Report for the Hearing delivered in Case 166/85

I — Statement of facts

1. Mr I. Bullo and Mr F. Bonivento (hereinafter referred to as the accused) are employees of the Banca Agricola Popolare (Agricultural Cooperative Bank) in Cavarzere (Venice), a cooperative society with limited liability. The accused are charged with carrying out transactions connected with the grant of credit decided on and carried out in contravention of the credit-restriction measures adopted by the competent Italian authorities, in particular by the Bank of Italy and the Ministry of the Treasury. The court of first instance regarded the accused as persons responsible for a public service and convicted them of misappropriation of private funds under Article 315 of the Italian Penal Code.

2. The applicants appealed to the Corte d'Appello di Venezia (Court of Appeal, Venice), claiming that the First Council Directive (Directive 77/780/EEC of 12 December 1977), on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions (Official Journal L 322, p. 30) — hereinafter refered to as the directive — prevents employees of the credit institutions to which it applies from being given the status of public officials or persons responsible for a public service.

3. The national court found that the directive excluded from its scope only certain credit institutions belonging to State authorities. In this case, the directive was applicable to the institution in question. Consequently, the Italian State had to ensure, under Article 3 (4) of the directive, that the structural organization of the institution was established. In the event, it was necessary to establish whether, account being taken of all the provisions of the directive, the fact that under Italian law employees of credit institutions had the status of public officials and as persons responsible for a public service was in conformity with the result which the directive sought to achieve. Since it considered that it was necessary to resolve that problem before reaching a decision in the criminal proceedings, the Corte d'Appello, Venice, by order of 15 April 1985, decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty:

4. The order of the Corte d'Appello was received at the Court Registry on 31 May 1985.

5. In accordance with Article 20 of the Protocol of the Statute of the Court of Justice of the EEC, written observations were submitted on 29 July 1985 by the Commision of the European Communities, represented by G. Berardis, a member of its Legal Department, assisted by S. Pieri, an Italian civil servant serving with the Commission under an exchange arrangement with the national civil services, on 3 September 1985 by the accused, represented by A. Casellati, of the Venice Bar, and on 12 September 1985 by the Government of the Italian Republic, represented by P. G. Ferri, Avvocato dello Stato.

6. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. By order of 3 July 1986, the Court assigned the case to the Second Chamber.

II — Written observations submitted to the Court

The accused state firstly that the status of directors, managers and employees of banks subject to public law as public officials within the meaning of Article 357 of the Italian Penal Code and of those of banks subject to private law as persons responsible for a public service within the meaning of Article 358 of the same code is recognized by the case-law of the Italian Corte di Cassazione (Court of Cassation). The consequence of that court's decisions is that the business of banks governed by private law is subject to strict public supervision excluding any discretion in their administration particularly with regard to the implementation of the regulations and instructions of both the Bank of Italy and the Ministry of the Treasury.

According to the accused, those forms of supervision and binding obligation are incompatible with the fact that the credit business is conducted by undertakings and, consequently, incompatible with the right of establishment and with the rules governing free competition and, in particular, with the directive. That incompatibility is widely recognized by Italian legal writers. To classify directors, managers and employees of banks as either public officials or persons responsible for a public service is to depart from the principles underlying the directive. The directive lays down both the nature of the banking undertaking, which presupposes the freedom of choice inherent in undertakings, and the right of establishment, which is restricted by the fact that bank employees are so classified. It is unacceptable that in Italy bank employees can be charged with serious offences arising out of facts which might be regarded as entirely lawful under the legal systems of the Member States from which they come.

The accused draw attention to the fact that a bill submitted to the Senate of the Italian Republic providing for complete implementation of the directive expressly provided for the abandonment of that classification in criminal law on the ground that it is incompatible with the directive.

On those grounds in particular, the accused propose that the reply to the question referred to the Court should be as follows:

The Italian Government points out first that Decree No 350 of the President of the Republic of 27 June 1985 (GURINo 165 of 15. 7. 1985) laid down the legislative provisions necessary to completely implement the directive in Italy. That decree contains no provision concerning the classification of employees of credit institutions. Although a bill was lodged which proposed to legislate in this area, the Italian Parliament considered such legislation neither necessary nor desirable.

The Italian Government observes that the text of the directive contains no provision directly related to the problem raised by the question referred to the Court for a preliminary ruling with regard to the national court's reference to content, taken as a whole of the directive, that is to say, to the spirit and purpose of the measure taken together, the Italian Government is of the opinion that it is not possible to derive rules which, because they are not based on a legislative text, are tantamount to newlycreated provisions giving rise to an obligation on the part of the Member States to receive them into their internal legal order. That view is corroborated by the fact that the directive is merely intended to coordinate national legislation and does not settle the question by meeting all the requirements of coordination.

Furthermore, the Italian Government does not agree that Articles 357 and 358 of the Italian Penal Code may be regarded as rules relating to the structural organization of credit institutions. Application of those provisions merely affects the conditions under which an individual may incur criminal liability and the degree of that liability. They have no effect on the situation of a bank employee in regard to his duties, the way in which those duties are carried out and his obligations towards the establishment to which he belongs. The same can be said in regard to Article 3 (4) of the directive, which is in no way intended to regulate the structural organization of credit institutions. In any event, that provision has no influence on the application of the rules of national law to employees of credit institutions.

The Italian Government therefore proposes to reply to the national court's question as follows :

The Commission first provides a detailed description of the structure of the Italian banking system in order to explain the reasons for which bank employees are classified as public officials or persons responsible for a public service within the meaning of the Penal Code. It then summarizes the consequences in criminal law ensuing from that classification.

As regards, more specifically, the national court's question, the Commission, like the Italian Government, considers that none of the provisions of the directive prevent Member States from conferring on employees of credit institutions the status of public officials or persons responsible for a public service. The Member States remain free to legislate as they see fit on that point. Although the directive, since it is primarily concerned with access to banking, excludes from its scope certain banking institutions or services which are undoubtedly subject to public law and of public interest, the credit institutions to which the directive applies are not required by it to be strictly private in nature. The directive does not prohibit Member States from entrusting duties in the nature of those of a public service to bank employees, including employees of private banks. In so far as the directive is also concerned with the business of credit institutions, the principal objective of the provisions on that subject is the protection of savers.

Consequently, the Commission proposes that the reply to the national court's question should be as follows:

III — Oral procedure

The accused, represented by Mr A. Casellari, the Italian Government, represented by Mr P. G. Ferri, and the Commission, represented by Mr G. Berardis, presented oral argument at the hearing on 23 October 1986.

The Advocate General delivered his Opinion at the sitting on 22 January 1987.

1 Language of the Case: Italian.