CJEU Case C-537/16 / Opinion

Garlsson Real Estate SA and Others v Commissione Nazionale per le Società e la Borsa (Consob)
Policy area
Justice, freedom and security
Deciding body type
Court of Justice of the European Union
Deciding body
Advocate General
Type
Opinion
Decision date
12/09/2017
ECLI (European case law identifier)
ECLI:EU:C:2017:668
  • CJEU Case C-537/16 / Opinion

    Key facts of the case

    Request for a preliminary ruling from the Corte suprema di cassazione.


    Reference for a preliminary ruling — Directive 2003/6/EC — Market manipulation — Penalties — National legislation providing for an administrative penalty and a criminal penalty for the same acts — Charter of Fundamental Rights of the European Union — Article 50 — Ne bis in idem principle — Criminal nature of the administrative penalty — Existence of the same offence — Article 52(1) — Limitations to the ne bis in idem principle — Conditions.

    Outcome of the case

     

    In the light of the arguments set out, I propose that the Court reply as follows to the questions submitted by the Corte suprema di cassazione (Supreme Court of Cassation, Italy):

    Article 50 of the Charter of Fundamental Rights of the European Union:

    (1) does not permit double administrative and criminal punishment of the same unlawful conduct consisting of market abuse, when the administrative penalty which, in accordance with national legislation, is applicable to that conduct is of a substantively criminal nature and the duplication of proceedings against the same person in respect of the same acts is provided for without establishing a procedural mechanism which prevents such duplication;

    (2) may be relied on directly by an individual before a national court, which is obliged to give full effect to the right of ne bis in idem and, if necessary, to refuse of its own motion to apply any conflicting provision of national legislation.

  • Paragraphs referring to EU Charter

    35) Before suggesting an answer to the two questions, I believe it is useful to make two observations. The first is that Article 50 of the Charter is undoubtedly applicable to this case, for the national legislation on market abuse, pursuant to which the penalties at issue were imposed, was adopted by the Italian State in order to transpose Directive 2003/6 into national law.

    36) The scope of the Charter, as far as the actions of the Member States are concerned, is defined in Article 51(1) thereof, according to which the provisions of the Charter are addressed to the Member States only when they are implementing Union law. The fundamental rights guaranteed by the Charter must be respected when applying national provisions which, in turn, reflect or derive from provisions of EU law. ( 12 ) However, the Court does not have jurisdiction to rule on a legal situation not included in the scope of the Charter and the provisions of the Charter cannot by themselves be the basis for that jurisdiction. ( 13 )

    ...

    38) That dual-track administrative and criminal system (doppo binario sanzionatorio) displays characteristics which make it difficult to reconcile with the principle of ne bis in idem in Article 50 of the Charter, as the referring court explains. If such a system had been established by Directive 2003/6, it would be necessary to consider whether it is null and void, on the grounds that it might infringe Article 50 of the Charter.

    39) In my view, however, Directive 2003/6 does not compel Member States to implement a dual-track administrative and criminal system to punish the kind of unlawful conduct at issue. Therefore, I do not consider that directive to be incompatible with Article 50 of the Charter. ( 14 )

    ...

    52) In the Opinion in Menci I set out at length my considerations on:

    • The application of Article 50 of the Charter to the joint imposition of tax and criminal penalties in the light of the case-law of the Court, in particular the judgment of 26 February 2013, Åkerberg Fransson, ( 26 ) and other earlier judgments. ( 27 )
    • The case-law of the ECtHR on the concept of ne bis in idem, in relation to the same acts and to the duplication of proceedings in which a penalty is imposed. ( 28 )
    • The effect of the judgment of the ECtHR of 15 November 2016, A and B v. Norway, ( 29 ) on EU law. ( 30 )
    • The possibility of exploring the use of the first sentence of Article 52(1) of the Charter to limit the right not to be tried or punished twice in criminal proceedings for the same criminal offence . ( 31 )

    53) I believe that those considerations are applicable mutatis mutandis to the interpretation of the scope of the protection granted by Article 50 of the Charter against the duplication of proceedings and of criminal and administrative penalties in respect of the same act which can be classified as market abuse. I therefore refer to those considerations.

    54) In its first question, the referring court seeks to ascertain whether Article 50 of the Charter permits the bringing of administrative proceedings to penalise the perpetrator of unlawful conduct consisting of market manipulation, where that person has already been convicted by a final judgment in criminal proceedings.

    55) For the purposes of application of the principle ne bis in idem, protected by Article 50 of the Charter, four conditions must be satisfied: (1) the person prosecuted or on whom the penalty is imposed is the same, (2) the acts being judged are the same (idem), (3) there are two sets of proceedings in which a penalty is imposed (bis) and (4) one of the two decisions is final.

    ...

    59) To my mind, the application of Article 50 of the Charter by the Court should follow that same approach. I do not believe that it is necessary to examine that point in detail ( 35 ) because there is little doubt in this case that the acts for which Mr Ricucci was punished twice are identical. None of the parties which have submitted observations dispute that and the referring court also takes that view in its order, referring expressly to the judgments of the ECtHR in Zolotukhin v. Russia ( 36 ) and Grande Stevens and Others v. Italy. ( 37 )

    ...

    61) Article 50 of the Charter will be breached if, in addition to a criminal conviction by a final judgment, the same person is subject to proceedings (of the kind brought by Consob) at the end of which he may have imposed on him penalties which, whilst appearing to be formally administrative in nature, are in fact really criminal penalties.

    62) As I pointed out in the Opinion in Menci, ( 38 ) in the context of Article 50 of the Charter, the Court has used the so-called Engel criteria as parameters for determining when proceedings or a penalty that are in principle administrative are actually criminal in nature. ( 39 )

    ...

    69) On that basis, the most rational conclusion is that the Italian legislation on market abuse enables the same unlawful conduct to be punished twice in the form of an administrative (albeit criminal in substance) penalty and a criminal penalty, without establishing a clear procedural mechanism to prevent double prosecution and double punishment of the perpetrator of the acts. To that extent, it infringes the right of ne bis in idem protected by Article 50 of the Charter.

    70) Two arguments have been submitted to counter that conclusion. According to the first, the administrative and criminal proceedings are sufficiently closely connected in substance and in time, within the meaning of the judgment of the ECtHR in A and B v. Norway, ( 45 ) to make them compatible with Article 50 of the Charter.

    71) I do not subscribe to that argument, for the reasons I explained in more detail in the Opinion in Menci. ( 46 ) I repeat that the Court should not adopt the strict interpretation of the right of ne bis in idem in Article 50 of the Charter, by refusing to follow in the wake of the change in the case-law of the ECtHR concerning Article 4 of Protocol No 7. Rather, the Court should maintain a higher level of protection of that right, in line with the judgments given to date on Article 50 of the Charter. ( 47 )

    72) The second argument is that the doppo binario sanzionatorio is justified by the need to ensure effective, proportionate and dissuasive penalties as a response to market abuse. That is required by Article 14(1) of Directive 2003/6. The Italian, German and Polish governments and Consob argued in their oral submissions that those features of the penalties permit limitation of the scope of Article 50 of the Charter, so that double criminal and administrative punishment makes it possible to tackle market abuse more effectively.

    73) Like the Commission, I believe that the requirement that penalties must be effective does not constitute a limitation of the right of ne bis in idem laid down in Article 50 of the Charter. The obligation to apply effective, proportionate and dissuasive penalties is incumbent on Member States in general terms and is independent of whether they adopt a dual-track (criminal and administrative) or single-track (criminal) system to penalise market abuse. Whatever the mechanism chosen, the system of penalties must be effective and, at all events, must respect the right of ne bis in idem protected by Article 50 of the Charter.

    74) As I argued in the Opinion in Menci, ( 48 ) only the horizontal clause in Article 52(1) of the Charter allows for an examination of whether the effectiveness of the penalties against market abuse may be classified as an ‘objective of general interest’, capable of justifying derogations from Article 50 of the Charter. ( 49 )

    75) In accordance with the horizontal clause in the first sentence of Article 52(1) of the Charter, a limitation of the right of ne bis in idem must be provided for by law and respect the essence of that right. In accordance with the second sentence of that paragraph, subject to the principle of proportionality, limitations may be made to the right of ne bis in idem only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others. ( 50 )

    ...

    77) However, I doubt whether, in these circumstances, there is respect for the essence of the right not to be tried or punished twice in criminal proceedings for the same criminal offence. At all events — and this is the key factor — I believe that the limitation I am now examining is not necessary within the meaning of Article 52(1) of the Charter.

    78) To my mind, the fact that the legislation of the Member States provides for different solutions in this regard itself demonstrates that that limitation is not necessary. If the limitation were really necessary, in accordance with Article 52(1) of the Charter, it would be necessary for all and not only some of the Member States. There are Member States which have established single-track systems for the punishment of market abuse and others which have maintained the dual-track system but have established procedural mechanisms (‘aiguillage’ in France) which prevent the accumulation of penalties. ( 51 )

    ...

    80) As regards effectiveness, I do not see why, in the case of penalties which are substantively criminal and therefore subject to the guarantees inherent in criminal law, the proceedings of administrative bodies should have to be more expeditious than those of the courts. It will be for the Member States to establish (legislative, administrative and judicial) measures suitable for tackling market abuse, combining the effectiveness of those measures with respect for the rights protected by the Charter.

    81) In short, when the administrative punitive response is substantively criminal in nature, double administrative and criminal punishment of the same unlawful conduct consisting of market abuse, without establishing a procedural mechanism to prevent it, does not guarantee respect for the right of ne bis in idem protected by Article 50 of the Charter.

    ...

    82) The referring court seeks to ascertain whether Article 50 of the Charter is directly applicable in cases such as this and whether it confers on individuals’ rights which the national courts must protect.

    83) The reply to that question can be clearly inferred from the case-law of the Court. Article 50 of the Charter is a clear, precise and unconditional provision which grants all persons the right not to be tried or punished twice for the same offence. That right may, of course, be relied on directly by individuals before national courts, which are obliged to protect it.

    84) Furthermore, in accordance with Article 6 TEU, Article 50 of the Charter forms part of primary EU law and, as such, has primacy over provisions of secondary EU law and over provisions of the Member States.

    85) In case of conflict between national law and rights guaranteed by the Charter, a national court which is called upon, within the exercise of its jurisdiction, to apply provisions of EU law is under a duty to give full effect to those provisions. Therefore, it must, if necessary, refuse of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such a provision by legislative or other constitutional means. ( 52 )

    ...

    87) In the case of provisions that are incompatible with the right of ne bis in idem, protected by Article 50 of the Charter, the national court or the competent administrative authorities must, therefore, stay the proceedings pending without any negative consequences for the person concerned who has already been tried or punished in other criminal proceedings or administrative proceedings of a criminal nature.

    ...

    88) In the light of the arguments set out, I propose that the Court reply as follows to the questions submitted by the Corte suprema di cassazione (Supreme Court of Cassation, Italy):

    Article 50 of the Charter of Fundamental Rights of the European Union:

    (1) does not permit double administrative and criminal punishment of the same unlawful conduct consisting of market abuse, when the administrative penalty which, in accordance with national legislation, is applicable to that conduct is of a substantively criminal nature and the duplication of proceedings against the same person in respect of the same acts is provided for without establishing a procedural mechanism which prevents such duplication;

    (2) may be relied on directly by an individual before a national court, which is obliged to give full effect to the right of ne bis in idem and, if necessary, to refuse of its own motion to apply any conflicting provision of national legislation.

  • Paragraphs referring to EU Charter (original language)