Recent amendments to Italian law add a new chapter to the longstanding debate over the Italian dual-track system and its compatibility with the double jeopardy (ne bis in idem) principle.
On 29 September 2018, Decree no. 107 of August 10, 2018 (the Decree), which amended the Italian legislative provisions to transpose the Market Abuse Regulation no. 596/2014 (the MAR) in Italy, entered into force. Inter alia, the Decree amends art.187-terdecies of Legislative Decree no. 58 dated 24 February 1998 (the Italian Financial Services Act or TUF) on the application and enforcement of criminal and administrative sanctions.
Under the amended law the Italian Companies and Stock Exchange Commission (CONSOB) (which is capable of imposing administrative sanctions for market abuse) and the judicial authorities will be required, when imposing sanctions for market abuse or insider trading offences, to take into account any criminal or administrative sanctions already imposed by the other authority on the same individual or entity in cases involving the same facts. This change implicitly confirms the existence of a dual track sanctioning system consisting of administrative sanctions and criminal sanctions for market abuse offences; indeed, the same individual or entity could potentially be sanctioned twice on the same facts, provided that the sanctions already applied are “taken into account” by the competent authorities imposing the second sanction.
Notably the amendment comes into force a few months after the Court of Justice of the European Union (
CJEU) issued three decisions on the compatibility of the Italian sanctioning regime with EU legislation on double jeopardy (
ne bis in idem) (for further information see page 12 of the
Q1 2018 edition of Allen & Overy’s European White Collar Crime Report). With these decisions, the CJEU had expressly limited the possibility of someone being sanctioned twice for the same conduct where the first sanction is considered adequate, proportionate and capable of addressing the violation concerned. In other words, the Court concluded that the
ne bis in idem principle may indeed be limited, though on an exceptional basis and solely for the purpose of protecting the financial interests of the EU and its financial markets.
At first glance, the reform of Article 187-terdecies appears to comply with the principles set out by the CJEU in its decisions by requiring CONSOB and Criminal Judges to apply the standards set down by the Court and to take into account the adequacy and proportionality of the sanctions already imposed.
However, the reform does not contain any detail on how the authorities should take into account the sanctions already imposed in practice. This lack of guidance could represent an obstacle, for instance where criminal judges are required to assess the suitability of imprisonment for individuals already sanctioned with administrative monetary penalties, given the substantial differences between these two types of sanction.
