The principle of ‘ne bis in idem’ - providing that a person cannot be criminally prosecuted or punished twice for the same offence (case C-617/10) - may be limited in order to protect the financial interests of the EU and the stability of the financial markets, if this limitation does not exceed that which is strictly necessary, the Court ruled on Tuesday 20 March in a number of joined cases (C-524/15, C-537/16, C-596/16, C-597/16).
The Court had been consulted on the following cases: (1) the Italian tax authorities imposed on Mr Luca Menci an administrative fine for having failed to pay VAT. Menci was subsequently brought before the District Court of Bergamo with respect to the same acts (C-524/15); (2) in 2007, the Italian National Companies Stock Exchange Commission (Consob) imposed an administrative penalty on Mr Stefano Ricucci for market manipulation. In the context of his appeals, Ricucci claimed that he had already been finally convicted and sentenced in 2008, with respect to the same acts, to a criminal penalty extinguished as a result of a pardon (C-537/16); (3) in 2012, the Consob handed down administrative fines to Mr Di Puma and Mr Zecca for insider trading. Before the Court of Cassation, they claimed that in the criminal proceedings underway for the same acts, in parallel to the administrative procedure, the criminal judge had ruled that there was not enough evidence of the insider trading (C-596/16 and C-597/16).
The Court, to which these matters were referred by the District Court of Bergamo and the Italian Court of Cassation, in the matters at hand, said there could be a duplication between criminal proceedings/penalties and administrative proceedings/penalties of a criminal nature against the same person with respect to the same acts, which would therefore limit the ne bis in idem principle.
The Court holds that such limitations require justification and that any national legislation authorising a duplication of proceedings and penalties of a criminal nature must: - pursue an objective of general interest; - establish which acts and omissions may be subject to such a duplication; - limit the additional disadvantage as much as possible; - ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.
The Italian courts will be responsible for verifying whether these requirements have been met in these particular cases.
In the Menci case, the European court finds that the objective of ensuring the collection of all value-added tax (VAT) due is capable of justifying a duplication of proceedings and penalties of a criminal nature. The Italian legislation furthermore makes it possible to ensure that this duplication does not exceed what is strictly necessary.
In the Ricucci case, the Court finds that the objective of guaranteeing the integrity of the financial markets and public confidence in financial instruments justifies a duplication of proceedings and penalties of a criminal nature. However, the Italian law penalising market manipulation does not appear to respect the principle of proportionality, as it authorises administrative proceedings of a criminal nature for acts that have already been subject to a criminal conviction.
In the Di Puma and Zecca cases the Court finds that under Italian procedural law, the ‘authority of the matter already judged’ (res judicata) of the definitive criminal acquittal prohibits the continuation of the administrative proceedings with respect to the same acts.
According to the European Court, in view of the principle of res judicata, or claim preclusion, the Italian legislation is not in breach of the 'MiFID' directive on the financial markets, even though it imposes an obligation to provide for effective, proportionate and deterrent administrative sanctions. The continuation of administrative proceedings would manifestly exceed what is strictly necessary, it considers. (Original version in French by Mathieu Bion)