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Article 49 - Principles of legality and proportionality of criminal offences and penalties
Key facts of the case:
Request for a preliminary ruling from the Verwaltungsgerichtshof.
Reference for a preliminary ruling – Freedom to provide services – Article 56 TFEU – Games of chance – Making prohibited lotteries available – Penalties – Proportionality – Minimum-level fines – Accumulation – No limit – Custodial sentence in the event of non-payment – Proportional contribution to the costs of proceedings – Article 49(3) of the Charter of Fundamental Rights of the European Union.
Outcome of the case:
On those grounds, the Court (Second Chamber) hereby rules:
1) This request for a preliminary ruling concerns the interpretation of Article 56 TFEU and Article 49(3) of the Charter of Fundamental Rights of the European Union (‘the Charter’).
18) The referring court notes, however, that its assessment of the lawfulness of the penalty depends on whether the provisions of the GSpG, in conjunction with those of the VStG, which must be applied by the Landesverwaltungsgericht Steiermark (Regional Administrative Court, Styria) for the purposes of determining the sentence are compatible with Article 56 TFEU and, as the case may be, with Article 49(3) of the Charter.
19) In those circumstances, the Verwaltungsgerichtshof (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) In the context of criminal proceedings that are being conducted in order to protect a monopoly system, must the national court or tribunal examine the applicable criminal penalty rule in the light of the freedom to provide services if it has previously examined the monopoly system in accordance with the guidance provided by the Court … and that examination has revealed that the monopoly system is justified? (...)
(3) If Question 1 is answered in the negative:
(a) Must Article 49(3) of the [Charter] be interpreted as precluding a national provision according to which, by way of sanction for making prohibited lotteries commercially available contrary to the [GSpG], a fine must be imposed per gaming machine, with no absolute limit on the total fine imposed?
(b) Must Article 49(3) of the Charter be interpreted as precluding a national provision which, by way of sanction for making prohibited lotteries commercially available contrary to the [GSpG], provides for the mandatory imposition of a minimum penalty of EUR 3000 per gaming machine?
(c) Must Article 49(3) of the Charter be interpreted as precluding a national provision which, by way of sanction for making prohibited lotteries commercially available contrary to the [GSpG], provides for a custodial sentence in lieu of a fine per gaming machine, with no absolute limit on the total number of custodial sentences imposed?
(d) Must Article 49(3) of the Charter be interpreted as precluding a national provision which, in the event of a penalty being imposed for making prohibited lotteries commercially available contrary to the [GSpG], requires the payment of a contribution to the costs of criminal proceedings amounting to 10% of the fines imposed?’
42) Furthermore, it is apparent from the Court’s case-law that, where a Member State relies on overriding requirements in the public interest in order to justify rules which are liable to obstruct the exercise of the freedom to provide services, such justification, provided for by EU law, must be interpreted in the light of the general principles of EU law, in particular the fundamental rights henceforth guaranteed by the Charter. Thus the national rules in question can fall under the exceptions provided for only if they are compatible with the fundamental rights the observance of which is ensured by the Court (judgment of 30 April 2014, Pfleger and Others, C‑390/12, EU:C:2014:281, paragraph 35 and the case-law cited).
45) Thirdly, the severity of the penalties imposed must also be commensurate with the seriousness of the infringements for which they are imposed, in particular by ensuring a genuinely deterrent effect, while not going beyond what is necessary to attain that objective (see, to that effect, judgment of 5 March 2020, OPR-Finance, C‑679/18, EU:C:2020:167, paragraph 26 and the case-law cited), such a requirement resulting inter alia from the principle of proportionality of penalties set out in Article 49(3) of the Charter (see, to that effect, judgment of 20 March 2018, Menci, C‑524/15, EU:C:2018:197, paragraph 55).
57) It is, however, for the referring court to satisfy itself, when setting the actual amount of the contribution to those costs, in so far as such a contribution is established on the basis of a percentage of the amount of the fine imposed and having regard to the absence of a limit to that fine, that it is not excessive in the light of the actual cost of those proceedings and does not infringe the right of access to a tribunal enshrined in Article 47 of the Charter (see, to that effect, judgment of 6 November 2012, Otis and Others, C‑199/11, EU:C:2012:684, paragraph 48).
58) In the light of the foregoing considerations, the answer to the second question is that Article 56 TFEU must be interpreted as not precluding a national provision which, in cases where prohibited lotteries have been made commercially available, makes it mandatory to: