Criminal proceedings against Paul der Weduwe (C-153/00)

Contents

Judgment of the Court10 December 2002^noteIn Case C-153/00,REFERENCE to the Court under Article 234 EC by the Onderzoeksrechter in de Rechtbank van eerste aanleg te Turnhout (Belgium) for a preliminary ruling in the criminal proceedings before that court againstPaul der Weduwe,THE COURT,composed of: J.-P. Puissochet, President of the Third and the Sixth Chambers, acting for the President, M. Wathelet, R. Schintgen and C.W.A. Timmermans (Presidents of Chambers), C. Gulmann, D.A.O. Edward, A. La Pergola (Rapporteur), P. Jann, V. Skouris, F. Macken, N. Colneric, S. von Bahr and J.N. Cunha Rodrigues, Judges,Advocate General: P. Léger,Registrar: H.A. Rühl, Principal Administrator,after considering the written observations submitted on behalf of:— Mr der Weduwe, by J. Mertens, advocaat,— the Belgian Government, by A. Snoecx, acting as Agent, and M. van der Woude, P. Callens and T. Chellingsworth, advocaten,— the Commission of the European Communities, by C. Tufvesson, and T. van Rijn, acting as Agents,having regard to the Report for the Hearing,after hearing the oral observations of Mr der Weduwe, represented by B. Poelemans, advocaat; of the Belgian Government, represented by M. van der Woude and T. Chellingsworth; of the Luxembourg Government, represented by N. Mackel, acting as Agent, and by P. Kinsch, avocat, and of the Commission, represented by C. Tufvesson and T. van Rijn, at the hearing on 29 January 2002,after hearing the Opinion of the Advocate General at the sitting on 23 April 2002,gives the following

Judgment

1By order of 13 April 2000, received at the Court on 25 April 2000, the Onderzoeksrechter in de Rechtbank van eerste aanleg te Turnhout (investigating judge at the Court of First Instance, Turnhout) (Belgium) referred to the Court for a preliminary ruling under Article 234 EC four questions on the interpretation of Article 49 EC.

2Those questions were raised in a judicial investigation seeking to determine the criminal liability of Mr der Weduwe, a Netherlands national living in Luxembourg, who is employed by a bank also established in Luxembourg and is accused of a number of offences through canvassing for clients in Belgium between October 1993 and May 1999.

Legal background

Provisions of Belgian law

3Article 458 of the Belgian Criminal Code provides:‘Medical practitioners, surgeons, health officers, apothecaries, midwives and all other persons who, by reason of their status or profession, are guardians of secrets entrusted to them and who disclose them except where they are called to give evidence in legal proceedings or where the law requires them to do so, shall be liable to imprisonment of between eight days and six months and a fine ranging from one hundred to five hundred francs.’

4According to the case-law of the Belgian courts, the requirement of professional secrecy laid down in Article 458 of the Criminal Code does not apply to employees of credit institutions (Cass. 25 October 1978, Pas., 1979, I, 237).

5The hearing of witnesses by the investigating judge is governed by Articles 71 to 86 of the Belgian Code of Criminal Procedure. Article 75 of that code provides that the witness is to swear an oath that he will tell the whole truth and nothing but the truth. The refusal of a witness to answer certain questions, even where it has been established that his testimony would be such as to incriminate himself or a third party, is treated as equivalent to a refusal to appear when summoned as a witness, which is punishable under Article 80 of the code (Cass. 10 July 1916, Pas., 1917, I, 195).

Provisions of Luxembourg law

6Under Luxembourg law, professional secrecy is governed by Article 458 of the Luxembourg Criminal Code, the text of which is analogous to Article 458 of the Belgian Criminal Code, save for the amount of the fine, which ranges from LUF 10000 to 50000.

7Article 41 of the Law of 5 April 1993 on the financial sector (Memorial A, 1993, p. 462), as amended, provides:1. Directors, members of the governing and supervisory boards, managers, employees and other persons employed by the credit institutions and other professions of the financial sector mentioned in Part I hereof shall be required to maintain secrecy in regard to information entrusted to them in the course of their professional business. Disclosure of such information is an offence punishable under Article 458 of the Criminal Code.2. The duty to maintain secrecy shall cease when disclosure of information is authorised or required by or pursuant to a legislative provision even if it predates the enactment hereof....’

The main proceedings

8The order for reference shows that Mr der Weduwe, a Netherlands national living in Luxembourg, successively employed by two banks established in Luxembourg, namely Banque UCL and Rabobank, is alleged to have canvassed for clients in Belgium with a view to persuading them to place money in deposits or negotiable securities with his employers. In the course of his activities, in the period from October 1993 to May 1999, Mr der Weduwe allegedly collected money from Belgian clients and took it to Luxembourg. He allegedly also took coupons pertaining to negotiable securities to Luxembourg on behalf of Belgian clients in order to place the proceeds of those coupons with his employer.

9The national court is conducting a judicial investigation concerning the offences of forgery, use of forged documents, fiscal forgery, use of forged tax documents, money-laundering and failure to declare income as required by Articles 305 to 310 of the Belgian law on income tax. In the course of the investigation, Mr der Weduwe, the defendant in the case, was questioned by the national court on the manner in which he canvassed for clients in Belgium and the manner in which the negotiable securities were moved to Luxembourg. Mr Marc Troch, a Belgian national living in Luxembourg, who worked for the Banque UCL, where he was responsible for the arbitrage office, investment funds, international credits and private banking, was also questioned as a witness by the Belgian police.

10Both Mr der Weduwe and Mr Troch have refused to answer the questions put to them, invoking the obligation of professional secrecy which Luxembourg law imposes on employees in the financial sector.

11According to the national court, the Luxembourg provisions on banking secrecy seriously impede the collection of evidence in judicial investigations into activities carried out in Belgium under the freedom to provide services. Employees of banks established in Luxembourg which exercise their right to provide services freely in the territory of another Member State in which a refusal to give evidence is a criminal offence, such as the Kingdom of Belgium, are faced with the dilemma of necessarily having to breach either the laws of the host Member State or the Luxembourg provisions on banking secrecy. That conflict of laws also results in unequal treatment of banks and their clients according to their nationality and place of establishment.

12The national court points out that in Case C-384/93 Alpine Investments [1995] ECR I-1141 the Court of Justice interpreted Article 59 of the EC Treaty (now, after amendment, Article 49 EC), to the effect that a Member State may not maintain a national rule which impedes trade in services between Member States, unless that rule satisfies all the conditions necessary for it to be deemed to be in the public interest. The national court considers that the extraterritorial application of Luxembourg provisions on banking secrecy constitutes an unreasonable impediment to cross-border banking activities.

The questions submitted for a preliminary ruling

13In those circumstances, taking the view that an interpretation of Article 49 EC was necessary to resolve the dispute before it, the Onderzoeksrechter in de Rechtbank van eerste aanleg te Turnhout decided to stay proceedings and refer the following questions to the Court of Justice for a preliminary ruling:‘Must Article 49 EC be interpreted to mean that, where a credit institution authorised in a Member State in which breaches of banking secrecy are a criminal offence operates, under the freedom to provide services, in another Member State where there is no analogous banking secrecy,(1) that provision of the Treaty does not preclude a legislative provision of the host Member State pursuant to which employees of the credit institution concerned are required to give evidence in criminal proceedings concerning services provided by them, under the freedom to provide services, in the territory of the host Member State in circumstances in which employees of credit institutions of the host Member State are under a like obligation to give evidence as witnesses;(2) that provision does not preclude a legislative provision of the host Member State pursuant to which employees of the credit institution concerned who, when interviewed as suspects, choose not to rely on their right to remain silent, may as suspects make a statement in criminal proceedings concerning services provided by them, under the freedom to provide services, in the territory of the host Member State in circumstances in which employees of credit institutions established in the host Member State have the same right to make a statement as suspects, where they do not or do not wish to rely on their right to remain silent;(3) that provision precludes a legislative provision of the Member State of origin pursuant to which employees of the credit institution concerned may be rendered criminally and civilly liable if, in the context of a criminal investigation conducted in a host Member State (see the first and second questions) (in this case, the Kingdom of Belgium), they give evidence concerning services provided by them in the territory of the host Member State under the freedom to provide services;(4) that provision precludes a legislative provision of the Member State of origin pursuant to which employees of the credit institution concerned may be rendered criminally and civilly liable if, in the context of a criminal investigation conducted in a host Member State (see the first and second questions) (in this case, the Kingdom of Belgium), they make a statement as suspects concerning services provided by them in the territory of the host Member State (in this case the Kingdom of Belgium) under the freedom to provide services, whilst at the same time not relying or not wishing to rely on the right to remain silent?’

Preliminary observations

14By its first and second questions, which can be taken together, the national court is asking essentially whether, where banks established in one Member State have engaged in the cross-border provision of banking services on the territory of a second Member State, Article 49 EC precludes the criminal law and criminal procedural law of the second Member State from, first, requiring employees of those banks to give evidence, under threat of criminal sanctions, where they are called as witnesses in criminal proceedings brought in that Member State in respect of events which occurred on its territory in relation to those cross-border services, and, second, authorising them to disclose information if they are defendants in such criminal proceedings.

15By its third and fourth questions, which can be taken together, the national court is asking essentially whether, where banks established in one Member State have engaged in the cross-border provision of banking services on the territory of a second Member State, Article 49 EC precludes the criminal law of the first Member State from prohibiting, under threat of criminal prosecution, employees of those banks from breaching banking secrecy where they are heard as witnesses or defendants in criminal proceedings brought in the second Member State in respect of events which occurred on the territory of that State in connection with those cross-border services.

16It is clear from the legal background given in the order for reference that, under Belgian law, Article 458 of the Belgian Criminal Code, which provides that the breach of professional secrecy is a criminal offence, does not apply to the banking sector. Conversely, under Luxembourg law, the criminal sanctions for breach of professional secrecy laid down in Article 458 of the Luxembourg Criminal Code also apply to the banking sector by virtue of Article 41 of the Luxembourg Law of 5 April 1993. Accordingly, unlike Belgian law, Luxembourg law makes the breach of banking secrecy a criminal offence.

17Against that legal background, characterised by a difference in the laws on banking secrecy in the two Member States, the obstacle encountered by the national court in the main proceedings is that both the defendant, who has not exercised his right to silence, and the witness have refused to answer questions put to them in the course of the investigation, expressly invoking their need to observe the provisions on professional secrecy applicable in Luxembourg in respect of banking matters. The national court states that it is only the extraterritorial scope of the Luxembourg provisions on banking secrecy which constitutes an impediment to the collection of evidence in the main proceedings.

18In addition, the national court considers that the unequal treatment of banks and their clients according to their nationality and place of establishment, which it regards as contrary to Article 49 EC, is likewise the result only of the extraterritorial scope of the Luxembourg provisions in question. The national court maintains, more specifically, that those provisions prohibit employees of banks established in Luxembourg from disclosing information covered by banking secrecy to the judicial authorities of another Member State, by laying them open to criminal prosecution in Luxembourg. In that way, those provisions constitute an unreasonable impediment to cross-border banking activities.

19The national court therefore considers that it is the conflict between the extraterritorial scope of the Luxembourg provisions on banking secrecy, as interpreted by it, and the provisions of the Belgian Criminal Code and Code of Criminal Procedure, which alone are applicable in the main proceedings, which constitutes, first, an impediment to the collection of evidence in its judicial investigation and, second, unequal treatment of banks and their clients according to their nationality and place of establishment.

20Accordingly, as regards, more specifically, the first and second questions, the national court is seeking to ascertain whether Article 49 EC is incompatible with the obligation of a witness to give evidence and the possibility for a defendant to disclose information, as provided for in the Belgian Criminal Code and Code of Criminal Procedure, only in cases where the witness and the defendant actually risk prosecution in Luxembourg, by virtue of the extraterritorial scope of Luxembourg rules on banking secrecy, on account of evidence given by them in judicial proceedings in Belgium. Similarly, as regards, more specifically, the third and fourth questions the national court is seeking to ascertain whether Article 49 EC precludes the prohibition on breaching banking secrecy laid down in the Luxembourg provisions only where that prohibition also applies, by virtue of the extraterritorial scope of Luxembourg banking secrecy, to a witness or a defendant heard in judicial proceedings in another Member State.

21Whether the Luxembourg provisions on banking secrecy have extraterritorial scope depends upon the interpretation given to them.

Admissibility

Observations submitted to the Court

22According to Mr der Weduwe, the questions referred by the national court are inadmissible. He claims in particular that, in its order for reference, the national court did not provide adequate concrete factual and legal information to allow the Court to give a useful answer to the questions referred.

23According to the Belgian Government, the third and fourth questions have a bearing on Community law only in so far as the national court's interpretation of the Luxembourg provisions on banking secrecy is correct.

24The Belgian Government observes that, according to the legal literature, there is as yet no Luxembourg case-law on the territorial scope of the Luxembourg provisions on banking secrecy. It considers that those provisions are open to two possible interpretations.

25On one interpretation, they have no extraterritorial scope. Disclosure of information outside Luxembourg territory is therefore not punishable under Luxembourg law.

26On the other interpretation, those provisions have extraterritorial scope. In that case, however, logic would dictate that that extraterritorial scope should apply both to the principle of banking secrecy and to the exception for evidence given in judicial proceedings, for which Luxembourg law also provides. Bank employees obliged to observe Luxembourg banking secrecy would therefore be authorised to disclose information covered by that secrecy requirement to the judicial authorities of another Member State.

27The Belgian Government thus considers that the interpretation by the national court to the effect that Luxembourg banking secrecy has extraterritorial scope but the exceptions provided for in Luxembourg law do not, is implausible. However, the obstacle encountered by the national court in the main proceedings, and the difficulties which it might raise in relation to Article 49 EC, exist only if such an interpretation were to be accepted.

28At the hearing before the Court, the Luxembourg Government indicated that it shared Mr der Weduwe's doubts as to the admissibility of the questions submitted for a preliminary ruling. It considers that the reasoning of the national court is based on a hypothetical interpretation of Luxembourg law. Since that interpretation may not necessarily be the correct one, the questions submitted to the Court are also hypothetical.

29The Luxembourg Government explains in that regard that factual situations giving rise to the type of dispute in question are too rare and too atypical to have come before the Luxembourg courts, which explains why the question of the extraterritorial scope of the Luxembourg provisions on banking secrecy has not yet been resolved by those courts.

30According to the Luxembourg Government those provisions do have extraterritorial scope. Moreover, the exemption from criminal liability for witnesses giving evidence in judicial proceedings, provided for in the Luxembourg legal system, also has extraterritorial scope. According to that government, the concept of judicial authority in Article 458 of the Luxembourg Criminal Code covers not only Luxembourg judicial authorities but also those of other Member States. Likewise, a defendant is always entitled to disclose information covered by banking secrecy where that disclosure is made in judicial proceedings.

Findings of the Court

31It is settled case-law that, in the context of the cooperation between the Court of Justice and the national courts established by Article 234 EC, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted by the national court concern the interpretation of Community law, the Court of Justice is, in principle, bound to give a ruling (see, inter alia, Case C-415/93 Bosman [1995] ECR I-4921, paragraph 59; Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraph 38, and Case C-390/99 Canal Satélite Digital [2002] ECR I-607, paragraph 18).

32However, the Court has also held that, in exceptional circumstances, it can examine the conditions in which the case was referred to it by the national court, in order to assess whether it has jurisdiction (PreussenElektra, paragraph 39, and Canal Satélite Digital, paragraph 19). The spirit of cooperation which must prevail in preliminary ruling proceedings requires the national court for its part to have regard to the function entrusted to the Court of Justice, which is to contribute to the administration of justice in the Member States and not to give opinions on general or hypothetical questions (Bosman, paragraph 60, and C-451/99 Cura Anlagen [2002] ECR I-3193, paragraph 26).

33Accordingly, the Court can decline to rule on a question submitted by a national court where, for example, the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a helpful answer to the questions submitted to it (see to that effect, PreussenElektra, paragraph 39, and Canal Satélite Digital, paragraph 19).

34Moreover, in order to enable the Court to give a useful interpretation of Community law, it is essential for the national court to explain why it considers that an answer to its questions is necessary for resolving the dispute (see Joined Cases 98/85, 162/85 and 258/85 Bertini [1986] ECR 1885, paragraph 6, and Case C-343/90 Lourenço Dias [1992] ECR I-4673, paragraph 19).

35As to the third and fourth questions, it should be noted, first, that, in the main proceedings, the national court must apply the provisions of Belgian law, particularly those of Belgian criminal law and criminal procedure, and that the national court invokes the Luxembourg provisions on banking secrecy only because it considers them to constitute an obstacle to its investigation.

36Secondly, as the Belgian Government has correctly pointed out, it is only on the basis of an asymmetric interpretation of the Luxembourg provisions on banking secrecy that the national court has discerned a potential obstacle which may, in its view, be connected with Article 49 EC, and thus require an interpretation of that provision by the Court. On the one hand, the national court assumes that the provisions, contained in Article 458 of the Luxembourg Criminal Code and Article 41(1) of the Luxembourg Law of 5 April 1993, making the breach of banking secrecy a punishable offence, have extraterritorial scope. On the other hand, it implicitly considers that the exemptions from criminal liability set out in Article 458 of that code in respect of giving evidence in legal proceedings and in Article 41(2) of the Law of 5 April 1993 in respect of the more general case where the authority or duty to disclose information covered by banking secrecy are laid down by law are, by contrast, limited in scope to Luxembourg territory.

37As the Advocate General correctly pointed out in paragraph 49 of his Opinion, the interpretation chosen by the national court is hypothetical, since the Luxembourg courts have not ruled on the issue. It is not the only possible interpretation of those provisions. Moreover, the Belgian Government has made it clear in its submissions to the Court that it regards the national court's interpretation as implausible. That interpretation is further challenged by the Luxembourg Government itself, which considers that the banking secrecy prescribed by Luxembourg law cannot be invoked against judicial authorities in other Member States in investigations such as the one being conducted in the main proceedings.

38The national court has not in any way explained why it considers the interpretation on which it relies to be the only one possible. The fact that the relevance of the questions raised by the national court rests on a particular interpretation of a national law other than its own made it particularly necessary to state the grounds for the order for reference on that point.

39In those circumstances, since the referring court has not provided the Court with all the necessary information to determine whether an interpretation of Article 49 EC would serve a useful purpose in the main proceedings, the third and fourth questions must be held inadmissible.

40As regards the first and second questions, in the light of the finding in paragraph 20 of this judgment, and in the absence of any specific reasoning in the order for reference as to why the national court asks whether Article 49 EC must be interpreted as precluding the application of provisions of the Belgian Criminal Code and Code of Criminal Procedure, those questions are also inadmissible.

Costs

41The costs incurred by the Belgian and Luxembourg Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,THE COURT,in answer to the questions referred to it by the Onderzoeksrechter in de Rechtbank van eerste aanleg te Turnhout by order of 13 April 2000, hereby rules: The reference for a preliminary ruling by the Onderzoeksrechter in de Rechtbank van eerste aanleg te Turnhout (Belgium), by order of 13 April 2000, is inadmissible.

Delivered in open court in Luxembourg on 10 December 2002.