass EU requirements.
The focus has shifted from whether the prescription rules are constitutional to whether the specific fraud meets the “serious” criteria defined by EU law.
FAQ
Does the Lin II ruling affect past cases?
No. According to the CJEU, EU law does not require the reopening of cases that have already attained the authority of res judicata (final, definitive rulings).
What constitutes “serious” fraud under this ruling?
Under the CJEU’s interpretation, if national law does not provide a specific definition, any fraud impacting EU financial interests totaling more than 50,000 euros is automatically classified as “serious.”
Are Romanian courts now forced to ignore national law?
Not entirely. The CJEU clarified that it does not require courts to combine conflicting regulations to create a new system. It simply mandates that national standards of protection must not be applied in a way that creates a systemic risk of impunity for serious financial crimes.
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