Abstract
While the EU has for a long time had the power to require Member States to provide effective means for ensuring the enforcement of EU law, even if those meant the imposition of criminal law, enforcing EU law through criminalization at the EU level has always been a different question, given that the EU lacked a legislative competence prior to the Lisbon Treaty. However, despite the Treaty reformation and thereby the inclusion of criminal law in the Treaty (as part of the area of freedom, security and justice), as this contribution will show, that the EU legislator still favors the administrative procedure in certain market related areas. In order to better understand the rationale of enforcement of EU law through use of criminal law, it is necessary to clarify the delicate debate regarding the characterization of the sanctions used in further detail. Administrative sanctions have always formed a crucial part of the EU’s enforcement strategy, particularly with regard to competition fines and sanctions in the domain of EU agriculture and fisheries policies. Yet with the entry into force of the Lisbon Treaty, and thereby the legislative competences granted in criminal matters, one would perhaps have thought that there was no further need for administrative law sanctions in the EU where there are already criminal law sanctions in place. With Lisbon Treaty in place, the framework has naturally changed as, alongside the EU’s general enforcement armory, Articles 82 and 83 Treaty of the Functioning of the European Union (TFEU) specifically grant the EU a competence in criminal law matters with a cross-border dimension.
University Research Chair. This chapter was presented at the University of the West of England workshop on white collar crime July 2014, thanks go to Nicholas Ryder and the participants for helpful comments. The chapter was updated summer 2016. The usual disclaimer applies. The chapter draws to some extent on E Herlin-Karnell, “The Challenges of EU Enforcement and Elements of Criminal Law Theory: On Sanctions and Value in Contemporary ‘Freedom, Security and Justice’ Law” (Yearbook of European Law, 2016, 1–27), E. Herlin-Karnell “Constructing Europe’s Area of Freedom, Security, and Justice through the Framework of ‘Regulation’: A Cascade of Market-Based Challenges in the EU’s Fight Against Financial Crime”, (2015), German Law Journal 171.
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Notes
- 1.
E.g. J Frese, Sanctions in EU Competition Law (Oxford, Hart Publishing, 2014).
- 2.
Directive 2005/60, supra note 8.
- 3.
See, e.g., Steve Peers, EU Justice and Home Affairs Law 1 (2011).
- 4.
E.g., Giandomenco Majone, Dilemmas of European Integration: The Ambiguities and Pitfalls of Integration by Stealth (2009).
- 5.
For on an overview what it means in the EU context, see Niamh Moloney, The Legacy Effects of the Financial Crises on Regulatory Design in the EU, in The Regulatory Aftermath of the Global Financial Crises 111, 111 (Elis Ferran et al. eds., 2012).
- 6.
Niamh Moloney, Confidence and Competence: The Conundrum of EC Capital Market Law, 4 J. Corp. L. Stud. 44 (2004).
- 7.
Ibid.
- 8.
Thomas Wilhelmsson, The Abuse of the Confident Consumer, 27 J. Consumer Pol’y 317 (2004).
- 9.
Communication for the Spring European Council, Driving European Recovery, COM (2009) 0114 final (Apr. 3, 2009).
- 10.
The High Level Group on Financial Supervision in the EU Report (Feb. 25, 2009), http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf
- 11.
Directive of the European Parliament and the Council on Criminal Sanctions for Insider Dealing and Market Manipulation, (Directive 2014/57/EU, L173/179).
- 12.
Emiliano Grossman & Patrick Leblond, European Integration: Finally the Great Leap Forward, 49 J. Common Mkt. Stud. 413 (2011).
- 13.
Guido Ferrarini & Niamh Moloney, Reshaping Order Execution in the EU and the Rule of Interest Groups: From MiFID I to MiFID II, 13 Eur. Bus. Org. L. Rev. 557 (2012). See also Elliot Posner, The Lamfalussy Process: Polyarchic Origins of Networked Financial Rule-Making in the EU, in EU Governance: Towards a new Architecture? 108 (Charles Sabel & Jonathan Zeitlin eds., 2010), Niamh Moloney, EU Securities and Financial Markets Regulation (OUP 2015, 3 edition).
- 14.
Moloney ibid.
- 15.
See e.g., Engel and others v. The Netherlands, Series A no. 22 [1979–1980].
- 16.
C-240/90 Germany v. Commission [1992] ECR I-05383.
- 17.
AG Jacobs stated in his Opinion of 3 June 1992 that “certainly EC law in its present state does not confer on the Commission, the CFI or the ECJ the function of a criminal tribunal. It should however be noted that that would in itself not preclude the EC from harmonizing the criminal laws of the Member States if that were necessary to attain one of the objectives of the Community”.
- 18.
For a strict interpretation of the “Engel test”, see C-489/10 Criminal Proceedings against Bonda, CJEU, Judgment of 5 June 2012, confirming previous case law, including C-210/00 Käserei Champignon Hofmeister v. Hauptzollamt Hamburg-Jonas [2002] ECR I-6453.
- 19.
See E. Herlin-Karnell, The Constitutional Dimension of European Criminal Law (Oxford, Hart Publishing, 2012), ch. 2.
- 20.
Case C-105/14, Tarico delivered on 8 September 2015 nyr.
- 21.
Para 52. See for more detail E Herlin-Karnell & N Ryder “The Robustness of EU Financial Crimes Legislation: A Critical Review of the EU and UK Anti-Fraud and Money Laundering Scheme”, European Business Law Review (2017), issue 2 forthcoming.
- 22.
Proposal for a Directive of the European Parliament and of the Council on the fight against fraud to the Union’s financial interests by means of criminal law, COM(2012) 363 final, available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52012PC0363&from=EN (last accessed 13 May 2016).
- 23.
Court of First Instance (CFI), Case T-315/01, Yassin Abdullah Kadi v Council of the European Union and Commission of the European Communities [2005] ECR II-3649; European Court of Justice (CEJ), Case C-402/05 P, Yassin Abdullah Kadi v Council of the European Union and Commission of the European Communities [2008] ECR I-5351; General Court, Case T-85/09, Yassin Abdullah Kadi v European Commission, judgment of 30 September 2010, Kadi II, Joined Cases C-584/10 P, C-593/10 P and C-595/10 P, judgment of 18 July 2013 (not yet reported).
- 24.
See Gazzini & Herlin-Karnell, ‘Restrictive measures adopted by the EU against individuals from the standpoint of International and European Law’ (2011) 36 European Law Review, 798.
- 25.
Case C-130/10, European Parliament v Council, Opinion of AG Bot delivered on 31 January 2012.
- 26.
Case C-130/10, European Parliament v Council, judgment of 19 July 2012 (not yet reported).
- 27.
Case C-300/89 Commission v Council [1991] ECR I-2867.
- 28.
Fourth Money Laundering Directive, Directive of the European Parliament and of the Council on the Prevention of the Use of the Financial System for the Purpose of Money Laundering and Terrorist Financing, Directive (EU) 2015/849. See also the European security agenda COM(2015) 185 final and proposal for a Directive on Combating terrorism and replacing Council Framework Decision 2002/475/JHA, COM(2015) 625 final. On money laundering see e.g. N Ryder, Money Laundering—An Endless Cycle? A comparative analysis of the anti-money laundering policies in the United States of America, the United Kingdom, Australia and Canada (Routledge 2012).
- 29.
Directive 91/308/EEC OJ 1991 L 166/77.
- 30.
Directive 2001/97/EC of the European Parliament and of the Council amending Directive 91/308/EEC on the prevention of the use of the financial system for the purpose of money laundering OJ L344, 28 December 2004.
- 31.
Directive 2005/60/EC OJ L309, 25 November 2005.
- 32.
Fourth Money Laundering Directive, COM/2013/045 final, on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing. Now adopted as Directive (EU) 2015/849 and implemented by summer 2017.
- 33.
Money laundering is by definition based on another crime termed a predicate offence, which gives rise to the laundering in question.
- 34.
Given that different tax offences may be designated in each Member State as constituting ‘criminal activity’ punishable by means of the sanctions as referred to in point (4)(f) of Article 3 of this Directive, national law definitions of tax crimes may diverge.
- 35.
Article 57 states “Differences between national law definitions of tax crimes shall not impede the ability of FIUs to exchange information or provide assistance to another FIU, to the greatest extent possible under their national law.”
- 36.
On the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, COM (2013) 45/3.
- 37.
Directive 2013/40/EU on attacks against information systems.
- 38.
Regulation (EU) 2015/847 on information accompanying transfers of funds.
- 39.
see e.g. Case C-293/12 and C-594/12, Digital rights, judgment of 8 April 2014 nyr and Case C-362/14, Schrems, judgment delivered on 6 October 2015, nyr.
- 40.
Directive 2014/57/EU, Directive on criminal sanctions for insider dealing and market manipulation, OJ L 3/179.
- 41.
Ibid.
- 42.
Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.
- 43.
Directive 2004/39/EC, Markets in Financial Instruments, OJ L 145, 21 April 2004.
- 44.
European Commission Communication: Ensuring efficient, safe and sound derivatives markets, COM (2009) 332, 3 July 2009.
- 45.
Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.
- 46.
See Herlin-Karnell, ‘White-Collar Crime and European Financial Crises: Getting Tough on EU Market Abuse’ (2012) 37 European Law Review 487.
- 47.
C-617/10, Åkerberg Fransson, judgment of 26 February 2013 (not yet reported).
- 48.
A Barak, ‘Proportional Effect: The Israeli Experience’, (2007) University of Toronto Law Journal, 369.
- 49.
G Conway, The Future of a European Public Prosecutor in Maria Fletcher, Ester Herlin-Karnell and Claudio Matera (eds), The European Union as an Area of Freedom, Security and Justice, (2016 Routledge forthcoming).
- 50.
See Presidency conclusions Proposal for a Regulation on the establishment of the European Public Prosecutor’s Office 2013/0255 (APP) Brussels 3 June 2016 available at http://eur-lex.europa.eu/procedure/EN/2013_255 (last accessed 13 July 2016). And Proposal for a Council Regulation on the Establishment of the European Public Prosecutor’s Office, COM (2013) 0534 final (July 7, 2013). On corpus juris see M. Delmas-Marty & J.A.E. Vervaele (eds.), The Implementation of the Corpus Juris in the Member States (Intersentia 2000). See also discussion in E Herlin-Karnell, The Function of Subsidiarity in EU Area of Freedom, Security and Justice Law, Europarattslig tidskrift 2017 issue 1.
- 51.
A Csuri, The Proposed European Public Prosecutor’s Office—from a Trojan Horse to a White Elephant? Cambridge Yearbook of European Legal Studies, 1–30 (2016).
- 52.
See C Gómez-Jara Díez Federal European Criminal Law (Intersentia, 2015).
- 53.
See e.g. Katalin Ligeti (ed) Toward a Prosecutor for the European Union Volume 1 (Oxford, Hart, 2012), G Conway, The Future of a European Public Prosecutor in Maria Fletcher, Ester Herlin-Karnell and Claudio Matera (eds), The European Union as an Area of Freedom, Security and Justice, (2016 Routledge forthcoming) and Marianne Wade, A European Public Prosecutor: Potential and Pitfalls, Crime, Law & Social Change, 59, 439. (2013).
- 54.
Steve Peers EU Justice and Home Affairs Law (Oxford, Oxford University Press, 2011) 858–860.
- 55.
Presidency conclusions Proposal for a Regulation on the establishment of the European Public Prosecutor’s Office 2013/0255 (APP) Brussels 3 June 2016 available at http://eur-lex.europa.eu/procedure/EN/2013_255 (last accessed 13 July 2016).
- 56.
The EPP will not replace Eurojust, which will continue in its current role regarding all offences other than those against the financial interests of the EU.
- 57.
See e.g. C Gómez-Jara Díez Federal European Criminal Law (Intersentia, 2015).
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Herlin-Karnell, E. (2018). The EU Sanctions and the Fight Against Financial Crime. In: Ryder, N. (eds) White Collar Crime and Risk. Palgrave Studies in Risk, Crime and Society. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-47384-4_4
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