Inês Pereira de Sousa, Lecturer and PhD candidate at Porto Faculty
of Law, Universidade Católica Portuguesa; Researcher at CEID – Católica
Research Centre for the Future of Law; Member of ANESC – Academic Network on
the European Social Charter and Social Rights; Member of EUCRIM –European
Criminal Law Associations’ Forum - isousa@porto.ucp.pt
On 2 February 2021, the Court of
Justice had the opportunity to reanalyse the right to remain silent and the
right to avoid self-incrimination in a preliminary ruling from the Italian
Constitutional Court.
In Case C-481/19, DB v Commissione
Nazionale per le Società e la Borsa (Consob), Consob had imposed (in
2012) on DB, a natural person, financial penalties for two administrative offences
of insider trading in 2009, plus another financial penalty for the fact that DB
had asked several times for the postponement of his hearing and, when finally
heard, had declined to cooperate and to answer the questions of the national
authority, an administrative offence which is contained in Article 187 of the
Italian Decreto legislativo n. 58 (Legislative Decree No. 58). In addition, Consob
also imposed the ancillary penalty of temporary loss of fit and proper person
status for a period of 18 months and ordered confiscation of assets of
equivalent value to the profit or the means employed to obtain it under Articles
187quater(1) and 187sexies of the such national law.
The Italian law in question, the Decreto
Legislative n. 58, consolidates all provisions in the field of financial intermediation
and includes the transposition of the Directive 2003/6/EC on insider dealing
and market manipulation, which was repealed by Regulation (EU) No 596/2014
on market abuse.
DB brought an appeal against
those penalties before the Corte d’appello di Roma (Court of Appeal of Rome),
which was dismissed. Faced with this decision, he lodged an appeal before the Corte
Suprema di Cassazione (Supreme Court of Cassation), which referred two
interlocutory questions of constitutionality to the Corte Costituzionale
(Constitutional Court). The Corte Costituzionale then decided to stay the
proceedings and to ask the Court of Justice whether Article 14(3) of Directive
2003/6, in so far as it continues to apply ratione temporis, and Article
30(1)(b) of Regulation No 596/2014, in the light of Articles 47 and 48 of the
Charter of Fundamental Rights of the European Union (Charter) and the European
Court of Human Rights (ECtHR) case-law, should be interpreted as permitting
Member States to refrain from penalising individuals who refuse to answer
questions by the competent authorities and which might establish their
liability for an offence punishable by administrative sanctions of a ‘punitive’
nature.
In fact, Articles 47 and 48 of
the Charter enshrine the right to a fair trial and the presumption of
innocence, which are also guaranteed in Article 6 of the European Convention of
Human Rights (ECHR). Although the European Union has not acceded to the ECHR
yet, it should be recalled that Article 6(3) TEU confirms that fundamental
rights recognized by the ECHR constitute general principles of EU law, and
Article 52(3) of the Charter provides that the rights contained in the
Charter which correspond to rights guaranteed by the ECHR are to have the same
meaning and scope as those laid down by the ECHR ((the so-called homogeneity clause).
Both the right to remain silent
and to avoid self-incrimination, whose ponderation was at the heart of the
questions referred for a preliminary ruling in the DB v Consob case, arise from
Article 6 (right to a fair trial) ECHR and Articles 47 (right to an effective
remedy and to a fair trial) and 48 (presumption of innocence and right of
defence) of the Charter.
Historically, the protection
against self-incrimination is linked to human dignity. It was developed as a
protection for individuals to avoid torture aimed at extracting a criminal
confession, and to prevent the cruelty of being faced with only three options
(the ‘trilemma’): (1) to be sanctioned
for refusing to cooperate; (2) to provide the authorities with incriminating
information; (3) or to lie and risk prosecution for perjury. However, this
privilege is not exclusively for natural persons, nor is it limited to criminal
offences.
In fact, such right has been
developed thanks to both CJEU and ECtHR case-law. In the Engel and others v
Netherlands judgment, the ECtHR extended the scope of this right to
administrative decisions which could imply sanctions. According to the ECtHR, the
right not to be obliged to produce evidence against oneself includes the right
to remain silent and not to answer any question, even factual ones. In other
words, the ECtHR has excluded the admissibility of answers obtained from the
accused through compulsory questioning during a non-judicial investigation as
evidence, including answers to purely factual questions (see, e.g., ECtHR, Funke v France; ECtHR,
John Murray v United
Kingdom; and ECtHR, Saunders v United
Kingdom).
In the EU legal context, one of
the areas that involves these administrative decisions is competition law. In
this field, the undertakings must cooperate by answering questions and
providing documents; yet they cannot be forced to confess their participation
in the infringements.
The first significant case in
this matter, in the EU, was Orkem
(judgment of 18 October 1989, Case C-374/87), in which the ECJ recognized that
the duty to provide information related to the subject of the inquiry was not
absolute and undertakings could refuse to answer certain questions that could
involve the provision of self-incriminating information. In this case, the
undertaking was a legal person, and the Court excluded the answers to purely
factual questions from the protection against self-incrimination.
In DB v Consob, on the one hand, the ECJ was faced with a right to
remain silent by an individual, and, on the other hand, it was necessary to
establish the conditions under which such right must be respected in the case
of proceedings potentially leading to administrative sanctions of a criminal
nature.
Regarding the fact that the person who did not
cooperate with the national authority was an individual, the Italian Government
argued that the case-law on the legal person’s right to avoid
self-incrimination could be applied by analogy when establishing the scope of
the right of natural persons to remain silent in administrative procedures for
detecting market abuse. From the Opinion of Advocate-General Pikamäe, delivered
on 27 October 2020, it results that the scope of natural persons’ right to
remain silent does not seem to have been considered by the Court until that
moment. In the judgment, the ECJ considered that it was not possible to apply
the Orkem formula by analogy when
determining the scope of individuals’ right to silence because that
jurisprudence concerns procedures against undertakings and associations of
undertakings.
As for the second issue, the
jurisprudence has been stating that if the administrative procedure in question
is likely to lead to a penalty falling within the ‘criminal sphere’, the full
range of guarantees under the criminal head of Article 6 ECHR applies,
including the right to silence. CJEU case-law highlights three criteria for
verifying a sanction’s criminal nature: the legal classification of the offence
under national law; the intrinsic nature of the offence; and the degree of
severity of the penalty that the person concerned is likely to incur in (Case
C-537/16, Garlsson
Real Estate and Others).
In DB v Consob, another important question was presented to the ECJ.
Once again, in the Advocate-General’s words, until that moment, neither the
Court, nor EU legislature had addressed the question of whether, regarding the
case-law of the ECtHR concerning Article 6 ECHR, and Articles 47 and 48 of the
Charter, required such right to be recognized in administrative proceedings
which could lead to the imposition of ‘punitive’ penalties. Consequently, it
was necessary to clarify whether those provisions allowed not sanctioning
persons refusing to answer questions which might establish their liability for
an offence punishable by criminal penalties, or by administrative penalties of
a punitive nature.
The Court addressed the question
objectively, recognizing that, even if the penalties imposed on DB were not
criminal in nature, the right to silence could also stem from the fact that, in
accordance with national legislation, the evidence obtained in those
proceedings may be used in criminal proceedings against that person to
establish that a criminal offence was committed. Accordingly, in judgment DB v Consob, it was established that
authorities should respect the privilege against self-incrimination in two
different cases: in administrative proceedings that may lead to the imposition
of administrative sanctions of a criminal nature; and in administrative
proceedings that may not lead to the imposition of sanctions of a criminal
nature, if the evidence produced in this proceeding may be used in criminal
proceedings against that person in order to establish that a criminal offence
was committed.
Finally, the Court concluded that
Article 14(3) of Directive 2003/6, and Article 30(1)(b) of Regulation No
596/2014, read in the light of Articles 47 and 48 of the Charter, must be
interpreted as allowing Member States not to penalise natural persons who
refuse to provide the competent authority with answers capable of establishing either
their liability for an offence that is punishable by administrative sanctions
of a criminal nature, or their criminal liability.
It is thus clear that the ECJ
refused to transfer to individuals its more restrictive position towards legal
entities developed in the field of competition law, which leads us to the
distinctive treatment of natural and legal persons in what concerns the right
to avoid self-incrimination. Furthermore, could the DB v Consob judgment be understood as a broader interpretation of
punitive proceedings against legal entities?
Regarding the distinctive
treatment, it should be recalled that the extension of fundamental rights to
legal persons follows a general criterion based on the nature of the right. For
this reason, most arguments of legal scholars in favour of the exclusion of
legal persons from the scope of the right to avoid self-incrimination or to
justify a different protection in terms of such privilege, are related to its
nature as a purely personal privilege, based on human dignity and autonomy. Moreover,
Directive 2016/343, on the strengthening of certain aspects of the presumption
of innocence and of the right to be present at trial in criminal proceedings,
excludes legal persons from its scope (in its Recitals 13 to 15), making it
clear that the protection that results from the presumption of innocence is not
applicable to legal persons in the same way as it is to natural persons.
Nevertheless, some arguments
could justify the extension of this protection to legal persons, such as the
close link to the right to a fair trial, the need to limit the Commission and
national authorities’ powers of investigation, and to harmonize ECtHR and CJEU’s
application of the right to a fair trial.
Undoubtedly, it is necessary to
balance the right of defence and the public interest and, while recognizing
that human dignity justifies a different treatment of individuals, it can be
observed that, in recent years, the application of fundamental rights, ‘whose
nature is more individual, to legal persons has expanded. Therefore, the
question remains – should legal entities have the right to remain silent
against the provision of any evidence that may constitute an admission of guilt?
CJEU case-law has been confirming
that the scope of legal persons’ privilege against self-incrimination is restricted
to questions that require the provision of self-incriminatory information, and
it does not cover answers to questions relating to facts, unless their purpose
is to obtain an admission from the undertaking concerned. This position has
been confirmed in more recent cases such as Buzzi
Unicem v Commission (Case C-267/14 P), HeidelbergCement
v. Commission (Case C-247/14 P) and Qualcomm
and Qualcomm Europe v Commission (Case C‑466/19 P).
As a matter of fact, this
interpretation obliges undertakings to answer purely factual questions and to
comply with requests for the production of documents already in existence, and
CJEU has already declared that these obligations do not breach the rights of
the defence and the right to fair trial (see Case T‑446/05, Amann
& Söhne and Cousin Filterie v Commission).
This understanding leads to a
(very) slight distinction between factual and non-factual questions. Answers to
factual questions can also encompass self-incriminating information, and the
characterization of a question as factual or non-factual can be the result of
an incorrect assessment on the part of national courts or the CJEU, which
clearly happened in many CJEU judgments, such as Buzzi Unicem.
In this particular case, one of
the Commission’s questions required the undertakings to comment on the level of
its profit margins. Although the answer to that question was equivalent to an
infringement admission, the General Court did not censured the Commission’s
questionnaire and dismissed the action, arguing that “the applicant was
entitled, at a later stage of the administrative procedure or in the course of
an appeal against the Commission’s final decision, to put forward an
alternative interpretation of its answer to that question” (Case T-297/11, Buzzi Unicem). This justification caused
perplexity: the undertakings’ possibility to challenge the self-incriminatory
nature of question, if and when the Commission adopted a decision imposing a
fine upon it, does not mean that the Court cannot censure the violation of
rights. Accordingly, the Advocate-General Wahl considered that the General Court
made an incorrect interpretation and breached the undertaking’s privilege
against self-incrimination. However, the ECJ did not address the incorrect
classification of the question as purely factual and avoided to take a stance
about scope of the right to avoid self-incrimination (Case C-267/14 P, Buzzi Unicem).
It appears from CJEU case-law
that this delimitation between factual and non-factual questions is constant,
and that the recognition of an absolute right to silence to legal persons,
covering each and every question, would constitute an unjustified obstacle to
ensuring compliance with competition rules.
The different protection for
individuals and legal persons was once again confirmed in DB v Consob. It is worth recalling that this differentiation is not
always as unequivocal as EU jurisprudence states. Under EU competition law, the
concept of undertaking covers any entity engaged in an economic activity,
regardless of its legal status and the way in which it is financed (see, e.g.,
Case C-41/90, Klaus
Höfner and Fritz Elser v Macrotron GmbH). Thus, single traders and
professionals exercising their profession alone and unincorporated can be
considered undertakings. EU case‑law has also specified that the
concept of undertaking must be understood as designating an economic unit, even
if it consists of several persons, whether natural or legal (see Case C‑217/05
Confederación
Española de Empresarios de Estaciones de Servicio and Case T‑325/01,
Daimler
Chrysler v Commission). In this situation, the undertaking is an
individual and it seems that the different treatment is not justified.
Notwithstanding this strict
interpretation of the Court regarding the protection of legal persons and its
refusal to apply this position in DB v
Consob, I believe the intention of the Court was not to change its point of
view regarding legal persons, but to clarify that individuals are entitled to a
different treatment, a more protective treatment that allows them not to
provide any self-incriminatory information and to be silent in any proceedings
that could result in a sanction of criminal nature or evidence of criminal
responsibility.
The judgment in DB v Consob established decisive aspect
of the scope of individuals’ right to silence, and concluded that Articles 47
and 48 of the Charter require such right to be recognized in administrative
proceedings that may lead to the imposition of administrative sanctions of a
criminal nature, as well as in other administrative proceedings where the
evidence produced may be used against that person in criminal proceedings to
establish criminal liability.
This case has (involuntarily) left
a small window open for relaunching the debate on the protection of individuals
and legal entities to avoid self-incrimination in punitive proceedings.
However, contrary to some legal scholars’ expectations, I dare to state that no
room for manoeuvre has been created in this judgment for revisiting legal
persons’ privilege against self-incrimination.
Barnard & Peers: chapter 10,
chapter 24
Photo credit: Jastrow,
via Wikimedia Commons
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