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

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).

Keywords: regulation, administrative sanctions, criminal sanctions, learning organisations, double jeopardy, self-incrimination

JEL Classification: K23, K42