OPINION OF ADVOCATE GENERAL
CAMPOS SÁNCHEZ-BORDONA
delivered on 12 September 2017 (1)
Case C‑537/16
Garlsson Real Estate SA, in liquidation,
Stefano Ricucci,
Magiste International SA
v
Commissione Nazionale per le Società e la Borsa (Consob)
(Request for a preliminary ruling
from the Corte suprema di cassazione (Supreme Court of Cassation, Italy)]
(Charter of Fundamental Rights of the European Union — Directive 2003/6/EC — Market manipulation — National law which provides for an administrative penalty and a criminal penalty for the same acts — Infringement of the principle ne bis in idem)
1. In the Opinion in Menci, (2) which is delivered at the same time as this Opinion, I analyse the extent to which the principle ne bis in idem applies when the laws of some Member States permit the joint imposition of administrative and criminal penalties to punish non-payment of VAT. This reference for a preliminary ruling concerns the same problem, although this time the conduct that is punished twice comes within the area of ‘market abuse’, which includes insider dealing and market manipulation.
2. The harmonisation of administrative sanctions in this field was carried out by Directive 2003/6/EC, (3) which was subsequently repealed by Regulation No 596/2014. (4) That regulation completely harmonised the system of administrative sanctions, whilst Directive 2014/57/EU (5) also harmonised, albeit only partially, the criminal sanctions applicable by Member States to such conduct. (6)
I. Legal framework
A. European Convention for the Protection of Human Rights and Fundamental Freedoms of 1950 (‘ECHR’)
3. Article 4 of Protocol No 7 annexed to the ECHR, signed in Strasbourg on 22 November 1984 (‘Protocol No 7’) governs the ‘Right not to be tried or punished twice’, as follows:
‘1. No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State.
2. The provisions of the preceding paragraph shall not prevent the reopening of the case in accordance with the law and the penal procedure of the State concerned, if there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case.
3. No derogation from this Article shall be made under Article 15 of the Convention.’
B. EU law
1. Charter of Fundamental Rights
4. In accordance with Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’):
‘No one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law.’
5. Article 52 defines the scope and interpretation of the rights and principles enshrined in the Charter:
‘1. Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made 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.
…
3. In so far as this Charter contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.
4. In so far as this Charter recognises fundamental rights as they result from the constitutional traditions common to the Member States, those rights shall be interpreted in harmony with those traditions.
…
6. Full account shall be taken of national laws and practices as specified in this Charter.
…’
2. Secondary legislation on market abuse
(a) Directive 2003/6
6. Recital 38 states:
‘In order to ensure that a Community framework against market abuse is sufficient, any infringement of the prohibitions or requirements laid down pursuant to this Directive will have to be promptly detected and sanctioned. To this end, sanctions should be sufficiently dissuasive and proportionate to the gravity of the infringement and to the gains realised and should be consistently applied.’
7. Article 5 provides:
‘Member States shall prohibit any person from engaging in market manipulation.’
8. In accordance with Article 14(1):
‘Without prejudice to the right of Member States to impose criminal sanctions, Member States shall ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative sanctions be imposed against the persons responsible where the provisions adopted in the implementation of this Directive have not been complied with. Member States shall ensure that these measures are effective, proportionate and dissuasive.’
(b) Regulation No 596/2014
9. Recital 71 is worded as follows:
‘… a set of administrative sanctions and other administrative measures should be provided for to ensure a common approach in Member States and to enhance their deterrent effect. The possibility of a ban from exercising management functions within investment firms should be available to the competent authority. Sanctions imposed in specific cases should be determined taking into account where appropriate factors such as the disgorgement of any identified financial benefit, the gravity and duration of the infringement, any aggravating or mitigating factors, the need for fines to have a deterrent effect and, where appropriate, include a discount for cooperation with the competent authority. In particular, the actual amount of administrative fines to be imposed in a specific case may reach the maximum level provided for in this Regulation, or the higher level provided for in national law, for very serious infringements, while fines significantly lower than the maximum level may be applied to minor infringements or in case of settlement. This Regulation does not limit Member States’ ability to provide for higher administrative sanctions or other administrative measures.’
10. Recital 72 reads:
‘Even though nothing prevents Member States from laying down rules for administrative as well as criminal sanctions for the same infringements, they should not be required to lay down rules for administrative sanctions for infringements of this Regulation which are already subject to national criminal law by 3 July 2016. In accordance with national law, Member States are not obliged to impose both administrative and criminal sanctions for the same offence, but they can do so if their national law so permits. However, maintenance of criminal sanctions rather than administrative sanctions for infringements of this Regulation or of Directive 2014/57/EU should not reduce or otherwise affect the ability of competent authorities to cooperate and access and exchange information in a timely manner with competent authorities in other Member States for the purposes of this Regulation, including after any referral of the relevant infringements to the competent judicial authorities for criminal prosecution.’
11. According to recital 77:
‘This Regulation respects the fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union. Accordingly this Regulation should be interpreted and applied with respect to those rights and principles …’
12. Article 15 provides:
‘A person shall not engage in or attempt to engage in market manipulation.’
13. Article 12 defines conduct constituting market manipulation as follows:
‘1. For the purposes of this Regulation, market manipulation shall comprise the following activities:
(a) entering into a transaction, placing an order to trade or any other behaviour which:
(i) gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a financial instrument, a related spot commodity contract or an auctioned product based on emission allowances; or
(ii) secures, or is likely to secure, the price of one or several financial instruments, a related spot commodity contract or an auctioned product based on emission allowances at an abnormal or artificial level;
…
(b) entering into a transaction, placing an order to trade or any other activity or behaviour which affects or is likely to affect the price of one or several financial instruments, a related spot commodity contract or an auctioned product based on emission allowances, which employs a fictitious device or any other form of deception or contrivance;
(c) disseminating information through the media, including the internet, or by any other means, which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a financial instrument, a related spot commodity contract or an auctioned product based on emission allowances or secures, or is likely to secure, the price of one or several financial instruments, a related spot commodity contract or an auctioned product based on emission allowances at an abnormal or artificial level, including the dissemination of rumours, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading;
(d) transmitting false or misleading information or providing false or misleading inputs in relation to a benchmark where the person who made the transmission or provided the input knew or ought to have known that it was false or misleading, or any other behaviour which manipulates the calculation of a benchmark.’
14. Article 30 governs administrative sanctions and other administrative measures as follows:
‘1. Without prejudice to any criminal sanctions and without prejudice to the supervisory powers of competent authorities under Article 23, Member States shall, in accordance with national law, provide for competent authorities to have the power to take appropriate administrative sanctions and other administrative measures in relation to at least the following infringements:
(a) infringements of Articles 14 and 15, Article 16(1) and (2), Article 17(1), (2), (4) and (5), and (8), Article 18(1) to (6), Article 19(1), (2), (3), (5), (6), (7) and (11) and Article 20(1); and
(b) failure to cooperate or to comply with an investigation, with an inspection or with a request as referred to in Article 23(2).
Member States may decide not to lay down rules for administrative sanctions as referred to in the first subparagraph where the infringements referred to in point (a) or point (b) of that subparagraph are already subject to criminal sanctions in their national law by 3 July 2016. Where they so decide, Member States shall notify, in detail, to the Commission and to ESMA, the relevant parts of their criminal law.
By 3 July 2016, Member States shall notify, in detail, the rules referred to in the first and second subparagraph to the Commission and to ESMA. They shall notify the Commission and ESMA without delay of any subsequent amendment thereto.
2. Member States shall, in accordance with national law, ensure that competent authorities have the power to impose at least the following administrative sanctions and to take at least the following administrative measures in the event of the infringements referred to in point (a) of the first subparagraph of paragraph 1:
…’
(c) Directive 2014/57
15. In accordance with recitals 22, 23 and 27:
‘(22) The obligations in this Directive to provide for penalties on natural persons and sanctions on legal persons in their national law do not exempt Member States from the obligation to provide in national law for administrative sanctions and other measures for breaches provided for in Regulation (EU) No 596/2014 unless Member States have decided, in accordance with Regulation (EU) No 596/2014, to provide only for criminal sanctions for such breaches in their national law.
(23) The scope of this Directive is determined in such a way as to complement, and ensure the effective implementation of, Regulation (EU) No 596/2014. Whereas offences should be punishable under this Directive when committed intentionally and at least in serious cases, sanctions for breaches of Regulation (EU) No 596/2014 do not require that intent is proven or that they are qualified as serious. In the application of national law transposing this Directive, Member States should ensure that the imposition of criminal sanctions for offences in accordance with this Directive and of administrative sanctions in accordance with the Regulation (EU) No 596/2014 does not lead to a breach of the principle of ne bis in idem.
…
(27) This Directive respects the fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union (the Charter) as recognised in the TEU. Specifically, it should be applied with due respect for the right … not to be tried or punished twice in criminal proceedings for the same offence (Article 50).’
16. According to Article 5:
‘1. Member States shall take the necessary measures to ensure that market manipulation as referred to in paragraph 2 constitutes a criminal offence at least in serious cases and when committed intentionally.
2. For the purposes of this Directive, market manipulation shall comprise the following activities:
(a) entering into a transaction, placing an order to trade or any other behaviour which:
(i) gives false or misleading signals as to the supply of, demand for, or price of, a financial instrument or a related spot commodity contract; or
(ii) secures the price of one or several financial instruments or a related spot commodity contract at an abnormal or artificial level;
…
(b) entering into a transaction, placing an order to trade or any other activity or behaviour which affects the price of one or several financial instruments or a related spot commodity contract, which employs a fictitious device or any other form of deception or contrivance;
(c) disseminating information through the media, including the internet, or by any other means, which gives false or misleading signals as to the supply of, demand for, or price of a financial instrument, or a related spot commodity contract, or secures the price of one or several financial instruments or a related spot commodity contract at an abnormal or artificial level, where the persons who made the dissemination derive for themselves or for another person an advantage or profit from the dissemination of the information in question; or
(d) transmitting false or misleading information or providing false or misleading inputs or any other behaviour which manipulates the calculation of a benchmark.’
17. Under Article 7:
‘1. Member States shall take the necessary measures to ensure that the offences referred to in Articles 3 to 6 are punishable by effective, proportionate and dissuasive criminal penalties.
2. Member States shall take the necessary measures to ensure that the offences referred to in Articles 3 and 5 are punishable by a maximum term of imprisonment of at least four years.
3. Member States shall take the necessary measures to ensure that the offence referred to in Article 4 is punishable by a maximum term of imprisonment of at least two years.’
C. Italian law
18. Article 185(1) and (2) of Testo unico delle disposizioni in materia di intermediazione finanziaria (Legislative Decree No 58/1998, TUF) consolidating all provisions in the field of financial intermediation provides as follows:
‘1. Any person making untrue statements or employing fictitious devices or other forms of deception which are in fact capable of bringing about a significant change in the price of financial instruments will be punished by a term of imprisonment of between one and six years and a fine of between EUR 20 000 and EUR 5 000 000.
2. A court may increase the fine by up to three times its amount or up to an amount 10 times greater than the proceeds or profit obtained from the offence, where the fine is insufficient, even if the maximum amount has been applied, having regard to the seriousness of the offence, the personal qualities of the offender and the size of the proceeds or profit obtained.’
19. Article 187b(1) of the TUF (7) reads:
‘Without prejudice to criminal penalties where the act in question constitutes a criminal offence, any person who, through the media, including the internet, or by any other means, disseminates information, rumour or false or misleading news which gives or is likely to give false or misleading signals as to financial instruments shall be liable to an administrative penalty of between EUR 100 000 and EUR 25 000 000.’
20. Article 187b(3)(c) of the TUF provides that, without prejudice to criminal penalties, where the act in question constitutes a criminal offence, the same pecuniary administrative sanctions are applicable to any person who engages in ‘transactions or orders to trade which employ fictitious devices or any other form of deception or contrivance’.
21. In accordance with Article 187K(1) of the TUF:
‘Administrative investigation proceedings and proceedings to have a decision set aside under Article 187f may not be stayed during the criminal proceedings covering the same facts or facts on the determination of which the outcome of the case depends.’
22. Article 187L(1) of the TUF states:
‘When, in relation to the same act, a pecuniary administrative sanction under Article 187f is imposed on the convicted person or entity … the pecuniary penalty and the pecuniary sanction that may be imposed in relation to the criminal offence shall be limited to the part in excess of the penalty or sanction imposed by the administrative authorities.’
23. Article 649 (‘Prohibition on further proceedings’) of the codice di procedura penale (Code of Criminal Procedure) stipulates:
‘An accused person who has been acquitted or convicted in criminal proceedings by way of a judgment or order which has become final may not have fresh criminal proceedings brought against him in respect of the same act, even if the latter is treated differently in terms of legal classification, degree of seriousness or circumstances, unless otherwise provided for in Articles 69(2) and 345.’
II. The dispute in the main proceedings and the question referred for a preliminary ruling
24. On 9 September 2007, the Commissione Nazionale per le Società e la Borsa (National Companies and Stock Exchange Commission; ‘Consob’) imposed an administrative penalty of EUR 10 200 000 on Mr Stefano Ricucci and two companies under his direction (Magiste International SA and Garlsson Real Estate SA), which were jointly and severally liable. The acts of which he was accused, which occurred in 2005, were classified as market manipulation contrary to Articles 187b(3)(c) and 187d(1)(a) of the TUF.
25. Mr Ricucci and the two companies appealed against the administrative penalty to the Corte di appello di Roma (Appeal Court, Rome, Italy) which, by judgment of 2 January 2009, reduced the penalty to EUR 5 000 000.
26. All the parties concerned lodged an appeal against that judgment with the Corte suprema di cassazione (Supreme Court of Cassation, Italy). In particular, Mr Ricucci relied in his appeal on the significant fact that he had been convicted of the same acts in criminal proceedings by a final judgment of 10 December 2008, given by the Tribunale di Roma (Regional Court, Rome, Italy).
27. Parallel criminal proceedings had been brought against Mr Ricucci in respect of the same acts (8) as those punished in the administrative proceedings. The criminal proceedings concluded, as a result of plea bargaining, with a judgment of 10 December 2008, in which the Tribunale di Roma (District Court, Rome) sentenced Mr Ricucci to a term of imprisonment of four years and six months, reduced to three years on account of the plea bargain, and a number of additional penalties. (9) The sentence was later extinguished as a result of a pardon granted under Law No 241/06.
28. The (criminal) judgment of 10 December 2008 became final on 11 September 2009, as the Corte suprema di cassazione (Supreme Court of Cassation) dismissed the appeal brought against that judgment.
29. In the course of the appeal in cassation brought against the judgment of 2 January 2009, the Corte suprema di cassazione (Supreme Court of Cassation) referred the matter to the Corte costituzionale (Constitutional Court, Italy) for a ruling on the constitutionality of Article 187b(1) of the TUF.
30. However, in judgment No 102 of 12 May 2016, the Corte costituzionale (Constitutional Court) declared that the question concerning constitutionality was inadmissible. (10) As a result of that decision, the referring court explains in its order that the failure to provide under the national legal system for the extension of the ne bis in idem principle to include the relationship between criminal sanctions and administrative sanctions of a criminal nature would appear to be at odds with the principles of EU law. In the view of that court, the dual-track system is not permissible, in line with supranational principles, and therefore the imposition of concurrent criminal and administrative penalties, applied in separate proceedings, is likewise not permissible where the latter is in the nature of a criminal penalty.
31. The Corte suprema di cassazione (Supreme Court of Cassation) therefore considers that the bringing and resolution of the administrative proceedings, following the judgment in the criminal proceedings against Mr Ricucci, may constitute a breach of the ne bis in idem principle enshrined in Article 50 of the Charter, pursuant to the judgment of the Court of Justice of 26 February 2013, Åkerberg Fransson, (11) and the case-law of the ECtHR (judgments of 4 March 2014, Grande Stevens and Others v. Italy (CE:ECHR:2014:0304JUD001864010); of 20 May 2014, Nykänen v. Finland (CE:ECHR:2014:0520JUD001182811); of 27 November 2014, Lucky Dev v. Sweden (CE:ECHR:2014:1127JUD000735610); and of 10 February 2009, Zolotukhin v. Russia (CE:ECHR:2009:0210JUD001493903)].
32. Against that background, the Corte suprema di cassazione (Supreme Court of Cassation) has referred the following questions to the Court for a preliminary ruling:
‘(1) Does Article 50 of the Charter of Fundamental Rights of the European Union, interpreted in the light of Article 4 of Protocol No 7 to the European Convention on Protection of Human Rights and Fundamental Freedoms, the relevant case-law of the European Court of Human Rights and national law, preclude the possibility of conducting administrative proceedings in respect of an act (unlawful conduct consisting in market manipulation) for which the same person has been convicted by a decision that has the force [of] res judicata?
(2) May the national court directly apply EU principles in connection with the ne bis in idem principle, on the basis of Article 50 of the Charter of Fundamental Rights of the European Union, interpreted in the light of Article 4 of Protocol No 7 to the European Convention on the Protection of Human Rights and Fundamental Freedoms, the relevant case-law of the European Court of Human Rights and national law?’
33. Written observations were submitted by Consob, the Italian, German and Czech governments, and the Commission.
34. At the hearing on 30 May 2017, held jointly with the hearing in the Menci (C‑524/15) case and the joined cases of Di Puma (C‑596/16) and Consob (C‑597/16), oral argument was presented by the representatives of Mr Ricucci, the Italian and German governments, and the Commission.
III. Analysis of the questions referred for a preliminary ruling
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)
37. The second observation concerns the decision of the Italian legislature when it introduced, in 2005, a system involving duplication of proceedings and of (administrative and criminal) penalties to punish market abuse, for the purpose of implementing Directive 2003/6.
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)
40. Having made those observations, I shall examine first the EU legislation on market abuse, from the perspective of the concept of ne bis in idem, before going on to give a brief explanation of the scope of Article 50 of the Charter. Lastly, I shall propose replies to the two questions submitted by the referring court.
A. The EU legislation on market abuse and the principle ne bis in idem
41. Directive 2003/6 prohibits market abuse with the aim of preserving the integrity of financial markets and enhancing investor confidence. Investors must have a guarantee that they will operate on an equal footing and that they will be protected against the improper use of inside information. (15)
42. Article 14(1) of Directive 2003/6 provides that Member States must punish such improper conduct using sanctions that are sufficiently dissuasive, effective, and proportionate. (16) Although the directive does not oblige Member States to impose sanctions of a criminal nature on perpetrators of insider dealing, it does not prohibit them from doing so either. Furthermore, the Court has held that, ‘in the light of the nature of the infringements at issue and the degree of severity of the sanctions which may be imposed, such sanctions may, for the purposes of the application of the ECHR, be qualified as criminal sanctions’. (17)
43. Directive 2003/6 does not refer to the principle ne bis in idem or to the need to establish, under its influence, the relationship between administrative punishment and criminal prosecution of market abuse. However, it cannot be inferred from the silence of the directive in that regard that it seeks the adoption of a dual-track system for the punishment of such conduct. The directive allows States considerable latitude to frame the relationship between administrative and criminal sanctions and does not preclude States from providing for mechanisms to ensure respect for the right of ne bis in idem, so that the duplication of proceedings and penalties is prevented.
44. Secondary EU legislation on market abuse was significantly revised through the adoption of Regulation No 596/2014 (which replaced Directive 2003/6) and Directive 2014/57, which harmonises the criminal sanctions to be imposed by Member States in respect of market abuse. Although neither is applicable to this case for the reasons of time to which I have referred above, useful guidance for the case can be drawn from both provisions.
45. As regards administrative proceedings, Regulation No 596/2014 significantly strengthens the supervisory, investigative and punitive powers of national authorities. In particular, Article 30(2) authorises Member States ‘to take appropriate administrative sanctions and other administrative measures’ that are particularly onerous. (18)
46. Notwithstanding their formal classification, a number of these nominally administrative sanctions are substantively criminal in nature, in accordance with the Engel criteria in the case-law of the ECtHR, (19) which were adopted by the Court in its judgments in Bonda (20) and Åkerberg Fransson. (21) As I have already pointed out, the Court recognised in the judgment in Spector Photo Group and Van Raemdock that such sanctions may be classified as criminal sanctions, owing to their severity and the nature of the infringements they are intended to penalise. (22)
47. That particular factor (some of the administrative sanctions provided for in Regulation No 596/2014 are, in fact, criminal in nature) raises the issue of their compatibility with the criminal sanctions applicable to the same types of market abuse under Directive 2014/57, from the perspective of the right of ne bis in idem.
48. Regulation No 596/2014 does not make any express provision in that regard. However, the second subparagraph of Article 30(1) provides that Member States may decide, by 3 July 2016, not to lay down rules for administrative sanctions where the infringements are already subject to criminal sanctions in their national law. In that case, Member States must notify the relevant parts of their criminal law to the Commission and to the European Securities and Markets Authority. (23)
49. Unlike Regulation No 596/2014, Directive 2014/57 refers explicitly to the concept of ne bis in idem in recitals 23 and 27, transcribed above. (24) The directive states, as a mandatory requirement, that the imposition of criminal sanctions (in accordance with the directive) and of administrative sanctions (in accordance with Regulation No 596/2014) ‘does not lead to a breach of the principle of non bis in idem.’
50. However, the fact is that, despite those explicit references, the enacting terms of Directive 2014/57 do not provide for any specific mechanism to ensure that the joint imposition of criminal administrative penalties does not breach the principle ne bis in idem. It is the Member States which must ensure, when they transpose that directive into national law, that the same acts are not prosecuted twice.
51. At all events, if the dual-track administrative and criminal system is maintained for the punishment of market abuse, it is necessary for all national legal systems to establish appropriate procedural mechanisms to prevent the duplication of proceedings and ensure that a person is prosecuted and punished only once in respect of the same acts. (25)
B. The first question: application of the principle ne bis in idem in Article 50 of the Charter to the duplication of criminal and administrative proceedings for market manipulation
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.
56. The referring court has no doubt that the person prosecuted is the same or that the criminal conviction is final. According to the information in the order for reference and the other information provided by the parties, Mr Ricucci was tried twice and punished twice, in criminal proceedings and in administrative proceedings. As I have already observed, a term of imprisonment (32) was imposed on him by the Tribunale di Roma (District Court, Rome) by judgment of 10 December 2008, and became final on 11 September 2009. The administrative penalty (fine of EUR 10 200 000, later reduced to half that amount) was imposed on him by Consob and is the subject of an appeal to the Corte suprema di casazzione (Supreme Court of Cassation), during the course of which the request for a preliminary ruling arose.
57. The referring court’s uncertainties therefore concern the other two elements of the concept of ne bis in idem, which are the existence of the same acts (idem) and the duplication of the proceedings (bis).
1. The same acts (idem)
58. As I explain in the Opinion in Menci, (33) the case-law of the Court, particularly the case-law on Article 54 of the Schengen Convention, and also the case-law of the ECtHR following the judgment in Zolotukhin v. Russia (34) both take the view that the prohibition of double punishment refers to the same material acts (idem factum), understood as a set of concrete circumstances which are inextricably linked together, irrespective of the legal classification given to them or the legal interest protected (idem crimen).
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)
60. Moreover, as the Commission suggests in its written observations, application of the criterion of idem crimen instead of that of idem factum would lead to the same outcome in this case, since the legal interest protected by Articles 187b and 185 of the TUF is the same: the integrity of financial markets.
2. The duplication of proceedings in which a penalty is imposed (bis)
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)
63. The first Engel criterion (the legal classification of the offence under national law) if of little relevance in this case, for Italian law classifies as administrative the proceedings and penalties dealt with by Consob. However, that should not preclude their subsequent examination in the light of the other two criteria. (40)
64. The second Engel criterion concerns the legal nature of the offence. A nominally administrative offence will, in fact, be criminal in nature where it satisfies a set of factors (including that the penalty for the offence is established for the purposes of punishment and deterrence and is not restricted to compensation for pecuniary damage, and that it protects legal interests whose protection is normally guaranteed by provisions of criminal law) to which I referred in the Opinion in Menci. (41)
65. The referring court takes the view that, in the light of the nature of the unlawful conduct, the administrative offences in respect of which Consob imposed penalties are of a substantively criminal nature, in accordance with the second Engel criterion, a view with which I concur. The interests protected by those offences (Article 187b of the TUF) are identical to those protected by the criminal offences of the same name (Article 185 of the TUF). Both are intended to guarantee the integrity of the financial markets and maintain public confidence in the security of transactions. Granting Consob the power to punish these types of offences is intended both as a deterrent (deterring future offenders from committing unlawful conduct in the form of market abuse) and a punishment (penalising those who have committed such acts and preventing reoffending). (42)
66. The third Engel criterion concerns the nature and the degree of severity of the penalty, which may be assessed on the basis of factors to which I also referred in the Opinion in Menci. (43) Given the range of penalties which Consob may impose and, in particular, the high amount of the fines it may impose (EUR 10 200 000 in this case), the referring court acknowledges that these are penalties that are clearly criminal in tone.
67. As the referring court also states, the severity of the penalties must be assessed by reference to the penalty which may be imposed a priori on the person concerned and not the penalty which is finally imposed or enforced: the possible later reduction of the penalty or the non-fulfilment of the penalty as a result of a pardon (as occurred in the instant case) are irrelevant. (44)
68. Application of the Engel criteria to the main proceedings is the responsibility of the referring court, which is best placed to assess whether the administrative penalty on which it must adjudicate is really criminal in nature. In this case, the referring court points out that the administrative penalty imposed by Consob on Mr Ricucci is of a criminal nature.
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)
76. Of the four essential conditions for legitimising the limitation of a fundamental right, the first and the last do not present any particular difficulties in this case. National law provides for double prosecution and that satisfies an aim of general interest recognised by EU law (that is, the protection of the integrity of the financial markets).
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)
79. The dissuasive capacity of a penalty depends on its severity: prison sentences (imposed for criminal offences) are undoubtedly more dissuasive than pecuniary penalties (imposed for administrative offences). A system which combines — without duplication — pecuniary penalties for less serious offences and reserves prison sentences for more serious offences will fulfil the aim of preventing the spread of such offences.
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.
C. The second question
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)
86. Any provision of a national legal system and any legislative, administrative or judicial practice which might impair the effectiveness of EU law by withholding from the national court with jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions that might prevent EU rules from having full force and effect are incompatible with those requirements, which are the very essence of EU law. (53)
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.
IV. Conclusion
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.