COMMISSION v SPAIN

OPINION OF ADVOCATE GENERAL GEELHOED

deliveredon 10 July 2003 1

I — Introduction

1. The Commission of the European Com­munities is asking the Court to declare that the Kingdom of Spain has failed to adopt and to communicate within the prescribed period the laws, regulations and adminis­trative provisions necessary to comply fully with Directive 98/84/EC of the European Parliament and of the Council of 20 November 1998 on the legal protection of services based on, or consisting of, conditional access 2 ('the Directive').

2. In the defence, the Spanish Government raises an important point of law by invok­ing current Spanish legislation as inter­preted by national criminal courts. The Spanish Government submits that the legis­lation concerned already provides the pro­tection required by the Directive.

3. This case provides an opportunity to examine the circumstances in which a Member State may rely on its legislation as grounds for failing to adopt a formal act to transpose into national law a provision of a directive which requires penalties to be imposed in respect of certain precisely defined types of conduct.

4. The Spanish Government also refers to a draft proposal for an organic law amending the Criminal Code (Código Penal), which is intended to implement the Directive. That draft proposal may not be taken into consideration in these proceedings. It is settled case-law that the question whether a Member State has failed to fulfil its obli­gations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion. Legislation adopted subsequently, or which has yet to be adopted, is not sufficient to remedy a failure to fulfil an obligation. It is also settled case-law that a Member State may not rely on matters internal to its own legal system in order to justify a delay in trans­posing a directive into national law within the prescribed period.

1 — Original language: Dutch. 2 — OJ 1998 L 320, p. 54.

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I I — Legal framework

A — Community law

5. According to Article 1 of Directive 98/84, the objective of the directive is to approximate provisions in the Member States concerning measures against illicit devices which give unauthorised access to protected services.

6. Article 2 defines protected services as 'any of the following services, where pro­vided against remuneration and on the basis of conditional access:

— television broadcasting, as defined in Article 1(a) of Directive 89/552/EEC,

— radio broadcasting, meaning any trans­mission by wire or over the air, includ­ing by satellite, of radio programmes intended for reception by the public,

— information society services within the meaning of Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provi­sion of information in the field of technical standards and regulations and of rules on information society services,

or the provision of conditional access to the above services considered as a service in its own right'.

In addition, Article 2 of the Directive provides that 'conditional access shall mean any technical measure and/or arrangement whereby access to the protected service in an intelligible form is made conditional upon prior individual authorisation'.

7. Article 4 of the Directive states: 'Member States shall prohibit on their territory all of the following activities:

(a) the manufacture, import, distribution, sale, rental or possession for commer­cial purposes of illicit devices;

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(b) the installation, maintenance or replacement for commercial purposes of an illicit device;

(c) the use of commercial communications to promote illicit devices.'

8. Article 5 of the Directive lays down the following conditions, which sanctions and remedies must meet if the prohibitions provided for in Article 4 are to be effective:

' 1 . The sanctions shall be effective, dis­suasive and proportionate to the poten­tial impact of the infringing activity.

2. Member States shall take the necessary measures to ensure that providers of protected services whose interests are affected by an infringing activity as specified in Article 4, carried out on their territory, have access to appropri­ate remedies, including bringing an action for damages and obtaining an injunction or other preventive measure, and where appropriate, applying for disposal outside commercial channels of illicit devices.'

B — National law

9. In the defence, the Spanish Government lists a number of provisions of the Spanish Criminal Code which are relevant to the question whether the Directive has been implemented.

10. First, the Spanish Government adduces Article 270 of the Criminal Code, which provides that 'anyone who, for profit and to the detriment of a third party, repro­duces, plagiarises, distributes or publicly broadcasts, in whole or in part, a literary, artistic or scientific work, or an artistic reworking, rendition or performance of such a work, regardless of the medium or the means by which it is broadcast, without the authorisation of the holders of the relevant intellectual property rights or their assignees, shall be sentenced to between six months and two years' imprisonment or to a fine for a period of between six and twenty-four months.'

11. Second, the Spanish Government cites Article 248(2) of the Criminal Code, pur­suant to which 'anyone who, for profit and using a computer or similar device, under-

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takes the transfer of any financial asset, without consent and to the detriment of a third party, shall be guilty of fraud.'

12. Third, the Spanish Government draws attention to Article 255 of the Criminal Code, under which 'anyone who commits fraud in an amount exceeding fifty thou­sand pesetas... by any of the following methods:

— Using mechanisms installed to carry out the fraud.

— Maliciously altering readings or meters.

— Using any other illegal means.'

Shall be sentenced to a fine for a period of between three and twelve months. If the amount is lower than ESP 50 000, such conduct is classified as a minor offence and punished under Article 623(4) of the Criminal Code.

13. Fourth, the Spanish Government states that Articles 28 and 29 of the Criminal Code apply generally to persons who dis­close to the public where they may access the programme and the means necessary to decode the signal fraudulently.

14. As concerns the appropriate remedies provided for in Article 5(2) of the Directive, the Spanish Government refers to the following national provisions.

15. The Spanish Government claims that it is possible to take preventive measures under Articles 721 to 747 (in particular Article 727) of the Ley de Enjuiciamiento Civil (Law on Civil Procedure) and, where there is an associated criminal act, under Article 334 et seq. of the Criminal Code.

16. The Spanish Government maintains that Article 1902 of the Civil Code applies, because there are no special rules governing civil liability in this field. That general provision may be invoked in relation to users who fraudulently use services consist­ing of conditional access, or persons who design or makes available on the net, computer software aimed at circumventing the technological measures intended to protect services from unauthorised use.

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I I I — The proceedings

17. As I noted in the introduction, the proposed amendment of the Criminal Code did not take place within the period prescribed by the Directive. Furthermore, it appears from the rejoinder that the Spanish Government no longer considers it necessary to adopt that amendment. The draft proposal for an organic law amending the Criminal Code, which was initially adduced by the Spanish Government, has no bearing on the proceedings before the Court.

18. Next, the Spanish Government acknowledges that it failed to communicate to the Commission within the prescribed period the legislation in force which, in its view, complies with the Directive. The Commission also draws attention to the fact that the legislation in force was not notified as an implementing measure and that, consequently, the Court must declare that the Kingdom of Spain has failed to fulfil its obligations.

19. Since it is common ground that the national legislation in force, which the Spanish Government claims satisfies the requirements of the Directive, was not communicated to the Commission within the prescribed period, it is clear that the Kingdom of Spain has failed to fulfil its obligations under the EC Treaty. However, that finding alone is not a ground for upholding the action in its entirety. In the application, the Commission also claims —

in my view, as its principal claim — that there has been a failure to adopt the necessary legislation within the prescribed period.

20. There is also a third way of delimiting the scope of the proceedings. In regard to the obligation under Article 5(2) of the Directive, the Commission contends in the reply that the provisions of national law relied on by the Spanish Government do not provide, as a remedy, for the disposal outside commercial channels of illicit devices. The Spanish Government does not comment on that assertion in the rejoinder. The Spanish Government clearly does not rebut that claim of the Commis­sion. It is therefore also clear that the Kingdom of Spain has failed to fulfil its obligation under the EC Treaty to trans­pose Article 5(2) of the Directive into national law.

21. Consequently, the dispute on which the Court must adjudicate is limited to the transposition of Article 4 and Article 5(1), to which Article 4 is directly linked, of the Directive into national law. Specifically, the subject-matter of the proceedings is con­fined to the question whether the current Spanish legislation, as interpreted by Span­ish courts, already complies in full with the Directive.

22. It is the view of the Spanish Govern­ment that the current legislation already guarantees the protection required by the Directive.

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23. In support of that argument, the Span­ish Government puts forward, by way of example, a judgment of the Juzgado de lo Penal (Criminal Court), Cordoba (Spain), of 11 February 2002. The Spanish Govern­ment states that in that judgment, the distribution of 'pirated cards', to the detri­ment of Canal Satélite Digital, S.L., was found to constitute fraud and an infringe­ment of intellectual property rights. The Spanish Government states that the perpe­trator was sentenced to a term of imprison­ment and a fine, and was ordered to pay compensation to Canal Satélite Digital, S.L. The Spanish Government argues that that judgment shows that the legislation in force provides for adequate sanctions to be imposed in respect of the types of conduct classified as offences under the Directive.

24. In the reply, the Commission argues that the current provisions are clearly insufficient to effect correct and complete transposition of the Directive — particu­larly Articles 4 and 5 thereof — into Spanish law. In that connection, the Com­mission cites the principle laid down in Article 4(1) of the Spanish Criminal Code, which precludes the application of criminal provisions to cases which they do not expressly cover (nulla poena sine lege).

25. The Commission maintains that the reference to Article 270 of the Criminal Code is immaterial, since the Directive is not aimed at protecting intellectual prop­erty rights in works disseminated using

services consisting of conditional access but rather at protecting the right of the pro­viders of those services to receive appropri­ate remuneration in return for the services.

26. As concerns the offence of fraud, the Commission states that the presumption behind Article 248(2) of the Criminal Code is that there must be a transfer of an asset without consent and to the detriment of a third party, whereas the types of conduct referred to in Article 4 of the Directive are broader in scope. Under Article 4 of the Directive, it is not necessary for there to be a transfer of an asset. Article 255 of the Criminal Code applies to fraud for personal gain, whereas the infringements set out in Article 4 of the Directive are commercial in nature.

27. In view of the fact that Articles 248 and 255 of the Criminal Code do not transpose Articles 4 and 5 of the Directive into national law, the Commission submits that Articles 28 and 29 are not capable of doing so either. Articles 28 and 29 of the Criminal Code merely define what is meant by perpetrator and accomplice, but do not further define the offence.

28. In the rejoinder, the Spanish Govern­ment contends that the Criminal Code affords service providers more effective protection than the Directive, in that the Criminal Code also penalises conduct which is not for commercial gain. More-

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over, Article 255 of the Criminal Code is not restricted to fraud for personal gain. In that connection, the Spanish Government cites a judgment delivered by a criminal court in Barcelona. Finally, the Spanish Government acknowledges that Article 270 of the Criminal Code differs from the Directive in that it protects intellectual property, but goes on to point out that, notwithstanding, the protection of intellec­tual property contributes to the achiev­ement of the aim pursued by the Directive. The Spanish Government takes the view that many of the types of conduct pro­hibited by the Directive actually constitute infringements of intellectual property rights. In regard to Article 248(2) of the Criminal Code, the Spanish Government argues that the types of conduct prohibited under Article 4 of the Directive always involve the transfer of an asset.

29. Next, I shall consider the position of the Commission with regard to the judg­ment of the Juzgado de lo Penal, Cordoba. According to the Commission that judg­ment cannot be relied on in support of the arguments put forward by the Spanish Government. The Commission lists three reasons for that:

— it is an isolated judgment;

— the judgment is confined to the appli­cation of Article 248(2) of the Criminal Code to the sale of decoding cards, and does not show that the provisions of

Article 4 of the Directive relating to other types of conduct have been trans­posed into national law;

— the judgment was delivered by a lower court.

30. In that connection, the Commission cites Article 1 of the Spanish Civil Code, which refers to the sources of law. The sources of the Spanish legal system are statute, custom and the general principles of law. Article 1(6) of the Civil Code provides that the legal system is to be supplemented by the settled case-law of the Tribunal Supremo (Supreme Court) (Spain). According to the Commission, under Spanish law, an isolated judgment delivered by a criminal court cannot be regarded as case-law, from which it follows that it cannot be relied upon in support of a particular interpretation of the law.

31. In the rejoinder, the Spanish Govern­ment also adduces another judgment, which was delivered by a criminal court in Barcelona. In that judgment, it was held that the sale to third parties of illegal cards for decoding the signal of a cable television operator without authorisation amounted to fraud.

32. According to the Spanish Government there is no relevant case-law of the Tribu­nal Supremo because that court has not yet had the opportunity to hear actions

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brought under the Directive. However, the Spanish Government argues that Spanish criminal courts tend to punish conduct which is prohibited under the Directive. The courts take the view that such conduct is included in the categories of offences laid down in the Criminal Code. In the opinion of the Spanish Government, new legislation could lead to confusion.

IV — Analysis

33. The central issue raised in these pro­ceedings concerns the circumstances in which a Member State may rely on current legislation, as interpreted by national courts, in order not to adopt a formal implementing act.

34. In its case-law, the Court has laid down strict requirements relating to the trans­position into national law of provisions of directives which grant rights to individuals, or which — like Article 4 of the Direc­tive — impose obligations on individuals. In those circumstances, the Court regards the principle of legal certainty as para­mount.

35. Although Article 249 EC permits Member States to choose the form and methods of giving effect to directives, the Court has held that this will generally require a formal implementing act which, in many instances, amends the national

legislation. Exceptionally, it may be deemed that a general measure (already in force) gives effect to a directive, provided that that measure actually ensures the implementation of the directive in a suffi­ciently clear and precise manner. Since that is a derogation from the general rule, it must be interpreted strictly, as Advocate General Tizzano rightly observed in his Opinion in Commission v Netherlands. 3

36. Nor is it sufficient that the national legislation should be generally compatible with the directive; rather, there must be clear and precise conformity between national law and the directive, particularly where the directive grants rights to individ­uals. Where, like Article 4 of Directive 98/84/EC, a provision of a directive pro­hibits certain types of conduct, the Member States must provide for appropriate sanc­tions to be imposed in respect of each type of conduct referred to in that directive.

37. I shall now consider the role of the national courts. As I stated in my recent Opinion in Commission v Italy, 4 national courts play a vital role in ensuring that Community law is implemented in national legal systems. In particular, the interpre­tation of national law given by national courts must be as consistent as possible with the relevant provisions of Community

3 — Case C-144/99 [2001] ECR I-3J41, point 16. 4 — Case C-129/00 [2003] ECR I-14637, I-14640, point 57 et

seq.

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law (the interpretation must be compatible with Community law). In essence, the Spanish Government claims that Spanish courts interpret national law in this way.

38. The question which arises concerns the circumstances in which an interpretation that is compatible with a directive can rectify shortcomings in national legislation. In my view, three separate aspects of that question must be examined in order to provide an answer. The first aspect relates to national legislation: does national legis­lation in force permit an interpretation which is compatible with the directive? The second aspect concerns the subject-matter of the relevant provision of the directive: does that provision permit an interpretation which is compatible with the directive, or does such interpretation not provide sufficient legal certainty to those to whom it is addressed? The third aspect refers to the manner in which national courts apply the directive: do national courts apply the directive consistently?

39. I shall begin by examining the first aspect. The Spanish Government lists a number of provisions of the Criminal Code which, in its opinion, adequately give effect to Article 4 of the Directive. In that connection, the Commission cites the prin­ciple of legality laid down in the Spanish Criminal Code. In my view, the Commis­sion is right to invoke that principle, which is also enshrined in Article 7 of the European Convention on Human Rights

and Article 49 of the Charter of Funda­mental Rights of the European Union. No one may be punished on account of any act which did not constitute a criminal offence when it was committed.

40. There is a possible conflict between the obligation of national courts to interpret national law in a manner which is con­sistent with the relevant directive and the principle of legality. As a result of the principle of legality, which has the status of a fundamental right, there is often less latitude to interpret provisions of criminal law in a manner which is compatible with the directive concerned. Nevertheless, to my mind, it is excessive to claim that the principle of legality invariably precludes an interpretation which is consistent with a directive. Social or technical developments might mean that types of conduct which did not exist previously now fall within the scope of a current provision of criminal law. It is for the national court to interpret provisions of criminal law with such deve­lopments in mind. That task does not change where a development is the result of provisions of international or Commu­nity law which have been adopted in the interim. However, irrespective of such developments, criminal courts have a duty to give a literal interpretation of criminal provisions in all cases. The principle of legality does not permit a broader inter­pretation.

41. In short, national courts interpret provisions of criminal law on the basis of the principle of legality. However, that principle does not preclude national courts

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from taking into consideration the provi­sions of Community directives. Neverthe­less, they remain within boundaries set for them by the principle of legality.

42. As I have already indicated, the second aspect of the question relates to the subject-matter of the provision of the directive concerned. The Court has invoked the principle of legality in its case-law, par­ticularly in relation to provisions of direc­tives which grant rights to individuals. According to settled case-law, it is essential that the legal situation resulting from national implementing measures be suffi­ciently precise and clear and that individ­uals be made fully aware of their rights so that, where appropriate, they may rely on them before the national courts. 5 To my mind, that position does not change where, instead of granting rights to individuals, a provision of a directive prohibits certain types of conduct. That is the essence of criminal law. It is precisely where breach of a prohibition on certain types of conduct leads to the imposition of sanctions that individuals must be able to ascertain clearly from national legislation which acts they must refrain from committing. Naturally, that also follows from the principle of legality.

43. Furthermore, the judgment in Commis­sion v Netherlands 6 would indicate that a general measure cannot of itself be deemed adequately to transpose a directive into national law. In that judgment, the Court

declared that, 'even where the settled case-law of a Member State interprets the provisions of national law in a manner deemed to satisfy the requirements of a directive, that cannot achieve the clarity and precision needed to meet the require­ment of legal certainty.' The Court made that statement in connection with private law rules on consumer protection. If the Court took the view that more clear and precise national provisions were necessary in the field of private law, that criterion is all the more important in the field of criminal law. I refer once more to the principle of legality.

44. I shall now examine the third aspect. The Spanish Government cites two judg­ments delivered by Spanish criminal courts, and claims that it follows from those judgments that the Directive has been implemented in Spain. In my Opinion in Commission v Italy, 7 I listed three criteria for determining whether national case-law which is not compatible with a directive constitutes an infringement of the EC Treaty by a Member State. Those criteria are:

— the status of the judgments in question,

5 — See, for example, the judgment in Case C-478/99 Commis­sion v Sweden [2002] ECR I-4147, paragraph 18.

6 — Cited in footnote 3, paragraph 21. 7 — Cited in footnote 4, paragraph 62 et seq.

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— the structural nature of the case-law,

— the effect of the judgments on achiev­ing the aim of the relevant Community provision.

45. In this case it is the opposite question which arises. Can national case-law which is compatible with the Directive rectify an infringement of the EC Treaty? In any event, in my view, the abovementioned criteria are also applicable to this case.

46. First of all, as concerns the status of judgments, the general rule should be that the judgments of higher national courts provide guidance to the lower courts. That statement does not apply to the judgments of lower courts in relation to higher courts. Second, as regards the structural nature of national case-law: is this an isolated case or does it reflect a trend in the case-law. I do not regard that criterion as a requirement that there must already be a number of judgments in a case such as this one, which concerns a provision of a relatively new directive which has not yet given rise to much case-law. However, there must be more than one judgment, particularly where the judgment concerned was not delivered by the highest-ranking court. Third and most important, as I pointed out in my Opinion in Commission v Italy, is the effect of the judgments concerned on achieving the aim pursued by the Commu­

nity measure. In the case of criminal offences, the effect must be that the judg­ments enable action to be taken against infringements of the relevant provision and that such action is actually taken. In that way, the rights which the directive con­cerned seeks to protect are guaranteed.

47. In the light of those considerations, I shall now consider the specific subject-matter of these proceedings.

48. In my opinion, it is clear that the current Spanish legislation does not suffi­ciently meet the requirements of Article 4 and Article 5(1) of the Directive. That finding is not altered by the two criminal court judgments referred to by the Spanish Government.

49. It is not apparent from the national legislation relied on that sanctions are imposed in the Kingdom of Spain in respect of all the types of conduct referred to in the Directive. In that connection, I refer to the provisions of Article 4 of the Directive. In any event, the Spanish legislation does not prohibit the possession of illicit devices (Article 4(a)) or the promotion of illicit devices (Article 4(c)). Moreover, as the

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Commission rightly points out, in the Spanish legislation, the prohibitions are subject to a number of restrictions which are not provided for in the Directive, namely:

— Article 270 of the Criminal Code refers only to infringements of the rights of owners of intellectual property;

— Under Article 248 of the Criminal Code, there must be a transfer of an asset.

50. Moreover, Article 255 of the Criminal Code is not by itself sufficient to give effect to the obligations laid down in the Direc­tive. Irrespective of whether, as the Com­mission asserts, Article 255 refers only to fraud for individual gain, the actual sub­ject-matter of that article is fraud, whereas the Directive prohibits specific acts, such as the mere possession or use of illicit devices.

51. Next, I shall examine the issue of an interpretation which is consistent with the Directive. In my view, there is no doubt that such an interpretation would not rectify the abovementioned infringement.

In any event, I have concluded that the Spanish legislation does not prohibit all the types of acts set out in the Directive. None the less, in a number of cases, certain acts provided for in the Directive are also covered by a provision of the Spanish Criminal Code. Those are precisely the cases to which the judgments relied on by the Spanish Government relate.

52. I would add the following:

•—• The principle of legality precludes Spanish courts from imposing sanc­tions in respect of acts which are not expressly defined as offences in the Spanish Criminal Code.

— It is not apparent from the Spanish legislation which acts are prohibited.

— The Spanish Government puts forward only two judgments of lower courts. Since, as was pointed out above, those judgments are limited in scope, they do not have the sufficient effect to ensure that the aim of the Directive is achieved. The judgments concerned relate exclusively to acts already pro­hibited under the Spanish Criminal Code.

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V — Conclusion

53. In the light of the foregoing considerations, I propose that the Court of Justice should:

(1) Declare that, by failing to adopt and to communicate to the Commission the laws, regulations and administrative provisions necessary to implement Articles 4 and 5 of Directive 98/84/EC of the European Parliament and of the Council of 20 November 1998 on the legal protection of services based on, or consisting of, conditional access, the Kingdom of Spain has failed to fulfil its obligations under that directive.

(2) Order the Kingdom of Spain to pay the costs, in accordance with Article 69(2) of the Rules of Procedure.

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