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Harmonising Criminal Laws and EU’s Significant Bankers: First Use of Article 83(2) TFEU, Rights of the Accused and Learning Organisations

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Abstract

This chapter critically reviews the harmonisation of national criminal laws pertaining to bankers active in the 100-plus significant supervised banks of the European bank union (“Significant Bankers”). It discusses the tension between administrative sanctions as mentioned in the Market Abuse Directive (596/2014) and the criminal sanctions as mentioned in Criminal Sanction Directive (2014/57). The chapter is limited in scope and deals with insider trading and market manipulation as international financial crimes only. It is not argued that harmonisation of criminal laws should not take place on the basis of Article 86(2) TFEU. However, it is argued that compliance by Significant Bankers with these substantive rules will not increase, if and when both sanction arrangements are actively made applicable on them. Reasons for that assertion are certain of their rights in criminal procedure, including the legal concepts of ne bis in idem (double jeopardy) and nemo tenetur (self-incrimination). The argument is also based on the regulatory science’s and organisational science’s insight that “learning organisations” improve their performance when mistakes are discussed and reviewed and subsequently transformed to innovations and changed behaviour. Hence the argument to restrict the regulatory arrangement around Significant Bankers to the administrative sanctions, and to instruct public prosecutors not to take action against Significant Bankers on the basis of national laws implementing the Criminal Sanction Directive (2014/17).

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Notes

  1. 1.

    OECD Report for G20 Leaders 2013.

  2. 2.

    Regulation 468/2014 of 16 April 2014 of the European Bank Establishing the Framework for Cooperation within the Single Supervisory Mechanism between the European Central Bank and the National Competent Authorities and with National Designated Authorities, OJ L 141, p. 1 (SSM Framework Regulation), Article 49(1).

  3. 3.

    Buckley 2011, p. 12; Wymeersch et al. 2012, p. 9.

  4. 4.

    See among others the preambles of the various EU legislative instruments pertaining to the financial market, such as EU Regulation 596/2014. See below n. 6.

  5. 5.

    Regulation 596/2014 of The European Parliament and of the Council of 16 April 2014 on Market Abuse Repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, OJ L 173/1 (Market Abuse Regulation).

  6. 6.

    See Cappiello 2015, p. 1.

  7. 7.

    In The Netherlands “De Nederlandse Bank” (DNB) and “Autoriteit Financiele Markten” (AFM) respectively.

  8. 8.

    See below Sect. 13.3.

  9. 9.

    Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on Criminal Sanctions for Market Abuse, OJ L 173/179 (Market Abuse Directive).

  10. 10.

    Consolidated Version of the Treaty on the Functioning of the European Union, signed on 13 December 2007, OJ C 326 (entered into force on 1 December 2009) as amended on 26 October 2012 (TFEU), Article 83(2).

  11. 11.

    See above n. 7.

  12. 12.

    In The Netherlands the “Openbaar Ministerie” (OM).

  13. 13.

    See, among others, van Erp et al. 2015, p. 14.

  14. 14.

    Market Abuse Directive, above n 9.

  15. 15.

    Miglietti 2014, p. 6.

  16. 16.

    Market Abuse Regulation, above n. 5.

  17. 17.

    Vervaele et al. 2014, p. 40.

  18. 18.

    Vervaele 2013a, p. 540.

  19. 19.

    Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 Concerning Investigations Conducted by the European Anti-Fraud Office, OJ L 136, 31.5.1999, pp. 1–7, 1999 as amended (OLAF).

  20. 20.

    Council Act of 26 July 1995 Drawing up the Convention on the Protection of the European Communities’ Financial Interests, OJ C 316 (27 November 1995) pp. 48–57.

  21. 21.

    EU Council of the European Union, Presidency Conclusions—Tampere European Council, 15 and 16 October 1999. http://www.europarl.europa.eu/summits/tam_en.htm conclusion 48. Accessed 29 January 2015.

  22. 22.

    Bianco 2015, p. 228; Luchtman and Vervaele 2014, p. 201.

  23. 23.

    Council Framework Decision 2003/80/JHA of 27 January 2003 on the Protection of the Environment through Criminal Law, OJ L 29, 5.2.2003, pp. 55–58, 2003.

  24. 24.

    EU European Court of Justice, Commission versus Council Case C-176/03, Judgment of the Court (Grand Chamber), 13 September 2005, European Reports of Cases 2005 I-07879-ECLI:EU:C:2005:542.

  25. 25.

    See above n. 24.

  26. 26.

    EU European Court of Justice, Commission versus Council Case C-440/05, Judgment of the Court (Grand Chamber), 23 October 2007, European Reports of Cases 2007 I-09097-ECLI:EU:C:2007:625.

  27. 27.

    Directive 2008/99/EC of the European Parliament and of the Council of 19 November 2008 on the Protection of the Environment through Criminal Law, OJ L 328/28; Luchtman en Vervaele 2014, p. 34.

  28. 28.

    Vervaele et al. 2014, pp. 23, 53.

  29. 29.

    European Commission 2011.

  30. 30.

    European Commission 2010.

  31. 31.

    European Commission 2010, pp. 2–3.

  32. 32.

    European Commission 2010, p. 11.

  33. 33.

    European Commission 2011, p. 2.

  34. 34.

    Larosière 2009, p. 45.

  35. 35.

    European Commission 2011, p. 4.

  36. 36.

    Miglietti 2013, p. 8; Klip 2012, p. 7.

  37. 37.

    See above Sect. 13.1.

  38. 38.

    Directive 2003/6/EC of the European Parliament and the Council of 28 January 2003 on Insider Dealing and Market Manipulation, OJ L 96/16 (Market Abuse Directive).

  39. 39.

    Market Abuse Regulation, above n. 5.

  40. 40.

    Ibid. Consideration 1.

  41. 41.

    Ibid. p. 33.

  42. 42.

    Market Abuse Regulation, above n. 5, Article 23(2)(f).

  43. 43.

    Ibid. Article 23(2)(l).

  44. 44.

    Ibid. Article 30(1).

  45. 45.

    Ibid. Article 30(2)(c).

  46. 46.

    Ibid. Article 30(2)(f).

  47. 47.

    Ibid. Article 30(2)(i)(i).

  48. 48.

    Ibid. Article 30(2)(j)(i).

  49. 49.

    Dougan 2012, p. 75.

  50. 50.

    Greek Government, Market Abuse Law 3340/2005, 2005 as amended.

  51. 51.

    Greece Court HCMC, Case HCMC v Investment marktmanipulatie, 2015.

  52. 52.

    Denmark Government, Securities Trading Act 2003 (Værdipapirhandelsloven), as amended.

  53. 53.

    Danish Financial Service Authority, Case FSA versus Vestjysk Bank, 2014.

  54. 54.

    Spanish Government, Act 24, 1988 as amended.

  55. 55.

    Spanish Court CNMV, Case CNMV versus Impose Corp Buss Monte de Piety 2014.

  56. 56.

    Netherlands Government, Financial Supervision Act (Wet Op Het Financieel Toezicht), Stb. 2006, 475, as amended.

  57. 57.

    Netherlands Court CBB, Case Fortis v AFM 2014, ECLI:NL.CBB.2014.6.

  58. 58.

    European Court of the Human Rights, Judgment Grande Stevens vs Italy Case 18,640/10, 18,647/10, 18,663/10, 18,668/10 and 18,698/10, 4 March 2014, available at http://hudoc.echr.coe.int/sites/eng-press/pages/search.aspx?i=003%2D4687386%2D5686720#{%22itemid%22:[%22003%2D4687386%2D5686720%22]}, accessed 7 July 2014., unreported.

  59. 59.

    See above Sect. 13.1.

  60. 60.

    Levi-Faur 2005, p. 13.

  61. 61.

    Ebner and Beck 2008, p. 3; See Avgouleas 2012, p. 23.

  62. 62.

    Burris et al. 2005, p. 32.

  63. 63.

    Morgan and Yeung 2007, p. 153.

  64. 64.

    Bach and Newman 2007, p. 831.

  65. 65.

    Ayres and Braithwaite 1992, p. 5; Parker 2013, p. 6.

  66. 66.

    Ayres and Braithwaite 1992, p. 21.

  67. 67.

    Ibid. p. 47.

  68. 68.

    Apel and Nagin 2014, p. 998.

  69. 69.

    Braithwaite 2010, p. 475.

  70. 70.

    Resulting in among others bow-tie models, see Reason 1990, 480.

  71. 71.

    For instance, the Australian Tax Office, often taken as case study in various scholarly research projects in this regard, see Mascini and Van Wijk 2009, p. 27.

  72. 72.

    Steenwijk 2015, p. 69.

  73. 73.

    See in general Senge 1990, p. 1.

  74. 74.

    Hendriksen 2014, p. 1.

  75. 75.

    Kolb 1984, p. 1.

  76. 76.

    Market Abuse Regulation, above n. 5, Article 8(1).

  77. 77.

    Ibid. Article 8(2).

  78. 78.

    Including the additional function of the whistleblowing directive of 2015, supporting any person that reports infringements on the Market Abuse Regulation to the competent authorities: Commission Implementing Directive (EU) 2015/2393 on Regulation (EU) No 596/2014 of the European Parliament and of the Council as regards reporting to competent authorities of actual or potential infringements of that Regulation, OJ L 332/126 (18 December 2015).

  79. 79.

    Peršak 2007, p. 36; Husak 2008, p. 99.

  80. 80.

    Wermink et al. 2014, p. 731.

  81. 81.

    Vervaele 2013b, p. 211.

  82. 82.

    Such as the European Bank Authority (EBA) or the European Securities and Markets Authority (ESMA).

  83. 83.

    Such as The Netherlands Dutch Central Bank (DNB) and Financial Services Supervisor (AFM).

  84. 84.

    See above n. 5, Article 23(4).

  85. 85.

    See for a similar approach Faure and Svatikova 2012, p. 253.

  86. 86.

    Netherlands Government, Convenant ter voorkoming van ongeoorloofde samenloop van bestuurlijke en strafrechtelijke sancties, Stcrt 15-1-2009, Nr. 665., 2009.

  87. 87.

    Apel and Nagin 2014, p. 998.

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Authors and Affiliations

  1. The Hague University of Applied Sciences, The Hague, The Netherlands

    Ernst E. van Bemmelen van Gent

  2. Utrecht University, Utrecht, The Netherlands

    Ernst E. van Bemmelen van Gent

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  1. Faculty of Governance, Law and Security (BRV), The Hague University of Applied Sciences, The Hague, The Netherlands

    Jaap de Zwaan

  2. Faculty of Management & Organisation, The Hague University of Applied Sciences, The Hague, The Netherlands

    Martijn Lak

  3. Faculty of Governance, Law and Security (BRV), The Hague University of Applied Sciences, The Hague, The Netherlands

    Abiola Makinwa

  4. Faculty of Governance, Law and Security (BRV), The Hague University of Applied Sciences, The Hague, The Netherlands

    Piet Willems

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van Bemmelen van Gent, E.E. (2016). Harmonising Criminal Laws and EU’s Significant Bankers: First Use of Article 83(2) TFEU, Rights of the Accused and Learning Organisations. In: de Zwaan, J., Lak, M., Makinwa, A., Willems, P. (eds) Governance and Security Issues of the European Union. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-144-9_13

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