1. EDPL 2|2016258 Case Notes
Interception of Telecommunications and Emails Seizure: What
Are the EU Charter’s Limitations?
Stephanie Mihail*
C‑419/14 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt Adó- és Vám Főigaz-
gatóság, (CJEU, 17 December 2015) - Opinion Advocate General Wathelet of 16 September
2015
I. Facts
WebMindLicenses (WML) is a commercial company
registered in Hungary, which acquired from Hy-
podest Patent Development Company, an undertak-
ing established in Portugal, know-how enabling a
website to be operated, free of charge, through which
erotic interactive audiovisual services were supplied.
That know-how was made available to Lalib —
Gestão e Investimentos Lda (Lalib), a company also
established in Portugal by a licensing agreement. Fol-
lowing a tax inspection from the Nemzeti Adó- és
Vámhivatal Kiemelt Adó- és Vám Főigazgatóság (Na-
tional Tax and Customs Authority, Principal Direc-
torate of Taxes and Customs for Major Taxpayers;
‘the Hungarian Tax and Customs Authority’), WML
was required to pay the Hungarian VAT, a fine and
penalties on the ground that the transfer of WML’s
know-how to Lalib did not correspond to a genuine
economic transaction. According to the Hungarian
tax authorities, the know-how was in reality exploit-
ed by WML, since the exploitation of that know-how
had taken place on Hungarian territory. The Hungar-
ian tax authorities alleged that this was a way of cir-
cumventing Hungarian tax law, which was less ad-
vantageous than Portuguese tax law.
WML brought an action against the decision of
the National Tax and Customs Authority, complain-
ing that it had used evidence obtained without
WML’sknowledgebymeansofinterceptingtelecom-
munications and seizing emails in the course of a
parallel criminal procedure, which was not open to
WML. The Hungarian Administrative and Labour
Court referred a preliminary ruling to the Court of
Justice of the EU (CJEU), including 17 questions, of
which questions 10 to 15 are relevant to privacy. The
Hungarian Administrative and Labour Court was
mostly uncertain ‘whether it is to be inferred from
the objectives of the VAT Directive that the tax au-
thorities may gather evidence obtained in the con-
text of a criminal procedure, including by secret
means, and use it as the basis for an administrative
decision. In this connection, (…) it raises the ques-
tion of what limits the Charter places on the institu-
tional and procedural autonomy of the Member
States’.1
II. Judgment
Although this case regards matters related to tax law,
the CJEU’s judgment provides powerful arguments
for respecting privacy. Questions 10 to15 particular-
ly address the issue of whether EU law must be in-
terpreted as not precluding the tax authorities from
being able to use evidence in administrative proceed-
ings, obtained without the taxable person’s knowl-
edge, in the context of a parallel criminal procedure
that has not yet been concluded, by means of the in-
terception of telecommunications and seizure of
emails.2
The CJEU’s view is that
the question whether action constituting an abu-
sive practice has taken place must be examined in
accordance with the rules of evidence of national
law. Those rules must not, however, undermine
the effectiveness of EU law.3
The CJEU went further, by stating that ‘secondly, in
accordance with settled case-law, the fundamental
* Legal Researcher in ICT law, KU Leuven University, Centre for IT
& IP Law (CiTiP)–iMinds. For correspondence: <stephanie
.mihail@law.kuleuven.be>.
1 C‑419/14 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal
Kiemelt Adó- és Vám Főigazgatóság (CJEU, 17 December 2015)
ECLI:EU:C:2015:832, para 26.
2 ibid, paras 61-91.
3 ibid, para 65; C‑255/02 Halifax and Others (CJEU, 21 February
2006) ECLI:EU:C:2006:121, para 76.

2. EDPL 2|2016 259Case Notes
rights guaranteed in the legal order of the European
Union are applicable in all situations governed by EU
Law’. 4
In this case, the CJEU considered that the VAT
adjustment at issue constitutes an implementation
of EU law for the purposes of Article 51(1) of the Char-
ter.5
As a conclusion, CJEU found that
it follows that EU law does not preclude the tax
authorities from being able in the context of an
administrative procedure, in order to establish the
existence of an abusive practice concerning VAT,
to use evidence obtained in the context of a paral-
lel criminal procedure that has not yet been con-
cluded, provided that the rights guaranteed by EU
law, especially by the Charter, are observed.6
Therefore, the CJEU concluded that
EU law must be interpreted as not precluding, for
thepurposesoftheapplicationofArticle4(3)TEU,
Article 325 TFEU and Articles 2, 250(1) and 273 of
Council Directive 2006/112/EC of 28 November
2006, the tax authorities from being able to use ev-
idence obtained without the taxable person’s
knowledgeinthecontextofaparallelcriminalpro-
cedure that has not yet been concluded, in order
to establish the existence of an abusive practice
concerning value added tax, by means, for exam-
ple,oftheinterceptionoftelecommunicationsand
seizure of emails, provided that the obtaining of
that evidence in the context of the criminal proce-
dure and its use in the context of the administra-
tive procedure do not infringe the rights guaran-
teed by EU law. By virtue of Articles 7, 47 and 52(1)
of the Charter of Fundamental Rights of the Euro-
pean Union, the CJEU held that “it is incumbent
upon the national court (..) to verify, first, whether
the interception of telecommunications and
seizure of emails were means of investigation pro-
vided for by law and necessary in the context of
the criminal procedure and, secondly, whether the
use by the tax authorities of the evidence obtained
by those means was also authorised by law and
necessary7
.
Regarding the value and use of this evidence in ad-
ministrative proceedings, the CJEU concluded that
It is incumbent upon that court to verify whether,
in accordance with the general principle of obser-
vance of the rights of the defense, the taxable per-
son had the opportunity, in the context of the ad-
ministrative procedure, of gaining access to that
evidence and of being heard concerning it. If the
national court finds that the taxable person did
not have that opportunity or that that evidence
was obtained in the context of the criminal proce-
dure, or used in the context of the administrative
procedure, in breach of Article 7 of the Charter of
Fundamental Rights of the European Union, it
must disregard that evidence and annul that deci-
sion if, as a result, the latter has no basis. That ev-
idence must also be disregarded if the national
court is not empowered to check that it was ob-
tained in the context of the criminal procedure in
accordance with EU law or cannot at least satisfy
itself, on the basis of a review already carried out
by a criminal court in an inter partes procedure,
that it was obtained in accordance with EU law.8
III. Comment
In this judgment, particular reference is made to the
Charter of Fundamental Rights of the European
Union9
, which has enshrined the human rights pro-
vided by the European Convention of Human Rights
(ECHR), such as the right to privacy and the right to
a fair trial. To this end, any restrictions or violations
of these rights may only be foreseen by law and must
be necessary for recognised public interest objec-
tives, such as the prevention of fraud. To this end,
any restrictions to the right to privacy should be able
to have the desired effect and not to go beyond what
is strictly necessary. Firstly, the CJEU found that the
interference was provided by law, which precondi-
tions that the legal basis permitting the tax authori-
ties to use that evidence must be
sufficiently clear and precise and that, by defin-
ing itself the scope of the limitation on the exer-
cise of the right guaranteed by Article 7 of the
Charter, it affords a measure of legal protection
4 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt
Adó- és Vám Főigazgatóság, para 66; C‑617/10 Åkerberg Frans-
son (CJEU, 26 February 2013) ECLI:EU:C:2013:105, para 19.
5 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt
Adó- és Vám Főigazgatóság, para 67.
6 ibid, para 68.
7 ibid, para 91.
8 ibid, para 4.
9 art 52 (1) of the Charter.
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3. EDPL 2|2016260 Case Notes
against any arbitrary interferences by those au-
thorities.10
To this end, the CJEU held that
in that regard, since, as has been pointed out in
paragraph 35 of the present judgment, preventing
possible tax evasion, avoidance and abuse is an ob-
jective recognised and encouraged by the VAT Di-
rective (..), investigative measures carried out in
the context of a criminal procedure with a view,
inparticular,toprosecutingoffencesinthatsphere
have an aim which meets an objective of general
interest recognised by the European Union.11
Therefore, after having established this fact, the
CJEU undertook a three-step test, namely (a) whether
the evidence in the criminal case was illegally ob-
tained (without judicial authorisation); (b) whether
the use of this evidence by the tax authorities consti-
tutes an impermissible restriction on the rights of de-
fence, considering that a less severe offense would
have sufficed; and (c) whether the WML had the op-
portunity to gain access to that evidence and to make
appropriate representations. If the court is unable to
verify that these conditions are met, the evidence is
to be discarded. As the Advocate General12
has ob-
served in his Opinion,
when considering the necessity for such use in the
main proceedings, it must be assessed in particu-
lar, whether the use is proportionate to the aim
pursued, examining whether all the necessary in-
formation could not have been obtained by means
of investigation that interfere less with the right
guaranteed by Article 7 of the Charter, than inter-
ception of telecommunications and seizure of
emails, such as a simple inspection at WML’s
premises and a request for information or for an
administrative enquiry sent to the Portuguese au-
thorities pursuant to Regulation No 904/2010.13
Hence, in order to reach its conclusion, the CJEU fol-
lowed the proportionality and necessity test which
is a well-established practice both in the CJEU’s, as
well as the ECtHR’s case law. In particular, by virtue
of Articles 7, 47 and 52(1) of the Charter of Funda-
mental Rights of the European Union, the national
courts must verify firstly whether the interception of
telecommunications and seizure of emails are means
of investigation provided for by law and necessary
in the context of the criminal procedure and, second-
ly, whether the use by the tax authorities of the evi-
dence obtained by those means was also authorised
by law and necessary. The CJEU specifically states
that ‘the interception of telecommunications and the
seizing of emails constitute an interference with the
right laid down in Article 7 of the Charter. Therefore
limitations must comply with the conditions set out
in Article 52(1)’.14
1. Proportionality
As regards the proportionality principle, the CJEU
has already held that the measures adopted by the
Member States ‘must not go further than necessary
to attain the objectives of ensuring the correct levy-
ing and collection of VAT and the prevention of tax
evasion’.15
In the main proceedings of this case, the
interception of the telecommunications and the
emails seizure occurred in the context of a criminal
procedure. Therefore, it is in the light of that proce-
dure that the assessment of the aim of those acts and
the need for them must take place. In that regard, the
CJEU found that ‘preventing possible tax evasion,
avoidance and abuse is an objective recognised and
encouraged by the VAT Directive’.16
Hence, the ‘in-
vestigative measures carried out in the context of a
criminal procedure with a view, in particular, to pros-
ecuting offences in that sphere have an aim which
meets an objective of general interest recognised by
the European Union.17
However, the CJEU remind-
10 C‑419/14 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal
Kiemelt Adó- és Vám Főigazgatóság (CJEU, 17 December 2015)
ECLI:EU:C:2015:832, para 81; Malone v the United Kingdom App
no 8691/79 (ECtHR, 2 August 1984), para 67; and Gillan and
Quinton v the United Kingdom App no 4158/05 (ECtHR, 12
January 2010), para 77.
11 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt Adó-
és Vám Főigazgatóság, paras 76 and 35.
12 Opinion of Advocate General Wathelet (16 September 2015),
point 133: ‘Furthermore, it may be asked whether all the informa-
tion required for the purposes of combating VAT evasion and
avoidance could not have been obtained by means of a simple
inspection at WebMindLicenses’ premises or a request to the
Portuguese tax authorities for assistance in connection with
Lalib. This is an issue for the referring court to determine.’
13 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt Adó-
és Vám Főigazgatóság, para 82.
14 ibid, paras 71-73.
15 C‑285/09 R (CJEU, 7 December 2010) ECLI:EU:C:2010:742, para
45.
16 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt Adó-
és Vám Főigazgatóság, para 71.
17 ibid.

4. EDPL 2|2016 261Case Notes
ed that ‘the measures adopted by the Member States
must not go further than necessary to meet the ob-
jective of general interest being pursued’.18
2. Necessity
The emails were seized without any judicial authori-
sation. In its examination of the necessity of these
investigative measures, the CJEU held that
it is to be noted that, in the absence of prior judi-
cial authorisation, a strict legal framework for, and
strict limits on, such seizure are required if indi-
viduals are to be protected from arbitrary interfer-
ence by the authorities with the rights guaranteed
under Article 7 of the Charter. 19
The CJEU reminded the limit placed by the Charter,
stating that ‘thus, such seizure can be compatible
with Article 7, only if domestic legislation and prac-
tice afford adequate and effective safeguards against
abuse and arbitrariness’20
.
In addition, the CJEU defined the criteria to be
considered by the national courts during this assess-
ment. In particular, it stated had
the referring court had to examine whether the ab-
sence of a prior judicial warrant was, to a certain
extent, counterbalanced by the availability to the
person concerned by the seizure of an ex post fac-
tum judicial review relating to both the legality
and necessity of the seizure, a review which must
be effective in the particular circumstances of the
case at issue.21
Furthermore, the CJEU commented on the lack of
need in this instance
to examine whether transmission of the evidence
by the department responsible for the criminal in-
vestigation and the gathering thereof by the de-
partment conducting the administrative proce-
dure would interfere with the right to protection
of personal data, as guaranteed by Article 8 of the
Charter.22
Therefore, the CJEU found that there was no need to
assess if the gathering and use of that evidence by
the tax authorities interfered with the right to pro-
tection of personal data, since ‘WML is not a natur-
al person’.23
As a conclusion, it is incumbent to the national
courtstoundertaketheabovementionedproportion-
ality and necessity test when assessing the balance
in cases of interference with the right to one’s private
life. In the case that national courts find that any such
evidence is in breach of Article 7 of the Charter, they
‘must disregard that evidence and annul that deci-
sion if, as a result, the latter has no basis’.24
The same
decision must be held in the case that
the national court is not empowered to check that
(the evidence) was obtained in the context of the
criminal procedure in accordance with EU law or
cannot at least satisfy itself, on the basis of a re-
view already carried out by a criminal court in an
inter partes procedure, that it was obtained in ac-
cordance with EU law.25
The CJEU’s judgment, by setting a series of criteria
on the limits set by the EU Charter regarding the pro-
portionality and necessity assessment undertaken by
the national courts enhances the right to privacy and
has a considerable impact on future similar cases.
18 ibid, para 74.
19 ibid, paras 77-78; see also Camenzind v Switzerland App no
21353/93 (ECtHR, 16 December 1997), para 45.
20 Funke v France App no 10828/84 (ECtHR, 25 February 1993),
paras 56-57; Miailhe v France App no 12661/87 (ECtHR, 25 Feb-
ruary 1993), paras 37-38; and Société Colas Est and Others v
France App no 37971/97 (ECtHR, 16 April 2002), paras 48-49.
21 Smirnov v Russia App no 71362/01 (ECtHR, 7 June 2007), para
45.
22 C‑92/09 and C‑93/09 Volker und Markus Schecke and Eifert
(CJEU, 9 November 2010) ECLI:EU:C:2010:662, paras 52 and 53.
23 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt Adó-
és Vám Főigazgatóság, para 79; C‑201/14 Smaranda Bara and
Others v Președintele Casei Naționale de Asigurări de Sănătate, Casa
Naţională de Asigurări de Sănătate, Agenţia Naţională de Adminis-
trare Fiscală (ANAF) (CJEU, 1 October 2015) ECLI:EU:C:2015:638.
24 WebMindLicenses Kft v Nemzeti Adó- és Vámhivatal Kiemelt Adó-
és Vám Főigazgatóság, para 1.2.
25 ibid.