Case C‑537/16

Garlsson Real Estate SA and Others

v

Commissione Nazionale per le Società e la Borsa (Consob)

(Request for a preliminary ruling from the Corte suprema di cassazione)

(Reference for a preliminary ruling — Directive 2003/6/EC — Market manipulation — Penalties — National legislation providing for an administrative penalty and a criminal penalty for the same acts — Charter of Fundamental Rights of the European Union — Article 50 — Ne bis in idem principle — Criminal nature of the administrative penalty — Existence of the same offence — Article 52(1) — Limitations to the ne bis in idem principle — Conditions)

Summary — Judgment of the Court (Grand Chamber), 20 March 2018

1. Fundamental rights—Charter of Fundamental Rights of the European Union—Scope—Implementation of EU law—National legislation providing for pecuniary administrative penalties against persons responsible for market manipulation—Included

   (Charter of Fundamental Rights of the European Union, Arts 50 and 51(1); European Parliament and Council Directive 2003/6, Arts 5 and 14(1))

2. Fundamental rights—European Convention on Human Rights—Instrument not formally integrated into the EU legal order

   (Art. 6(3) TEU; Charter of Fundamental Rights of the European Union, Art. 52(3))

3. Fundamental rights—Ne bis in idem principle—Conditions under which—Duplication of proceedings and penalties of a criminal nature—Criteria for assessment—Legal classification of the offence under national law, nature of the offence and degree of severity of the penalty incurred

   (Charter of Fundamental Rights of the European Union, Art. 50)

4. Fundamental rights—Ne bis in idem principle—Conditions under which applicable—Existence of the same offence—Criterion for appraisal—Identity of the material acts

   (Charter of Fundamental Rights of the European Union, Art. 50)

5. Fundamental rights—Ne bis in idem principle—Restriction—National legislation providing for the duplication of an administrative penalty of a criminal nature and a criminal penalty—Lawfulness—Conditions—Limitation fulfilling an objective of general interest—Objective of protecting the integrity of financial markets in the Union and public confidence in financial instruments—Included

   (Charter of Fundamental Rights of the European Union, Arts 50 and 52(1))

6. Fundamental rights—Ne bis in idem principle—Restriction—National legislation providing for the duplication of an administrative penalty of a criminal nature and a criminal penalty—Lawfulness—Conditions—Observance of the principle of proportionality—Scope

   (Charter of Fundamental Rights of the European Union, Arts 49(3), 50 and 52(1); European Parliament and Council Directive 2003/6, Arts 5, and 14(1))

7. Fundamental rights—Ne bis in idem principle—Restriction—National legislation permitting the bringing of proceedings for an administrative penalty of a criminal nature against a person, for market manipulation, who was already the subject of a final, effective, proportionate and dissuasive criminal judgment for the same acts—Unlawful

   (Charter of Fundamental Rights of the European Union, Arts 50 and 52(1))

8. Fundamental rights—Ne bis in idem principle—Direct effect

   (Charter of Fundamental Rights of the European Union, Art. 50)

1.  First of all, it should be noted that, under Article 14(1) of Directive 2003/6, read in conjunction with Article 5 thereof, Member States are to impose, without prejudice to their right to impose criminal penalties, effective, proportionate and dissuasive administrative measures or sanctions against the persons responsible for market manipulation.

   According to the information in the order for reference, Article 187b of the TUF was adopted in order to transpose into Italian law those provisions of Directive 2003/6. Therefore, the administrative procedure at issue in the main proceedings and the administrative fine provided for in Article 187b imposed on Mr Ricucci amount to an implementation of EU law within the meaning of Article 51(1) of the Charter. As a result, they must inter alia respect the fundamental right not to be tried or punished twice in criminal proceedings for the same criminal offence, guaranteed by Article 50 thereof.

   (see paras 22, 23)

2.  See the text of the decision.

   (see para. 24)

3.  As regards the assessment as to whether proceedings and penalties, such as those at issue in the main proceedings, are criminal in nature, it must be noted that, according to the Court’s case-law, three criteria are relevant. The first criterion is the legal classification of the offence under national law, the second is the intrinsic nature of the offence, and the third is the degree of severity of the penalty that the person concerned is liable to incur (see, to that effect, judgments of 5 June 2012, Bonda, C‑489/10, EU:C:2012:319, paragraph 37, and of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 35).

   Nevertheless, the application of Article 50 of the Charter is not limited to proceedings and penalties which are classified as ‘criminal’ by national law, but extends regardless of such a classification to proceedings and penalties which must be considered to have a criminal nature on the basis of the two other criteria referred to in paragraph 28 of the present judgment.

   As regards the criterion, relating to the very nature of the offence, it must be ascertained whether the purpose of the penalty at issue is punitive (see judgment of 5 June 2012, Bonda, C‑489/10, EU:C:2012:319, paragraph 39). It follows therefrom that a penalty with a punitive purpose is criminal in nature for the purposes of Article 50 of the Charter, and that the mere fact that it also pursues a deterrence purpose does not mean that it cannot be characterised as a criminal penalty. By contrast, a measure which merely repairs the damage caused by the offence at issue is not criminal in nature.

   (see paras 28, 32, 33)

4.  According to the Court’s case-law, the relevant criterion for the purposes of assessing the existence of the same offence is identity of the material facts, understood as the existence of a set of concrete circumstances which are inextricably linked together and which resulted in the final acquittal or conviction of the person concerned (see, by analogy, judgments of 18 July 2007, Kraaijenbrink, C‑367/05, EU:C:2007:444, paragraph 26 and the case-law cited, and of 16 November 2010, Mantello, C‑261/09, EU:C:2010:683, paragraphs 39 and 40). Therefore, Article 50 of the Charter prohibits the imposition, with respect to identical facts, of several criminal penalties at the conclusion of different proceedings brought for those purposes.

   Moreover, the legal classification, under national law, of the facts and the legal interest protected are not relevant for the purposes of establishing the existence of the same offence, in so far as the scope of the protection conferred by Article 50 of the Charter cannot vary from one Member State to another.

   (see paras 37, 38)

5.  As regards the question whether the limitation of the ne bis in idem principle resulting from national legislation, such as that at issue in the main proceedings, meets an objective of general interest, it is apparent from the case file before the Court that that legislation seeks to protect the integrity of the financial markets of the European Union and public confidence in financial instruments. In the light of the importance that is givenin the Court’s case-law, for the purposes of achieving that objective, to combating infringements of the prohibition on market manipulation (see, to that effect, judgment of 23 December 2009, Spector Photo Group and Van Raemdonck, C‑45/08, EU:C:2009:806, paragraphs 37 and 42), a duplication of criminal proceedings and penalties may be justified where those proceedings and penalties pursue, for the purpose of achieving such an objective, complementary aims relating, as the case may be, to different aspects of the same unlawful conduct at issue, which it is for the referring court to determine.

   In that regard, concerning offences relating to market manipulation, it seems legitimate that a Member State might wish, first, to dissuade and punish any infringement, whether intentional or not, of the prohibition of market manipulation by imposing administrative penalties set, as the case may be, on a flat-rate basis and, secondly, to dissuade and punish serious infringements of such a prohibition, which have particularly negative effects on society and which justify the adoption of the most severe criminal penalties.

   (see paras 46, 47)

6.  As regards compliance with the principle of proportionality, it requires that the duplication of proceedings and penalties provided for by national legislation, such as that at issue in the main proceedings, does not exceed what is appropriate and necessary in order to attain the objectives legitimately pursued by that legislation, it being understood that, when there is a choice between several appropriate measures, recourse must be had to the least onerous and the disadvantages caused must not be disproportionate to the aims pursued (see, to that effect, judgments of 25 February 2010, Müller Fleisch, C‑562/08, EU:C:2010:93, paragraph 43; of 9 March 2010, ERG and Others, C‑379/08 and C‑380/08, EU:C:2010:127, paragraph 86; and of 19 October 2016, EL-EM-2001, C‑501/14, EU:C:2016:777, paragraphs 37 and 39 and the case-law cited).

   In that regard, it should be noted that, under Article 14(1) of Directive 2003/6, read in conjunction with Article 5 thereof, Member States are free to choose the penalties applicable to persons responsible for market manipulation (see, to that effect, judgment of 23 December 2009, Spector Photo Group and Van Raemdonck, C‑45/08, EU:C:2009:806, paragraphs 71 and 72). In the absence of harmonisation of EU law in the matter, Member States therefore have the right to provide either for a system in which infringements of the prohibition of market manipulation may be subject to proceedings and penalties only once, or fora system allowing a duplication of proceedings and penalties. In those circumstances, the proportionality of national legislation, such as that at issue in the main proceedings, cannot be called into question by the mere fact that the Member State concerned chose to provide for the possibility of such a duplication, without which that Member State would be deprived of that freedom of choice.

   With regard to its strict necessity, national legislation, such as that at issue in the main proceedings, must, first of all, provide for clear and precise rules allowing individuals to predict which acts or omissions are liable to be subject to such a duplication of proceedings and penalties.

   Next, national legislation, such as that at issue in the main proceedings, must ensure that the disadvantages resulting, for the persons concerned, from such a duplication are limited to what is strictly necessary in order to achieve the objective referred to in paragraph 46 of the present judgment.

   As regards, first, the duplication of proceedings of a criminal nature which, as is apparent from the information in the case file, the requirement noted in the above paragraph implies the existence of rules ensuring coordination so as to reduce to what is strictly necessary the additional disadvantage associated with such a duplication for the persons concerned.

   Secondly, the duplication of penalties of a criminal nature requires rules allowing it to be guaranteed that the severity of the sum of all of the penalties imposed corresponds with the seriousness of the offence concerned, that requirement resulting not only from Article 52(1) of the Charter, but also from the principle of proportionality of penalties set out in Article 49(3) thereof. Those rules must provide for the obligation for the competent authorities, in the event of the imposition of a second penalty, to ensure that the severity of the sum of all of the penalties imposed does not exceed the seriousness of the offence identified.

   (see paras 48, 49, 51, 54-56)

7.  Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as precluding national legislation which permits the possibility of bringing administrative proceedings against a person in respect of unlawful conduct consisting in market manipulation for which the same person has already been finally convicted, in so far as that conviction is, given the harm caused to the company by the offence committed, such as to punish that offence in an effective, proportionate and dissuasive manner.

   That conclusion is not called into question by the fact that the final sentence pronounced in accordance with Article 185 of the TUF can, where appropriate, subsequently be extinguished as a result of a pardon, as seems to have happened in the case in the main proceedings. It follows from Article 50 of the Charter that the protection conferred by the ne bis in idem principle must benefit persons who have already been finally acquitted or convicted, including, consequently, those who have been made subject, by such a conviction, to a criminal penalty which was subsequently extinguished as a result of a pardon. Therefore, such a circumstance is irrelevant for the purpose of assessing whether national legislation such as that at issue in the main proceedings is strictly necessary.

   (see paras 62, 63, operative part 1)

8.  The ne bis in idem principle guaranteed by Article 50 of the Charter of Fundamental Rights of the European Union confers on individuals a right which is directly applicable in the context of a dispute such as that at issue in the main proceedings.

   In accordance with settled case-law, the provisions of primary law which impose precise and unconditional obligations, not requiring, for their application, any further action on the part of the EU or national authorities, create direct rights in respect of the individuals concerned (see, to that effect, judgments of 1 July 1969, Brachfeld and Chougol Diamond, 2/69 and 3/69, EU:C:1969:30, paragraphs 22 and 23, and of 20 September 2001, Banks,C‑390/98, EU:C:2001:456, paragraph 91). The right that Article 50 of the Charter confers on individuals is not subject, according to the very wording of that provision, to any conditions and is therefore directly applicable in the context of the dispute in the main proceedings.

   (see paras 65, 66, 68, operative part 2)