19/03/2024

FUNDAMENTAL RIGHTS AND ECONOMIC CRIMINAL LAW

The gradual formation over the last seventy years of a system of principles concerning
the criminal matter in Europe has developed under a so called “multilevel
constitutionalism” that interweaves various sources and judicial powers in a synergistic
relationship that is not always precisely defined.
This relationship includes the European Convention on Human rights in light of the
interpretation of the Strasbourg Court, the fundamental principles of European Law as
crystallized in EU Charter of Fundamental Rights and as interpreted in the
jurisprudence of the Court of Justice of the European Union, as well as the national
Constitutions with the interpretative work of the Constitutional Courts of the Member
States.
Different levels of protection of fundamental rights were developed within the context
of European integration:
- At national level, the protection of fundamental rights is ensured by
constitutional law and by domestic criminal law.
- At European level, the protection of human rights is guaranteed, first, by the
European Court of Justice on the basis of European Union law and, second, by
the European Court of Human Rights (ECtHR) on the basis of the European
Convention on Human Rights.
The recognition of fundamental rights in the EU and in the domestic legal orders
plays an important role in the harmonization of the different systems of law, including
criminal law.
In 1950, the Council of Europe adopted the European Convention for the Protection
of Human Rights and Fundamental Freedoms (ECHR).
The Convention, which was signed on 4 November 1950 in Rome, entered into force in
1953; it has been ratified by all 47 Member States of the Council of Europe.
The ECHR established the European Court of Human Rights (ECtHR).
The European Convention on Human Rights is an international treaty under which the
Member States of the Council of Europe promise to secure fundamental civil and
political rights, not only to their own citizens but also to everyone within their
jurisdiction.
 The Convention protects in particular:
 the right to life,
 the right to a fair hearing,
 the right to respect for private and family life,
 the freedom of expression,
  the freedom of thought, conscience and religion and,
 the protection of property.
 The Convention prohibits in particular:
 torture and inhuman or degrading treatment or punishment,
 slavery and forced labour,
 death penalty,
 arbitrary and unlawful detention, and
 discrimination in the enjoyment of the rights and freedoms set out in the
Convention.
Under art. 33, any Party may bring an application alleging a breach of the Convention
by another Party that has ratified it. In addition, under art. 34 all parties accept the right
of «any person, non-governmental organisation or group of individuals», regardless
of nationality, claiming to be a victim of a breach of the Convention to bring an
application against it.
Therefore, States and individuals can file a case (an “application”) claiming some
violation of the ECHR.
Under Protocol 11, both inter-State and individual applications go to the ECtHR,
which is a permanent Court composed of full-time judges. The Court will first make a
finding as to whether the application is admissible.
 CONDITIONS OF ADMISSIBILITY:
 Cases can only be brought to the Court after domestic remedies have been
exhausted: individuals complaining of violations of their rights must first have
taken their case through the courts of the country concerned, up to the highest
possible level of jurisdiction.
 An applicant’s allegations must concern the violation of one or more of the
rights defined in the Convention.
 Applications must be lodged with the Court within four months following the
last judicial decision in the case, which will usually be a judgment by the
highest court in the country concerned
 The applicant must be, personally and directly, a victim of a violation of the
Convention, and must have suffered a significant disadvantage.
Applications can only be lodged against one or more of the States Parties to the
Convention, and not against any other State or against an individual.
  If the application is admissible:
 the Court will try to settle the dispute. If it cannot reach a settlement, the
European Court will decide the case on the merits.
 The Court decides in a judgment whether there has been a breach of the
Convention.
 Judgments finding violations are binding on the States concerned and they are
obliged to execute them.
The execution by parties of Court judgments against them is monitored by the
Committee of Ministers of the Council of Europe (composed of government
representatives of all of the Member States) particularly to ensure payment of the
amounts awarded by the Court to the applicants in compensation for the damage they
have sustained.
The execution of judgements of the Court is basically entrusted to the good will of the
States, under the supervision of the political authorities of the Council of Europe.
o Article 46 (3) states that “if the Committee of Ministers considers that the
supervision of the execution of a final judgment is hindered by a problem of
interpretation of the judgment, it may refer the matter to the Court for a ruling
on the question of interpretation”.
o The Committee may initiate an infringement proceeding against the State which
has failed correctly to comply with a judgement of the Court, but in any case
 there are no powers of sanction, other than political pressure and interim
resolutions through which the Council of Ministers requests the State to provide
remedies within a specified period that would achieve the objectives set by the
Court.

Fundamental rights can perform a double function both as a limit of punitive power
and as a source of positive obligations to criminalize:
1) The European Convention of Human Rights and the decisions of the European
Court of Human Rights affect national systems first of all by reducing the
criminal area or by expanding guarantees with regard to criminal matters.
The Convention does not cover either the main principles in criminal matters (unlike
trial matters, Article 6, and with the exception of Article 7 and Article 3) or the
competence of the ECtHR to verify the compliance of the national criminal system with
the Convention.
However, judicial review of individual and concrete national violations of human rights
may involve rulings concerning criminal law, which by its very nature touches on
fundamental human rights and freedoms.
The Court, in checking on a single case, also checks whether the national law causing
the limitation of human rights is in accordance with the Convention (indirect
incidence).
The rulings of the Court are pertinent only to a specific and concrete case of law.
The only duty incumbent on the country against which the judgment is delivered is to
remedy the individual injustice through appropriate compensation or retrial, as
suggested by the Court.
However, the Court’s decisions have recently acquired a more general relevance.
The Court not only decides whether a violation of the European Convention on Human
Rights occurred in the specific case but also identifies the systemic problem and gives
the Government clear indications of the type of remedial measures needed to resolve it
(the Court states that the case entails a general incompatibility between the national
criminal law and the European human rights system).
 Besides, the Committee of Ministers and the Court have begun to request each country
to modify its national law or take remedial measures to avoid multiple judgements
under the same provision  Pilot Judgments
 e.g. Case Torreggiani and Others v. Italy
ECHR as a limit to the punitive power of the States:
 A major influence of the Convention is on the general part of the criminal law,
especially with regard to categories such as “criminal subject” or “legality” as
defined by Article 7 of the Convention.
ARTICLE 7: No punishment without law
1. No one shall be held guilty of any criminal offence on account of any act or
omission which did not constitute a criminal offence under national or
international law at the time when it was committed. Nor shall a heavier penalty
be imposed than the one that was applicable at the time the criminal offence was
committed.
2. This Article shall not prejudice the trial and punishment of any person for any
act or omission which, at the time when it was committed, was criminal
according to the general principles of law recognised by civilised nations.

 Moreover, the Convention lays down the standard that criminal sanctions may
not involve deprivation of life (Protocol VI and XIII), torture, or inhuman or
degrading treatment or punishment (Article 3).
 The Convention also lays down the standards concerning the criminal
proceeding (Article 6)
ARTICLE 6. Right to a fair trial
“1. In the determination of his civil rights and obligations or of any criminal charge
against him, everyone is entitled to a fair and public hearing within a reasonable time by
an independent and impartial tribunal established by law. Judgment shall be pronounced
publicly but the press and public may be excluded from all or part of the trial in the
interests of morals, public order or national security in a democratic society, where the
interests of juveniles or the protection of the private life of the parties so require, or to
the extent strictly necessary in the opinion of the court in special circumstances where
publicity would prejudice the interests of justice.
2. Everyone charged with a criminal offence shall be presumed innocent until proved
guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights:
(a) to be informed promptly, in a language which he understands and in detail, of the
nature and cause of the accusation against him;
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he
has not sufficient means to pay for legal assistance, to be given it free when the interests
of justice so require;
(d) to examine or have examined witnesses against him and to obtain the attendance and
examination of witnesses on his behalf under the same conditions as witnesses against
him;
(e) to have the free assistance of an interpreter if he cannot understand or speak the
language used in court.”
 The notion of “criminal matter” developed by the ECtHR (and based on the
nature of the illicit and the severity of the sanction) means that the guarantees
applied in the criminal law area go beyond the “name” assigned to the
individual illicit act in national law and instead refer to a “substantive” criterion.
In other words, the Court’s decisions consider “criminal” not only the conduct or the
sanctions as defined by national law, but also conduct with general application and
whose sanctions have a punitive and deterrent purpose that are very strict as well.
In the case law of the European Court of Human Rights, the notion “criminal charge”
(Article 6) had been given an autonomous interpretation, independent of the
categorisations employed by the national legal systems of the member States (see e.g.
case of Blokhin v. Russia, 2016).
According to ECtHR an important element of this definition is that a punitive element
must be attached to the sanction.
 Administrative sanctions are not considered to belong to the criminal law
system in a strict sense. However, administrative sanctions are to some extent
and in some cases treated as if they are part of criminal law.
The classification of criminal law by the ECtHR depends on whether there has been a
“criminal charge” pursuant to article 6 ECHR. In this context, the definition of the
ECHR includes both criminal law (in a strict sense) and administrative sanctions.
Since Engel v. The Netherlands (Application No. 5100/71, 1976), the Court has
enlarged the concept of “criminal matter” by linking it to substantial rather than formal
criteria.
In this way, it has extended the boundaries of the guarantees derived from Article 6 of
the Convention (fair trial principle) and from Article 7 (legality) applied in criminal law.
Also the legality principle is established by the Court using substantive standards
such as accessibility of the norms and of the jurisprudence, prediction of the
conduct and conviction, rather than formal criteria such as the rule of law.
“Engel criteria” to be considered in determining whether or not there was a “criminal
charge”:
- legal classification of the offence under national law,
- very nature of the offence,
 - degree of severity of the penalty that the person concerned risks incurring.
The second and third criteria are alternative and not necessarily cumulative.
The Court has held that this, however, does not rule out a cumulative approach where
separate analysis of each criterion does not make it possible to reach a clear conclusion
as to the existence of a criminal charge (case of Sergey Zolotukhin v. Russia, 2009).
Any administrative sanction, either of financial or different nature, which is general
(i.e. in principle applicable to the generality of citizens, and not only to a specific
organized group as the disciplinary by professional organizations), that has a deterrent
and punitive nature and therefore is not mainly intended to afford pecuniary reparation
of damage (i.e. it is not compensatory) is to be classified as criminal, for the purpose of
article 6.
 «The general character of the rule and the purpose of the penalty, being both
deterrent and punitive, is sufficient to show that the offence in question was, in
terms of article 6 of the convention, criminal in nature» (Öztürk v. Germany
case, 1984).
Case-law of the ECtHR on the meaning of criminal sanction:
For example in the Judgment 20.1.2009 in the case Sud Fondi srl and Others v. Italy
(No. 75909/01), which concerned companies whose legal representatives had been
charged with unlawful site development, the Court recognized the criminal character of
the land confiscation.
The ECtHR stated that, for the purposes of Article 7, a legislative framework that did
not enable an accused to know the meaning and scope of the criminal law was deficient
not only as regards the general conditions pertaining to the “quality” of the “law”, but
also as regards the specific requirements of legality in the criminal law. Consequently,
the confiscation of the properties had not been prescribed by law for the purposes
of Article 7 and amounted to an arbitrary penalty. So the Court stated that
confiscation is a penalty, a criminal sanction and not just a patrimonial security
measure.
2) Moreover, since the 1970s, the ECHR has developed a new theory on the most
important human rights, the “theory of positive obligations.”
Some judgments concerning the rights to life, physical integrity, personal freedom and
sexual freedom have imposed upon national authorities the positive obligation to
actively protect fundamental rights.
In fact, effective exercise of certain freedoms does not depend merely on the State’s
duty not to interfere but may require positive measures.
In other words, the Court has required countries to take positive action to prevent the
violation of human rights, not just formally but proactively, by introducing all the
legislative, judicial, administrative, and practical preventive measures necessary to
ensure the effective protection of human rights.
The Court has obliged countries to introduce adequate criminal law systems to protect
fundamental rights.
 e.g. Case Cestaro v. Italy: obligation to introduce effective criminal law
provisions to punish torture
From the standpoint of harmonization, it is evident that the ECtHR and its judgments
have decisive influence. Two very important problems arise:
- When the obligations that arise from harmonization enlarge the criminal area in
continental Europe, the formal rule of law and the extrema ratio principle are
obstacles to their effectiveness.;
- The European Convention on Human Rights and the judgments of the European
Court of Human Rights do not directly affect national law,
From the international point of view, the ECtHR judgments require the country involved
to remedy the violation that the Court has determined, and in the manner that the Court
determines.
From the point of view of the individual member states, the influence of the European
human rights system depends on national legislation, because the Convention
establishes the rules but does not say how they are to be implemented in any given legal
system.
The European human rights convention system establishes a “minimum standard of
protection” for fundamental human rights but grants member states freedom to
determine the way in which they will make their national systems conform to this
standard.
The Italian system has followed the route of incorporation through Law No. 848/1955.
National judges and legislative doctrine have increasingly accorded the European
human rights system greater force than ordinary law by combining the provisions of the
Convention with those of the Italian Constitution. The European human rights system
has thus been used as a legitimate parameter with which to interpret, remove or
modify national laws, but the Italian Constitutional Court is competent to verify
the conformity of the provisions of the Convention with the Italian Constitution.
 NE BIS IN IDEM
ARTICLE 4, PROTOCOL No. 7 to the ECHR: Right not to be tried or punished
twice
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 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.
Article 4 of the Seventh Protocol incorporates the principle of ne bis in idem. In other
terms it protects the person from double jeopardy.
The protection against duplication of criminal proceedings is one of the specific
safeguards associated with the general guarantee of a fair hearing in criminal
proceedings.
Nevertheless, in the Convention system in principle ne bis in idem is protected under
Article 4 of the Seventh Protocol and not under Article 6 of the main Convention.
Accordingly, if the respondent State concerned has not ratified the Protocol, those parts
of applications raising a ne bis in idem claim will be rejected at the admissibility stage.
 It does not matter whether or not the person was actually acquitted in the first
set of proceedings, or in the second, or both, Art. 4 being broader than the right
not to be punished twice, or a prohibition on a second conviction.
The Art. 4 guarantee provides for three distinct elements: no one should be
 Liable to be tried;
 Tried; or
 Punished for the same offence.
The aim of Art. 4 is therefore to prohibit the repetition of a prosecution or trial that
has been concluded by a “final” acquittal or conviction.
The words «under the jurisdiction of the same State» limit the application of Art.
4, para. 2, to the national level only.
The principle of ne bis in idem does not apply to where a person has been or will be
tried or punished by the Courts of different States.
This means that a State will not consider the trial of a person for a particular criminal
offence in another State as a bar on prosecuting the person for the same offence in that
State.
The first paragraph of Article 4 sets out the three key components of the ne bis in idem
principle:
1. whether both proceedings were “criminal” in nature,
2. whether the offence was the same in both proceedings and
3. whether there was a duplication of proceedings.

 NOTION OF «CRIMINAL» PROCEEDING:

 Article 4 does not prevent the person from being subject, for the same act, to
action of a different character (i.e. not “criminal”, such as for example, a
disciplinary action).
However: The notion of “criminal” (proceedings) is an autonomous one.
The Court applies the general principles concerning the corresponding words “criminal
charge” and “penalty” respectively in Articles 6 and 7 of the Convention, and applies
the so-called “Engel criteria” (the legal classification of the offence under national
law; the very nature of the offence and the degree of severity of the penalty that the
person concerned risks incurring).
 NOTION OF «FINAL» DECISION:
It becomes “relevant on commencement of a new prosecution, where a prior acquittal
or conviction has already acquired the force of res iudicata” (Sergey Zolotukhin v.
Russia, 2009).
The Grand Chamber adopted the wording of the Explanatory Report to the Seventh
Protocol, which itself referred back to the European Convention on the International
Validity of Criminal Judgments, to the effect that a “decision is final if, according to
the traditional expression, it has acquired the force of res iudicata. This is the case
when it is irrevocable, that is to say when no further ordinary remedies are available or
when the parties have exhausted such remedies or have permitted the time-limit to
expire without availing themselves of them”.
In Mihalache v. Romania (8.7.2019) the Grand Chamber of the ECHR had to determine
whether a public prosecutor’s order discontinuing criminal proceedings while imposing
a fine on the applicant was a “final acquittal or conviction” within the autonomous
meaning of the Convention, triggering the application of the ne bis in idem principle as
laid down in Article 4 of Protocol No 7 to the Convention. In answering that question in
the affirmative, the ECHR relied on a series of criteria: determination as to the merits,
availability of ordinary remedies, expiry of the time-limit within which those remedies
are to be used.
 NOTION OF “SAME OFFENCE”
Article 4 para. 1 prohibits a further prosecution for exactly the same offence.
The major problem, therefore, concerns the question whether the offences for which an
applicant was prosecuted were the same.
In Gradinger v. Austria (1995), the Court found the violation of Art. 4 of the Seventh
Protocol as the applicant had been punished twice, by two different courts (criminal and
administrative), on formally different accusations, though both for causing the death by
negligence while driving under the influence of alcohol. The Court based its decision on
the fact that both proceedings concerned the same conduct.
By contrast, in Oliveira v. Switzerland (1998), the Court found that there had been a
single act constituting multiple offences (the accused was convicted of failing to control
a vehicle and subsequently in separate criminal proceedings of negligently causing
physical injury), holding that there had not been violation of Art. 4.
That Article, the Court stressed, «prohibits people being tried twice for the same offence
[i.e. multiple criminal proceedings for the same offence], whereas in cases concerning a
single act constituting various offences one criminal act constitutes two separate
offences [which could be tried by different courts] ».
In Franz Fischer v. Austria (2001) the Court placed emphasis on the «essential
elements» of two offences as a condition for the application of Art. 4.
Following one event, the applicant was first convicted by an administrative authority
for drunken driving and then convicted by a domestic court of causing death by
negligence. The Court held that there was a violation of Art. 4 as the 2 offences did not
differ «in their essential elements».
In Sergey Zolotukhin v. Russia (2009), the Grand Chamber tried to harmonize its
approach to the application of Art. 4. The case concerned two sets of proceedings
relating to disorderly conduct against a public official wherein the administrative
proceeding had become final before the criminal proceeding commenced.
Art. 4 had to be understood as «prohibiting the prosecution or trial of a second offence
in so far as it arises from identical facts or facts which are substantially the same…
The Court’s inquiry should therefore focus on those facts which constitute a set of
concrete factual circumstances involving the same defendant and [are] inextricably
linked together in time and space…».
 Article 4, para. 2, specifically envisages the resumption of a trial («re-opening
of the case»); such resumption must be «in accordance with the law and penal
procedure of the State concerned», in order to prevent arbitrary decisions to re-
try individuals.
Moreover, the re-opening of the case may only occur «if there is evidence of new or
newly discovered facts, or if there has been a fundamental defect in the previous
proceedings».
With regard to para. 2, the Explanatory Report to the Seventh protocol states that Art. 4,
co. 2, “does not prevent a reopening of the proceedings in favour of the convicted
person and any other changing of the judgment to the benefit of the convicted person”.
The principle of ne bis in idem is embodied also in the constitutions and/or in the
domestic legislation of many countries; as for Italy, it is recognized at an internal level
in the Code of Criminal Procedure, Article 649.
It is also recognized by Article 50 of the EU Charter of Fundamental Rights.
o GRANDE STEVENS Case (ECtHR, Judgement of March 4, 2014)
The case of Grande Stevens and Others v Italy (application no. 18640/10, 18647/10,
18663/10 and 18698/10) concerned administrative and criminal proceedings brought
against two companies, Exor s.p.a (a majority shareholder in the Italian car
manufacturer FIAT) and Giovanni Agnelli & C. s.a.p.a., together with their chairman
Mr Gabetti, an authorised representative of Giovanni Agnelli, Virgilio Marrone, and the
Agnelli group's lawyer Mr Franzo Grande Stevens (the applicants) in respect of
allegations of market manipulation in Italy.
The facts:
 In 2005 Consob asked Exor and Giovanni Agnelli & C. to issue a press release
providing information concerning any initiative taken in view of the expiry of a 2002
loan agreement between FIAT and several banks, of any new fact concerning Fiat and of
any information that could explain the fluctuation of Fiat shares on the market.
The applicants issued a press release indicating that no initiatives had been examined
or instituted in relation to the expiry of the financing contract.
No mention was made of the fact that, in reality, Exor (and representatives of
Agnelli), upon suggestion of Mr. Grande Stevens, had already entered into
negotiations with Merrill Lynch International Limited to renegotiate a separate
agreement Exor had with Merrill Lynch, which would allow Exor to maintain control
of FIAT after the expiry of FIAT's loan agreement.
CONSOB (Commissione nazionale per le società e la borsa) [the public authority
responsible for regulating the Italian financial markets] was not informed of these
negotiations until September 14, 2005, the day before Exor entered into the renegotiated
agreement with Merrill Lynch. Merrill Lynch International Ltd finalised an agreement
amending the previous contract with Exor, thus enabling the Italian company to
preserve its 30% holding in FIAT.
In February 2006, CONSOB's insider trading office accused the applicants of market
manipulation in breach of Legislative Decree no. 58 of 24 February 1998, for their
failure to mention the negotiations with Merrill Lynch in the press release, and in
particular for "disseminating information ... capable of providing false or misleading
information concerning financial instruments".
CONSOB subsequently imposed administrative sanctions on the applicants and
banned the individuals from administering, managing and controlling companies listed
on the stock exchange for varying periods. The decision of the Commission was
appealed before the Turin Court of Appeals. The court substantially upheld Consob’s
decision, which was confirmed by the Court of Cassation in 2009.
Separately, the applicants were criminally prosecuted for the same conduct.
In fact, in 2008, the Turin prosecutors brought criminal proceedings against the
individuals that had already received an administrative sanction. The trial court
acquitted the defendants, holding in particular that the relevant conducts did not have a
potential significant impact on market prices. On appeal, however, some of the
defendants were found guilty, and they appealed to the Italian Supreme Court.
The limitation period expired in 2013, while the case was pending in the Supreme
Court, and the defendants were acquitted.
The defendants filed a case before the European Court of Human Rights, which
issued its decision on 4 March 2014.
The ECtHR considered a number of potential violations of the Convention and found
that there had been a breach of Article 6(1), the right to a fair trial, on several
grounds.
However, the aspect of the case with potentially the most far reaching implications is
the Court's decision that the criminal prosecution of the applicants, in addition to
administrative enforcement action for the same conduct, was a breach of the ne bis in
idem principle as articulated in Article 4 of Protocol No 7.
 The regulatory framework regarding market abuse under Italian law at the time
of the alleged violations derived from Directive 2003/6/EC.
Directive 2003/6/EC required Member States to prohibit insider trading and market
manipulation and to provide for adequate administrative sanctions. The Directive
compelled the Member States only to provide for administrative sanctions. The national
legislators were therefore free to decide if and how provide for criminal sanctions.
o Article 14 Directive 2003/6/CE
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.
Forms of Market Abuse:
 Insider trading: use of inside information, not available to other investors, in
the financial market for personal gain. The insider can foresee the future value of
stocks and bonds (selling the ones which are losing value and buying the ones
whose value is increasing).
 Market manipulation: conduct of a person who knowingly gives out to the
financial market false or misleading information (or uses other fraudulent
means) in order to influence the price of stocks, bonds, etc., to gain an advantage
Article 187-ter TUF (legislative decree n. 58/1998, the banking law), regulating the
administrative violation, punished two types of conduct: ‘informational’ and ‘operative’
manipulation. The former involves the dissemination of false or misleading
information, rumors or news with respect to securities traded on regulated markets or
multilateral exchange facilities. The Fiat group and its executives and consultants were
accused of violating this provision by not properly and timely disclosing the agreement
with Merrill Lynch ltd.
Article 185 TUF, regulating the criminal violation, punishes the dissemination of false
or misleading information (or the performance of simulated transactions or other
deceitful actions) concretely likely to produce a significant alteration in the price of
financial instruments.
 A difference between the administrative and the criminal provision lies in the
fact that the latter is applicable only when the false or misleading information is
actually capable of altering market prices; the administrative sanction, on the
other hand, can be imposed independently of the actual effect of altering market
prices.
This distinction was the basis on which the Turin Tribunal acquitted the defendants.
 Another difference concerns culpability: to impose the administrative sanction,
negligence is sufficient, while to impose the criminal sanction, the defendant
must be proved to have acted intentionally.
Reasoning of the ECHR:
The Court had to ascertain whether the procedure before Consob concerned the
“determination of a criminal charge”.
The starting point of the Strasbourg Court’s reasoning is the qualification of the charge
in a proceeding that the Italian legislature defines as ‘administrative’ as an “accusation
en matière pénale” or ‘criminal accusation’.
Coherently with its own precedents in other areas, the ECtHR disregarded the
formalistic distinction used by the Italian (and many other) legislatures between
administrative and criminal sanctions based on the name attached to the sanction and
the authority responsible for inflicting it.
The Court stated that in order to determine whether it was a matter of criminal charge or
not, three criteria had to be taken into consideration: (i) the legal qualification of the
matter within the system of the relevant State; (ii) the nature of the matter itself; (iii) the
nature and the severity of sanctions (Engel criteria).
The conclusion of the Court is that although the sanction was described as
“administrative” in Italian law, the severity of the fines imposed by Consob on the
applicants meant that they were criminal in nature.
 The Court observed, first of all, that the rules are designed to protect the
integrity of financial markets and the trust of investors, i.e., general interests
typically protected by criminal law provisions.
 In addition, the Court held that the main function of the administrative sanctions
is deterrence and punishment, because they are proportional to the seriousness
of the conducts, not to the damage caused to investors. The measure of the
applicable fines, which can reach several million euros, and the fact that
professional debarment can be imposed also lead the Court to conclude that the
provisions are of a criminal nature.
The ECtHR also clarifies that the fact that some elements describing the violations (art.
187 ter and art. 185 TUF) differ is irrelevant, since both provisions punish the same
conducts, and there is no doubt that the conducts leading to the prosecution were the
same.
The Court recalls on this point its own jurisprudence since 2009 with regard to the
interpretation of “same offence”, considering that the aim of art. 4 is to prohibit “the
prosecution or trial of a second offence in so far as it arises from identical facts or
facts which are substantially the same”, in this case the false press release.
 For all these reasons the sanctioning system set forth in the Italian market abuse
legislation is considered contrary to the ne bis in idem prohibition established in art.
4 of the 7 th Protocol to the European Convention on Human Rights.
 Partly dissenting opinion of judges Karakaş and Pinto de Albuquerque:
The judges notice that Articles 185, 187 ter and 187 duodecies (that concerns the
relation between the administrative and the criminal proceeding) of the TUF set out a
“double-track system” (doppio binario) for the punishment of natural persons, which
provides for criminal proceedings in accumulation with administrative proceedings
for the “same facts”. Indeed, administrative sanctions are established “without
prejudice to the penal sanctions applicable when the action constitutes a criminal
offence”.
Furthermore, administrative proceedings and the judicial review proceedings relating
thereto are not suspended when criminal proceedings are pending “in relation to the
same facts or facts on which the definition of the case depends”.
The “double-track system” was also introduced for legal persons, which can be
sentenced to administrative sanctions under Article 187-quinquies of the TUF and under
Article 25-sexies of Legislative Decree no. 231 of 8 June 2001 for the same facts.
In the opinion of the judges, this punitive system of “doppio binario” breaches the
principle of ne bis in idem, both in its dogmatic conception and current practice.
“Both the criminal offence of Article 185 and the administrative offence of Article 187
ter are conduct-based offences which protect the same “legal interest” (bene
giuridico), namely the transparency of the market, the difference between them being
that the former is a “concrete risk of harm offence” and the latter an “abstract risk of
harm offence”. Thus, it is obvious that the principle of speciality applied, since the
provision of concrete risk of harm is special in relation to the provision of abstract
risk of harm concerning the same “legal interest”, and therefore criminal proceedings
should prevail over, and exclude, administrative proceedings. The material
accumulation of criminal and administrative sanctions not only overburdens the State
with two autonomous investigations, with the risk of different pronouncements on the
same facts, but also clearly frustrates the principle of speciality”.
 In 2014, the European legal framework governing market abuses has been
changed by the introduction of the new Regulation 596/2014 and the new
Directive 2014/57/UE aiming at harmonising the sanctioning regimes of the
different Member States.
In particular, Directive 2014/57/UE, issued according to Article 83 para 2 TFEU (annex
competence), requires Member States to provide that ‘serious cases of insider dealing,
market manipulation and unlawful disclosure of inside information’ (essentially defined
basing on their impact on the market) ‘constitute criminal offences when committed
with intent’.
The current rules introduce a change of direction in matters of sanctions, mandating
the Member States to ensure criminal sanctions, at least in serious cases, and leaving
them the option to provide (or not provide) for administrative sanctions.
Directive 2014/57/EU contemplate the possibility that a State will punish insider trading
or market manipulation with both an administrative and a criminal sanction. The choice
to maintain or not the double-track system is left to the Member States.
However, according to the Preamble (23) of Directive 2014/57/EU “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”.
 Decree no. 107/2018 was enacted to comply with the 596/2014 EU market
abuse regulation and Law n. 238/2021 was enacted to implement the Directive
2014/57/EU but the problem of the violation of European ne bis in idem still
remains
Case A and B v. Norway (15.11.2016): The case concerned two taxpayers who
submitted that they had been prosecuted and punished twice – in administrative and
criminal proceedings – for the same offence.
The Court that there had been no violation of Article 4 of Protocol No. 7:
“The Court found that the conduct of dual proceedings, with the possibility of a
combination of different penalties, had been foreseeable for the applicants, who must
have known from the outset that criminal prosecution as well as the imposition of tax
penalties was possible, or even likely, on the facts of their cases. The Court observed
that the administrative and criminal proceedings had been conducted in parallel and
were interconnected. The facts established in one of the sets of proceedings had been
relied on in the other set and, as regards the proportionality of the overall punishment,
the sentence imposed in the criminal trial had taken account of the tax penalty.
The Court was satisfied that, while different penalties had been imposed by two
different authorities in the context of different procedures, there had nevertheless
been a sufficiently close connection between them, both in substance and in time, for
them to be regarded as forming part of an overall scheme of sanctions under
Norwegian law”.
 Case Nodet v. France (6.6.2019), concerning two parallel (administrative and
criminal) sets of proceedings for market manipulation: the Court took into
account the fact that these two sets of proceedings pursued the same purpose and
involved, to a certain extent, independent collection of evidence, which led it to
a conclusion that there was no sufficiently close connection in substance
between them. Moreover, the Court found that there was no sufficient
connection in time between the two sets of proceedings. Accordingly, the Court
concluded that the applicant suffered disproportionate prejudice for having been
tried and punished twice for the same offence.