SOURCE: Monthly Case-law Digest - February 2021
Reference for a preliminary ruling – Approximation of laws – Directive 2003/6/EC – Article 14(3) – Regulation (EU) No 596/2014 – Article 30(1)(b) – Market abuse – Administrative sanctions of a criminal nature – Failure to cooperate with the competent authorities – Articles 47 and 48 of the Charter of Fundamental Rights of the European Union – Right to remain silent and to avoid self-incrimination
On 2 May 2012, the Commissione Nazionale per le Società e la Borsa (Consob) (National Companies and Stock Exchange Commission, Italy) imposed on DB penalties totalling EUR 300 000 for an administrative offence of insider dealing committed in 2009. It also imposed on him a penalty of EUR 50 000 for failure to cooperate. DB, after applying on several occasions for postponement of the date of the hearing to which he had been summoned in his capacity as a person aware of the facts, had declined to answer the questions put to him when he appeared at that hearing.
Following the dismissal of his appeal against those penalties, DB brought an appeal on a point of law before the Corte suprema di cassazione (Supreme Court of Cassation, Italy). On 16 February 2018, that court referred an interlocutory question of constitutionality to the Corte costituzionale (Constitutional Court, Italy) concerning the provision of Italian law on the basis of which the penalty for failure to cooperate was imposed. That provision penalises anyone who fails to comply with Consob’s requests in a timely manner or delays the performance of that body’s supervisory functions, including with regard to the person in respect of whom Consob alleges an offence of insider dealing. The Corte costituzionale (Constitutional Court) pointed out that, under Italian law, insider dealing constitutes both an administrative offence and a criminal offence. It then noted that the provision concerned was adopted in performance of a specific obligation under Directive 2003/6 and now implements a provision of Regulation No 596/2014. Next, it asked the Court whether those measures are compatible with the Charter of Fundamental Rights of the European Union (‘the Charter’) and, in particular, the right to remain silent.
The Court, sitting as the Grand Chamber, recognises the existence, for natural persons, of a right to silence, protected by the Charter, and holds that Directive 2003/6 and Regulation No 596/2014 allow Member States to respect that right in an investigation carried out in respect of such persons and capable of establishing their liability for an offence that is punishable by administrative sanctions of a criminal nature, or their criminal liability.
Findings of the Court
In the light of the case-law of the European Court of Human Rights on the right to a fair trial, the Court emphasises that the right to silence, which lies at the heart of the notion of a ‘fair trial’, precludes, inter alia, penalties being imposed on natural persons who are ‘charged’ for refusing to provide the competent authority, under Directive 2003/6 or Regulation No 596/2014, with answers which might establish their liability for an offence that is punishable by administrative sanctions of a criminal nature, or their criminal liability.
The Court states, in that regard, that the case-law relating to the obligation on undertakings to provide, in proceedings that may lead to the imposition of penalties for anticompetitive conduct, information which may subsequently be used to establish their liability for such conduct cannot apply by analogy to establish the scope of the right to silence of natural persons charged with insider dealing. The Court adds that the right to silence cannot, however, justify every failure to cooperate on the part of the person concerned with the competent authorities, such as refusing to appear at a hearing planned by those authorities or using delaying tactics designed to postpone it. Finally, the Court notes that both Directive 2003/6 and Regulation No 596/2014 lend themselves to an interpretation which is consistent with the right to silence, in that they do not require penalties to be imposed on natural persons for refusing to provide the competent authority with answers which might establish their liability for an offence that is punishable by administrative sanctions of a criminal nature, or their criminal liability. In those circumstances, the absence of an express prohibition against the imposition of a penalty for such a refusal cannot undermine the validity of those measures. It is for the Member States to ensure that natural persons cannot be penalised for refusing to provide such answers to the competent authority.