December 01
Anjum Shabbir
27th October 2020
Banking & Finance Human Rights Justice & Litigation

AG Pikamäe: existence and scope of ‘right to remain silent’ in market abuse administrative proceedings that can lead to criminal sanctions

Advocate General Pikamäe has handed down his Opinion in Grand Chamber case DB v Consob (Commissione Nazionale per le Società e la Borsa) (C-481/19). He advises the Court of Justice that the Market Abuse Directive 2003/6 and Market Abuse Regulation 596/2014 can be interpreted in line with the ‘right to remain silent’ as protected by fundamental rights law. This leads to the result that Member States are not required to provide that a supervisory authority must sanction a person who refuses to answer the supervisory authority’s questions when investigating market abuse to impose ‘administrative sanctions of a criminal nature’. The Advocate General in fact considers that there is a ‘right to remain silent’ in such procedures, and further that its scope is in line with that set out with ECtHR case law (rather than the Court of Justice’s case law on the scope of that right in the context of competition law proceedings): namely that the scope of the right extends to questions that are asked concerning facts that have a bearing on the conviction or penalty. 

The referring court, the Italian Constitutional Court, asks the preliminary questions on which the Advocate General provides this advice in the context of an appeal brought by Mr DB against a decision of the National Commission for companies and the stock exchange (Consob). Consob imposed administrative sanctions in the form of a penalty of 50,000 euros on Mr DB on the basis of a breach of a national provision (the constitutionality of which is being reviewed in the main proceedings) designed to protect the carrying out of Consob’s tasks as a supervisory authority when it is investigating market abuse (both an administrative and criminal offence under Italian law). Consob sanctioned Mr DB because he had postponed a hearing requested by Consob several times, and then refused to answer questions put to him once the hearing took place, in the context of its market abuse proceedings, there being no such ‘right to remain silent’ guaranteed.

In order to decide whether the national provision is unconstitutional, the Italian Constitutional Court asks the Court of Justice:

  • if Article 14(3) of the Market Abuse Directive (sanctions to be applied for failure to cooperate in an investigation) and Article 30(1)(b) of the Market Abuse Regulation (failure to cooperate or to comply with an investigation), provisions which the national provision in question aimed to implement, means Member States do not have to apply (administrative) sanctions (of a punitive nature) for the kind of refusal to answer questions as in this case;

and if such sanctions are applied:

  • if those provisions are compatible with the EU Charter of Fundamental Rights (Articles 47 and 48 – read in the context of Article 6 ECHR), in particular the right to remain silent and not to incriminate oneself.

The Advocate General described the issues in the case as a ‘delicate legal question’, and  reformulated the questions in order to provide what he considered would be a more useful answer for the referring court: focusing more on the scope of any right to remain silent, and highlighting at the outset the difficulty in determining it due to an alleged discrepancy between the ECtHR’s case law and the Court’s case law on its scope.

First, he noted that the right to remain silent is recognised automatically where penalties examined are classified as of a criminal nature, applying the criteria set out in Bonda C‑489/10.

Second, he recalled that Member States have broad discretion in deciding how to punish infringements of national provisions that transpose the Market Abuse Directive – which can include criminal penalties and administrative penalties of a criminal nature, and even mere administrative measures instead of administrative penalties in the strict sense. Such discretion on the scope of ‘administrative sanctions’ would be limited only by the obligation to ensure that they are ‘effective, proportionate and dissuasive’. He also pointed out that the Directive only provides for ‘minimum harmonisation’ as an explanation of why the EU legislature has not specifically regulated the situation at hand. He also agreed that the provisions of the Directive and Regulation were drafted in general and unconditional terms, but that this did not prevent exceptions being made in order to respect fundamental rights by way of interpretation, and further noted that their recitals require fundamental rights to be taken into account. Therefore, in his view, the relevant provisions of the Directive and Regulation did not prevent an interpretation of them that is consistent with the right to remain silent as derived from Articles 47 and 48 of the Charter, the validity of the relevant provisions of the Directive and Regulation therefore not coming into question.

Third, on the scope of the right to remain silent that he deemed to exist in these circumstances, he said it should be determined by reference to the case law of the ECtHR on Article 6 ECHR, as it concerns only natural and not legal persons, and referring to Saunders v. the United Kingdom and Corbet v. France which treated issues of improper compulsion, coercion and self-incrimination. He discounted the Court’s case law in determining the scope of the right in this particular context because it is restricted to the field of competition law and only concerns legal persons. In relying on the ECtHR’s case law, the Advocate General drew on the ECtHR principle that the scope of the right in this particular case must relate to questions that have ‘a bearing on the guilty verdict or the penalty’.

With respect to the type of sanctions that have been applied in this case, the Advocate General found that this principle is ‘likewise applicable where those statements have had a bearing on a conviction or penalty imposed at the end of administrative proceedings that fall under the criminal head of Article 6 ECHR’.

He also clarified that the existence of a public interest was irrelevant to determining the scope of the right.

Read the Advocate General’s Opinion in full here.


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