Select Committee on European Scrutiny Twentieth Report


MUTUAL RECOGNITION OF FINANCIAL PENALTIES


(a)
(22622)
10710/01




(b)
(23164)
5299/02

Proposal from the French Republic, the Kingdom of Sweden and the United
Kingdom for the adoption by the Council of a draft Framework Decision on
the application of the principle of mutual recognition to financial penalties.




Draft Framework Decision on the application of the principle of mutual
recognition to financial penalties


Legal base:Article 31(a) and 34(2)(b) EU; consultation; unanimity
Deposited in Parliament: (a) 21 September 2001
(b) 7 February 2002
Department:Home Office
Basis of consideration: (a) Minister's letter of 5 February 2002
(b) EM of 25 February 2002
Previous Committee Report: (a) HC 152-viii (2001-02), paragraph 2 (28 November 2001), HC 152 -xii (2001-02), paragraph 5 (16 January 2002)
(b) None
To be discussed in Council: No date set
Committee's assessment:Legally and politically important
Committee's decision:(a) Cleared;
(b) Not cleared; further information requested


Background

  7.1  We considered a draft of a proposal for the mutual recognition and enforcement of financial penalties on 28 November 2001. We noted that the draft Framework Decision followed the pattern of the 1991 Brussels convention on the enforcement of foreign criminal penalties and the 1970 Council of Europe Convention on the International Validity of Criminal Judgments by providing for the transmission of judgments from an issuing State for subsequent recognition and enforcement in the executing State. Similarly, the Framework Decision also provided for grounds on which enforcement of the judgment might be refused.

  7.2  We noted that Article 1 of the proposal (document(a)) provided for the recognition and enforcement of penalties imposed by an 'administrative authority'. We noted the Minister's explanation that this might include fines imposed by traffic police as well as those imposed by customs or tax officials and asked the Minister to keep us informed of progress in defining the term 'administrative authority' more precisely.

  7.3  We were concerned that there was no express reference to procedural unfairness as a ground for refusal of recognition. This seemed to us to be particularly necessary where the kind of penalty in issue (such as a fine for a motoring offence) could be imposed without the defendant being made aware of the charge against him.

  7.4  The Minister referred us to the provision requiring the issuing State to confirm in a certificate that the sentenced person had been duly notified of the proceedings against him. We did not think that such an assertion by the issuing State was a sufficient safeguard and we referred the Minister to provisions in earlier instruments[16] which required or permitted the courts in the executing State to refuse recognition if they were not satisfied that the sentenced person had been given notice of the original proceedings in sufficient time to enable him to arrange for his defence.

The Minister's reply

  7.5  In his letter of 5 February 2002, the Parliamentary Under-Secretary of State at the Home Office (Mr Bob Ainsworth) noted our view that the Framework Decision should include a condition that the person concerned must be notified of proceedings imposing a penalty in sufficient time to enable him to prepare his defence and that such a condition should appear in the main body of the text. The Minister comments as follows:

    "The Framework Decision, like other mutual recognition instruments currently under negotiation, provides for the Executing State to enforce decisions on the basis of a certificate from the Issuing State. The purpose of the certificate is to make the enforcement process as lightweight and rapid as possible. Although I understand the Committee's concern about the fair treatment of defendants, I would want to avoid wording which encouraged UK courts to re-open decisions taken by authorities in other Member States. This is unnecessary since ECHR safeguards apply to all Member States."

  7.6  However, the Minister goes on to explain that an additional paragraph, based on Article 34(2) of Council Regulation (EC) No. 44/2001, would be included in a revised version of the text. This would provide that the competent authority in the Executing State would be entitled to refuse recognition and enforcement of the judgment.

    "Where criminal judgment was rendered in absentia, if the defendant was not served with a document in sufficient time and in such a way as to enable him to arrange for his defence unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so."

  7.7  On the question of the definition of the term 'administrative authority', the Minister explains that the new text tabled by the Presidency in January includes an additional paragraph in Article 1(a) to include in the definition of the term 'judgement' a reference to the case where 'the decision was made by a judicial or an administrative authority in respect of a criminal offence'. The Minister gave as an example the system of fixed penalty notices for road traffic offences.

The revised proposal

  7.8  A revised text of the proposal (document (b)) was produced by the Presidency on 24 January and is the subject of the Minister's Explanatory Memorandum of 25 February. The salient changes may be summarised as follows. In Article 1, the definition of 'judgement' has been expanded to include the case of a decision made by a judicial or an administrative authority in respect of a criminal offence. The definition of 'financial penalty' has been amended to make it clear that it includes compensation orders of the sort which might be made by a UK court in criminal proceedings, as well as orders to pay sums to public funds or to victim support organisations.

  7.9  Article 2 continues to provide for the transmission of judgments, with their accompanying certificates, direct to the authority in the Executing State. Article 2(5) provides that where an authority in the Executing State has no jurisdiction to recognise the judgment and take enforcement measures, it is to 'transmit the judgment to the competent authority'[17] and 'shall so inform the competent authority in the Issuing State'. It is only 'in exceptional cases' that the judgment and certificate may be transmitted to a central authority in the Executing State[18] (Article 2(6)[19]).

  7.10  Article 4 has been amended to include further grounds for non-recognition[20]. The previous version (document (a)) allowed recognition to be refused where judgment had been enforced against the person in the Executing or any other State. Recognition might also be refused where the judgment relates to acts carried out in any Member State other than the Issuing State, and those acts do not constitute an offence under the law of the Executing State, or where enforcement is barred by a statutory time limit in that State.

  7.11  The three further grounds for non-recognition concern, first, the case where the judgment is related to a person who 'according to the immunities recognised[21] by the legislation of the Executing State, could not be sentenced in a similar case', or where 'his or her patrimony may not be enforceable'[22] according to the law of the Executing State. The second ground for refusing recognition concerns the case where a natural person has not attained the age of criminal responsibility under the law of the Executing State.

  7.12  The third ground for refusing recognition concerns the enforcement of judgments given in the absence of the defendant, a matter to which we drew attention on 16 January. The new provision is in the terms explained by the Minister to us in his letter of 5 February, namely that recognition may be refused where the criminal judgment was given in absentia and the defendant was not served with a document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so[23].

  7.13  Article 4 also now contains provision for refusing recognition where the judgment is for a sum below a financial threshold, but there appears to be no agreement on what that threshold should be.

  7.14  Article 7 provides for imprisonment or other sanctions for non-payment of fines. In cases where it is not possible to enforce the judgment, either wholly or in part, the Executing State is to ask the Issuing State 'to apply an alternative sanction, including an alternative custodial sanction'. It is then provided that:

    "The Issuing State shall decide and inform, within the term established by the Executing State, considering to apply this alternative sanction or to recover the right of enforcement the judgment."[24]

  7.15  In all cases, the length of the custodial sentence is to be determined by the Executing State, but may not exceed any maximum stated in the certificate transmitted by the Issuing State.

  7.16  Article 8 deals with the grant of pardons or an amnesty, and with the termination of enforcement. It has been amended so that the Executing State may also grant an amnesty or pardon where that State also had jurisdiction to prosecute the offence under its own criminal law. Article 8 also permits the Executing State to terminate enforcement where there is clearly no prospect of recovering the penalty, due to the offender's lack of means, death or serious illness and it is not possible or reasonable to apply alternative sanctions, including those of imprisonment.

The Government's view

  7.17  In his Explanatory Memorandum of 25 February, the Parliamentary Under Secretary of State at the Home Office (Mr Bob Ainsworth) describes the amendments which have been made to the proposal. He explains that the Government supports the amendments which have been made to Article 1. In relation to Article 4, the Minister considers that the reference to 'patrimony' in the first of the new grounds for non-recognition is unclear. The Minister supports the new second ground (the case where the defendant is too young to be criminally liable). In relation to proceedings held in the absence of the defendant, the Minister comments as follows:

    "The Government accepts that provision on in absentia proceedings should be included in the Framework Decision on Financial Penalties, but is concerned that the provision as drafted may be so general as to impair the effectiveness of the instrument. We are considering how it could be improved."

  7.18  The Minister comments that the new procedure in Article 7, which requires the Executing State to refer to the Issuing State for a decision on what alternative sanction to apply, would be 'very cumbersome', and that the Government would prefer to allow the Executing State to impose any alternative sanction which the Issuing State had not excluded.

    

Conclusion

  7.19  We are grateful to the Minister for his reply addressing our concern over the existence of procedural guarantees as a condition of recognition and enforcement of judgments imposing financial penalties. We welcome the new provision in the draft which corresponds to that in Council Regulation (EC) No. 44/2001, and which would allow the court in the Executing State to satisfy itself that a person, against whom a judgment or order is made in his absence, has been served with a document in sufficient time to enable him to arrange for his defence.

  7.20  We are concerned that the Minister appears to be reluctant to accept this revision on the grounds that it may impair the effectiveness of the instrument. This provision, in one form or another, has been a feature of the arrangements between Member States for the mutual recognition and enforcement of judgments in civil and commercial matters at least since 1968, without impairing the effectiveness of those arrangements. Moreover, the scope of the present instrument makes it particularly likely that defendants will be faced with the enforcement of orders (even those made by an administrative authority) without first being served or being given an opportunity to enter a substantive defence.

  7.21  We do not agree with the Minister's view that this procedural safeguard is unnecessary 'since ECHR safeguards apply to all Member States'. If no provision is made along the lines of the new Article 4(2)(e), the defendant will be obliged to incur the expense and difficulty of raising this issue of substance in the foreign court (and may well find himself out of time for doing so). We consider the new provision to be an essential minimum guarantee, and we ask the Minister to explain why he considers this provision would impair the effectiveness of the instrument and what he means by considering how it could be improved.

  7.22  We would be grateful for the Minister's assessment of whether the arrangements for the direct transmission of judgments, without first passing through a central authority, deal adequately with the risk of jurisdictional conflicts between the various parts of the United Kingdom, and ask if he has consulted his counterparts in Scotland and Northern Ireland on this issue.

  7.23  We also register our concern over the drafting of this instrument dealing with the criminal law. We have identified a number of points where the true meaning is hard to discern (notably in relation to the enforceability of 'patrimony' and the provisions of Article 7). We look forward to an assurance by the Minister that these points will be addressed and a new, more intelligible, text will be produced.

  7.24  We shall hold the current document (document (b)) under scrutiny, but will clear document (a) as it has now been superseded.



16  The 1991 EPC Convention on the enforcement of foreign criminal offences, the 1998 Convention on Driving Disqualification and Council Regulation (EC) No 44/2001 on the recognition and enforcement of judgments in civil and commercial matters. Back

17  The context suggests that this is the authority in the issuing State. Back

18  Such direct transmission may be practicable in the case of unitary states, but in the United Kingdom, the courts of England and Wales, Scotland or Northern Ireland might all be courts for the place where the person 'has property or income', whilst one of them might also be the court for the place where the person is 'normally resident' or, in the case of a legal person, has its seat. Without transmission to a central authority, it is hard to see how intra-UK jurisdictional conflicts will be addressed. It is, presumably, not intended that the Issuing State should determine which court is to have jurisdiction within the various parts of the UK. Back

19  Article 2(6) speaks of the judgment being transmitted to the competent authority in the Issuing State, but this must be a drafting error. Back

20  The Article uses the curious formulation that a competent authority 'may oppose to' the recognition and execution of the judgment in such cases.  Back

21  It is not clear if this means 'provided for' under the law of the Executing State, or if it refers to some immunity under a foreign system of law which the law of the Executing State is prepared to recognise. Back

22  It is far from clear what is meant by the 'patrimony' being 'enforceable'. It may be a transposition of the concept of 'patrimoine' (assets), which may not be attached by reason of an immunity. Back

23  This follows closely the wording of Article 34(2) of Council Regulation (EC) No 44/2001 on the recognition of civil judgments given in default of appearance. Back

24  The drafting seems impenetrable, but presumably what is meant is that the Issuing State is to take a decision, within a specified time, on whether to ask for an alternative sanction to be imposed, or to desist ('recover the right of enforcement the judgment') from seeking to enforce the judgment.  Back


 
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