On the 18th of October 2018, in legal affair C-301/17, European Commission v. Romania, the Court of Justice of the European Union decided that by failing to comply with regarding the 68 landfills concerned in the case, the obligation to take all necessary measures to close as soon as possible, in accordance with article 7 letter (g) and article 13 of the Council Directive 1999/31/EC of April 26, 1999 on the landfills of waste, those landfills which, in accordance with Article 8 of that Directive, have not been authorized to continue to operate, Romania has not fulfilled its obligations under article 14 letter (b) of Directive 1999/31, in conjunction with article 13 of the same act.

In fact, as it emerges from the reading of the European court’s ruling, the European Commission has called into question the non-compliance by Romania with the undertaken obligations regarding the management of 68 landfills. The legal action for failure to comply with the European law was made only after an extended communication and notification procedure from the 26th of March 2012 to the 23rd of May 2017. The Commission primarily reproached the fact that, for the 68 landfills in the case, no action was taken to close them, although the landfills had not obtained the authorization to allow them to continue their activity. Romania has admitted in the course of the procedure that it has only taken measures to stop the storage of new waste in these locations (which, in the opinion of the national authorities, would mean a significant progress was being made).

In its analysis on the substance of the case, the Court of Justice of the European Union reiterated that, in particular, article 14 letter (b) of Directive 1999/31 requires, first, that the competent authorities take a final decision on the continuation of exploitation on the basis of a development plan and the directive and, on the other hand, that the Member States take the measures necessary to close those landfills which have not been granted an authorization to continue to operate as soon as possible. However, as stated in the defense, Romania did not take measures to close the 68 landfills before the deadline set by the Commission (the 25th of November 2015, extended from the 16th of July 2009) and succeeded, until the date of the judgment of The Court of Justice, in closing only 11 non-compliant landfills.

In response to the defense of the Romanian Government in the sense that there are difficulties in obtaining advice notes and authorizations, the Court recalled that, according to its constant jurisprudence, a Member State cannot invoke situations of its internal order to justify its failure to comply with its obligations and the deadlines resulting from the Union law (Judgment of the 25th of February 2016, Commission v. Spain, C-454/14, not published, EU:C:2016:117, paragraph 45).

This judgment seems to prove – yet again – the inefficiency of national authorities invested with environmental responsibilities. For example, the available data indicates that only about 5% of the total waste is recycled in Romania, given that the European Union aims to ensure the recycling of 65% of total waste by 2030. Integrated waste management systems seem to be, with only one exception, inoperative, and ecological bombs such as those in Cluj-Napoca (Pata Rât) can multiply in the immediate future.
Suspension Maintained by the High Court. Temporary Judicial Protection

The High Court of Cassation and Justice validated, by civil decision no. 3410 on the 18th of October 2018, a solution for suspension of a decision to impose issued by the Administration for Medium-sized Enterprises/Taxpayers established in the Cluj Region, on the basis of article 14 of Law no. 554/2004 through civil judgment no. 416 on the 14th of December 2016.

For the Costaş, Negru & Asociaţii lawyers’ civil partnership, this decision is a validation of the conclusions that we constantly expose, as it is necessary to provide temporary judicial protection for taxpayers affected by the issuance of decisions to impose that produce immediate effects.

Indeed, at the present stage of the Romanian tax procedure, decisions to impose issued by the tax authority have very rapid effects, with additional payment liabilities to be paid within 20-30 days from the issue and disclosure of the debt instrument. The tax pressure felt by the taxpayer is augmented by the fact that, in the case of filing a criminal report by the tax authorities, the unanimous practice of the regional general directorates and the Directorate General for Solving Complaints is to suspend the resolution of tax complaints. In other words, a taxpayer is forced to pay the amounts included in the decision to impose, without analyzing in any way the arguments put forward in the defense (since the resolution of the tax complaint is blocked sine die and the judicial contestation procedure cannot be initiated before the settlement of the tax complaint).

The taxpayer legally represented by the lawyers’ civil partnership of Costaş, Negru & Asociaţii, in collaboration with Septimiu Ioan Puţ Law Office, was exactly in this difficult situation that opened wide prospects for bankruptcy of the company. The successfully identified and enforced remedy – the suspension of the decision to impose, under article 14 of Law no. 554/2004 – made the continuation of the company’s activity possible, which provides services of general public interest, at least until the judgment on the substance of the tax court.

It should be noted, in the same context, that the company also obtained another important decision before the Cluj Court of Appeal, namely the forcing of the Cluj-Napoca Public Finance Regional Directorate to resolve the tax complaint (pending litigation, in the procedural stage of the second appeal before the High Court of Cassation and Justice). In fact, all courts appear to have validated the company’s arguments, in the sense that at the level of appearance, the tax inspection did not value the taxpayer’s defense and did not show, beyond any doubt, the taxpayer’s participation in a VAT fraud mechanism.

Finally, we point out that the High Court of Cassation and Justice has rejected all the tax authority’s arguments as to the influence that a criminal case could have on the application for suspension, in which accusations were made against the manager of the company in question. In dissonance with the tax authority, but in the spirit of article 6 paragraph 2 of the Convention, the supreme court has applied the principle of the presumption of innocence. It is indeed a wise solution, given that in almost all criminal litigations of this kind, the company to which additional tax liabilities have been established has no legal position in the criminal case.

It can also be discussed, in the context, about a toxic practice of the tax authorities that they can take their arguments from various criminal cases tale quale, possibly directly on their memory stick, without conducting any research into the tax situation. This at least negligent approach conducts to the abolishing of many administrative fiscal acts clearly lacking any factual and legal basis. However, considering the case law of the Court of Justice of the European Union in the Web Mindl Licenses legal affair, the transfer of evidence from criminal proceedings to the tax procedure and vice versa raises serious compatibility issues with EU regulations and conventional provisions.

In the court proceedings concerning the suspension of the injurious decision to impose, the company was legally represented by Mr. Cosmin Flavius Costaş, PhD (before the High Court of Cassation and Justice), respectively by Mr. Septimiu Ioan Puţ, PhD, and Ms. Alina Mihaela Gherman (before the Cluj Court of Appeal).

All the details of our practice in the matter of tax law, lawyers and the types of legal services we provide are available on the Costaș, Negru & Asociații lawyers’ civil partnership website, at https://www.costas-negru.ro.