Lasagni2019 Chapter TheHybridNatureOfBankingSuperv

Chapter 6
The Hybrid Nature of Banking Supervision
Independence and accountability, standards in information sharing, nature of super-

visory sanctions, compliance with fair trial rights: Several are the profiles relevant
under a criminal law perspective, that emerge as critical from the analysis carried
out so far on the US and, above all, on the EU banking supervisory systems.
In order to investigate over these aspects, the Chapter proceeds as follow.
In Sect. 6.1, the status and organization of the US and EU supervisory authorities
are analysed in light of the Basel Committee’s Core Principles, with special atten-
tion to the rules requiring independence and accountability, as well as effectiveness
in cooperation and exchange of information. While examining such issues is per se
relevant, given the high public interest in an efficient and fair administration of the
banking industry, these profiles result extremely meaningful also under a criminal
law perspective, since their violation may already undermine at the very bases the
possibility for banking supervisors to comply with fair trial guarantees.
This profile is especially critical in the EU, where specific considerations may be
drawn about the substantive nature of banking supervisory sanctions.
In Sect. 6.2, it is argued that a significant part of the penalties imposable by the
Single Supervisory Mechanism (SSM) within the European Central Bank shall be
recognized a punitive nature in light of the Engel case-law developed by the Court
in Strasbourg, as applied by the Court of Justice.
Following this assumption, Sect. 6.3 examines the fairness of the SSM sanction-
ing proceedings not only in light of the procedural rights already applicable to
administrative proceedings due to Article 41 CFREU, but also of the fair trial rights
required for la matière a coloration pénale by Article 6 ECHR and Article 4,
Protocol no. 7 to the Convention, as well as by their equivalents in the Charter of the
Fundamental Rights of the EU. Against this background, critical issues of non-
compliance of the SSM sanctioning procedures are identified, which pose serious
risks to undermine not only the fairness, but also the efficiency of this new European
enforcement model.
© Springer International Publishing Switzerland and G. Giappichelli Editore 2019 161

G. Lasagni, Banking Supervision and Criminal Investigation, Comparative,
European and International Criminal Justice 1,
https://doi.org/10.1007/978-3-030-12161-7_6
162 6 The Hybrid Nature of Banking Supervision
6.1 B
anking Supervision and the BCBS Core Principles:
Defining Effective Supervisory Models?
Through the Core Principles for Effective Banking Supervision, the Basel Committee
pursues the safety and soundness of banks and of the banking system as such, both
directly, with the establishment of minimum prudential capital requirements, and
indirectly, with the strengthening of banking supervisory practices.1
To achieve so, the Principles tackle specific profiles of supervisory activities.
Before examining those more relevant to the present analysis, however, it is worth
recalling that these standards and recommendations do not provide clear indication
as to whether a certain supervisory model shall be considered preferable than oth-
ers. The Core Principles, in particular, remain silent with regard to a series of basic
structural choices, like as whether effectiveness is better guaranteed by a single
entity, or by multiple supervisory authorities; whether central banks should be
responsible for banking supervision (with subsequent concentration of monetary
and supervisory functions) or not; and whether it is advisable to have a consolidated
supervision of all financial services (such as banking, securities, and insurance).2
On one side, it is true that, to date, no empirical evidence has shown that these
profiles actually represent a main factor in determining the efficiency of the banking
industry3: These lacunas should not, therefore, be given an undue weight in deter-
mining the possibility to carry out meaningful comparative analyses on banking
supervisory models, and to achieve the very goal pursued by the Principles. It could
also be argued that defining an optimal level of controls in the banking and financial
field seems hard to be solved in abstracto by a single paradigm applicable to all
legal systems.4 Political, legal, economic and social contexts do matter, when it
comes to measure the effectiveness of regulatory models (but perhaps of any legal
order, including criminal justice systems).5
1
Cf. BCBS (2012), p. 4, at 16, that clearly indicates how the safety and soundness of banks repre-
sents the “primary objective for banking supervision”. For the role of the Committee and the con-
tent and structure of the Core Principles, see Sect. 3.5.
2
Profiles identified as basic organizational issues for banking supervisors by Barth et al. (2002).
Cf. however also Wymeersch (2007), p. 40 et seq., who notices that the very structure of the Core
Principles seems to meet the 3 pillars or institutional supervisory model.
3
Cf. Barth et al. (2002), p. 1; Goodhart (2000), p. 43; Masciandaro and Nieto (2014), p. 7 et seq.;
Onado (1997); Meister (2019).
4
Moloney (2012a), pp. 81 and 94, highlighting how not even the last financial crisis has made it
clear which supervisory models are correlated with strong financial markets; Jackson (2007);
Moloney (2012b), p. 138.
5
Moloney (2012a), p. 82 et seq., and Agarwal et al. (2014), referring also to the supervisory style
and approaches, including the extent to which supervisors outsource their job to self-regulation);
Black (2002), p. 22 et seq.; Black (2005), p. 101–108 et seq., and especially p. 117 et seq. in which
the author drafts a parallel between democratization of financial regulation and models of restor-
ative justice; Colliard (2014).
6.1 Banking Supervision and the BCBS Core Principles: Defining Effective… 163
Also the definition of the preferable regularoty governance model (principle, rule
or risk-based) still remains a matter for open debate.6
Banking regulation is indeed «a complex and multidimensional activity», in
which the failure of any single dimension may have important but sometimes not
easily predictable repercussions on the functioning of the whole system.7
Such basic structural choices moreover do touch sensitive public interests, which
appear especially interesting also under a criminal law perspective.
Concerning the first profile, having a single supervisory authority may seem
appropriate—among other reasons8—to prevent gaps in coordination, which inevi-
tably arise in case of multiple regulators (especially at the transnational level, where
having just a single contact point is more efficient)9; and to provide centralized and
consistent identifications of supervisory priorities, avoiding conflicts between regu-
latory goals—which are more likely to emerge if supervisory tasks are allocated to
different authorities.
A single supervisor may also be considered as more transparent and accountable,
since responsibility in policy choices (and changes in the latter) could be attributed
more clearly than in case of a plethora of supervisors. This option could allow for a
simpler and less fragmented regulatory framework, more capable to concentrate the
necessary organizational resources (e.g. personnel, training), and to avoid duplica-
tions in the proceedings. Lastly, the action of a single supervisor may better adapt to
the changes of the financial market, being a single institution characterized by more
flexibility than a complex network of authorities.10
On the other side, however, multiple regulators may appear preferable to avoid
excessive concentration of powers in the same entity11; and to prevent the growing
of supervisors into massive bureaucratic, and thus inefficient, apparatus.12
Competition among regulators may also serve as an incentive to be more responsive
to the innovation in the banking industry,13 and to favour a pluralistic and demo-
cratic raising of different, and potentially valuable approaches to supervision.14
Pro and cons may be found also as far as the role of central banks is concerned.
Assigning some supervisory tasks to a central bank, for instance, may allow for
an efficient collection of information, as these authorities already receive huge
amounts of supervisory relevant data for monetary policy purposes, and may be
6
On which see, for a detailed analysis, Black (2010); Black (2008); Moloney (2012a), p. 88 et seq.;
Castellano et al. (2012).
7
Black (2012), p. 1038; see also Sarkany (2012).
8
Analytically examining pro and cons in relation to safety and soundness of the banking systems,
and costs to supervisory authorities, and market participants, Barth et al. (2002), p. 6 et seq.
9
Cf. Llewellyn (1999), pp. xi–xix; Goodhart (2002); Abrams and Taylor (2001); Briault (1999);
Wall and Eisenbeis (2000).
10
Briault (1999), Llewellyn (1999) and Abrams and Taylor (2001).
11
Cf. Briault (1999); Llewellyn (1999); Kane (1996), p. 28; Taylor (1995).
12
Cf. Llewellyn (1999) and Abrams and Taylor (2001).
13
Kane (1984) and Romano (2001); Moloney (2012a), p. 98 et seq.
14
Cf. Llewellyn (1999).
well positioned to gather organizational resources—which might be especially

important for the timely management of banking crisis.15 Central banks, moreover,
are often supported by independence requirements, which guarantee a certain level
of safeguard to the parties involved in supervisory proceedings.16
On the other side, a timely flew of information does not necessarily require the
involvement of central banks, as long as effective information sharing agreements
are into place.17 Joining monetary policy and banking supervision may also exacer-
bate conflicts of interest18 and expose such authorities to both stronger political
pressure, that may hinder their independence, and higher reputational risks (since
failure in one of the two areas may have a direct impact also on the other).19
Finally, uncertainty remains also about the opportunity of establishing consoli-
dated models of financial supervision, to face the increasing “blurring of d istinctions
between different types of financial activities, the growing complexity and size of
financial services firms, and the increasing globalization of financial services”.20
Under this perspective, it is possible to distinguish among supervisory models based
on 3 separate pillars (banks, insurance and securities, the so-called institutional
model), on 2 pillars (a supervisor for banks and insurance, and another one for secu-
rities (functional or twin-peaks model), or on a single integrated supervisor.21 From
one side, a fragmented supervision may appear less effective to face global financial
conglomerates, while a consolidated supervision would be better placed to under-
15
In this sense, for instance, cf. Goodhart and Schoenmaker (1995) (as reported by Barth et al.
(2002), p. 12) which analyzed the data «for 104 bank failures in 24 countries during the 1980s and
find that there were fewer bank failures in countries in which banking supervision and monetary
policy were combined in the central bank»; cf. also Ioannidou (2002); Wymeersch (2007), p. 36 et
seq.; and Ferran (2012a), p. 114 et seq., highlighting how before the financial crisis, many EU
Member States located frontline responsibility for microprudential supervision of all sectors of
financial market activity with a single regulatory authority that operated autonomously from the
central bank (BE, DE, FI, DE, PL, SE, UK), others employed an integrated supervisor model in
which all functions were performed by the central bank (CZ, SK), others, finally, divided respon-
sibility between the central bank (banking supervision), securities market supervisory authority
and one or more other authorities responsible for insurance and pensions (EL, IT, PT, ES). In some
countries (such as FR, IE and UK), however, the financial crisis triggered in many counties a rear-
rangements and reappraisal of the role of central banks in financial supervision.
16
Cf. Giddy (1994) and Abrams and Taylor (2001); Goodhart (2000), p. 43, according to whom
central banks have better «better fund, more independent and hence more expert and more
reliable».
17
In this sense, for instance, cf. Goodhart and Schoenmaker (1995) (as reported by Barth et al.
(2002), p. 12) which analyzed the data “for 104 bank failures in 24 countries during the 1980s and
find that there were fewer bank failures in countries in which banking supervision and monetary
policy were combined in the central bank”; cf. also Ioannidou (2002).
18
Cf. Haubrich (1996); Briault (1999); Abrams and Taylor (2001); Goodhart and Schoenmaker
(1993, 1995); Antoniazzi (2013), pp. 156 and 159; Vella (2002), p. 163 et seq.
19
Cf. Briault (1999), Haubrich (1996) and Abrams and Taylor (2001).
20
Cf. Barth et al. (2002), p. 12.
21
Wymeersch (2007), p. 3 et seq.; Padoa Schioppa (2002); Moloney (2012b), p. 119; Goodhart
(2000), p. 11 et seq.; Weber et al. (2014), and p. 179 et seq.
stand market systemic risks, and to save costs in terms of information sharing and
internal resources.22 On the other side, however, consolidated supervision would
imply a very high concentration of powers, possibly not always justifiable in demo-
cratic societies. That might moreover originate relevant conflict of interests; a gen-
eral lower level of expertise to address specific financial sectors, and a higher risk of
adverse consequences in case of mismanagement.23
In lack of specific criteria established by the Core Principles, all these organiza-
tional choices remain in the discretion of national (or supranational, as in case of the
EU) legislators to be taken, which will have to take into account the specificities of
the single contexts to define their own optimal level of supervision. And indeed,
models of banking supervision adopted by EU Member States and in the US highly
vary from each other in their structural design.24 The following analysis of the EU
and US supervisory systems builds on this basis.
6.1.1 I ndependence and Accountability of Banking

Supervisors
According to the standards developed by the Basel Committee, independence and

accountability represent fundamental features for effective banking supervisors,
even if their practical coexistence may lead to tensions within the regulator. In this
sense, these principles have effectively been described as “communicating vessels”
which, although not ruling out each other, do “imply a delicate balance”.25 Both
parameters are established in Core Principle 2, which establishes that banking
supervisors shall not be subject of any interference from the government or the
industry—such an independence being provided by law, and publicly disclosed—
but, at the same time, shall be accountable for the discharge of their duties and use
of their resources.
Essential Criteria to Core Principle 2 further prescribe how such standards
should be guaranteed.26
First, within the applicable national legal framework, supervisors shall enjoy
discretion in setting their objectives, allocating resources, and taking any supervi-
sory actions on controlled entities; for which choices, adequately published, they
should be held responsible.
22
Abrams and Taylor (2000); Whalen (2001); Briault (1999); Llewellyn (1999); International
Monetary Fund (2001), pp. 36–38; Goodhart (2000), p. 24 ff.
23
Cf. Barth et al. (2002), p. 15; Whalen (2001); Goodhart (2000), p. 20 et seq.
24
For instance, ES, PT, IT, FR, EL, CY, LT and RO adopted an institutional model, NL, LU, SK
and BG adopted a twin-peaks model, and PL, UK, SE, DK, FI, DE, AT, BE, IE, CZ, EE, HR, LV
and MT opted for an integrated model, see Wymeersch (2007), p. 42 et seq. Cf. also Ferran (2012a),
p. 111 et seq.
25
Cf. Ter Kuile et al. (2015), p. 166.
26
Cf. BCBS (2012), Principle 2 - Essential Criteria 1,2,3,4,5,6,9.
Concerning the structure of the regulators, appointment and removal of the heads
of these authorities shall follow transparent rules established by law (and not
referred to the discretion of the appointing body); in particular, the governing body
of a supervisor shall be structured in a way that avoids “any real or perceived con-
flicts of interest”. To discourage bypassing, rules on how to avoid conflicts of inter-
est shall be supported by sanctions.27 A supervisory regulator should also be able to
rely on an independent budget, adequately financed “in a manner that does not
undermine its autonomy or operational independence”, taking into account opera-
tional needs such as travelling for on-site inspections, recruiting external experts
with specific professional skills, and providing regular training and necessary tools
to their personnel.
Finally, supervisors shall be supported by qualified “staff in sufficient numbers
and with skills commensurate with the risk profile and systemic importance of the
banks and banking groups supervised”, granted with adequate salary scales to
attract and retain it, and legally protected from lawsuits and costs caused by actions
and/or omissions made while discharging their duties in good faith.
Against this background, the paradigms of banking supervision applied in the
EU and in the US present substantial weaknesses, notably common to both systems,
which are relevant not only to assess their compliance with the Core Principles, but
also—under a criminal law perspective—their capability of carrying out reasonably
fair proceedings.
At theoretical level, in fact, explicit statements that conflicts of interests shall be
avoided, and supervisory decision-making bodies and staff shall be preserved from
undue influence may be found in basically every system. In daily oversight, how-
ever, good intents risk to be substantially downgraded by bad practices, supported
by somewhat ambiguous structural rules shaping the organization of most regula-
tory authorities.
A first weakness concerns the recruitment procedure of the heads of the supervi-
sory agencies, which in most cases also means of their decision-making bodies. At
first glance, in fact, Core Principle 2 hinders with political intrusion in the action of
banking supervisors.28 Nonetheless, assessments of these models shall not be made
only in light of independence, but also of accountability requirements. In this sense,
a political appointment, problematic under the parameter of independence, is gener-
ally unavoidable and even desirable to confer democratic coverage over technical
bodies granted with enormous powers to interfere with the rights and private life of
citizens.
To comply with both principles, therefore, it becomes pivotal the choice of which
political body is entitled to make such appointments.
Supervisory models which favour a primary role of the Executive rather than of
the Parliament may in fact rise concerns not only for the compliance with the BCBS
Principles, which clearly require independence from governmental influence. That
27
The importance of independence and absence of conflict of interests has been reaffirmed also in
the 2011 Financial Stability Oversight Council Annual Report, cf. FSOC (2011), p. 118.
28
Cf. BCBS (2012), Core Principle 2, Essential Criterion 1.
is for instance the case of the US where, as previously illustrated, all supervisory
chairpersons are directly appointed by the President with the confirmation of the
Senate. Since chairpersons have substantial powers in appointing the boards respon-
sible to lead regulators, the connection of supervisors with the US Government is
rather straightforward.29 In the EU, on the contrary, the link between national gov-
ernment and supervisors is not so direct, even if at least part of the reasons for this
difference lays on the politically fragmented structure of the Union.
Indeed, as far as the EU institutions are involved, while the European Parliament
has a voice in the choice of most Chairpersons of EU authorities, it is the European
Council that determines the composition of the SSM and SRM’s Executive Boards.30
The majority of the components of the Governing Council, however, are appointed
at national level.31 Since these appointments follow 28 (or 19 for the Eurozone) dif-
ferent sets of rules, potentially diverging in relevant aspects, such as fit and proper
evaluations, or length of mandates, the precise relationship between governmental
powers and a fair part of banking supervisor’s managements is at least not so easy
to reconstruct.
This situation could therefore result even more critical than in the US: Indeed
where centralised governmental bodies are not supported by a clear and direct dem-
ocratic mandate, as it is the case of the EU,32 governmental appointment may result
critical not only for independence reasons, but also with regard to the rule of law. In
the current legal framework, however independence of supervisory tasks is guaran-
teed by Article 19 SSM R, according to which the “ECB and the national competent
authorities acting within the SSM shall act independently. The members of the
Supervisory Board and the steering committee shall act independently and objec-
tively in the interest of the Union as a whole and shall neither seek nor take instruc-
tions from the institutions or bodies of the Union, from any government of a Member
State or from any other public or private body”.33
Accountability is instead addressed by Article 20 SSM R, which states that the
ECB shall be responsible to both the European Parliament and the Council for the
implementation of supervisory tasks, and shall provide information to the European
Parliament, national parliaments, the Commission, the euro Group, the Council, and
national parliaments,34 through annual reports or through oral or written hearings.
29
Cf. above, Chap. 5.
30
Analysing the degree of independence of the SSM against the European Parliament, Masciandaro
and Nieto (2014, p. 18 et seq.
31
Cf. above, Sect. 4.4.
32
On the limits to the delegation of administrative powers to EU agencies in light of the Meroni
doctrine, see Wolfers and Voland (2014), p. 1490 et seq. On the judicial and political accountability
of the SSM, see also Duijkersloot et al. (2017).
33
Cf. also Recital (75) SSM R.
34
In light of the impact of the SSM decisions (also) at domestic level, national parliaments may
address to the ECB reasoned observations on the annual report; request the ECB to reply in writing
to their observations; invite the Chair of the Supervisory Board to participate in an exchange of
views in relation to the supervision of banks in that Member State together with an NCA represen-
tative, cf. Article 21 SSM R.
To establish good relationships, and exchange of information with the other EU

institutions, the SSM has also concluded an Inter-Institutional Agreement with the
European Parliament35 and a Memorandum of Understanding with the Council.36
In the context of the SSM, however, there are no formal sanctions in case the
principles of independence and accountability are breached (unless they could be
classified as potential frauds to the budget of the Union, which fall under the com-
petence of the European anti-fraud office OLAF).37
The SSM results critical under Core Principle 2 under two other profiles: The
prominent role of Member States (and national law), and the relationship with the
ECB monetary policy tasks.38
First, as anticipated, according to Article 10 of the ECB Statute, most of the
Governing Council’s members are appointed at national level (and the same goes
for most of the Boards of the ESAs39), following diverging national regulation: Such
members are thus subject to different regimes of (also) accountability, a feature
which does not appear in compliance with the clarity requirements prescribed by
the Basel Committee.
Identifying which is the liable authority (e.g. for damages towards supervised
entities) is not straightforward also in proceedings characterized by the cooperation
between the ECB and national authorities. It could however be argued that where
the first is requesting the (compulsory) assistance of the NCAs ex Article 6(3) SSM
R national supervisors have no choice but to assist the ECB, so it is the latter which
shall be held responsible for the whole supervisory activity.40 The excessive reliance
of the SSM on national resources is also problematic for determining who is the
ultimate responsible for the supervisory decisions adopted. This issue is especially
relevant in daily supervision carried out by Joint Supervisory Teams, which, in the
35
Cf. Interinstitutional Agreement between the European Parliament and the European Central
Bank on the practical modalities of the exercise of democratic accountability and oversight over
the exercise of the tasks conferred on the ECB within the framework of the Single Supervisory
Mechanism, (2013/694/EU), O.J. 2013, L 320/1, based on Article 20(8) SSM R. Cf. also
Masciandaro and Nieto (2014, p. 21 et seq, highlighting also the fundamental role played by the
Court of Justice in reviewing the ECB decisions.
36
Memorandum of Understanding between the Council of the EU and the European Central Bank
on the cooperation on procedures related to the Single Supervisory Mechanism (SSM) of
11.12.2013. https://www.ecb.europa.eu/ecb/legal/pdf/mou_between_eucouncil_ecb.pdf. Accessed
20 July 2018.
37
Cf. Recital (82) SSM R. OLAF’s competence over the ECB has been affirmed by the ECJ in the
notorious Commission v. European Central Bank, Case C-11/00, 10.07.2003, ECLI:EU:C:2003:395.
On the issue see Elderson and Weenink (2003), pp. 273–301, contra see Zilioli and Selmayr
(2001), p. 213. See above Sect. 2.3.4.
38
Affirming the overall compliance of the SSM legal framework with the principle of accountabil-
ity is Ter Kuile et al. (2015), pp. 187–188, according to “It is submitted that, in establishing bank-
ing supervision at EU level and in constructing this new task of the ECB, the legislature has duly
paid respect to the requirement of accountability”. On the same line, but more cautious, Wolfers
and Voland (2014), pp. 1488–1489.
39
Cf. Article 40 ESAs Regulation.
40
On the point, see Ter Kuile et al. (2015), p. 185. Cf. Sect. 4.4. And anyway, the ECB maintains
responsibility for the overall performances of banking supervision with regard to the tasks assigned
to it by the SSM Regulations.
words of the 2016 Special Report of the European Court of Auditors, are “heavily”
composed by “staff appointed by national authorities. Thus, despite its overall
responsibility, the ECB has insufficient control over the composition and skills of
supervision and inspection team”.41
Second, as anticipated, the SSM is part of the European Central Bank, which (in
this being similar to the Federal Reserve) is now responsible both for banking
supervision and the monetary policy in the Eurozone.
According to the SSM Regulations, the SSM shall act independently from the
ECB monetary tasks, but again, the only decision-making body for both areas is the
Governing Council (due to the lack of amendments to the Treaty).42
Even if the Mediation Panel has been established precisely to reduce potential
conflicts between the two areas, several are the critical issues which might affect the
day-by-day independent management of banking supervision. As again underlined
by the European Court of Auditors, in fact, “within the ECB the SSM Supervisory
Board does not exercise control over the supervisory budget or human resources.
This raises concerns about the independence of the two areas of the ECB’s work, as
does the fact that some ECB departments provide services to both functions without
clear rules and reporting lines that would minimise possible conflicts of objectives”.43
When it comes to banking regulators, however, the hotbed of conflict of
interests—which had been proved substantial in increasing the tragic consequences
of the 2006–2008 financial crisis both in the EU and in the US, showing serious
concerns for the independence of financial supervisors—regards the relation with
the relevant industry.
For instance, US credit rating agencies helped build an active market for securi-
ties related to home loans, and continued to do so despite signs of a deteriorating
mortgage market, providing top rating (AAA) for most of those financial products.
Unsurprisingly then, a vast majority of RMBS and CDO securities with AAA rat-
ings incurred substantial losses and was downgraded to junk securities starting from
mid-2008.44 The severe consequences of such conducts were highly exacerbated by
41
Cf. European Court of Auditors (2016), p. 11. Highlighting the need to face SSM issues of demo-
cratic legitimacy, transparency and accountability, also Antoniazzi (2015), pp. 318–369.
42
Cf. Sect. 5.2 for the Fed. Res., and Sect. 4.4 for the legal basis of the SSM in the TFEU. On the
issue of the ECB multiple functions, and of the consequences in terms of the supervisor’s liability,
see D’Ambrosio (2015), especially p. 124 et seq.; D’Ambrosio (2016), p. 299 et seq.; also with
respect to the NCAs Andenæs (2015), pp. 3–6.
43
Cf. European Court of Auditors (2016), Executive Summary No. VII and VIII, and table at p. 31.
Internal audit, IT resources and (the high-management of) the legal service are some of these
shared service.
44
“Mortgage-backed securities (MBS) are debt obligations that represent claims to the cash flows
from pools of mortgage loans, most commonly on residential property” (https://www.sec.gov/fast-
answers/answersmortgagesecuritieshtm.html). They might result especially risky if interest rate on
home loans decline, causing homeowners to refinance their mortgages and deprive the holder of
the security from future interest payments. Collateralized Debt Obligation (CDO) are instead
pooled assets—such as mortgages, bonds and loans (cf. https://www.nasdaq.com/investing/
glossary/c/collateral-trust-bonds) that serve as collateral for the CDO—that their level of risk var-
ies substantially, depending on their priority in the event of default.
the fact that, since the AAA score generally implies a less than 1% probability of
incurring defaults, these are also the only investments allowed to certain entities
with high public relevance, like pension funds, and insurance companies.
The causes of these gross inaccuracies in rating have been carefully analysed in
the years following the financial collapse. The most significant was identified pre-
cisely in the “inherent conflict of interest arising from the system used to pay for
credit ratings. Credit rating agencies were paid by the Wall Street firms that sought
their ratings and profited from the financial products being rated. The rating compa-
nies were dependent upon those Wall Street firms to bring them business and were
vulnerable to threats that the firms would take their business elsewhere if they did
not get the ratings they wanted.
Rating standards weakened as each credit rating agency competed to provide the
most favourable rating to win business and greater market share. The result was a
race to the bottom”.45
Regardless of these considerations, however, in the US, no significant structural
changes have been implemented by the 2010 Dodd-Frank Act to avoid similar phe-
nomena to occur again in the future.46 At theoretical level, the activity of credit rat-
ing agencies seems to be institutionally more controlled in Europe, where it falls
under the specific jurisdiction of ESMA47—even though the latter does not extend
its jurisdiction on rating agencies established abroad, but with influence of the
European financial market such as those placed in the US.
With specific regard to the banking industry, however, an extremely critical issue
for the independence of supervisors is the relation between their decision-making
bodies and credit institutions. Indeed, the duty of banking supervisors to perform
their tasks independently from the supervised entities, stands at the very core of the
concept of effective supervision both in the EU and in the US (distinguishing it from
self-regulation) Nonetheless, the lack of effective provisions to avoid conflict of
interests between supervisors and credit institutions was revealed as one of the main
causes of the 2006–2008 financial crisis.48
45
“Additional factors responsible for the inaccurate ratings include rating models that failed to
include relevant mortgage performance data, unclear and subjective criteria used to produce rat-
ings, a failure to apply updated rating models to existing rated transactions, and a failure to provide
adequate staffing to perform rating and surveillance services, despite record revenues. Compounding
these problems were federal regulations that required the purchase of investment grade securities
by banks and others, thereby creating pressure on the credit rating agencies to issue investment
grade ratings. Still another factor were the […] (SEC) regulations which required use of credit rat-
ings by Nationally Recognized Statistical Rating Organizations (NRSRO) for various purposes
but, until recently, resulted in only three NRSROs, thereby limiting competition”, cf. U.S. Senate
Permanent Subcommittee on Investigations (2011), p. 244 et seq. On the role played by credit rat-
ing agencies during the crisis, see also Black (2012), p. 1049 et seq.
46
Cf. Sect. 5.4.
47
For the role of ESMA in the European financial market, see Sect. 4.2. For technical standards in
force, see: https://www.esma.europa.eu/convergence/guidelines-and-technical-standards.
Accessed 20 July 2018.
48
While provisions on the avoidance of conflict of interest are rather common at staff level, cf.
Barth et al. (2004), pp. 43–45.
Several are the structural and contingent reasons that led to this result; among the
first, especially problematic is the way supervisors’ funding systems have been set
up.
The Core Principles do not provide clear indications on this profile, to which
usually relatively little attention is paid by the public opinion as well as by academ-
ics, so that supranational standards establishing how banking supervisors should be
funded, ensuring at the same time their independence, are currently lacking, and
models differ from authority to authority. In most of the regulators here examined,
for instance, incomes derive from periodical fees paid by the supervised entities.49
While this model does not automatically cause problems in all legal contexts,
criticisms has been raised under various perspectives. On one side, it has been high-
lighted that it may put at risk the efficiency of supervisors «when the banks are
under strain (prociclicality)».
The use of such model in the eurozone, where no harmonization of funding
schemes has been established, may also increase discrepancies in funding fee struc-
tures and impair effective coordination with national supervisors.50 Lastly, private
premiums have tangibly proved critical in backgrounds characterized by the con-
centration of financial power in the hands of relatively few big financial groups. The
already-mentioned short sales realized by Goldman Sachs in 2006 are perhaps
quintessential examples of this phenomenon, but they are far from representing an
isolated case.51 Underlying conflicts of interest have actually been recognized as one
of the main reasons for a “culture of deference to bank management”, and a light-
handed approach by supervisors that—(at least) in the period preceding the last
financial crisis—did not efficiently oppose (or even explicitly authorized) an uncon-
trolled growth of high-risk operations, and financial institutions’ speculations to the
detriment of the investors and the market.
For instance, in the less renowned case of Washington Mutual Bank (WaMu), the
heads of the former Office for the Thrift Supervision (OTS)52 did not take any sig-
nificant action against the risks undertaken by the bank in over a 5-year period,
regardless of the frequent, numerous and substantial red flags pointed out by its own
examiners.53 Among some minor collateral structural deficiencies, post-crisis inqui-
ries found out that the main cause for the OTS lax and obstructive conduct towards
WaMu relied on its dependence on a system of “semi-annual fees assessed on the
institutions it regulated, with the fee amount based on the size, condition, and com-
plexity of each institution’s portfolio. Washington Mutual was the largest thrift
overseen by OTS and, from 2003 to 2008, paid at least $30 million in fees annually
to the agency, which comprised 12–15% of all OTS revenue”.54 As summarized by
49
Cf. Sects. 4.2 and 4.4, and Chap. 5.
50
Masciandaro and Nieto (2014, p. 20.
51
Cf. supra, Sect. 2.2.
52
Cf. Sect. 5.4.
53
Cf. U.S. Senate Permanent Subcommittee on Investigations (2011), p. 162.
54
Cf. U.S. Senate Permanent Subcommittee on Investigations (2011), pp. 164 and 230 et seq.:
“When asked why OTS senior officials were not tougher on Washington Mutual Bank, several
the WaMu’s former Chief Risk Officer, “Washington Mutual made up a substantial
portion of the assets of the OTS, and one wonders if the continuation of the agency
would have existed had Washington Mutual failed”.55
The OTS “unusually deferential” performances over the mortgage market in the
years preceding the burst of the crisis, authoritatively labelled as “a regulatory
approach with disastrous results”,56 and ““by far the softest” oversight of any fed-
eral bank regulator”57 eventually led to the abolition of the Office. The 2010 reform
however (even without taking into account the potential counter-effects of the 2017
Financial CHIOICE Act), left open the very core problem related to the OTS disas-
trous performances, as the Office was not the only federal banking regulator to be in
a high-risk position of conflict of interests with its own controlled subjects.58
For instance, also the Comptroller of the Currency (OCC)’s funding structure
relies on fees paid by its regulated entities, and appears to share a “self-restrictive”
policy quite similar to that applied by the OTS.59 Interestingly, it was precisely the
OCC the regulator selected to take over OTS’ tasks.
An equally careful approach needs to be adopted also when looking at the EU
context, where not only poor and fragmented regulatory supervision, but also hid-
den conflicts of interest have been at the basis of recent notorious financial scandals,
such as Libor/Euribor and Fortis Bank’s.60
In particular, it would be wise not to ease down on the idea that after the last
financial crisis all structural deficiencies have been effectively and promptly
reformed with the Banking Union project: Even in the new financial supervisory
system, in fact, conflicts of interest maintain a high potential in affecting the effi-
ciency of banking regulators.61
This being the context, the adoption for the Single Supervisory Mechanism and
for the Single Resolution Fund of the same premium fee system used by the OTS
persons brought up the issue of fees—that WaMu supplied $30 million or nearly 15% of the fees
per year that paid for OTS’ operating expenses”.
55
James Vanasek testimony before the U.S. Senate, cf. U.S. Senate Permanent Subcommittee on
Investigations (2010a), p. 10.
56
Cf. U.S. Senate Permanent Subcommittee on Investigations (2011), p. 162 et seq. See also
U.S. Senate Permanent Subcommittee on Investigations (2010b).
57
U.S. Senate Permanent Subcommittee on Investigations (2011), p. 209 et seq.: “It seemed as if
the regulator was prepared to allow the bank to work through its problems and had a higher degree
of tolerance that I had… seen with the other two regulators.… I would say that the OTS did believe
in self- regulation […]”.
58
Cf. Sect. 5.4.
59
“Because banking is essentially a business of managing risk, supervision is centred on the accu-
rate evaluation and management of risks. The OCC believes that bankers, and not regulators,
should manage their banks”, in OCC (2008), p. 17. For OCC structure, see also Sect. 5.3.
60
For Libor/Euribor scandals, cf. above Sect. 2.2. Analysing the Fortis Bank case, see Vervaele
(2014), p. 61 et seq., more recently, also on Libor/Euribor and BNP Paribas (the latter concerning
however an embargo violation), Vervaele (2017), pp. 170–174.
61
See, e.g., ECB Monthly Bulletin (2012), p. 95.
and the OCC, apparently without any serious publicly disclosed reservation, may be
considered as rather worrisome in light of the American experience.62
Completeness demands to recall, on the other side, that in the US also the SEC,
the only regulator exclusively paid by public funding, had not proven particularly
efficient before the burst of the crisis—as shown by its notorious failure to intercept
the faults in J.P. Morgan’s anti-money laundering structure, which allowed Bernard
Madoff’s fraudulent operations to be carried out for almost 20 years beginning in
the mid-1980s.63
Part of these serious deficiencies may be ascribed to the funding model of the
Commission, that repeatedly suffered from drastic cuts in its budget, which cer-
tainly and substantially affected its action—raising also some doubts about the will-
ingness of the political parties then holding the majority in the Congress to really
ensure a proper functioning of the SEC.64
In light of the above, mixed funding models, which combine both public invest-
ments and premium fees from supervised entities, like those adopted in the US by
the Federal Reserve, and in the EU by the three European Supervisory Authorities,
appear to be a more balanced option in a hedging bets perspective.65
At least in theory, in fact, this paradigm seems to avoid excessively burdening
public finances (de facto, linking the efficiency of banking supervisors exclusively
to the political will of the government in charge) and, at the same time, make super-
62
Cf. Recitals (77)-(78) SSM R: “The costs of supervision should be borne by the entities subject
to it. Therefore, the exercise of supervisory tasks by the ECB should be financed by annual fees
charged to credit institutions established in the participating Member States”, and Recital (19)
Regulation 806/2014, “The Fund should be financed by bank contributions raised at national level
and should be pooled at Union level in accordance with an intergovernmental agreement on the
transfer and progressive mutualisation of those contributions”.
63
The case did not end up with a decision on the criminal liability of the financial institution thanks
to an out-of-court agreement before the competent supervisory authority, where J.P. Morgan con-
sented to a settlement of overall $ 2.05 billion for wilful violations of the Bank Security Act, see
U.S. Department of the Treasury (2014) and FinCEN (2014). On the structure and powers of the
SEC, see also Sect. 5.3. Highlighting the SEC’s failure during the crisis also Moloney (2012b), p.
125 et seq.
64
The extent of the budget cuts is clearly exemplified by the Senate interview of Lynn E. Turner,
former Chief accountant of the SEC, which took place on 7.10.2008, reported in Ferguson (2010),
p. 27: “Rep. Peter Welch: A hundred and forty six people were cut from the enforcement division
of the e-, SEC; is that what you also testified to?
Lynn E. Turner: Yes. Yeah, I, I think there has been a, a, a systematic gutting, or whatever you
want to call it, of the agency and its capability, through cutting back of staff. […]
Rep. Peter Welch: The SEC Office of, uh, Risk Management was reduced to a staff, did you say,
of one?
Lynn E. Turner: Yeah. When that gentleman would go home at night, he could turn the lights
out”.
On this topic, see also Stewart (2011).
65
Cf. however Ferran (2012b), p. 78, highlighting the risk of undue influence on ESAs by the EU
Commission.
visors less likely to be unduly influenced by industry or governmental interests, in

line with the independence requirements expressed by Core Principle 2.66
6.1.2 D
issemination of Collected Information and Investigative
Overlapping in the US Regulatory Framework
According to Basel Core Principle 3, both at domestic and at the international level,
banking regulators shall possess the capacity of operating within an “effective net-
work of cooperation” established through “laws, regulations or other arrangements”,
while taking in due account the need to protect confidential information.67 May be
shared within such networks, but “only for bank-specific or system-wide supervi-
sory purposes and will be treated as confidential by the receiving party”.68
Confidential information, moreover, shall not be shared with third parties, unless
the request comes from a court order or mandate from a legislative body. If a super-
visor is legally compelled to disclose confidential information received from another
regulator, it shall promptly notify the latter indicating the information to be dis-
closed and the circumstances surrounding the release. In case consent to passing on
confidential information is not given, the requested supervisor “uses all reasonable
means to resist such a demand or protect the confidentiality of the information”.69
Essential Criteria to Core Principle 3 explicitly requires that, where needed,
there shall be “evidence” that cooperation agreements, both formal or informal,
“work in practice”.70 Such cooperation agreements shall be in place not only with
other banking regulators, but also with all authorities “with responsibility for the
safety and soundness of […] other financial institutions and/or the stability of the
financial system”.71
Against this background, supervisory systems characterized by a high number of
regulators—all equipped with investigative and sanctioning powers, and granted
with jurisdictions not clearly separated one from the other—may pose substantive
issues of (non-) compliance with the parameters established by the Basel
Committee.72
At first glance, Core Principle 3 appears to set standards more critical for the US
supervisory system than for the European one.
66
Concluding on an overall sufficient level of independence and accountability for the SSM,
Masciandro et al. (2014), p. 24 et seq.
67
Cf. also Core Principle 3 – Essential Criterion 3.
68
Cf. Core Principle 3 – Essential Criteria 3-4.
69
Cf. Core Principle 3 – Essential Criterion 4.
70
Cf. Core Principle 3 – Essential Criteria 1-2.
71
Cf. Core Principle 3 – Essential Criterion 1.
72
For an overview on main critical issues in multi-disciplinary (administrative and criminal law)
cooperation in the US and in the EU, see above Sect. 2.3.4.
Indeed, the regulatory model overseas presents not only a distinction—and

sometimes a duplication—between local and federal level, but also an organization
that distributes competences among different agencies73 according to the type of the
activities exercised by the controlled entity (deposit funds, bank holding companies,
credit unions, commercial and investment banks, and so on), perhaps without taking
in due account that, following the deregulatory reforms of the 1980s and 1990s,
several concerns may be raised as to whether this criterion is still capable to ade-
quately classify financial institutions.
At the academic level, the multiplicity of supervisory authorities has been differ-
ently interpreted, giving rise to opposite orientations. Some scholars consider the
overlapping of regulatory agencies as a detrimental fragmentation that is weakening
the public oversight on matters that require a sharper and coordinated response; oth-
ers believe it to be a fruitful abundance, necessary and needing to be further devel-
oped to encourage virtuous competition and make regulators more responsive to the
proliferation of financial malpractices and crimes.74
While in theory both arguments may be sustained, in practice the option in favour
of competition among regulators may have lost some of its charm in the last decade.
The issue is again well showed by the OTS misfunctioning example.
As discovered in the course of the Senate Committee investigations, in fact, the
policy of this Office was not limited to a guilty indulgence towards its controlled
entities: It but resulted also in such a positive obstructive behaviour against the fel-
low “competitors” (FDIC examiners), with whom the OTS was sharing its oversight
task, that the relationship between the two agencies has been formally targeted as a
“turf war” ended with a “hasty seizure and sale”.75
73
Cf. Wymeersch (2007), p. 53; for an overview of all main federal US financial regulators, cf.
Chap. 5.
74
In favour of a reduction of the number of regulators see, e.g., U.S. Senate Permanent Subcommittee
on Investigations (2011), p. 36; Myers (2011); on the opposite view a consistent part of the US
scholars: Romano (2001), Kane (1984) and Kupiec and White (1996); also to avoid that a single
regulator monopoly may be affected by excessive power, cf. Llewellyn (1999) and Briault (1999).
75
Cf. U.S. Senate Permanent Subcommittee on Investigations (2011), pp. 177 and 198 et seq.:
“Beginning in 2006, OTS management expressed increasing reluctance to allow FDIC examiners
to participate in WaMu […] OTS officials employed a variety of tactics to limit the FDIC oversight
of the bank, including restricting its physical access to office space at the bank, its participation in
bank examinations, and its access to loan files. In July 2008, tensions between the FDIC and OTS
flared after the FDIC sent a letter to OTS urging it to take additional enforcement action […] OTS
not only rejected that advice, but also expressed the hope that the FDIC would refrain from future
unexpected letter exchanges. In a separate email, Scott Polakoff, a senior OTS official called the
FDIC letter inappropriate and disingenuous […] OTS even went so far as to limit the FDIC’s
physical access to office space, as well as to needed information, at WaMu’s new headquarters.
[…] OTS also restricted the FDIC’s access to an important database that all examiners used to
review WaMu documents […] from July until November 2006, a period of about four months, the
FDIC examiners were denied access to both office space on the bank’s premises and the examiner’s
library. At the same time OTS was withholding office space and database access from the FDIC
examination team, it also, for the first time, refused an FDIC request to participate in an OTS
examination of WaMu”; see also p. 208: “The WaMu case history demonstrates how important it
is for our federal regulators to view each other as partners rather than adversaries in the effort to
ensure the safety and soundness of U.S. financial institutions”.
The picture under this profile was not really significantly improved by the fact
that several Memoranda of Understanding to enforce the efficiency of the system
and regulate the dissemination of information among supervisory agencies, have
been agreed upon among US banking regulators. These Memoranda play a particu-
larly relevant role in financial investigations, for instance requiring that, when rea-
sonable suspicions of a crime are raised, all related information may freely circulate
among administrative and criminal agencies, without any possibility to oppose
effective restraints, for instance related to privacy protection.76
Most of financial institutions active in the market of subprime mortgages and
their derivate financial products in the early 2000s, such as banks (e.g Bank of
America, Citigroup, J.P. Morgan-Chase, Wells Fargo), thrifts (for instance
Countrywide Financial Corporation, IndyMac Bank, Washington Mutual Bank) and
security firms (like Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch,
Morgan Stanley, but also asset management arms of large banks, as Citigroup,
Deutsche Bank, and again J.P. Morgan-Chase), were actually operating under the
constant oversight of federal supervisory regulators while engaging in increasingly
high risk financial operations, and potentially criminal conducts, that led to the burst
of the financial crisis.
As reported by the US Senate, in fact, “in the area of high risk mortgage lending,
for example, bank regulators allowed banks to issue high risk mortgages as long as
it was profitable and the banks quickly sold the high risk loans to get them off their
books.
Securities regulators allowed investment banks to underwrite, buy, and sell mort-
gage backed securities relying on high risk mortgages, as long as the securities
received high ratings from the credit rating agencies and so were deemed “safe”
investments. No regulatory agency focused on what would happen when poor qual-
ity mortgages were allowed to saturate U.S. financial markets and contaminate
RMBS and CDO securities with high-risk loans.
In addition, none of the regulators focused on the impact derivatives like credit
default swaps might have in exacerbating risk exposures, since they were barred by
federal law from regulating or even gathering data about these financial
instruments”.77
The situation in the US does seem significantly improved in the aftermath of the
post-crisis reforms. Similarly to other critical profiles mentioned above, in fact, also
the criticism arising from agencies overlapping was not satisfactorily tackled in the
2010 Dodd-Frank Act, which on the point appears quite inconclusive.
Indeed, whilst the Act, from one side, abolished an ineffective regulator as the
OTS, on the other side, it also increased the number of competent federal supervi-
sory agencies, potentially boosting rather than reducing, the overlapping
phenomenon.78
76
Cf. Lambrakopoulos et al. (2017), p. 11.
77
All references may be checked in the result of the investigations carried on by U.S. Senate
Permanent Subcommittee on Investigations (2011), p. 41.
78
Cf. Sect. 5.4.
6.1.3 D
issemination of Collected Information
Within the Single Supervisory Mechanism: Overview
of Main Critical Issues
Against the complexity of the US regulatory model, the European Union supervi-
sory system resulting from the 2011–2015 reforms and based on the Single
Supervisory Mechanism may appear quite straightforward, finally seeking for a
more effective centralized oversight, and certainly achieving an improvement if
compared to the previous highly fragmented national supervisory practice and regu-
lations.79 Nonetheless, also within the Banking Union, several are the lacunas and
discrepancies, which are raising the very same critical questions described in the US
supervisory model.
First, while the European System of Financial Supervision (ESFS) and the whole
apparatus for bank crises management (SRM, SRF, EDIS and DGS80) apply to all
28 EU Member States, the Single Supervisory Mechanism is in principle opera-
tional only in 19 States (the Eurozone),81 and thus has to cooperate with both the
ESFS and national supervisory authorities for what exceeds its direct competences
(for instance, if on-site inspections need to be carried out on a branch of a super-
vised credit institution located outside the participating Member States).
Moreover, even within its limited jurisdiction, the SSM is not providing for a
form of supervision completely alternative to banking national regulators. The latter
indeed retain relevant competences towards all less significant institutions (which
operate in the same financial market of significant ones), in the exercise of the (indi-
rect) sanctioning powers ex Article 18(5) SSM R, and in fundamental areas such as
AML/CFT and consumer protection policies (not to mention in the relationships
with domestic judicial authorities).
The ECB has therefore to heavily rely on the cooperation with national supervi-
sors; good relationships with the NCAs are necessary also in the aforementioned
case of Article 9(1) SSM R, where the SSM sends binding instructions to national
authorities.82
In such a composite framework, it is then understandable why a significant part
of the SSM Regulations aims at reinforcing forms of cooperation among and
towards national authorities, and also why, even if the Banking Union system inau-
gurated a model grounded on the action of the Single Supervisory and Resolution
Mechanisms, the (pre-existing) European Banking Authority maintains a relevant
role in facilitating inter-agency relations.83
79
Cf. above Chap. 4; cf. Shapiro (1997); Brodowski (2011).
80
Cf. above Sect. 4.1.
81
Besides for the possibility for States externals to the Eurozone to participate in the ECB central-
ized supervision, cf. Article 7 SSM R. Cf. above, Sect. 4.2.
82
Cf. Sect. 4.4.1.
83
Cf. Chapter II SSM R, and from Part V on of the SSM FR. On the role of EBA in the Banking
Union, see also Cappiello (2015); Gortsos (2016), p. 277 et seq. Cf. also Sect. 4.2.
Against this background, compliance with Core Principle 3 requiring effective

cooperation networks represents a main challenge for banking regulators in Europe
too, and especially for the Single Supervisory Mechanism.
Indeed, critical issues on cooperation for this authority do not exclusively derive
from the BCBS Core Principles, but arise also within the same scope and mandate
of the SSM, and in particular from the provisions in the SSM Regulations concern-
ing information sharing.
A thorough analysis of these problems—mostly due to the uncertainties related
in EU law to the protection of professional secrecy, and the recognition of privileges
and immunities to the ECB members of staff, still in lack of specific case-law on the
matter84—exceeds the remit of this work.85 Even from a necessarily synthetic over-
view, however, it can be noticed how the complex relationships surrounding the
activity of the SSM raise serious questions as to whether the cooperation network in
which the Mechanism operates may be considered “effective”.86
Indeed, according to Article 20 SSM FR, the ECB and the NCAs shall cooperate
in good faith, and be subject to an obligation to share information among each other
on an on-going basis.87
The exchange of confidential information is regulated by Articles 53–62 CRD
IV/V, according to which the latter could be used only for a limited list of purposes
related to supervisory activities.88 In general, however, the obligation to provide
information to, or to exchange information within the SSM, prevails over profes-
sional secrecy. In case of third parties, protection of confidentiality follows the rules
established by Articles 431 and 432 CRR, which allow banking supervisors to par-
tially omit the disclosure of such information to the public.
Dissemination of confidential information with supervisory authorities or with
other authorities or bodies located in third countries is instead regulated by specific
bilateral cooperation agreements (Memoranda of Understanding—MOUs) with the
SSM or the NCAs.89
84
Even though cases already occurred in practice. The reference goes to the seizure of ECB docu-
ments and computer hardware, carried out by Slovenian authorities on July 6th 2016, as part of a
national investigation against central bank officials, while the ECB had not given prior authoriza-
tion for it. For that, in May 2017 the Commission has started an infringement procedure against
Slovenia, cf. https://www.reuters.com/article/us-eu-slovenia-ecb/eu-executive-acts-against-slove-
nia-over-ecb-data-incident-idUSKBN18117A. Accessed 20 July 2018.
85
The issue of professional secrecy however is dealt with, in the analysis of the privilege against
self-incrimination in SSM supervisory proceedings applying punitive administrative sanctions cf
Sects. 6.3.5 and 6.3.6. Both the issues of professional secrecy and ECB staff immunity have been
raised by Allegrezza and Rodopoulos (2017). On this issue, see also Athanassiou (2011);
D’Ambrosio (2015); Arons (2015), p. 469 et seq. For the role of confidentiality in the exchange of
information between FIUs, see above, Sect. 3.3.
86
See, e.g., Chiu (2016), p. 67 et seq.; Kern (2016), p. 253 et seq.
87
Cf. also Article 21 SSM R.
88
Cf. Article 54 CRD IV.
89
Cf. Article 55 CRD IV/V and Article 3(6) SSM R. The ECB has signed MOUs with several third-
parties, such as Banco Central do Brasil, or the Central Bank of the Republic of Turkey.
Such Memoranda, to be reviewed on a regular basis, shall assure that disclosure

of confidential information may occur only subject to a guarantee that professional
secrecy requirements in that third country are at least equivalent to those established
by CRD IV/V. In any case, information may be shared only to perform the supervi-
sory tasks of those authorities or bodies. Where the information originates in another
Member State, the dissemination also requires the express agreement of the authori-
ties which have originally disclosed it.90
Lastly, following Article 57 CRD IV/V, in case of breaches of company law, and
to strengthen the stability and integrity of the financial system, relevant information
may be shared also with authorities or bodies responsible for the detection and
investigation of such breaches.
In particular, according to Article 71 CRD IV/V, banking supervisors shall estab-
lish “effective and reliable mechanisms to encourage reporting of potential or actual
breaches” to the competent authorities.
Under this profile, if, carrying out its tasks under the SSM Regulation, the ECB
has reason to suspect that a criminal offence may have been committed, the latter is
subject to internal and external reporting obligations. At the internal level (i.e.
within the EU institutional framework), the ECB has to report suspicions of illegal
activity to the European Anti-fraud Office (OLAF), whose competence extends also
on the European Central Bank.91
Such reporting duty has been detailed in ECB Decision 2016/456 of 4 March
2016, which at Article 3 requires the ECB to report to OLAF, without delay, any
information which gives rise to a suspicion about the existence of possible cases of
fraud, corruption or any other illegal activity affecting the Union’s financial inter-
ests.92 Normally, any member of the ECB staff who becomes aware of the suspi-
cions (including temporary personnel, or members of staff of national competent
authorities who are part of joint supervisory teams and on-site inspection teams, in
matters related to their work for the ECB) shall hierarchically made such report to
either the Director Internal Audit, the senior manager in charge, or the member of
the Executive Board who is primarily responsible for his/her business area. The
latter persons shall then “without delay transmit the information to the Director-
General Secretariat”, that shall, again without delay, transmit it to OLAF.93
In case there are “justified reasons” to consider that in practice the hierarchical
referral mechanism would not work properly, and there is “concrete information
supporting the possible existence” of illegal activities internal to the ECB, the report
may be done directly to OLAF, skipping internal controls.94
90
Cf. Article 55 CRD IV/V.
91
Cf. note 29.
92
Decision (EU) 2016/456 of the European Central Bank of 4.03.2016 concerning the terms and
conditions for European Anti-Fraud Office investigations of the European Central Bank, in relation
to the prevention of fraud, corruption and any other illegal activities affecting the financial interests
of the Union (ECB/2016/3).
93
Cf. Decision (EU) 2016/456, Article 3(1) and (3).
94
Cf. Decision (EU) 2016/456, Article 3(4).
Deviations from this standard procedure may be found only in exceptional cases,
(but rather broad) where the sensitivity of the information “could seriously under-
mine the ECB’s functioning”, such as when the information concerns: Supervisory
tasks; the stability of the financial system or individual credit institutions; monetary
policy decisions; operations related to the management of foreign reserves and
interventions on foreign exchange markets; or the euro banknotes’ security features
and technical specifications.95 In these cases, the decision to exchange relevant
information with OLAF shall be taken by the Executive Board.
On the other side, on an external, or vertical dimension (ECB-Member States), if
reason to suspect that a criminal offence may have been committed emerges, the
SSM is subject only to an indirect duty to refer the matter to judicial authorities.
According to the already mentioned Article 136 SSM FR,96 the SSM is not sub-
ject to direct referral duties before to national judicial authorities, but it “shall”
request the competent NCA to do so, in accordance with national law. In particular,
from the wording of this provision, it seems that the ECB is under the obligation to
make a referral to the NCA (“shall”), while whether the latter enjoys discretion or
not in reporting suspicious information to judicial authorities remains a matter sub-
ject to the rules in the applicable national regulation.97
The opposite case in which disclosure of information is requested by national
judicial investigating authorities, is instead dealt with by ECB Decision 2016/1162
of 30 June 2016 on disclosure of confidential information in the context of criminal
investigations.98 According to it, ECB, NCAs and judicial authorities shall act in
respect of the general principles of sincere cooperation and good faith, which repre-
sent a corner stone of the EU legal framework.99
Against this background, Article 2 of the Decision specifies that, when requests
concerning supervisory or other ECB tasks are received by the ECB, the response
shall be provided by the competent NCA on behalf of the ECB.
Information may be disclosed if that is due to an expressed obligation under
Union or national law, or if that is admissible under the relevant legal framework
and “there are no overriding reasons for refusing” to do so, such as “the need to
safeguard the interests of the Union or to avoid any interference with the function-
ing and independence of the ECB, in particular by jeopardising the accomplishment
of its tasks”.
95
Cf. Decision (EU) 2016/456, Article 4, and Recital (9).
96
Cf. Sect. 4.4.3; and below, Sect. 6.3.5–6.3.6.
97
Comparative analysis shows that in a majority of Eurozone countries, NCAs are under an obliga-
tion to report suspicions of a crime emerged during their supervisory activity to the competent
judicial authorities (AT, BE, DE, FR, IE, LU, and de facto IT), while in a minority of countries
NCAs retain margin of discretion in whether to inform the judicial authorities (EL, NL). Cf.
Lasagni and Rodopoulos (2019).
98
Decision (EU) 2016/1162 of the European Central Bank of 30.06.2016 on disclosure of confi-
dential information in the context of criminal investigations (ECB/2016/19).
99
Cf. Decision (EU) 2016/1162, Recitals (3) and (8).
In this regard, it has been underlined that reporting obligations deriving from
Decision 2016/1162 appear inconsistent with the ECB reporting obligations deriv-
ing from Article 9(1) SSM R, according to which the SSM “shall have all the pow-
ers and obligations, which competent and designated authorities shall have under
the relevant Union law, unless otherwise provided for by this Regulation”.100 Indeed,
while the SSM Regulation seems to equalize the position of the SSM with that of
NCAs (including a duty to report suspicions of crime to judicial authorities, where
so provided at national level), Decision 2016/1162 leaves much more discretion to
the ECB. This discretion, moreover, does not find its legal bases in the SSM
Regulation, requested under Article 9 SSM R, but by a subsequent ECB Decision.
Both in this case, and when reporting duties apply at the internal level (OLAF),
critical issues arise also with regard to the immunity recognized to the ECB/SSM
members of staff. The scope of such immunity shall be measured with regard to EU
law101 as interpreted by the Court of Justice, and (especially until a solid SSM-
related case-law will be developed by the CJEU) taking into account the jurispru-
dence provided for by the ECtHR and national courts on the matter.102
At present, useful indication about the SSM scope of the discretion in refusing
the production of documents to judicial authorities may be found in the 1990 CJEU
Order in Zwartveld, concerning the request of a Dutch prosecutor to disclose both
inspection results gathered by the Commission in the field of fish market, and the
identity of the inspectors.103
In that case, the Court recognized to the Commission the discretion to refuse
documents production “to a national judicial authority on legitimate grounds con-
nected with the protection of the rights of third parties or where the disclosure of
this information would be capable of interfering with the functioning and indepen-
dence of the Community, in particular by jeopardizing the accomplishment of the
100
Cf. Allegrezza and Rodopoulos (2017), p. 246, according to which “it is noteworthy that no
limitations of liability or immunities of the ECB and the SRB are provided for by the texts, despite
similar provisions that are found in national legal systems with regard to national supervisory
authorities. However, according to opinions expressed in the doctrine, limitations can be justified,
either on the legal basis of ‘the general principles common to the laws of the Member States’, or
the criterion of ‘sufficiently serious violation’, as this has been formed by the CJEU case law”.
101
Including Articles 274 and 343 TFEU; Article 39 of the ECB Statute (Protocol no. 4 to the
TFEU); Protocol No. 7 to the TFEU On the Privileges and Immunities of The European Union;
Regulation (EU, Euratom) No 883/2013 (OLAF Regulation); and the Headquarters Agreement
between the Government of the Federal Republic of Germany and the European Central Bank
concerning the seat of the European Central Bank, of 18.09.1998 [SEC/GovC/4/98/07].
102
See, e.g., ECtHR, Waite and Kennedy v. Germany, 18.02.1999, Application No. 26083/94, § 63;
and Greenpeace Nederland and Procurator General at the Supreme Court of the Netherlands
(intervening) v Euratom, Judgment on Appeal in Cassation, Decision No LJN: BA9173, RvdW
(2007) No 992, NJ 2008, 147, ILDC 838 (NL 2007), 13.11.2007, (Netherlands Supreme Court),
where the immunity was refused on the basis that functional immunity test requires it to assess
“whether or not the acts in question are immediately connected to the tasks entrusted to the
organisation”.
103
J.J. Zwartveld and Others, Case C-2/88 Imm., Order of the Court of 6.12.1990,
ECLI:EU:C:1990:440.
tasks entrusted to it”,104 only as long as the Commission was able to provide con-
crete, reasoned and specific evidence of these risks.105
On the other side, according to Decision 2016/1162, when the request is received
by an NCA and when the information required “is material, or that disclosure
thereof has the potential to adversely affect the reputation of the SSM”, the NCA is
under the obligation to seek the ECB advice on whether it is appropriate to comply
with the request, informing it in a timely manner, and “in any event, before provid-
ing a final response” to the judicial authorities.106
Here, it is the position of NCAs that appears particularly critical: In fact, on one
side, the NCA shall presumably follow the advice of the ECB on whether to comply
or not with the request, but on the other side, refusal to provide the information may
be considered as a crime by national legislation.107
A last relevant issue which shall be highlighted with regard to cooperation net-
works in SSM supervisory proceedings concerns the uncertainties about the stan-
dards of admissibility within administrative proceedings for information collected
under criminal procedural rules, and vice versa.108
The first hypothesis results less critical under a strict criminal law perspective,
since guarantees for defendants in criminal investigations are usually higher than
those established in administrative proceedings. This situation has been considered
by the Court of Justice in its 2015 decision WebMindLicence, concerning the use of
information collected through wiretapping, and the seizure of e-mails (this latter
lacking the necessary judicial authorization) during criminal investigations in a tax
administrative proceeding.109
In this case, the Court indicated that not only the proportionality of investigative
measures shall be assessed to determine the legitimacy of limitations to a funda-
mental right enshrined in the Charter (Article 7, in the specific case). Moreover the
same test shall be applied also to assess the “use” of the evidence so obtained at
trial.110
104
Id., § 11.
105
Id., §§ 11-13.
106
Cf. Decision (EU) 2016/1162, Article 3.
107
As it is, for instance, the case of Banca d’Italia, according to Article 7(1)(2) of Legislative
Decree no. 385, of 1.09.1993 (“Testo Unico Bancario”-TUB).
108
For a general framework of critical issues on the matter, see above, Sect. 2.3.4.
109
WebMindLicenses kft v Nemzeti Adó- és Vámhivatal Kiemelt Adó- és Vám Főigazgatóság, Case
C-419/14, 17.12.2015, ECLI:EU:C:2015:832.
110
Id., § 80, as highlighted by Tesoriero (2016), p. 1542 et seq. While the Court affirms this prin-
ciple with regard to transversal cooperation (administrative and criminal trial), it remains open the
question whether the same test shall be applied also within the same (administrative or criminal
proceeding). In case of a positive answer, it should then be necessary to examine separately not
only whether the investigative measure is in itself within the limits of Article 52(1) CFREU, but
also if the admission of that evidence at trial is in compliance with the same parameters. Among
the authors highlighting also the critical issues emerging from the lack of shared standards of
defence rights see, e.g., Gless (2013), p. 90; Klip and Vervaele (2002); Ruggeri (2015), p. 147 et
seq.; Caianiello and Di Pietro (2016); Mangiaracina (2004), p. 2194; Di Federico and Di Chiara
(1994); Traverso (1997); Allegrezza (2008a); Kostoris (2017).
The CJEU concluded that the administrative court receiving such information
“must be able to verify whether the evidence on which that decision is founded has
been obtained and used in breach of the rights guaranteed by EU law and, espe-
cially, by the Charter. That requirement is satisfied if the court hearing an action
challenging the decision […] is empowered to check that the evidence upon which
that decision is founded”.111
The receiving court, therefore, shall proceed with a double proportionality test:
First to verify whether the measures adopted to obtain the information did not go
beyond what is necessary to pursue the objective of general interests protected by
criminal proceeding; and afterwards, to verify whether its admissibility is propor-
tionate with the aim of the administrative proceeding, in the sense that the informa-
tion could not have been obtained by means of investigation that interfere less with
the rights at stake.112
This double-proportionality test, as it has been underlined, may be applied also
in the opposite case, much more critical in terms of fair trial rights protection, that
is when the information is transmitted from an administrative authority, e.g. a bank-
ing supervisor, to judicial ones.113 In this case, in fact, effective dissemination of
information could be impaired by criminal procedure rules on the admission of
evidence, according to which (in principle) information cannot be used in criminal
proceedings if it has been collected at administrative level in violation of “core”
procedural fair trial rights.114
Even besides for any consideration on the substantive nature of certain supervi-
sory sanctions,115 this is therefore a first reason why administrative authorities,
including the ECB in its supervisory capacity, shall take fundamental criminal pro-
111
Id., §§ 86-89.
112
Id., §§ 75 and 82.
113
Cf. Tesoriero (2016), p. 1540.
114
In this sense, while all procedural rights provided for by Articles 6 ECHR and 47-48 CFREU are
fundamental fair trial rights, “core” procedural fair trial rights are considered only those whose
violation is never tolerated by the case-law of the European Courts (for the time being, especially
by the ECtHR—although without that necessarily meaning the application of exclusionary rule,
since the Court in Strasbourg has never recognized automatic exclusions besides for violations of
Article 3 ECHR—on this see below Sect. 6.3.5). Lacking a shared notion of what exactly this
“core” is composed of, in this work this expression is used to refer to those procedural rights which
apply to every proceeding, regardless of its nature (Article 41 CFREU), plus those of Article 6
ECHR (and their correspondents in Articles 47-48 CFREU) that the ECtHR has selected as essen-
tial to be complied with also in case of administrative proceedings with substantive criminal nature
according to the Engel criteria. This definition allows a general identification of the “core” rights,
but critical issues still remain open concerning then the precise identification, within each of these
rights, of the procedural rules that identify the “core” of each of these rights (e.g., in the privilege
against self-incrimination, is it enough to be able to exercise the right, or also being informed of
the possibility to remain silent is indispensable not to violate the “core” of this right?). This highly
critical problem is not solved in general terms in this work, but a proposal of which are the “core”
procedural rights, also in their more detailed application, shall be complied with in the sanctioning
proceedings of the Single Supervisory Mechanism, is carried out below, in Sect. 6.3.
115
Cf. below, Sect. 6.2.
cedural rights into account: Not doing so, could not only prevent the supervisor
from operating within an “effective network of cooperation”, as required by Basel
Core Principle 3. It could also affect the efficiency of information exchange pre-
cisely in the most serious cases, where violations are so severe to require the inter-
vention of judicial authorities.
Lastly, and contrary to the US, in the EU, the relatively recent establishment of a
single supervisor may also present critical issues concerning cooperation under a
rather peculiar point of view.
A short-term perspective, in fact, sees an oversight on major European banking
groups that is no more exercised by NCAs, while the SSM—already operative—is
still struggling on several fronts to get effective. Integrating its internal legal frame-
work to cover all (or at least most) aspects of a complex system of banking supervi-
sion; gathering the adequate resources to perform its tasks (especially in terms of
personnel); trying to establish effective forms of cooperation with the NCAs, that
have to acquire a “secondary” role where they first had exclusive competence, and
establish relations with third countries supervisory authorities (such as the US), and
with the supervised credit institutions themselves (which in some cases challenged
the ECB before the Court of Justice to precisely to avoid its supervision116): These
are all challenges that still engage the ECB after almost five years from the estab-
lishment of the SSM.
Taking into account the necessary time frame to achieve so, the EU, and espe-
cially the Eurozone shall not therefore underestimate the risk of temporary lacunas
or blind spots in banking supervision, to avoid the whole SSM system to be torn to
shreds from its very outset.
6.2 B
anking Supervisory Sanctions in the EU: A New Field
of Criminal Law?
Both in the EU and in the US, banking supervision is a matter clearly regulated
under the label of administrative law.
Supervisory sanctions, therefore, formally have an administrative nature. This
choice finds confirmation also in the Regulations of the Single Supervisory
Mechanism, which entitles the ECB to impose only administrative penalties117).
116
Cf., recently, Landeskreditbank Baden-Württemberg - Förderbank v European Central Bank,
Case T-122/15, 16.05.2017, ECLI:EU:T:2017:337 and also, although on different grounds, Crédit
mutuel Arkéa v European Central Bank, Case T-712/15, 13.12.2017, ECLI:EU:T:2017:900 cur-
rently appealed before the ECJ, see Crédit mutuel Arkéa v ECB, Case C-152/18 P, 20.04.2018; and
Crédit mutuel Arkéa v European Central Bank, Case T-52/16, 13.12.2017, ECLI:EU:T:2017:902,
currently appealed before the ECJ, see Crédit Mutuel Arkéa v ECB, Case C-153/18 P, 23.02.2018.
Interestingly, however, the number of credit institutions subject to direct ECB supervision has
decreased since the Mechanism entered into force in 2014.
117
This option is provided for by Article 65 CRD IV, as described above in Sect. 4.3–4.4. This limi-
tation that, as previously discussed, may become critical in case Member States would decide to
6.2 Banking Supervisory Sanctions in the EU: A New Field of Criminal Law? 185
As renowned however, at least in Europe the classification made at statutory

level represents only a residual criterion to determine the nature of a sanction, due
to the substantial interpretation of matière pénale, developed by the Court in
Strasbourg with the Engel doctrine.118
This case-law results particularly relevant for the system(s) of European banking
supervision as, thanks to its adoption by the Court of Justice in the landmark cases
Hüls AG, Spector, Bonda and Fransson discussed above,119 this doctrine is today
applicable not only under before the ECtHR, and toward sanctions imposed at
national level, but also to penalties imposed by European institutions, bodies and
agencies, even in lack of any formal accession of the Union to the Convention
(although until then, the CJEU remains the only court with jurisdiction on the
matter).
Examining the penalties contained in CRD IV/V120 as well as the SSM supervi-
sory and sanctioning powers121 in light of the second (nature of the offence) and the
third (severity of the penalty) Engel criteria, several hints emerge which lead to
conclude that, besides for their formal classifications, some of the sanctions impos-
able in this supervisory legal framework de facto possess a criminal nature.122
In this sense, it is worth reminding that the Court in Strasbourg and the Court of
Justice do not distinguish between natural and legal persons in the application of the
Engel doctrine, and, especially for Strasbourg, several are the cases in which fair
trial rights deriving from a substantial approach to the definition of criminal matter
have already been recognized to legal persons.123
Under the first Engel criterion, SSM and CRD IV/V supervisory sanctions seem
to well fit in the parameters, previously described, developed by the ECtHR to
describe a substantially criminal “nature of the offence”.124
First, CRR and CRD IV/V request all banks in the EU to adopt certain prudential
conducts in the management of their activities; breaches of such standards may then
transpose the sanctioning provisions of CRD IV through criminal law provisions, as allowed by the
Directive.
118
As already analysed in Sect. 2.3. On the impact and relevance of the Engel case-law in banking
matters, see D’Ambrosio (2016), p. 1031 et seq. In general terms, see Trechsel (2005), pp. 14–30;
Ubertis (2009), p. 25 et seq.; van Dijk (2006), pp. 543–554; Lupária (2017), p. 940.
119
Hüls AG, Case C-199/92, § 150; Spector, Case C-45/08, § 42; Bonda, Case C-489/10, §§ 36;
Fransson, Case C-617/10, §§ 35-37, as analysed in Sect. 2.3.
120
As described in Sect. 4.3.
121
As described in Sects. 4.4.1 and 4.4.2.
122
On the general classification of supervisory sanctions in light of the Engel case-law, see De
Moor Van Vugt (2012), p. 5; D’Ambrosio (2013), p. 9.
123
Cf. for the CJEU, Spector, Case C-45/08, § 42; for the ECtHR see, e.g., Société Stenuit v.
France, 27.02.1992, Application no. 11598/85, § 7, with regard to the Commission report of
30.05.1991; Menarini Diagnostics S.r.l., § 44; Lilly France S.A. v. France; Didier v. France (dec.),
27.08.2002, Application no. 58188/00; Dubus SA, § 36. See also Jones and Sufrin (2016), p. 895;
Andreangeli (2008), pp. 17–18. For more on locus standi of legal persons under the Convention
see Zwaak (2006), pp. 52–55 and with regard to the application of the Engel criteria, p. 552. See
also Slater et al. (2008), p. 18. Analysing the privilege against self-incrimination for legal persons,
Sect. 6.3.5.
124
Cf. Sect. 2.3.
be sanctioned by Member States or, within its competence, by the ECB, applying
the national transpositions of CRD IV/V.
Second, such supervisory sanctions are undoubtedly also the result of supervi-
sory IV/V proceedings “instituted by a public body with statutory powers of
enforcement”, and in particular as established by CRD IV/V or in the SSM
Regulation.125
Moreover, in the wording of the Court, these provisions enjoy a “generally bind-
ing character” within their field of application,126 and prescribe “conduct of a certain
kind” which seek “to punish as well as to deter”, making “the resultant requirement
subject to a sanction that is punitive”.127 Lastly, the imposition of any sanction by
the SSM is “dependent upon a finding of guilt”, another clue identified by the
ECtHR as symptom of the substantive criminal nature of a provision.128
Against this background, substantial criminal nature may hence be recognized to
the sanctions provided for by Article 18(1) and, indirectly, by Article 18(5) SSM R,
which clearly state that penalties may be imposed upon credit institutions which
“intentionally or negligently, breach a requirement”.129
A similar deduction may be drawn also for the sanctions consisting in the publi-
cation of the penalties imposed, provided for by Articles 18(6) SSM R and 68 CRD
IV/V, as well as to the other “naming and shaming” provisions of Articles 66(2)(a),
1a, Regulation 2532/98, and 67(2)(a) CRD IV/V.130 In all these cases, in fact, the
negative reputational effects pursued by the sanctions appear to serve punitive and
deterrent, rather than restorative aims,131 which extend its effects (reputational, but
also financial) directly towards the offender and indirectly towards other credit insti-
tutions, influencing their future behaviours.
This conclusion is further supported by those who highlighted how the publica-
tion is inextricably linked with the administrative fine imposed, of which it repre-
sents a mere “corollary”.132 Following this interpretation, at least in those cases
where the administrative fine is recognized substantial criminal nature, the same
should apply also for its publication.133
125
Benham v. the United Kingdom, § 56.
126
Bendenoun v. France, § 47.
127
Öztürk v Germany, § 53; Grande Stevens, § 96.
128
Cf. Sect. 2.3.
129
Cf. Sect. 4.4.2.
130
Consisting of “a public statement which identifies the natural person, institution, financial hold-
ing company or mixed financial holding company responsible and the nature of the breach”, cf.
also above, Sects. 4.3 and 4.4.2.
131
Cf. D’Ambrosio (2013), p. 25.
132
In this sense, Opinion of Advocate General Mengozzi in Case C-203/12, Billerud Karlsborg AB,
Billerud Skärblacka AB v. Naturvårdsverket, delivered on 16.05.2013, ECLI:EU:C:2013:320, § 31.
133
Cf. Id., Opinion in Case C-407/14, María Auxiliadora Arjona Camacho v. Securitas Seguridad
España, SA, delivered on 3.09. 2015, ECLI:EU:C:2015:534, note 40, which includes “naming and
shaming” provisions among the “range of penalties” available to Member States; at academic
level, see, e.g., Doorenbos (2007), p. 88, referring to ECtHR decisions: O. v. Norway, 11.02.2003,
Application no. 29327/95; Ringvold V. Norway, 11.02.2003, Application no. 34964/97; Hammern
Even more evident hints that some supervisory sanctions present a substantial
punitive nature raise in the application of the third Engel criterion, concerning the
severity of the penalty that the person concerned risks incurring. In this sense, refer-
ence shall be made to the amounts and potential impact of supervisory penalties
upon the budget of supervised entities,134 alone or in combination with other disci-
plinary (or, as called in the SSM Regulations, “supervisory”) sanctioning powers.
In Öztürk v. Germany, in fact, the ECtHR clearly stated that the criminal nature
of a sanction is not automatically excluded by the fact that an offence is not punish-
able by imprisonment,135 and indeed both the ECtHR and the CJEU have repeatedly
recognized criminal nature to pecuniary administrative sanctions imposed by
administrative authorities with jurisdiction in tax law,136 as well as in economic and
financial law, such as the Italian regulatory authority for market and competition137;
and, in France, the sanctions committee of the financial market supervisory
authorities138; the Competition Commission139; the Financial Markets Board,140 and
the Disciplinary Offences (Budget and Finance) Court.141
In some cases, the assessment of the Court in Strasbourg referred to sanctioning
proceedings especially comparable to the one carried out by the SSM.
That is, for instance, what happened in the case of the then existing French
Commission bancaire in Dubus S.A. v France.142 According to former Articles L.
v. Norway, 11.02.2003, Application no. 30287/96; Pfaeltzer (2014), pp. 144–145, according to
which “After all, in its decision to impose an administrative fine, the supervisor indicates that the
sanction will be published. This indication implies that the decision to publish has been made
together with the decision to impose the fine. As a result, the administrative fine and its publication
each have a punitive character”.
134
On the possibility of considering the sanction pénale depending on the “nature, as significant or
less significant, of the bank concerned”, see D’Ambrosio (2013), p. 27; on the same line, in general
terms, Trechsel (2005), p. 24, but see also p. 26. For a more detailed analysis of the third Engel
criterion, see above, Sect. 2.3.
135
Öztürk v. Germany, § 53; Nicoleta Gheorghe v. Romania, § 26, according to which “la requérante
n’encourait plus une peine d’emprisonnement à l’époque des faits. Cela n’est toutefois pas déter-
minant en soi aux fins de l’applicabilité du volet pénal de l’article 6 de la Convention car, comme
la Cour l’a souligné à maintes reprises, la faiblesse relative de l’enjeu ne saurait ôter à une infrac-
tion son caractère pénal intrinsèque”.
136
Cf., recently, for the ECtHR, A and B v. Norway, and Jóhannesson and others v Iceland; for the
ECJ see e.g. Fransson, Case C-617/10, §§ 35-37; Bonda, Case C-489/10, §§ 36-46.
137
Menarini Diagnostics S.r.l., § 44.
138
Messier v. France (dec.), 19.05.2009, Application no. 25041/07, § 35.
139
Lilly France S.A. v. France.
140
Didier v. France.
141
Guisset v. France, 26.09.2000, Application no. 33933/96, §59. For a more detailed recollection
of cases on the matter, see, e.g., Trechsel (2005), pp. 23–24; van Dijk (2006), pp. 548–554.
142
Since 2010 joined with the Autorité de contrôle des assurances et des mutuelles, the Comité des
établissements de crédit et des entreprises d’investissement, and the Comité des entreprises
d’assurances in the new Autorité de contrôle prudentiel et de résolution (ACPR), cf. Ordonnance
n° 2010-76 du 21.01.2010 portant fusion des autorités d’agrément et de contrôle de la banque et de
l’assurance, NOR: ECEX0929065R, Version consolidée au 04 juillet 2017.
613-3 and L. 613-21 of the Code monétaire et financier, the Commission, an admin-
istrative authority performing supervisory tasks and directly related with the French
national central bank,143 was entitled to impose upon its controlled entities disciplin-
ary sanctions144 and/or pecuniary penalties amounting up to the minimum capital
required of the legal entity. The substantive nature of these powers was recognized
as a coloration pénale by the ECtHR (in line with what previously already acknowl-
edged by the French Conseil d’Etat145), taking into account the notable financial
consequences of the applicable sanctions (“De telles sanctions entraînent des con-
séquences financières importantes, et partant, peuvent être qualifiées de sanctions
pénales”146).
Similar conclusions were drawn in the 2014 decision Grande Stevens and others
v Italy concerning the Italian authority for securities supervision (CONSOB).147
Also in this case, the Court adopted a reasoning which seems to fit rather well also
to the case of banking supervision.
First, the Court recognized that the general interests pursued by CONSOB—pro-
tecting investors and ensuring the effectiveness, transparency and development of
the stock markets—are usually protected by criminal law. The Court also noticed
that the fines had both deterrent and punitive purposes, and that they were imposed
“on the basis of the gravity of the impugned conduct, and not of the harm caused to
investors”.148
The ECtHR then examined the nature and severity of the penalty which was
“likely to be imposed” on the applicants, taking into account that CONSOB sanc-
tioning powers ranged from disciplinary measures—such as temporary loss of their
honour for the representatives of the companies involved; temporary prohibition
from administering, managing or supervising listed companies; prohibition from
engaging the services of the offender; and temporary ban of the individual’s right to
carry out his or her professional activity—to pecuniary fines—which “could go up
to EUR 5,000,000 […], and this ordinary maximum amount could, in certain cir-
143
Cf. former Article L. 613-3 “La Commission bancaire comprend le gouverneur de la Banque de
France ou son représentant, président, le directeur du Trésor ou son représentant le président de
l’Autorité de contrôle des assurances et des mutuelles ou son représentant et quatre membres ou
leurs suppléants nommés par arrêté du ministre chargé de l’économie pour une durée de cinq ans
dont le mandat est renouvelable une fois: 1. Un conseiller d’Etat proposé par le vice-président du
Conseil d’Etat; 2. Un conseiller à la Cour de cassation proposé par le premier président de la Cour
de cassation; 3. Deux membres choisis en raison de leur compétence en matière bancaire et finan-
cière (…)”.
144
Such as “1. L’avertissement; 2. Le blâme; 3. L’interdiction d’effectuer certaines opérations et
toutes autres limitations dans l’exercice de l’activité; (…) 6. La radiation (…) de l’entreprise
d’investissement de la liste des (…) entreprises d’investissement [agréées] (…). Il en va de même
s’il n’a pas été déféré à l’injonction prévue à l’article L. 613-16”, cf. former Article L. 613-21.
145
CE, 29.11.1999, no 194721, Société Rivoli Exchange.
146
Dubus S.A. v France, §§ 36-38: “La Cour est d’avis que la Commission bancaire, lorsqu’elle a
infligé à la requérante la sanction du blâme, devait être regardée comme un “tribunal” au sens de
l’article 6 § 1 de la Convention”.
147
On the issues, see D’Ambrosio (2017), pp. 1031–1036. Cf. also above, Sect. 2.3.2.
148
Grande Stevens, § 96, and the cases there mentioned.
cumstances, be tripled or fixed at ten times the proceeds or profit obtained through
the unlawful conduct”.149
Against this background, the Court considered such penalties of undeniable
severity and significant financial implications, capable of compromising the integ-
rity of the persons concerned, and therefore, criminal in nature.150 This case-law was
then confirmed by the CJEU in the three 2018 aforementioned decisions, both with
regard to the tax matter (Menci) and to the very same CONSOB (Garlsson Real
Estate SA, Di Puma-Zecca).151
In light of such case-law, a substantial criminal nature to banking supervisory
sanctions may therefore be recognized to Article 18(1) and to the fines imposable
under Article 18(7) SSM R,152 where they confer the Single Supervisory Mechanism
the power to impose administrative pecuniary penalties of up to twice the amount of
the profits gained or losses avoided because of the breach where those can be deter-
mined, or up to 10% of the total annual turnover of a legal person in the preceding
business year. This conclusion holds true also taking into account that the concrete
fines imposed by the ECB might be lower than the maximum amount provided for
by the Regulation. Indeed, according to the ECtHR case-law, the severity of the
penalty that shall be considered purposes of the Engel test refers to the “maximum
penalties which could have been imposed” in abstracto, that is the “degree of sever-
ity of the penalty that the person concerned risks incurring”, and the importance of
the interests at stake in the proceeding.153
Similar conclusion might be also drawn for Article 66(2), let. c), d) and e), and
Article 67(2), let. e), f) and g) CRD IV/V, according to which breaches may be
sanctioned by penalties of up to 10% of the total annual net turnover (for legal per-
sons) or up to EUR 5.000.000 (for natural persons), or of up to twice the amount of
the benefit derived from the breach where that benefit can be determined (in both
cases).
In these situations, however, the substantial criminal nature of such provisions
needs to be examined also in light of the transposition of CRD IV. While no issue
arises in case they are transposed with criminal law provisions, a case-by-case anal-
ysis (which goes beyond the remit of this work) at the national level may be required
where they have been implemented as administrative sanctions. 154
149
Grande Stevens, § 97.
150
Grande Stevens, §§ 98-99.
151
Menci, Case C-524/15; Garlsson Real Estate SA, Case C-537/16; and Joined cases Di Puma
(C-596/16) and Zecca (C-597/16), previously analysed in Sects. 2.3 and 2.3.3.
152
Whose classification as substantially criminal has been so far accepted also at academic level,
cf. Allegrezza and Rodopoulos (2017), p. 245; D’Ambrosio (2017), p. 1031 et seq.; D’Ambrosio
(2013), p. 26 et seq.
153
Cf., e.g., Campbell and Fell v the United Kingdom, § 72; Demicoli v Malta, § 34; see also
Trechsel (2005), p. 24; Harris et al. (2014), p. 376 and case-law there mentioned.
154
for a comparative analysis of banking supervisory enforcement systems in 10 of the 19 Eurozone
Member States, see Allegrezza (2019).
Lacking still any specific case-law on the matter, however, the substantive nature
of the measures applicable at the end of supervisory proceedings is not always eas-
ily recognizable. This is especially true when they are different from pecuniary
penalties, and no subjective requirement has been established yet, so that they are
applicable regardless of any evaluation upon the “negligence” or “intention” of the
supervised entity.155
This is, for instance, the case of cease and desist orders (Articles 66(2), let. b)
and 67(2) let. b) CRD IV/V); suspension of the voting rights for the responsible
shareholder(s) (Article 66(2), let. f); the withdrawal of the banking authorisation
(Article 67(2) let. c); and the temporary ban from exercising functions in institu-
tions against a member of the institution’s management body or any other natural
person, who is held responsible (Article 67(2), let. d).156
An even more careful approach shall be adopted in examining the supervisory
measures provided for by Article 16 SSM R, which, at least in the intention of the
European legislator, do not have a punitive but rather a preventative purpose.157 In
all these cases, in fact, the possibility to recognize a substantive criminal nature
applying only just one of the three Engel criteria, channels the assessment espe-
cially towards the third Engel criterion, whose boundaries are however not always
easily foreseeable.
In this sense, it is worth recalling that the Engel criteria have not been applied by
the ECtHR only with regard to penalties such as detention or fines, but also to other
kind of measures, such as community services or, more relevant to the ECB legal
framework, the withdrawal of rights.158
In these cases, where the assessment over the severity of the penalty appears
much more blurring, the Court based its assessment on parameters that resemble
those used for disciplinary sanctions,159 such as the fact that the disqualifying effects
are limited to a period of time or not, or, similarly to publication penalties, linking
the substantial nature of a sanction to that of the ““principal” penalty to which it
attaches”.160
155
Cf., e.g., Joseph Kaplan v the UK, Report of 17.07.1980, Application no. 7598/76, §§ 168-170,
contra Garyfallou, § 34, as reported by van Dijk (2006), p. 552.
156
As described in Sect. 4.3.
157
Cf. Sect. 4.4.1. Cf. however, Allegrezza and Voordeckers (2015), p. 155, according to “The
wording of Art. 16(1) SSMR already suggests that these measures are not of a punitive, but rather
of a preventive nature, since the purpose is to intervene at an early stage, to avoid that there will be
a breach in the near future, or to ensure a sound management and risk coverage”.
158
Mostly with regard to driving licence, see, e.g., Pierre-Bloch v. France, 21.10.1997,
120/1996/732/938, §§ 55-57; Malige v France, 23.09.1998, 68/1997/852/1059, § 39. Cf. Trechsel
(2005), pp. 25–26; van Dijk (2006), p. 553.
159
On the assessment of the Court over disciplinary charges, see, e.g., Trechsel (2005), pp. 20–21;
Harris et al. (2014), p. 345.
160
Pierre-Bloch v. France, § 56; Escoubet v Belgium, 28.10.1999, Application no. 26780/95, § 37.
In light of this jurisprudence, and especially taking into account the notable con-
sequences that such measures cause upon both direct addressees and third parties
(e.g. shareholders, customers, employees), it could be argued that only the most
severe supervisory measures, that is the suspension of the voting rights of the
shareholder(s) held responsible for the breaches, and the withdrawal of the banking
authorization, respectively provided for by Article 66(2), let. (f) and Article 67(2)
let. (c) CRD IV/V (again, net of national transposition), may be considered punitive
in their content.161
Similar conclusions may be reached also with regard to the supervisory powers
under Articles 14(5) and 16(2) SSM R, characterized by a particularly serious puni-
tive content, since, as it has been highlighted, Article 6 ECHR should cover also
“restrictions of economic or professional freedom of a punitive character”.162
The reference hence goes to the power to withdraw a banking licence (Article
14(5) SSM R), for which the reasoning illustrated above should apply “broader”
“sanction package” whereby, at the end of the sanctioning process, the addressee is
not only fined but also declared ceased from office because of the loss of the fit and
proper qualifications “something that, once characterized as a criminal sanction”.163
Similar considerations could be drawn for the power to remove “at any time mem-
bers from the management body of credit institutions who do not fulfil the require-
ments set out in the acts referred to in the first subparagraph of Article 4(3)” (Article
16(2) let. m) SSM R).
In the other cases, instead—such as the opposition to qualified holding acquisi-
tions (Article 15 SSM R), the prohibition of distributions to shareholders, members
or holders of Additional Tier 1 instruments (Article 16(2), let. i, SSM R); or the
request to divest activities that pose excessive risks to the soundness of the institu-
tion (let. e) —the severity of the measure seems to depend more on the concrete
circumstances in which it is applied, than on a potential assessment in abstracto. A
criminal nature in these cases should therefore be excluded, unless proven differ-
ently in a case-by-case approach.
Lastly, purely administrative should also be considered the so-called periodic
penalty payment or “enforcement measures” provided for by Article 2 Regulation
2532/98, as recalled by Article 18(7) SSM R, which allows the ECB to impose peri-
odic penalty payments that amount up to 5% of the average daily turnover per day
of infringement.164 These measures neither present a particularly relevant degree of
severity, at least in principle,165 nor possess a punitive purpose, since they pursue a
161
In the same sense, also D’Ambrosio (2013), pp. 25–26.
162
Cf. van Dijk (2006), p. 556.
163
Cf. Lamandini et al (2015), p. 97, noting however also how “the prospect that a single set of
measures can receive different treatments, and be subject to different guarantees, depending on the
use of it that is intended used by administrative authorities (and whether it is possible to prove such
intention) is a bit disquieting”.
164
Cf. Article 4(a), Council Regulation (EU) 2015/159; see Sect. 4.4.2. On this point see also
Looseveld (2013b), pp. 423–425.
165
Cf. D’Ambrosio (2013), p. 27 according to whom the severity of those measures shall be mea-
sured in proportion to the financial capacity of the credit institution, in particular considering
whether it has been classified as significant or less significant. See also Riso (2014), pp. 32–35.
restorative goal, that is to force a supervised entity that is obstructing an ECB deci-
sion to comply with the latter.166
Naturally, these conclusions over the criminal nature of some supervisory sanc-
tions and measures need to be put in the perspective of the working method applied
by the Court in Strasbourg, that proceeds with a case-by-case approach, without
formulating general principles regardless of the context.
Officially, therefore, such supervisory sanctions and measures cannot be labelled
as substantially criminal until a judicial decision will affirm so in a specific case; a
decision which—until the EU does not access to the ECHR—could only come from
the Court of Justice. De facto, however, the arguments illustrated above show that,
at least as long as the Engel criteria will subsist, and continued to be applied by the
CJEU,167 a relevant part of the sanctioning powers in the field of banking supervi-
sion presents all the requirements to be considered a coloration pénale.
The recognition of a criminal nature to the penalties mentioned above has funda-
mental practical and theoretical consequences: It introduces also in an administra-
tive proceeding the need to comply with fair trial guarantees provided for by Article
6 ECHR, and with the prohibition of bis in idem established by Article 4, Protocol
No. 7 to the Convention.168
This obligation binds both the ECB and the NCAs in all proceedings which may
lead to the application of punitive sanctions. However due to the different supervi-
sory powers enforced from country to country, and the potentially highly varying
transposition of CRD IV at national level, the analysis on domestic supervisory
models of each Eurozone Member States falls out of the scope of the present
work.169
The latter focuses instead on the compliance of the SSM investigating and adju-
dicating model with the procedural rights required for the criminal matter by the
Convention, as well as with their correspondents in the EU Charter of Fundamental
Rights,170 and, where relevant, with the rules contained in the Directives safeguard-
ing the defendant’s procedural rights in criminal proceedings.171 To this aim, it is
worth reminding that most of the rights contained in the Charter have been shaped
on the basis of the Convention, a link that is further enhanced by the equivalence
clause of Article 6 TEU and Article 52(3) CFREU according to which “In so far as
this Charter contains rights which correspond to rights guaranteed by the Convention
166
Recently, on the non-punitive nature of pecuniary penalty payments (in environmental protec-
tion law), see Order of the Vice-President of the Court of 27.07.2017, in European Commission v
Republic of Poland, Case C-441/17 R, ECLI:EU:C:2017:877, § 102.
167
In this sense, it is worth to recall the attempt of several Member States, rejected by the Court in
Strasbourg, to reduce the application of Engel criteria to the administrative (tax) matter in relation
to the principle of ne bis in idem, carried out in A and B v. Norway, cf. Sect. 2.3.3.
168
Cf., with regard to the ECB banking supervision, D’Ambrosio (2013), p. 85.
169
For a first comparative analysis in this sense, see Allegrezza (2019).
170
Articles 47-50 CFREU.
171
Cf. especially to Directive 2016/343 on the presumption of innocence, cit.; see below, Sect.
6.3.5.
for the Protection of Human Rights and Fundamental Freedoms, the meaning and
scope of those rights shall be the same as those laid down by the said Convention”.
In the following analysis, therefore, the case-law of the Court of Justice, which
has so far analysed only very few of the critical profiles concerning the activity of
the SSM, none of which (yet) directly dealing with punitive sanctions, will be taken
into account especially to understand whether relevant fundamental rights are inter-
preted in the same way by the two European Courts and, where that is not the case,
to assess potential consequences of this discrepancy.
It is important to clarify that fair trial rights as such are not a prerogative of crimi-
nal proceedings. In Convention, in fact, some of the principles contained in Article
6 ECHR are applicable also to the civil matter, that although does not usually
include administrative proceedings (from which the “necessity” of the Court to
develop the Engel doctrine).
Administrative proceedings are instead directly addressed, in the post-Lisbon
EU legal framework, by Article 41 CFREU, which establishes the right to a good
administration,172 and are affected also by Article 47 CFREU, that explicitly pro-
vides the need to comply with some fair trial rights in all cases in which “rights and
freedoms guaranteed by the law of the Union are violated” Article 47 indeed does
not pose any distinction on the subject matter.173
As affirmed by established case-law of the Court of Justice, procedural rights
listed in Article 47 found therefore application in all proceedings “initiated against
a person which are liable to culminate in a measure adversely affecting that person”,
irrespective of its administrative or criminal nature.174 Evidence of the influence of
these legal bases may be found in the same SSM Regulations, where the need to
comply with “due process” and defence rights in the adoption of supervisory deci-
sions is explicitly stated in Recital (54) and Article 22 SSM R.175
Rights provided for by Articles 41 and 47 CFREU (and by Article 6 ECHR, in its
civil limb interpretation) which are especially relevant for the analysis of the SSM
sanctioning proceedings include: The right to an independent and impartial tribunal;
172
Recognized by the Court of Justice also as one of the general principles of EU law see, e.g.,
Detlef Nölle v Council of the European Union and Commission of the European Communities,
Case T-167/94, 18.09.1995, ECLI:EU:T:1995:169.
173
In light of Article 51 CFREU. For the debate on the Charter scope of application, cf. Sect. 2.3.3.
Cf. also Thomas Pringle v Government of Ireland and Others, Case C-370/12, 27.11.2012,
ECLI:EU:C:2012:756, §§ 178–182, commented by Adams and Parras (2013), pp. 848–865.
174
Cf., e.g., G.J. Dokter, Maatschap Van den Top and W. Boekhout v Minister van Landbouw,
Natuur en Voedselkwaliteit, Case C-28/05, 15.06.2006, ECLI:EU:C:2006:408, § 74. On this issue,
see also De Moor Van Vugt (2012), pp. 40–41, according to which “the adoption of the Charter as
part of the Lisbon Treaty has stimulated the further clarification and specification of safeguards in
administrative sanctioning procedures for both measures (of a reparatory nature) and penalties (of
a punishing nature). The difference in approach” between the two types of sanctions “is gradual,
which makes the reluctance of the CJ to qualify a sanction as criminal even more questionable.
Most procedural safeguards that have been implemented apply to both categories. The penalties
demand a more restrictive approach in the sense that the authorities need to respect the guarantees
that have been set by the ECHR and the Charter, when it comes to a criminal charge”.
175
Requiring that “defence rights of the parties concerned shall be fully respected”, cf. also Article
32(1) SSM FR.
the principle of equality of arms (particularly with regard to the right to be heard,
and the right of access to files); the right to a public hearing; and the right of
assistance.
The right to a reasonable length of the proceedings, the obligation to state rea-
sons, the right to be present at trial, and the right to a legal aid, also fundamental
principles established both in the same articles of the Charter (and sometimes by EU
Directives), and at the Conventional level,176 will not be specifically dealt with in
this work: The first two do not seem to raise specific problems in the context of
banking supervision; and the latter seems to have limited application there, since the
only targets of the SSM sanctioning proceedings are credit institutions.177
The extensive or multi-disciplinary scope of application of Article 41 and 47
CFREU, however, does not imply that these procedural rights (as well as the very
concept of “due process”) always bear the same content regardless of the field of
law where they are applied. Indeed, as it will be illustrated in the following para-
graphs, fair trial rights are interpreted more strictly when they apply to a criminal
(formally or substantially) matter, as in this case they also overlap with the defence
rights provided for by Articles 6 ECHR and 48 CFREU.178 To this end, it is here
shared the opinion of those legal scholars according to which the scope of Article 48
CFREU—concerning the presumption of innocence and the right of defence—like
Article 6 ECHR in its criminal limb shall be given a broad interpretation, including
also administrative punitive proceedings, and not only to criminal proceedings
stricto sensu.179
Also the moment from which the protection of Article 48 CFREU attaches shall
be read in light of the ECtHR case-law. Developing its own autonomous notion of
criminal “charge”, the Court established that Article 6 attaches from the moment in
176
Cf. Articles 41(1) and 47(2) CFREU, and Article 6(1) ECHR (reasonable length)—for a detailed
analysis of the case-law of the ECtHR on the matter, see Trechsel (2005), p. 134 et seq.; Harris
et al. (2014), pp. 439–446; Sayers (2014), p. 1258 et seq.; Article 296 TFEU, Article 41(2), third
point CFREU, and Article 6(1) ECHR (obligation to state reason)—for a detailed analysis of the
case-law of the ECtHR on the matter, see Trechsel (2005), p. 102 et seq.; Harris et al. (2014),
p. 430; Craig (2014), p. 1084 et seq.; Article 6 ECHR, 48 CFREU and Articles 8 and 9 Directive
2016/343 (right to be present at trial)—for a detailed analysis of the case-law of the ECtHR on the
matter, and a comment on the directive, see, e.g., Trechsel (2005), pp. 252–261; Harris et al.
(2014), p. 410 et seq.; Mosna (2017), p. 969 et seq.; Rafaraci (2007), p. 5 et seq. (especially with
regard to Stefano Melloni v. Ministerio Fiscal, Case C-399/11, 26.02.2013, ECLI:EU:C:2013:107);
Mangiaracina (2010), p. 135 et seq.; Negri (2015), p. 202 et seq.; and Article 47(3) CFREU, Article
6(3)(c) ECHR, and Directive 2016/1919 (legal aid)-for a detailed analysis of the case-law of the
ECtHR see Trechsel (2005), pp. 270–277; Harris et al. (2014), p. 478 et seq.; Sayers (2014),
p. 1315.
177
Which presumably should be able to afford legal expenses of defence. A residual hypothesis
may be that of natural persons indirectly involved in supervisory proceedings (e.g. shareholders),
where in any case Article 47 CRFEU shall apply.
178
See Nehl (2014), p. 1290; Sayers (2014), p. 1309, recalling that breaches of Article 48(2) may
also constitute a breach of Article 47(2) CFREU.
179
See Nehl (2014), p. 1290, and Sayers (2014), p. 1309, recalling that breaches of Article 48(2)
may also constitute a breach of Article 47(2) CFREU.
which the person under investigation is given a notification in this sense, therefore
covering also the pre-trial phase of the proceeding.180 In the analysis of the SSM
investigating and sanctioning powers, however, it shall be reminded that the SSM
regulations do not provide for a clear distinction between “ordinary” supervisory
activities and “investigations!, besides for the intervention of the Investigating Unit.
In this sense, it is often not clear when the more safeguarding rights of punitive
proceedings should attach.181
This interpretation appears justified in light of the equivalence clause linking the
Charter to the ECtHR case-law, and by the explicit adoption of the Engel criteria by
the CJEU in its previous case-law.182
The latter is also coherent with the scope of the EU directives on procedural
rights, that cover both accused and defendants,183 and with the jurisprudence of the
Court of Justice, according to which parties enjoy defence rights also before they
are notified a statement of objections.184 In this context, defence rights provided for
by Article 41 CFREU have been reasonably interpreted as a lex specialis of Article
48(2) CFREU, applicable to European administrative proceedings.185
Against this background, the compliance of the SSM sanctioning procedures
with fair trial principles is carried out in light of the (usually) more safeguarding
approach used by the Court in Strasbourg in interpreting such rights. Special atten-
tion, in particular, will be put to that ECtHR case-law introducing the right to a
judicial review before a body with unlimited jurisdiction as a necessary compensa-
tive measure to save the fairness of the proceeding, in case some fair trial rights are
not fully complied with in the administrative punitive matter.186
Other fair trial rights are originally typical of criminal proceedings, and find
application in administrative contexts only if they are recognized as punitive under
180
Cf., e.g., Deweer v. Belgium, 27.02.1980, Application no. 6903/75, §§ 42–46; Eckle v Germany,
15.07.1982, Application no. 8130/78, § 73; McFarlane v Ireland, 10.09.2010, Application no.
31333/06, § 143; Foti and others v Italy, 10.12.1982, Applications nos. 7604/76, 7719/76, 7781/77
and 7913/77, § 52; Imbrioscia v. Switzerland, 24.11.1993, Application no. 13972/88, § 36; Dvorski
v Croatia, 20.10.2015, Application no. 25703/11, § 76. See Allegrezza (2017), p. 948; Nehl (2014),
pp. 1282–1283.
181
Cf. above Sect. 4.4.3 and, if you wish, Lasagni (2019).
182
See above, Sect. 6.2; Regardless of what affirmed more recently by the CJEU in decision
WebMindLicenses Case C-419/14, § 83. On this line see, e.g., Allegrezza (2017), p. 947; Manes
(2012); D’Ambrosio (2013), p. 19 et seq.; Sayers (2014), p. 1306.
183
Although the directives do not identify always the same moment from which their rights attach,
see Allegrezza (2017), p. 949; on the definition of the notion of suspect, see, e.g., Quattrocolo
(2015), p. 85 et seq.; Flore (2014), p. 389 et seq.
184
Cf. CEF City Electrical Factors BV and CEF Holdings Ltd v. Nederlandse Federatieve
Vereniging, Case C-105/04 P, 21.09.2006, ECLI:EU:C:2006:592, § 50. The issue has been anal-
ysed by Covolo (2015), p. 435 et seq.; Nehl (2014), pp. 1282–1283.
185
Cf. Nehl (2014), p. 1290 et seq.
186
Cf. below, Sect. 6.3.3. The reference here goes to the right to an independent and impartial tri-
bunal (cf. below Sects. 6.3 and 6.3.1), the principle of equality of arms (cf. below Sect. 6.3.2), and
the right to a public hearing (cf. below Sect. 6.3.4).
the Engel doctrine; their implementation in this field, hence, requires special con-
sideration, and needs to be carefully assessed.
This is the case, in particular, of the privilege against self-incrimination, pro-
vided for by Article 6(1) ECHR in its criminal limb interpretation, and by Article
48(1) CFREU, (which results especially problematic in its application outside the
criminal matter stricto sensu187); and of the protection from double jeopardy.188
On the other side, the right to translation and interpretation, although explicitly
required for criminal proceedings under Article 6 ECHR and by Directive 2010/64/
EU will not be examined in this research, since all ECB proceedings, as those of EU
institutions, shall be carried out in any of the EU official languages.189
The right to information, also provided for as a separate right by Article 6 ECHR,
but which is a right “preparatory” for the exercise of other defence rights,190 for the
purpose of this work is dealt with together with the principle of equality of arms, as
in banking supervisory proceedings, its relevance is absorbed in the scope of the
rights to be heard, and of access to files.191
Lastly, it shall be reminded that the analysis of fair trial rights in the context of
the SSM sanctioning procedures requires sometimes a special calibration, since—as
already mentioned—the ECB is entitled to impose sanctions only upon legal enti-
ties.192 Indeed, despite the application of the Engel doctrine also to proceedings
involving legal persons, rights recognized to these subjects (and especially, the priv-
ilege against self-incrimination) are not completely equalized to those of natural
persons, especially in the Union legal framework.193
In assessing the compliance of the SSM procedural rights with fair trial princi-
ples, therefore, this asymmetry shall also be taken into account.
187
The issue is examined below, in Sect. 6.3.5.
188
The issue is examined below, Sect. 6.3.7.
189
Cf. Articles 23-24 SSM FR, according to which “The ECB and NCAs shall adopt arrangements
for their communications within the SSM, including the language(s) to be used”, and that “Any
document which a supervised entity or any other legal or natural person individually subject to
ECB supervisory procedures sends to the ECB may be drafted in any one of the official languages
of the Union, chosen by the supervised entity or person”. On the critical issues deriving from lan-
guage rights in the EU legal framework regardless of Directive 2010/64/EU of 20.10.2010 on the
right to interpretation and translation in criminal proceedings, see, e.g., Vogler (2015), p. 95;
Sayers (2014), p. 1325 et seq.; Gialuz (2014), p. 84 et seq.
190
Cf. Mosna (2017), p. 958; Sayers (2014), p. 1329 et seq.
191
Also the protection against entrapment, provided for by Article 6(1) ECHR, will not be dealt
with in this work, as it does not appear relevant in SSM sanctioning procedures. On the topic see,
e.g., Trechsel (2005), p. 111; Harris et al. (2014), pp. 427–428.
192
Cf. Sect. 4.4.2.
193
The issue, especially critical with regard to the privilege against self-incrimination, is analysed
below, in Sects. 6.3.5 and 6.3.6, and with regard to privacy protection, in Sect. 8.2.2.
6.3 Fair Trial Guarantees and Banking Supervision: The Right to an Independent… 197
6.3 F
air Trial Guarantees and Banking Supervision:
The Right to an Independent Tribunal
A major issue concerning the compliance of the SSM sanctioning proceedings with
Article 6 ECHR, and Article 47 CFREU is whether the supervisor’s structure, and
in particular its decision-making body, possess the requirements to be defined an
“independent and impartial tribunal established by law”.
The first step in this assessment is to determine when a decision-making body
can be named a “tribunal”194; a point upon which, as repeatedly underlined by legal
scholars, both European Courts have not developed a homogeneous and compre-
hensive definition yet.195
The ECtHR, on its side, considers as a primary criterion the acknowledgement of
a “judicial function” to the adjudicating authority, defined as the capability of
“determining matters within its competence on the basis of rules of law and after
proceedings conducted in a prescribed manner”,196 and the “power to give a binding
decision which may not be altered by a non-judicial authority”.197
Putting the attention on “teleological” parameters, rather than on structural fea-
tures typical of judicial bodies, such as internal independence, the Court in
Strasbourg therefore interprets rather extensively the concept of “tribunal”, It fol-
lows that, under certain circumstances, also administrative bodies may fall under
this definition. As renowed, in fact, this broad interpretation was developed by the
ECtHR to extend—when the sanctions imposable present a substantive punitive
nature—the fundamental safeguards of the criminal matter also to proceedings car-
ried out by administrative authorities, which usually provide for far lower standards
of protection to the parties involved. This jurisprudence certainly brought to an
194
Cf. Consolo (2017), p. 895 (civil matter), and Caianiello (2017), pp. 910–911 (criminal matter);
Panzavolta (2013), pp. 145–146; Trechsel (2005), p. 47 et seq.; Pech (2014), p. 1250 et seq.; Harris
et al. (2014), p. 446 et seq.; Viering (2006), pp. 612–613; Balsamo (2015), pp. 119–121.
195
Cf. Caianiello (2017), p. 47; according to Trechsel (2005), pp. 47–48, “It is thus quite obvious
that the “definition” is to some extent superfluous in that properties which, according to the text of
Article 6 § 1 are attached to the term, are here referred to as elements of its definition. The essential
point is that the Court does not give much importance to the label which is attached to the institu-
tions that function as a court”, on the same line, also Pech (2014), p. 1252. In any case, the features
of “impartiality”, “independence”, and “established by law” are rather overlapping, and “can
hardly be distinguished in a clear way”, Trechsel (2005), p. 49; Viering (2006), p. 612. According
to the Court in Findlay v the United Kingdom, 25.02.1997, Application no. 22107/93, § 73, “The
concepts of independence and objective impartiality are closely linked and the Court will consider
them together as they relate to the present case”.
196
Belilos v Switzerland, 29.04.1988, Application no. 10328/83, § 64, recognizing judicial func-
tions to a Swiss Police Board; see also H v Belgium, 30.11.1987, Application no. 8950/80, p. 34, §
50.
197
Findlay v the United Kingdom, § 77; Van de Hurk v. the Netherlands, 19.04.1994, Application
no. 16034/90, § 45.
improvement for the position of the subjects of punitive administrative investiga-

tions, it may also be criticized for several reasons.198
First, such jurisprudential notion of tribunal lacks of foreseeability and thus of
legal certainty, inasmuch as the assessment on the substantial nature of sanctions
and therefore over the possibility to consider an administrative authority a tribunal
under Article 6 is made on a case by case basis. The consistency of the case-law may
of course provide for some hints of predictability as to whether a certain system
may be considered so, but no legal certainty can be reached before a specific deci-
sion is issued.199
Moreover, this jurisprudence seems somehow to undermine at its basis the very
notion of “tribunal” in its more traditional, and “constitutional” interpretation.
Tribunals, indeed, are undoubtedly characterized, even more than by their function,
by their independence both from external powers, and from internal pressures.
The parameter of “external” independence has been taken in due account by the
case-law of the ECtHR, which repeatedly affirmed that, mostly in cases concerning
administrative or disciplinary tribunals, imposing punitive sanctions, the fact that
the decision-making body exercises “judicial functions” does not suffice to make it
a proper tribunal under Article 6 ECHR.200 To do so, these bodies shall indeed fulfil
a series of further requirements concerning the principles of independence and
impartiality, which represent the basis on which fair trial guarantees can be built
upon.
Specifically, a “tribunal” shall be considered independent from the legislator,201
the executive and other third parties, if guarantees exist “against outside pressures”,
with specific regard to the “duration of its members’ term of office”, and the “man-
ner of appointment of its members”.202
While the ECtHR appears to have adopted a rather self-restrictive approach in
questioning the independence of bodies already defined as tribunal at the national
level,203 the Court generally leaves a much lower margin of appreciation to States
when it comes to examine, administrative a uthorities with substantially criminal
sanctioning powers.
The ECtHR, on the contrary, has not taken yet an explicit stand on which stan-
dards shall define the internal independence of a tribunal. The reason for that appears
198
Cf. Caianiello (2017), pp. 910–11, persuaded of the prevalence of the negative impact of this
case-law.
199
In this sense, see also Vervaele (2017), p. 169.
200
Le Compte, Van Leuven and De Meyere v. Belgium, 23.06.1981, Application nos. 6878/75;
7238/75, § 55, and the case-law there mentioned. See also Harris et al. (2014), p. 447.
201
Cf., e.g., Crociani and others v Italy, 18.12.1980, Applications nos. 8603/79, 8722/79, 8723/79,
and 8729/79, p. 180 et seq.; Demicoli v Malta, cit., § 40 et seq. For more details on the indepen-
dence from the legislator, see Trechsel (2005), p. 53 et seq.
202
Cf., e.g., Le Compte, § 55; Belilos, § 64; Campbell and Fell v UK, § 78; Kleyn and Others v The
Netherlands, 6.05.2003, nos. 39343/98, 39651/98, 43147/98 and 46664/99, § 190; Coëme and
Others v Belgium, 22.06.2000, Applications nos. 32492/96, 32547/96, 32548/96, 33209/96 and
33210/96, § 99; Richert v Poland, 25.10.2011, Application no. 54809/07, § 43. See also Harris
et al. (2014), p. 448 et seq.
203
For case-law referred to stricto sensu judicial systems, see Trechsel (2005), pp. 54–55.
rather evident: Indeed, extending also to administrative bodies the application of

characteristics such as irremovability of members, limited internal hierarchical con-
trols, and existence of an autonomous system of disciplinary liability and ascertain-
ment, would, de facto, require a complete assimilation of these bodies to judicial
authorities.
The Court of Justice, on the other side, has developed its own set of criteria to
define the notion of “tribunal”, which only partially overlap with those indicated by
the ECtHR, at least in their practical application. Already in decisions preceding the
entry into force of the Charter, the CJEU adopted a substantive and autonomous
approach to the matter, that disregarded domestic classification and was based
exclusively on Community law.204
In Vaassen-Göbbels (1966), for instance, the Court recognized as “tribunal” the
Dutch Arbitration authority for the Fund for non-manual workers employed in the
mining industry, based on the fact that it was a “permanent body charged with the
settlement of the disputes defined in general terms’ and “bound by rules of adver-
sary procedure similar to those used by the ordinary courts of law”.205
Subsequently in Dorsch (1997), the CJEU better clarified the list of minimum
elements necessary to define a body as “tribunal”, requiring it to be: (i) Permanent;
(ii) established by law; (iii) independent; (iv) granted with compulsory jurisdiction
and (v) inter partes procedures; and (vi) applying rules of law.206 Independence (iii),
in particular, has been recognized by the Court as a key factor to distinguish
“between national courts and administrative authorities”.207 In its 2006 decision
Wilson, and in the following case-law, the CJEU affirmed that the concept of inde-
pendence, strictly linked to that of impartiality,208 is inherent in the task of adjudica-
tion, requiring for instance guarantees to protect the persons taking a decision,
against removal from office.209
204
Pierre Corbiau v Administration des contributions, Case C-24/92, 30.03.1993,
ECLI:EU:C:1993:118, § 15; see also Incal v Turkey, 9.06.1998, 41/1997/825/1031, § 65; François
De Coster v Collège des bourgmestre et échevins de Watermael-Boitsfort, Case C-17/00,
29.11.2001, ECLI:EU:C:2001:651, § 10.
205
G. Vaassen-Göbbels v Management of the Beambtenfonds voor het Mijnbedrijf, Case 61/65,
30.06.1966, ECLI:EU:C:1966:39, p. 273.
206
Dorsch Consult Ingenieurgesellschaft mbH v Bundesbaugesellschaft Berlin mbH, Case C-54/96,
17.09.1997, ECLI:EU:C:1997:413, § 23; for a more recent application of this case-law, cf., e.g.,
Camera di Commercio, Industria, Artigianato e Agricoltura (CCIAA) di Cosenza v Grillo Star Srl,
Case C-443/09, 19.04.2012, ECLI:EU:C:2012:213, § 20, and case-law mentioned there (which,
even if post-Lisbon Treaty, does not refer to Article 47 of the Charter). For an analysis of the
parameters developed by the Court see, e.g., Pech (2014), p. 1253 et seq.
207
Cf. Graham J. Wilson v Ordre des avocats du barreau de Luxembourg, Case C-506/04,
19.09.2006, ECLI:EU:C:2006:587, § 49; Opinion of Advocate General Stix-Hackl, delivered on
11.05.2006, in Wilson, Case C- C-506/04, § 45. See also the Opinion of Advocate General Ruiz-
Jarabo Colomer in Case C-17/00 De Coster, § 17; and Pech (2014), p. 12563 et seq.
208
Cf. Graham J. Wilson v Ordre des avocats du barreau de Luxembourg, Case C-506/04, §§
51-52; Katarina Abrahamsson and Leif Anderson v Elisabet Fogelqvist, Case C-407/98, 6.07.2000,
ECLI:EU:C:2000:367, § 32.
209
Cf., e.g., Katarina Abrahamsson and Leif Anderson v Elisabet Fogelqvist, Case C-407/98, § 36;
In 2007, still before the entry into force of the Lisbon Treaty, the Court explicitly
recognized in a competition law case, that the notion of “tribunal” shall be read in
light of Article 6(1) ECHR, even though, again showing a preferential treatment for
the antitrust matter,210 it avoided to take a clear position concerning the Commission.211
Actually, since its 1980 decision Van Landewyck the Court has always refused to
consider the Commission as a tribunal under the meaning of Article 6 ECHR, with-
out however never fully explaining the legal reasoning behind such interpretation212:
An exceptionalism which, despite the increasing criticism, has been maintained to
date.213
Whether also the Single Supervisory Mechanism may be eligible to receive a
similar treatment by the Court of Justice seems uncertain.
From one side, it is true that the SSM presents analogies with the Commission
acting as an antitrust authority, being both European institutions with investigative
and sanctioning powers towards national and transnational undertakings. On the
other side, however, these institutions significantly differ in the way information is
gathered. The SSM, contrary to the Commission, can in fact rely on huge amounts
of information already gathered in daily supervisory activity, well before the start-
Köllensperger and Atzwanger, Case C-103/97, 4.02.1999, ECLI:EU:C:1999:52, § 21.

210
As already discussed in the application of the Engel criteria, see above Sect. 2.3.
211
Schneider Electric v Commission, Case T-351/03, 11.07.2007, ECLI:EU:T:2007:212, §§
181–184.
212
Cf. Van Landewyck v Commission, Case C-209/78 (Joined Cases C-209/78, C-210/78, C-211/78,
C-212/78, C-213/78, C-214/78, C-215/78, C-218/78), 29.10.1980, ECLI:EU:C:1980:248, § 81;
Musique Diffusion française v Commission, Case C-100/80 (Joined Cases C-100/80, C-101/80,
C-102/80, C-103/80), 7.07.1983, ECLI:EU:C:1983:158, § 7, where the Court, briefly dismissed as
“irrelevant” the arguments of the applicant, concluded that the Commission “cannot be classified
as a tribunal within the meaning of Article 6 of the European Convention for the Protection of
Human Rights”.
213
Cf. Opinion of Advocate General Vesterdorf, Case T-L/89, Rhône-Poulenc v Commission, deliv-
ered on 10.07.1991, II-885; Shell v Commission, § 39; Enso Española v Commission, Case
T-348/94, 14.05.1998, ECLI:EU:T:1998:102, § 56; Cimenteries Cbr and Others v Commission, §
717; HFB and others v Commission, § 377; Dansk Rørindustri v Commission, Case T-21/99,
20.03.2002, ECLI:EU:T:2002:74, §144; Bolloré and others v Commission, Joined Cases T-109/02,
T-118/02, T-122/02, T-125/02, T-126/02, T-128/02, T-129/02, T-132/02 and T-136/02, 26.04.2007,
ECLI:EU:T:2007:115, § 86; Lafarge SA v Commission, Case T-54/03, 8.07.2008,
ECLI:EU:T:2008:255, § 38; Opinion of Advocate General Bot, Joined Cases C-322/07 P, C-327/07
P and C-338/07 P, Papierfabrik August Koehler AG (C-322/07 P), Bolloré SA (C-327/07 P),
Distribuidora Vizcaína de Papeles, SL (C-338/07 P) v Commission, delivered on 2.04.2009, note
51; Opinion of Advocate General Bot, Joined Cases C-201/09 P and C-216/09 P, ArcelorMittal
Luxembourg SA and others v European Commission, ECLI:EU:C:2010:634, delivered on
26.10.2010, § 44; Schindler Holding Ltd and others, Case T-138/07, § 54; Bolloré v European
Commission, §§55-57; Coats Holdings Ltd v European Commission, § 169; Opinion of Advocate
General Kokott, Case C-439/11 P, Ziegler SA v European Commission, delivered on 13.12.2012,
ECLI:EU:C:2012:800, § 140; Schindler Holding Ltd and others, Case C-501/11 P, 18.07.2013,
ECLI:EU:C:2013:522, § 30 (also quoting the ECHR decision Minarini); Saint-Gobain Glass
France SA and others v European Commission, Cases T-56/09 and T-73/09, 27.03.2014,
ECLI:EU:T:2014:160, §§75-79; Crown Equipment and others v Council of the European Union,
Case T-643/11, 12.12.2014, ECLI:EU:T:2014:1076, § 45.
ing of the investigating procedures. Moreover, causes for such an exceptionalism in

competition law seem to rely rather on historical reasons than on structural ones.
Under a pragmatic point of view, in fact, it could be argued that this field of law
still retains a sui generis treatment due to its well-established practice since the
origin of the European Communities and well before the Court of Justice started to
act as a court of fundamental rights. The SSM, on the contrary, has been introduced
in the EU legal framework well afterwards the Lisbon reform, and thus bears much
more expectations to act in compliance with fundamental rights, and the principles
of fair trial expressed by the Charter (directly), and by the Convention (indirectly).214
Against this background, applying the ECtHR and the CJEU case-law (not
referred to the Commission) to the Single Supervisory Mechanism, a “judicial func-
tion” may be recognized to the Governing Council.
The latter, indeed, is the ultimate decision-making body of the European Central
Bank; it is granted with compulsory competence; is established by law as permanent
and independent, and its action is subject to the rule of law.215
A more uncertain position is instead that of the Supervisory Board (SB).
Indeed, the SB is the body which determines the merit of the supervisory opera-
tions, since it drafts (on the basis of the results brought by the Investigating Unit,
when the latter is involved) complete decisions which the Governing Council may
only approve or reject.216 On the other side, though, according to Article 283 TFEU,
and Articles 10 to 12 of the ECB Statute, the Governing Council and the Executive
Board are the only ECB decision-making bodies, since the Treaty was not amended
for the establishment of the Single Supervisory Mechanism.217
Therefore, although the Supervisory Board certainly possesses a “judicial func-
tion” with regard to the merit, it lacks the power to issue legally binding decisions.
In light of the above, the only body which could be recognized as “tribunal” within
the SSM sanctioning procedures is the Governing Council.
214
The process will certainly be accelerated in case the EU will access to the European Convention.
Moreover, as discussed in Sect. 2.3.3, it appears that the CJEU is starting to overrrule part of the
special treatment reserved to competition law, at least with regard to the ne bis in idem.
215
Cf. Article 7, Statute of the European System of Central Banks and of The European Central
Bank: “when exercising the powers and carrying out the tasks and duties conferred upon them by
the Treaties and this Statute, neither the ECB, nor a national central bank, nor any member of their
decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or
agencies, from any government of a Member State or from any other body. The Union institutions,
bodies, offices or agencies and the governments of the Member States undertake to respect this
principle and not to seek to influence the members of the decision-making bodies of the ECB or of
the national central banks in the performance of their tasks”; cf. also Sect. 4.4.
216
217
Cf. above Sect. 4.4.2.
6.3.1 The Right to an Impartial Tribunal
Tribunals do not only need to be independent; they also have to be impartial, mean-
ing both that they shall be established by law before the commission of the alleged
breach,218 and that they shall be free from any prejudice in carrying out their tasks.219
In order to verify the absence of bias within adjudicating bodies, the ECtHR has
developed a subjective and an objective test, first formulated in the 1982 decision
Piersack v Belgium, and then resumed by the following case-law.220
Under the subjective test, it is necessary to show that the members of the decision-
making body did not act with personal bias against the applicant; personal impar-
tiality shall be presumed until there is proof of the contrary.221 Under the objective
test, it shall be assessed whether there are ascertainable facts which may raise doubts
as to the tribunal’s conduct, which shall not offer any legitimate chance to doubt,
even just in the appearances, of its impartiality.222
To assess whether the tribunal complies with these parameters, a fundamental
criterion considered by the Court—with major implications for non-judicial enti-
ties—concerns the separation between the body in charge for the investigations and
that responsible for the judgement and the imposition of sanctions. This feature
indeed is not frequently found in administrative decision-making bodies.223
218
In this sense, the ECtHR seems to have adopted a more restrictive notion of “law”, where nor-
mally it refers “to any norm of general application” as “the Court does not usually examine whether
it was passed by Parliament or whether it was adopted by the Government or any other body […]
Still, not every detail must be regulated by the law in the formal sense, i.e. Acts of Parliament—
details may be set out in delegated legislation […] However, these texts will have to satisfy the
general requirements of precision and foreseeability”. These elements should include at least: The
whole organizational set-up of the courts, jurisdiction, establishment of individual courts, determi-
nation of local jurisdiction, competence ratione loci and materiae, and the proceeding the tribunal
is to follow, although the case-law of the Court is not clear on the matter, cf. Trechsel (2005),
pp. 50–51, referring to Zand v. Austria, 16.05.1977, Application no. 7360/76, § 80; see also Harris
et al. (2014), p. 458.
219
See, e.g., Jorgic v Germany, 12.07.2007, Application no. 74613/01, § 64; Richert v Poland, § 41.
As underlined by Trechsel, indeed, the notion is therefore defined in negative terms, cf. Trechsel
(2005), p. 61 et seq.
220
Piersack v Belgium, 10.10.1982, Application no. 8692/76, § 30. As underlined, the separation
between these two tests is “quite convincing although the labels are not”, as it is “practically
impossible to determine or not” whether judges have an impartial state of mind, cf. Trechsel
(2005), p. 62; Harris et al. (2014), pp. 450–451.
221
Cf., e.g., Hauschildt v Denmark, 24.05.1989, Application no. 10486/83, §§ 47-48, according to
which “appearances may be of a certain importance”. The Court, however, has revealed itself
reluctant to find deficits of impartiality under the subjective test, as shown in cases Remli v France,
23.04.1996, Application no. 16839/90; Gregory v the UK, 25.02.1997, Application no. 22299/93;
Ferrantelli and Santangelo v Italy, 7.08.1996, Application no. 19874/92; Sander v The UK,
9.05.2000, Application no. 34129/96; cf. also Trechsel (2005), p. 64.
222
Id. § 48; Sramek v Austria, 22.10.1984, Application no. 8790/79, § 42. It is not clear, however,
whether the test should take into account the potential bias as perceivable “in the eyes of a reason-
able person or an “ordinary citizen””, cf. Trechsel (2005), p. 62.
223
Other criteria, less relevant for the analysis at stake, may concern the prior involvement of the
judge in the same case, or to affiliation to one of the parties, for a more detailed recollection of the
case-law on the matter, see e.g. Trechsel (2005), pp. 62–79; Harris et al. (2014), pp. 452–457.
At first glance, this requirement could basically make void any attempt of the
ECtHR to bring some administrative decision-making bodies back under the
umbrella of Article 6. To counterbalance this risk, in its case-law the Court repeat-
edly affirmed that a proceeding, even when the adjudicating body does not possess
the impartiality and independence typical of a judicial authority, may still be consid-
ered in compliance with these requirements if the issued decisions are subject to
subsequent review by a “judicial body that has full jurisdiction”, meaning an author-
ity entitled with the power to quash in all respects, on questions of fact and law, the
decisions of the body below.224
Impartiality is also a fundamental part of the notion of “tribunal” under Article
47(1) CFREU, as interpreted by the Court of Justice.
First examined in De Coster (2001), the CJEU better defined the concept in
Wilson (2006), where impartiality was considered an essential element “to ensure a
level playing field for the parties to the proceedings and their respective interests
with regard to the subject-matter of those proceedings”, which “requires objectivity
and the absence of any interest in the outcome of the proceedings apart from the
strict application of the rule of law”.225
In particular, as it has been underlined, impartiality in the jurisprudence of the
Court represents an “internal component of the broader notion of independence”,226
given its “functional connection between independence and impartiality, the former
being a necessary condition of the latter”.227
The case-law of both European Courts results especially relevant for the SSM,
whose sanctioning system, as most administrative bodies, shows some relevant
weaknesses under the profile of separation of phases between investigation and
adjudication.
Indeed, the SSM Regulations only provide for a few general statements on the
independency of the investigations. Article 123 SSM FR appreciably requires that
the members of the Investigating Unit (IU) “shall not be involved and shall not for
the two years before taking up the position of investigating officer, have been
involved in the direct or indirect supervision or authorisation of the relevant super-
vised entity”.228
224
Cf. Umlauft v Austria, 23.10.1995, Application no. 15527/89, § 37; Öztürk v Germany, § 56;
A. Menarini Diagnostics S.R.L. v Italy, §§ 59-63-67; see also Schmautzer v Austria, 23.10.1995,
Application no 15523/89, §36; Gradinger v Austria, 23.10.1995, Application no 15963/90, §44.
The issue of judicial review is dealt with below in Sect 6.3.3.
225
Graham J. Wilson v Ordre des avocats du barreau de Luxembourg, Case C-506/04, §§ 52–53.
226
Pech (2014), p. 1256; cf. Graham J. Wilson v Ordre des avocats du barreau de Luxembourg,
Case C-506/04, § 52. See also François De Coster v Collège des bourgmestre et échevins de
Watermael-Boitsfort, Case C-17/00, 29.11.2001, ECLI:EU:C:2001:651, §§ 17–22; while the first
ECJ case where impartiality has been mentioned was Katarina Abrahamsson and Leif Anderson v
Elisabet Fogelqvist, Case C-407/98, § 32.
227
Opinion of Advocate General Stix-Hackl, delivered on 11.05.2006, in Case C- C-506/04,
Wilson, § 75.
228
Article 123(2) SSM FR.
The Regulation further mandates that investigating officers perform their func-
tions “independently of the Supervisory Board and Governing Council and shall not
take part in the deliberations of the Supervisory Board and Governing Council”.229
Things become more critical when considering that the Investigating Units are
not structurally independent, but remain internal investigating bodies, whose offi-
cers are “designated by the ECB”,230 even if the Framework Regulation does not
identify which body of the Central Bank is specifically entrusted with this task.231
Actually, a similar gap could originally be found also with regard to the composi-
tion of the Administrative Board of Review, whose members shall also “be appointed
by the ECB”.232 In this case, however, the lacuna was filled by a subsequent ECB
Decision that assigned that competence to the Governing Council and detailed pow-
ers and procedures applicable to the ABoR.233
While it is of course desirable that such gap will be filled for the Investigating
Unit too, adopting a solution similar to that chosen for the ABoR might bring to
even more critical issues, considering that the Governing Council is the body
entrusted with the final decision power over the adoption of the sanctions for the
breaches investigated by the Unit.
The SSM sanctioning procedure appears also critical if the requirement of sepa-
ration of phases is examined in its dynamic dimension.
Indeed, as previously described, whether any reason to suspect a breach emerges,
the ECB (often the Joint Supervisory Teams—JSTs) refers it to the Investigating
Unit; the Unit undertakes investigations, and, if that is the case, elaborates a draft
proposal for a penalty to be applied before the Supervisory Board. The latter then
passes a complete draft proposal to the Governing Council, which may approve it as
a final decision through the non-objection procedure.234
Interestingly, a comparable structure was examined by the ECtHR in Grande
Stevens. Similarly to the SSM, also the (then into force) decision-making process of
the CONSOB was structured in three phases: Investigation, carried out by an inter-
nal office, which also articulates the accusation; submission of the report containing
the conclusions and the proposed penalties to a Directorate; and issuing of a final
decision (potentially including penalties) by the Commission.235
229
230
231
At the European level, a similar investigating structure may be found with regard to the “inde-
pendent investigating officer” appointed by the European Securities and Markets Authority
(ESMA), cf. Article 64, Regulation (EU) No 648/2012 of 4.07.2012 on OTC derivatives, central
counterparties and trade repositories. The same provisions, still referred to ESMA, may be found
in Article 31 of the recent Proposal for a Regulation of the European Parliament and of the Council
on European Crowdfunding Service Providers (ECSP) for Business, Brussels, 8.3.2018
COM(2018) 113 final.
232
Cf. Article 24 SSM R.
233
Cf. Article 4(1), Decision of the European Central Bank of 14.04.2014 concerning the establish-
ment of the Administrative Board of Review and its Operating Rules (ECB/2014/16); cf. also
above, Sect. 4.4.3.
234
Cf. Sect. 4.4.3.
235
In that case, although the Court recognized the existence of a “certain separation
between the investigative entities and the entity with responsibility for determining
whether an offence had been committed and imposing penalties”,236 the overall pro-
ceeding was not considered in compliance with the Conventional principles. The
Court considered that if the investigation, accusation and decision on the penalties
are exercised by “branches of the same administrative body, acting under the author-
ity and supervision of a single chairman […] this amounts to the consecutive exer-
cise of investigative and judicial functions within one body; in criminal matters such
a combination of functions is not compatible with the requirements of impartiality
set out in Article 6(1) of the Convention”.237
This argument, interestingly, was not raised, nor challenged in the drastic
revirement of the ECtHR case-law concerning the application of ne bis in idem, nor
it was rejected by the recent decisions of the CJEU precisely concerning CONSOB
sanctioning procedures.238
Applying such parameters to the Single Supervisory Mechanism, two main criti-
cal points emerge. First, the breach referral mechanism adopted by the SSM, even
though it made compulsory for the JSTs to refer potential irregularities to the
Investigating Units, did not abolished the discretion of the first in deciding what is
a breach, in order to refer it. A certain dependency of the IU to the non-independent
JSTs (in terms of formal guarantees, both towards the supervised institution(s) and
the rest of the SSM bodies) is therefore accepted in the SSM investigations. (not to
mention the case of pecuniary payments or supervisory measures, where the IU
does not play any role).
JSTs risk also to retain in practice a notable weight during the investigation itself.
In fact, a really independent investigation, which covers also an inquiry on the merit
of the breach, is affordable only if investigating officers are in a sufficient number to
face, and investigate, the presumably huge amount of information that will be
referred to them. Investigating officers, moreover, shall possess not only the neces-
sary legal knowledge (possibly including also criminal law competences, in light of
the Engel case-law), but also specific expertise on the “hard-core financial pruden-
tial requirements” (such as capital and liquidity requirements, while the issue
appears less critical for prudential requirements related to governance).
It is evident, that if this twofold condition is not met, Investigating Units have
practically to rely on the expertise of the JST members for what concerns the merit
of the investigation, that is determining whether a bank breached prudential require-
ments or not.
236
Idem.
237
Idem, §137.
238
On the changes in the jurisprudence of the Court in Strasbourg concerning ne bis in idem after
A and B v Norway, see above Sect. 2.3.2. On the 2018 CJEU decisions on CONSOB (Garlsson
Real Estate SA, Case C-537/16 and Di Puma - Zecca, Joined Cases C-596/16 and C-597/16) still
concerning the double jeopardy clause, see Sect. 2.3.3.
In this sense, statistics do not draw a reassuring picture: According to the ECB
Annual Reports on supervisory activities, in 2016 out of 42 handled sanctioning
proceedings, 34 were still ongoing at the end of the year.239 In the following year, the
34 pending cases were joined by 10 new sanctioning proceedings, of which about
half (24) were still ongoing at the end of 2017.240 In 2018, the ECB initiated 27
sanctioning proceedings. Taking into account the 24 proceedings that were ongoing
at the end of 2017, the ECB handled 51 sanctioning proceedings in 2018, “an
increase of 13% relative to the 45 proceedings handled in 2017. The 51 proceedings
in 2018 led to 16 ECB decisions, an increase of 60% on the previous year”.241
Such numbers, which clearly show an increasing trend of the SSM sanctioning
procedures, raise some issues on the capacity of the SSM Enforcement and Sanction
Unit (which deals not only with investigation and sanctions, but also with enforce-
ment), as it presently stands (in terms of personnel and resources in general) to cope
with the workload of the whole SSM.
All these considerations, moreover, hold valid only when the Investigating Unit
is involved; as anticipated, however, such procedural rules are not applied for all
kinds of substantially criminal sanctions imposable under the SSM legal frame-
work. Indeed the IU is entitled to propose only the application of “penalties”, as so
defined by Article Part X, Title 2 SSM FR.
According to it, supervisory measures under Article 16(2)(m) SSM R, with-
drawal of banking authorisation under Article 14 SSM R, and periodic penalty pay-
ments under Article 18(7) SSM R, on the contrary, are applied by the Governing
Council with a non-objection procedure upon indication of the competent JST,
which, does not present even the limited independence guarantees that characterise
the Investigating Unit. In case they would be recognized a substantially criminal
nature, therefore, such sanctions or measures seem destined to cause serious viola-
tions of at least one fundamental fair trial safeguard, which appear hardly remedia-
ble without a reform of the Joint Supervisory Teams’ structure.
Lastly, on a different but related perspective, all the different bodies potentially
involved in the SSM sanctioning procedure—the Investigating Unit, the Supervisory
Board, the Administrative Board of Review (and even the Mediation Panel)—could
be considered as “acting under the authority and supervision” of the same leading
body.
239
ECB (2017), p. 39, Table 6.
240
ECB (2018), p. 78, Table 5. “Of the 44 sanctioning proceedings handled in 2017, 28 related to
suspected breaches of directly applicable EU law (ECB decisions and regulations included). These
cases concerned 26 SIs and related to the areas of own funds, reporting, public disclosure, liquidity
and large exposures […] Nine proceedings were closed in 2017 owing mainly to the nonmateriality
of the suspected breaches or the absence of a legal basis for imposing sanctions. The remaining 16
out of the 44 sanctioning proceedings handled in 2017 related to suspected breaches of national
law transposing CRD IV provisions and concern SIs or natural persons. These proceedings involve
suspected breaches with regard to governance (including internal control mechanisms), manage-
ment body functions and remuneration”.
241
Cf. ECB (2019), § 3.2.
In fact, it is the Governing Council which appoints four of the six members of the
Supervisory Board, and proposes the appointment of the other two to the European
Council.242 It is the Governing Council that appoints the members of the ABoR.
Likely, also the appointment of the IU investigating officers might today depend
either on the Governing Council, or on the Executive Board, as they are the only
decision-making body in the ECB current structure. Lastly, of course, it is the
Governing Council which, at the end of the proceeding, takes the decisions on
whether to apply a sanction or not.
The similarities between the SSM internal structure and that of the CONSOB,
already censured as contrary to Article 6 ECHR in Grande Stevens, hence put the
ECB sanctioning procedure at a rather high risk to be found in violation of the prin-
ciples of independence and impartiality required by the Convention and the Charter.
This conclusion results especially critical with regard to certain supervisory sanc-
tions, for which, as will be examined further below,243 it is not possible to deem
applicable the remedy of a full judicial review.
6.3.2 T
he Principle of Equality of Arms: Right to Be Heard,
and Right of Access to Files
Another relevant profile in the fairness of the SSM punitive powers concerns the
compliance with the principle of equality of arms deriving by Article 6(1) ECHR.
The principle requires fair balance between the parties both in civil and in criminal
proceedings, in particular to guarantee that each party is given “a reasonable oppor-
tunity to present his case under conditions that do not place him at a substantial
disadvantage vis-à-vis his opponent”.244
The prohibition of discrimination, expressed in general terms by Article 14
ECHR, was first applied by the Court in Strasbourg to judicial proceedings in civil
matters,245 and was later translated in criminal proceedings, although it has been
observed that in this context, given the structural difference between the position of
the prosecutor and that of the defendant, “equality can only be conceived of […] as
a certain equivalence”.246
The content of this principle already finds application in EU administrative pro-
ceedings, and especially in individual determinations issued by the European Union,
or by Member States acting in the scope of EU law. Article 41 of the Charter, —pro-
viding for the right to good administration—recognizes to every natural or legal
person both the right of access to files, and the right to be heard—that is the right to
give the persons concerned by a decision, the opportunity of putting forward their
242
243
Cf. below, Sect. 6.3.3.
244
Cf. Kress v France, 7.06.2001, Application no. 39594/98, § 72.
245
Cf., e.g., Dombo Beheer v Netherlands, 27.10.1993, Application no. 14448/88, § 33.
246
Cf. e.g. Trechsel (2005), p. 96 et seq.; Balsamo (2015), p. 125.
point of view on the complaints made against them, before that decision is
taken.247
The CJEU recognized wide application to these rights to all proceedings which
may culminate in adversely affecting measures (including the field of competition
law248) even before the entry into force of the Charter,249 defining in particular the
right to be heard as “a fundamental principle of Community law which must be
guaranteed even in the absence of any rules governing the procedure in question”.250
Within the EU legal framework, however, some uncertainty—relevant also for the
field of banking supervision—exists with regard to the scope of the right to be heard
under a subjective perspective, which reflects also upon the scope of the right of
access to files.
Indeed, in what is considered by the literature the first original formulation of the
right to be heard, the 1974 CJEU decision Transocean, the right applied exclusively
to the addressees of adversely affecting decisions which may be issued in a proceed-
ing.251 This restrictive interpretation, however, was not consistently followed by the
Court.252 In the 1994 decision Lisrestal, for instance, the application of the right to
be heard was limited to the subjects against which a proceeding had been initiated.
This further condition, however, got lost in the translation of the decision from
247
Cf. M. M. v Minister for Justice, Equality and Law Reform and Others, Case C-277/11,
22.11.2012, ECLI:EU:C:2012:744; although the Court on the point seems to have changed its
jurisprudence, as recognized by Opinion of Advocate General Wathelet, delivered on 16.09.2015,
in WebMindLicence, Case C-419/14, § 136. For a more detailed analysis of the theme, see Piva
(2017), p. 756 et seq., underlining how, besides for the direct application of Article 41 on Member
States, the same principles apply to the latter due to the case-law of the CJEU, upon which Article
41 CFREU has been built upon.
248
Cf. e.g., on the right to be heard, Hoffmannn la Roche & Co. AG v. Commission, Case 85/76,
13.02.1979, ECLI:EU:C:1979:36, § 9; Musique Diffusion française v. Commission, Case 100/80,
§10; Shell v. Commission, Case T-11/89, § 39; Compagnie maritime belge v. Commission, Case
C-395/96, 16.03.2000, ECLI:EU:C:2000:132, § 142, where the Court clarified that, even if Article
6(1) ECHR does not apply to antitrust proceedings, still the right to be heard and to access to files
shall be respected. On access to files as part of the principle of equality of arms, see, e.g., Solvay
SA v Commission of the European Communities, T-30/91, 29.06.1995, ECLI:EU:T:1995:115, § 83;
Imperial Chemical Industries plc (ICI) v Commission of the European Communities, Case T-36/91,
29.06.1995, ECLI:EU:T:1995:118, § 93.
249
As repeatedly affirmed by the Court of Justice cf., e.g., Transocean Marine Paint Association v
Commission of the European Communities, Case 17-74, 23.10.1974, ECLI:EU:C:1974:106, § 15;
Lisrestal and others v. Commission, Case T-450/93, 6.12.1994, ECLI:EU:T:1994:290; Dieter
Krombach v André Bamberski, Case C-7/98, 28.03.2000, ECLI:EU:C:2000:164, § 42; Sopropé -
Organizações de Calçado Lda v Fazenda Pública, Case C-349/07, 18.12.2008,
ECLI:EU:C:2008:746, § 36.
250
Cf., e.g. Belgium v. Commission, Case 40/85, 10.07.1986, ECLI:EU:C:1986:305, § 28; Belgium
v. Commission, Case 234/84, 10.07.1986, ECLI:EU:C:1986:302, § 28.
251
Transocean Marine Paint Association v Commission of the European Communities, Case 17–74,
§ 15.
252
Cf., e.g., Detlef Nölle, Case T-167/94, § 63, where the fact that the applicants were not charged
with allegation was considered a cause for refusing the application of the right. This interpretation
has been recovered in trademark cases; for a reconstruction of the case-law on the matter, see
Rabinovici (2012), p. 170.
French to English,253 and the latter “incomplete” version was then replicated both in
the following case-law of the Court,254 and in Article 41(2) of the Charter, which
does not include any reference to the need of being the person(s) against which the
proceeding has been initiated for invoking that right.255
Along this line, although the scope of the right to be heard highly varies depend-
ing on subject matters, the CJEU has increasingly, and somehow seldom, recog-
nized it also in favour of third parties which may be adversely affected by a
procedure, without being its direct targets.256
Against this interpretation, especially relevant results the case-law developed by
the CJEU with regard to the admissibility requirements for bringing action before
the Court. According to Article 263(4) TFEU, in fact, natural or legal persons may
appeal “against an act addressed to that person” or, if third parties, against an act
“which is of direct and individual concern to them, and against a regulatory act
which is of direct concern to them and does not entail implementing measures”.257
253
As it emerges comparing the French version of Lisrestal v. Commission, § 42 which states: “Ce
principe exige que toute personne à l’encontre de laquelle une décision faisant grief peut être prise
soit mise en mesure de faire connaître utilement son point de vue au sujet des éléments retenus à
sa charge par la Commission pour fonder la décision litigieuse” with the English version “That
principle requires that any person who may be adversely affected by the adoption of a decision
should be placed in a position in which he may effectively make known his views on the evidence
against him which the Commission has taken as the basis for the decision at issue” where no refer-
ence is made to the fact that the measure shall be adopted against the party (emphasis added).
254
Cf., e.g., M. M., §§ 85-87, according to which “The right to be heard guarantees every person
the opportunity to make known his views effectively during an administrative procedure and
before the adoption of any decision liable to affect his interests adversely”; Spain v Commission,
Case C-287/02, 9.06.2005, ECLI:EU:C:2005:368, § 37; Sopropé, § 37; Foshan Shunde Yongjian
Housewares & Hardware v Council, Case C-141/08 P, 1.10.2009, ECLI:EU:C:2009:598, § 83;
France v People’s Mojahedin Organization of Iran, Case C-27/09 P, 21.12.2011,
ECLI:EU:C:2011:853, §§ 64–65.
255
According to which “the right of every person to be heard, before any individual measure which
would affect him or her adversely is taken”. As reported by Rabinovici (2012), pp. 152–153, also
this provision is differently translated within the EU, and a criterion similar of that of ‘à son encon-
tre’ appears in other six versions (besides for the French one): “Dutch (‘jegems hem’); German
(‘ihr gegenüber’); Swedish (‘mot honom eller henne’); Danish (‘over for ham/hende’); Spanish
(‘en contra suya’); Italian (‘nei suoi confronti’). However, the Finnish, Portuguese, and Greek ver-
sions are similar to the English version, omitting the ‘initiated against’ criterion”.
256
Rabinovici (2012), p. 172, noticing how most EU legislations (in the field of competition law)
grant basic hearing rights to third parties having sufficient interest in a procedure, so that usually
the Courts do not have to refer to Article 41(2) CFREU to extend its scope.
257
Cf., e.g., LVM v Commission, Case T-84/89 (Joined Cases T-79/89, T-84/89, T-85/89, T-86/89,
T- 89/89, T-91/89, T-92/89, T-94/89, T-96/89, T-98/89, T-102/89, T-104/89), 19.06.1990,
ECLI:EU:C:2002:582, and Judgment in Dow Benelux NV v Commission of the European
Communities, C-85/87, 17.10.1989, ECLI:EU:C:1989:379. This review is not only subject to strict
time limitations, as if no proceeding is instituted before the Court within the 2-month period from
the publication of the measure, or of its notification, or, in the absence thereof, of the day on which
it came to the knowledge of the plaintiff, the challenged decision is held to be valid and cannot be
contested anymore as far as its merit is concerned.
These parameters have been strictly interpreted by the Court of Justice, starting
from the 1963 landmark case Plaumann,258 according to which the standing require-
ment for third private parties shall be recognized when the challenged decision
“affects them by reason of certain attributes which are peculiar to them or by reason
of circumstances in which they are differentiated from all other persons and by vir-
tue of these factors distinguishes them individually just as in the case of the person
addressed”.259
This issue was recently raised with specific regard to the SSM supervisory pro-
ceedings in the Fursin (Trasta) case, still pending, concerning the ECB withdrawal
of the banking licence to a Latvian bank (Trasta Komercbanka-TKB), due to a series
of prudential requirement violations, including in the field of anti-money
laundering.260
In March 2016, after an ECB decision ordered the withdrawal, the bank was put
into liquidation and, under Latvian law, a liquidator was appointed, and all the pow-
ers of attorneys to the management body of the bank revoked. In May 2016, how-
ever, the lawyer representing TKB during the administrative proceedings brought an
action for annulment of the contested decision on behalf of TKB and, as a precau-
tion, on behalf of six of its direct and indirect shareholders, which, contrary to the
bank, were not the direct addressees of the ECB decision. Deliberating over the
admissibility of the appeal under Article 263 TFEU, in September 2017 the Court of
Justice recognized that shareholders retain an individual and direct concern that
justifies an interest in bringing proceeding.261
Building on Plaumann, the Court recognized an individual concern to sharehold-
ers, since the ECB decision affected them “by reason of certain qualities peculiar to
them or of a factual situation which differentiates them from any other person”, that
is as shareholders “of the bank whose authorisation has been withdrawn and dif-
ferentiates the 42 direct shareholders of that bank from any other person”.262 The
258
Plaumann & Co. v Commission of the European Economic Community, Case 25-62, 15.07.1963,
ECLI:EU:C:1963:17, p. 107; Commission of the European Communities v Aktionsgemeinschaft
Recht und Eigentum eV, Case C-78/03 P, 13.12.2005, ECLI:EU:C:2005:761, § 33.
259
See, e.g., Comité Central d’Entreprise de la Société Anonyme Vittel and Comité d’Etablissement
de Pierval and Fédération Générale Agroalimentaire v Commission of the European Communities,
Case T-12/93, 27.04.1995, ECLI:EU:T:1995:78, § 59, where standing was denied to the employees
of a company on the basis that the approval of a merger by the Commission would not be a direct
cause of the loss of jobs in the merged company.
Highlighting this restrictive interpretation, e.g., see Witte (2015), p. 228; Mastroianni and
Pezza (2014), p. 947; Lamandini (2015), p. 129.
260
Fursin and Others [former Trasta Komercbanka and Others] v ECB, T-247/16 (Application of
08.07.2016) and T-698/16 (Application of 11.11.2016).
261
Order of the General Court of 12.09.2017, ECLI:EU:T:2017:623, in Fursin and Others, cit.,
currently appealed before the Court in Case C-663/17 P, 24.11.2017 and in case Trasta Komercbanka
AS, Ivan Fursin, Igors Buimisters, C & R Invest SIA, Figon Co. Ltd, GCK Holding Netherlands BV,
Rikam Holding SA v ECB, Case C-669/17 P, 28.11.2017; on which see also Opinion of AG Kokott,
delivered on 11.04.2019 (ECLI:EU:C:2019:323), where she advices to set aside the Latvian rules
on revoking a bank’s mandates in order to provide an effective remedy against the withdrawal of
the authorisation (recognizing the standing of the bank) while finding that the shareholders have no
right to challenge the withdrawal of the license of a bank.
262
Idem, §§ 61–62.
CJEU also recalled its jurisprudence according to which, as in the case under exam,
persons may be recognized individually concerned by a measure, even if they
represent a group, inasmuch as they form part of a limited class of economic
operators.263
The Court recognized a direct concern to the shareholders also in light of its
case-law, according to which the legal situation of the latter is directly concerned if
the decision affects the “substance or extent’ of their rights, “either as regards their
proprietary rights or the ability, conferred on them by those rights, to participate in
the management of the company”.264 This situation actually occurred in the Trasta
case, where the withdrawal of the bank’s authorisation prevented the latter from
performing its economic activity, therefore directly affecting the legal position of
the shareholders too, in particular their right to receive dividends from the profits of
a commercial company, the exercise of voting rights, and the right to take part in the
management of the company.265
The case-law concerning the right to be heard appears applicable also to define
the scope of the right of access to file, which represents another fundamental part of
the defence rights, both before (to fully exercise the right to be heard) and after a
decision is issued (to challenge it by judicial review).266
The purpose of this right, enshrined not only in the Charter and in the Convention,
but also in Article 7 of Directive 2012/13/EU on the right to information in criminal
proceedings, is in fact to “enable the addressees of statements of objections to
examine evidence in the […] file so that they are in a position effectively to express
their views on the conclusion reached […] on the basis of that evidence”.267
In this case too, however, critical profiles arise, concerning the boundaries of this
right. A first issue regards the interpretation of “file”, and therefore the definition of
which documents the party shall be granted access to, taking into account that,
according to Article 41(2)(b) CFREU, the latter may be limited by “the legitimate
interests of confidentiality and professional and business secrecy”.
According to Article 7(2) and (3) of the Directive, the right of access to file shall
cover at least all “all material evidence in the possession of the competent authori-
ties, whether for or against suspects or accused persons”, in addition to “further
material evidence comes into the possession of the competent authorities”. In its
263
Idem; see also Markku Sahlstedt and Others v Commission of the European Communities, Case
C-362/06 P, 23.04.2009, ECLI:EU:C:2009:243, § 36 and the case-law cited.
264
Order of the General Court of 12.09.2017, § 65, and case-law cited there.
265
Idem, §§ 67–69.
266
On the link between the right of access to files, the principle of equality of arms, and Articles
5(4) and 6(3) let. b) ECHR, see Allegrezza (2008b), p. 143 et seq.; Mitsilegas (2016), p. 164 et
seq.; Sayers (2015), p. 1333 et seq.; Gless (2013), p. 90.
267
Solvay SA, Case T-30/91, § 59. See also Imperial Chemical Industries plc (ICI), §§ 69. See
especially Article 7(2), Directive 2012/13/EU of 22.05.2012 on the right to information in criminal
proceedings, which is essentially based on the ECtHR case-law, with few more elevated standards,
such as the so-called Letter of rights, see in this sense Mosna (2017), pp. 957 and 961, highlighting
also how the provision of Article 7 recalls Article 5(4) ECHR, but without providing for grounds
for refusal; see also Sayers (2015), p. 1334 et seq.; Cape et al. (2010), p. 32 et seq.
early jurisprudence, developed in competition law, the CJEU did not recognize an
obligation to disclose the complete file to the parties, but only those documents on
which the issuing authority has based its decision on. According to this interpreta-
tion, it was hence for the same authority to both issue a decision, and select the files
the parties may get access to.268
Later, however, in the 2004 landmark decision Aalborg Portland the Court
acknowledged the need to grant to the “undertaking concerned the opportunity to
examine all the documents in the investigation file which may be relevant for its
defence”, including “both incriminating evidence and exculpatory evidence, save
where the business secrets of other undertakings, the internal documents of the
Commission or other confidential information are involved”.269
Besides for a limited case-law in which documents were considered to be “of
relevance to the investigation […] in so far as they formed part of the file”,270 the
higher protection to defence rights given under Portland was however partially
downsized by the burden of proof set upon the claimant.
Indeed, to annul a decision taken without duly granting access to files, the latter
should have shown “that the result at which the Commission arrived in its decision
would have been different if a document which was not communicated to that
undertaking and on which the Commission relied to make a finding of infringement
against it had to be disallowed as evidence”.271 This test, extremely restricted the
defence’s prerogatives, even though the Court explicitly stated that, in case the doc-
ument not communicated consisted of an exculpatory evidence, “the undertaking
concerned must only establish that its non-disclosure was able to influence, to its
disadvantage, the course of the proceedings and the content of the decision of the
Commission”, and that “it would have been able to use the exculpatory documents
in its defence”.272
A second relevant issue concerns the level of limitation to the access that the
proceeding authority may impose on the undertakings due to secrecy or confidenti-
ality reasons. According to the CJEU case-law, in fact, these motives cannot be used
to totally deny access to files; and even where it is necessary to omit some parts of
a document to protect such interests, that cannot bring to the mere issuing of blank
268
Vereniging ter Bevordering van het Vlaamse Boekwezen, VBVB, and Vereniging ter Bevordering
van de Belangen des Boekhandels, VBBB, v Commission of the European Communities, Joined
cases 43/82 and 63/82, 17.01.1984, ECLI:EU:C:1984:9, § 25.
269
The already mentioned Cement joined case: Aalborg Portland A/S (C-204/00 P) and others, §
68. For its relevance with regard to the principle of ne bis in idem, see also Sect. 2.3.3.
270
Hoechst GmbH v Commission of the European Communities, Case T-410/03, 18.06.2008,
ECLI:EU:T:2008:211, § 152.
271
Idem, § 73.
272
Idem, §§ 74–75. This test was then slightly modified in 2011, when the CJEU in Solvay estab-
lished that “where access to the file, and particularly to exculpatory documents, is granted at the
stage of the judicial proceedings, the undertaking concerned has to show, not that if it had had
access to the non-disclosed documents, the Commission decision would have been different in
content, but only that those documents could have been useful for its defence”, cf. Solvay SA v
European Commission, Case C-110/10 P, 25.10.2011, ECLI:EU:C:2011:687.
pages: The proceeding authority is instead required to provide a comprehensible

non-confidential version of the document(s) to be disclosed.273
All limitations to the right of access to files may be challenged before the Court
of Justice, which shall determine whether a non-disclosed document “might have
influenced the course of the proceedings and the content of the decision” and “have
had a significance which ought not to have been disregarded” on the basis of “an
objective link between the documents which were not made accessible during the
administrative procedure and an objection adopted against the undertaking
concerned”.274
These issues have already been faced by the CJEU with specific regard to the
ECB or, more generally, to the field of financial supervision.
In Espirito Santo Financial (2018), the Court specified that limitations are
allowed only if “based on reasons of public or private interest”. Such reasons shall
be specific, actual, and punctually stated to the applicant requesting access to files.275
In Baumeister (2018), the Court specified that information concerning the
“supervision file, including its correspondence with other bodies, do not constitute,
unconditionally, confidential information”. The latter may instead be defined, in
regard to the need of maintaining professional secrecy, in information “(1) which is
not public and (2) the disclosure of which is likely to affect adversely the interests
of the natural or legal person who provided that information or of third parties, or
the proper functioning of the system for monitoring” the financial activities.276
Lastly, in UBS Europe (also 2018), the Court clarified that the “subject of a mea-
sure adversely affecting him must have the opportunity to examine all of the docu-
ments in the investigation that might be relevant for his defence. Those documents
comprise both inculpatory and exculpatory evidence, with the exception of business
secrets concerning other persons, internal documents of the authority that adopted
the measure and other confidential information”. The CJEU affirmed that “it is how-
ever allowed to exclude from the administrative procedure evidence which has no
relation to the allegations of fact and of law in the statement of objections and which
therefore has no relevance to the investigation […] It follows from the foregoing
considerations that the right to disclosure of the documents relevant to the defence
is not unlimited and unfettered […] Accordingly, in the event of a conflict of, on the
one hand, the interest of the person who is the subject of a measure adversely affect-
ing him in having access to the information necessary for him to be in a position to
exercise fully his rights of defence and, on the other hand, the interests in connec-
tion with maintaining the confidentiality of the information covered by the obliga-
tion of professional secrecy, it is for the competent authorities or courts to seek to
strike a balance between these opposing interests in the light of the circumstances
273
Hoechst GmbH v Commission, §§ 152–153.
274
Aalborg Portland A/S (C-204/00 P) and others, §§ 76-77, and 129.
275
Cf. Espírito Santo Financial (Portugal) v ECB, Case T-251/15, 26.04.2018, ECLI:EU:T:2018:234,
appealed in Case C-442/18 P of 23.11.2018, §§ 51–83, where the ECB decision refusing to grant
access to files was annulled by the Court.
276
Baumeister, Case C-15/16, 19.06.2018, ECLI:EU:C:2018:464, § 34 et seq.
of each case”. National authorities shall therefore “ascertain whether that informa-
tion is objectively connected to the complaints upheld against him and, if this should
be the case, to weigh up” the above mentioned interests.277
The jurisprudence mentioned so far, however, is not the only parameter against
which the SSM supervisory proceedings shall be examined: When they may end up
with the application of a substantially criminal penalty, the fairness of sanctioning
procedures shall indeed be assessed also in light of the notions of the rights to be
heard and of access to file developed by the ECtHR for the matière a coloration
pénale. In this field, in fact, both rights represent a fundamental part of the adver-
sarial proceeding guarantees, according to which prosecution and defence must be
given the opportunity to have knowledge of and comment on the observations filed
and the evidence (including witnesses’ testimonies) adduced by the other party.278
For the profiles relevant to the SSM sanctioning proceedings, the content of the
right of access to files in criminal matters does not differentiate much from that
provided for by Article 41 CFREU. Indeed, also under Article 6(1) ECHR, and start-
ing from the ECtHR case Borgers v Belgium, a party potentially affected by the
result of a proceeding has the right to have all the material evidence used for the
accusation disclosed in order to guarantee the equality of arms.279 In the ECtHR
case-law too, the scope of this right, that is the identification of the documents
which shall be disclosed, is determined on the basis of the “relevance” of the said
document(s) with regard to the proceeding.280 Lastly, also in criminal matters, the
right of access to files is not interpreted to be absolute, as both in the case-law of the
ECtHR and in Article 7(4) of Directive 2012/13, the latter may be restricted—only
as strictly necessary—to protect fundamental rights of other people, or to safeguard
important public interests, such as national security.281
The debate over the definition of the moment from which the right of access to
files attaches in criminal proceedings, especially critical (and crucial) when dealing
277
UBS Europe and o., Case C-358/16, 13.09.2018, ECLI:EU:C:2018:715, §§ 66–70.
278
Cf., e.g., Rowe and Davis v. the United Kingdom, 16.02.2000, Application no. 28901/95, § 60;
Užukauskas v. Lithuania, 6.07.2010, Application no. 16965/04, § 47. According to Trechsel
(2005), p. 90, from a Conventional perspective, prosecution shall not be included in the
definition.
279
Borgers v Belgium, 30.10.1991, Application no. 12005/86.
280
Cf., e.g., Edwards And Lewis v. The United Kingdom, 27.10.2004, Applications nos. 39647/98
and 40461/98, § 46.
281
Rowe and Davis v. the United Kingdom, § 61; Moiseyev v Russia, 9.10.2008, Application no
62936/00; Edwards and Lewis v UK; Van Mechelen and Others v. the Netherlands, 23.04.1997,
Applications nos. 21363/93, 21364/93, 21427/93 and 22056/93, § 58. Restricting provisions due
to business secrecy protections or other confidential information have also been implemented by
some EU legal acts, cf. Commission Notice on the rules for access to the Commission les in cases
pursuant to Articles 81 and 82 of the EC treaty, Articles 53, 54 and 57 of the EEA Agreement and
Council Regulation (EC) 139/2004. See also Levitt (1997), p. 1424. According to the Directive,
moreover, refusals to access to files shall be authorized by a judicial authority if strictly necessary
“to safeguard an important public interest, such as in cases where access could prejudice an ongo-
ing investigation or seriously harm the national security of the Member State in which the criminal
proceedings are instituted”, see Ciampi (2012), p. 9.
with criminal investigations stricto sensu, does not seem to be in point to the SSM
sanctioning proceedings, where most of the evidence gathered by the Investigating
Unit comes from the credit institutions under investigation.
Against this background, the right of access to files as provided by the SSM
Regulations does not appear especially problematic, even when applied to proceed-
ings leading to substantially criminal supervisory sanctions. According to Article 32
SSM FR, in fact, parties of supervisory proceedings “shall be entitled to have access
to the ECB’s file, subject to the legitimate interest of legal and natural persons other
than the relevant party, in the protection of their business secrets”.282
Of course, this exception for confidential information may heavily affect their
level of protection from the perspective of the subject under investigations.
Nevertheless, this clause, read in light of the consolidated case-law of the European
Courts and of the sensitiveness of the matter of banking oversight, may well fall
under those situations in which withholding certain documents from the defence is
necessary. Such limitation can therefore be considered proportionate, and in line
with the provisions of the Convention and of the Charter,283 at least as long as the
undisclosed material does not contain items so relevant as to enable the investigated
subject to exonerate itself or have the sentence reduced.284
Different conclusions should instead be drawn with regard to some profiles of the
right to be heard, where the notion varies more significantly (for the purposes of this
analysis) in its administrative and criminal dimension.
On one side, in fact, the SSM does not appear especially critical in light of Article
41 CFREU, as interpreted by the CJEU. Under this perspective, Articles 22 and 27
SSM R require that all entities potentially affected by the ECB decisions shall be
previously given the opportunity of commenting on the facts. This right applies to
all sanctions adopted under Article 18 SSM R, as well as to supervisory measures
provided for by Articles 14 SSM R and with those established by Article 16(2) SSM
R to ensure compliance with macro-prudential decisions.
In case “an urgent decision appears necessary in order to prevent significant
damage to the financial system”, Article 22 SSM FR allows the ECB to proceed and
take a decision without granting the possibility to previously comment on the facts.
Afterwards, however, “without undue delay after its adoption”, the interested par-
ties shall be given the opportunity to do so.285
According to Article 31(6) SSM FR, this option does not apply to administrative
penalties. Considering however that it could apply to substantially criminal supervi-
sory measures and that it represents an exception to a fundamental right, this provi-
282
Cf. Articles 22 and 32(1) SSM FR.
283
Cf. Caianiello (2019).
284
In this sense, cf. Natunen v Finland, 31.03.2009, Application no. 21022/04, § 43; C.G.P. v The
Netherlands (dec), 15.01.1997, Application no. 29835/96.
285
Cf. Article 31(1)-(4)-(5) SSM FR.
sion should be interpreted strictly286. In any case the ECB shall base its decisions
only on those objections that the parties concerned have been able to comment.287
Due to the limited scope of Article 22 SSM R, the right to be heard does not
apply to macro-prudential decisions. To comply with the ECHR and the CFREU,
therefore the right should be extended also to the latter at least when they are not
general but addressed to a single credit institution.288
In the criminal matter, moreover, the notion of the right to be heard results much
articulated, (although it is not considered by the Court in Strasbourg as an absolute
right).289
First, as part of the principle of equality of arms, in this limb such right partially
overlaps with the guarantees of Article 6(3)(d) ECHR, according to which everyone
charged with criminal offences has the right “to examine or have examined wit-
nesses against him and to obtain the attendance and examination of witnesses on his
behalf under the same conditions as witnesses against him”.290 At first glance, the
impact of this provision in the SSM supervisory proceedings appears rather limited,
since most of the evidence gathered in order to impose a sanction under Article
18(1) SSM R are likely to be of documental, rather than testimonial nature.
Nonetheless, where the latter would be the case, also this profile of the right to be
heard shall find application in the SSM (punitive) proceedings, even in lack of any
specific provision of the Regulations in that sense.
Critical issues, instead, arise with regard to the modalities in which such right
shall generally be put in place. In the ECtHR case-law applicable to the criminal
matter, in fact, the right to be heard shall be read in light of Article 6(1) of the
Convention, which requires the proceeding to be hold in a public hearing.
While the compliance with this specific profile could be considered of minor
relevance for the SSM,291 extremely significant is instead that jurisprudence accord-
ing to which the “entitlement to a “public hearing” in Article 6 § 1 necessarily
implies a right to an “oral hearing””.292 This obligation is not considered absolute
by the Court, especially in cases where fair trial rights are applicable due to an
extensive interpretation of criminal matter under the Engel doctrine.293 However,
even in those cases, the exclusion from the obligation to hold an oral hearing is not
286
D’Ambrosio (2013), p. 55.
287
Articles 22(1) and Article 24(7) SSM R.
288
As underlined by D’Ambrosio (2013), p. 59.
289
On the relative character of the right to be heard for the ECHR, see Trechsel (2005), pp. 90–92.
290
Although mainly concerning witnesses, the Court has sometimes traced this guarantee back to
evidence in general, interpreting it as a right that no evidence shall be used as the basis for a convic-
tion unless the defendant has had the opportunity to challenge its validity, and comment upon its
relevance; see, e.g., Perna v Italy, 6.05.2003, Application no. 48898/99, §§ 25–32. For a detailed
case-law analysis of Article 6(3)(d) ECHR, see Trechsel (2005), pp. 292–326; Harris et al. (2014),
p. 483 et seq.; Balsamo (2015), pp. 146–151.
291
As it will be argued below, in Sect. 6.3.4.
292
Döry v. Sweden, 12.11.2002, Application no. 28394/95, § 37.
293
Jussila v. Finland, §§ 41–43.
automatic, and the criterion to establish whether that is required or not depends on
“the nature of the issues to be dealt with” by the competent court, the “gravity”
attached to the proceedings, and the “significant degree of stigma” carried out by the
applicable sanctions (in particular on whether they raise any question of fact or law
which could not be adequately resolved on the basis of the case file).294
This jurisprudence raises critical issues in the SSM legal framework.
According to Article 126 SSM FR, once an investigation is completed, the
Investigating Unit shall notify a Statement of Objections to the supervised entity.
Within a “reasonable time limit” established in the same Statement, the party has
the right to make submissions in writing to the Unit on the factual results and the
objections raised against it. With the Statement of Objection, the Unit may also
invite the party to attend an oral hearing. Such a hearing may also be requested
directly by the supervised entity itself, but that does not limit the discretion of the
Unit in deciding whether to grant the hearing or not.295
In the SSM sanctioning proceedings, therefore, the very possibility of having an
oral hearing is not a right of the party of the proceeding, but depends on the discre-
tion of the Investigating Unit.296
Interestingly, a procedure similar to this one was examined by the ECtHR again
in Grande Stevens, where the right to be heard took place in a written exchange of
views between CONSOB and the private parties, rather than through an oral hear-
ing. In that case, the Court affirmed that although the obligation to hold a hearing is
not absolute, “refusing to hold an oral hearing may be justified only in rare cases”.297
The violation of the right to be heard, also in its dimension requiring an oral
hearing, does not however automatically determine a violation of the fair trial rights:
According to the ECtHR, similarly to what already mentioned with regard to the
principles of independence and impartiality, unjustified limitations of this right may
be “remedied” if the issued decision is subject to a review before a judicial body that
has full jurisdiction. This safeguard, however, as will be argued hereinafter, does not
seem entirely applicable to the Single Supervisory Mechanism, and therefore not
fully capable of remedying the deficiencies of its sanctioning proceedings under
Article 6 ECHR.298
Before analysing this crucial point, it is however necessary to finally underline
that the SSM sanctioning proceedings may also result critical for the right to be
heard under a last profile. Indeed, according to Article 126 SSM FR, the Statement
294
Idem, §§ 41–42, 47–48 (tax-surcharge proceedings); Suhadolc v. Slovenia (dec.), 17.05.2011,
Application no. 57655/08 (summary procedure for road traffic offences).
295
Cf. above, Sect. 4.4.3.
296
Contrary for instance to what established in competition law, where “The Commission shall
give the parties to whom it addresses an SO the opportunity to develop their arguments at an oral
hearing if they so request in their reply to the SO (Article 12(1) of Reg. 773/2004)”, cf. European
Commission (2012), p. 6/11—Right to be heard (3.1, § 28).
297
298
Cf., e.g., Riepan v Austria, 14.11.2000, Application no. 35115/97, § 39; cf. below, Sect. 6.3.3.
of Objection shall contain “the findings under the investigation carried out and of
any objections raised thereto”.
This provision seems able to satisfy the right to be informed of the charges pro-
vided for by Article 6(3)(a) ECHR299 which, as underlined by legal scholars, covers
the right to be informed immediately, or at least early enough in the course of the
proceedings, of the allegations in fact and in law made by the public authority; and
the right that charges cannot be modified unless there is a new communication by
the same authority, and a sufficient period of time to allow the defence to re-structure
its strategy.300
On the other side, however, it remains uncertain whether the reference to the
“objections raised” covers also the amount of the penalty that the Investigating Unit
is proposing the Supervisory Board to impose, or at least the aggravating circum-
stances and the figures used by the IU to calculate the sanction.
Nothing in Article 126 SSM R in fact mentions this profile, which has a major
relevance from the perspective of the defence. This circumstance, together with the
limited jurisdiction of the Court of Justice for some of the sanctions imposable by
the SSM, as will be argued below, risks to leave credit institutions dangerously
unsafeguarded precisely on the profile of a sanctioning procedure more capable to
adversely affect them, that is the amount of the penalty itself.
In this sense, even though that would increase the complexity and length of the
proceeding, in order to safeguard the fundamental rights of the undertakings, and to
prevent sanctioning decisions to be made void for violation of procedural fair trial
rights, it seems recommendable for the European Central Bank to establish a right
to be heard also on the amount of the imposable fine. Such a result could be achieved
amending the SSM Framework Regulation. In lack of a political consensus in this
regard, an attempt could be at least perhaps made issuing a separate working docu-
ment (to be published, so as to be foreseeable by the parties involved), similarly to
what already occurred in Antitrust proceedings before the Commission.301
299
Kamasinski v. Austria, 19.12.1989, Application no. 9783/82, § 79; Pélissier and Sassi v. France,
25.03.1999, Application no. 25444/94, § 51; Mattoccia v. Italy, 25.07.2000, Application no.
23969/94, § 59; Penev v. Bulgaria, 7.01.2010, Application no. 20494/04, §§ 33 and 42. On the
critical issues left unsolved by the ECtHR concerning the modalities in which communication of
the charges shall be made, see Mosna (2017), p. 960; Quattrocolo (2015), p. 87 et seq.
300
Cf., e.g., Trechsel (2005), pp. 195–196; Balsamo (2018), pp. 120–123.
301
Cf. European Commission (2012), pp. 5 and 6/15—Drafting of Statement of Objections (SO)
(2.2.2), according to which “The SO must also clearly indicate whether the Commission intends to
impose fines (Article 23 of Regulation 1/2003), a periodic penalty payment (Article 24) or other
remedies (structural or behavioural), should the objections be upheld, referring to the evidence and
facts supporting such measures.16 (16) In case of imposition of fines pursuant to Article 23 of
Regulation 1/2003, the SO will refer to the relevant principles laid down in the Guidelines on set-
ting fines […] The Best Practices Notice states that, although under no legal obligation in this
respect, the SO will endeavour to include (using information available) further matters relevant to
any subsequent calculation of fines, including the relevant sales figures to be taken into account
and the year(s) that will be considered for the value of such sales. Such information may also be
provided to the parties after the Statement of Objections. In both cases, the parties will be provided
with an opportunity to comment”.
6.3.3 Right to a Full Judicial Review
As already mentioned, the application of fair trial rights, especially in their criminal
limb interpretation, often results highly problematic when applied by formally
administrative authorities, which are structurally and procedurally different from
the judiciary.302
In order to find an applicable compromise between the need to elevate the stan-
dards of safeguard when punitive sanctions are at stake, and that of not forcing (at
least, not too much) a wide range of administrative bodies to assimilate completely
with judicial ones, the Court in Strasbourg has, since its 1983 Le Compte decision,
developed a solid case-law that identifies in the “full judicial review”, before a tri-
bunal that provides the guarantees of Article 6 ECHR, an adequate counter-balance
for certain lacunas of fair trial rights in administrative punitive proceedings.303
In particular, as anticipated, full judicial review is considered to be a remedy to
structural problems concerning the impartiality and the independence of decision-
making bodies, but also to limitations of the right to an oral and public hearing.304
According to such jurisprudence, “full judicial review” or “unlimited jurisdiction”
is identified by the possibility of the reviewing body to rule both on questions of fact
and law (e.g. analysing the appropriateness and proportionality of the penalty
imposed by the administrative authority).305 In Menarini (2011)—a case concerning
national competition law, particularly relevant under several profiles also for the
field of banking supervision—the Court further specified such notion.
The ECtHR indeed considered compatible with this parameter also the scope of
review of a national court which did not have, by law, unlimited jurisdiction, but
could still decide whether the administrative authority had made a proper use of its
powers, examine the grounds for its decision, its proportionality, as well as its tech-
nical evaluations, and also review the proportionality of the fine, and, in a given
case, replace it.306
This case-law has been recognized also in the European Union, where Article 47
CFREU covers, under the principle of effective judicial protection, both the right to
302
303
Albert and Le Compte v. Belgium, 10.02.1983, Application no. 7299/75; 7496/76, § 29; Segame
SA v. France, 7.06.2012, Application no 4837/06, § 55; Menarini Diagnostics S.r.l., § 59; although
this argument holds true for Article 6 ECHR also in its civil limb meaning, see Regner v. Czech
Republic, 19.09.2017, Application no. 35289/11, §§ 130, 136, 150.
304
Cf., e.g., Riepan v Austria, § 39.
305
Cf., e.g., Albert and Le Compte, § 29; Tsfayo v UK, 14.11.2006, Application no. 60860/00, §§
42–48; Janosevic v. Sweden, 23.07.2002, Application no. 34619/97, § 81; Menarini Diagnostics
S.r.l., § 59. But see also, with specific regard to the banking matter under civil limb, Capital Bank
AD v. Bulgaria, 24.11.2005, Application no. 49429/99, §§ 98–116, where a violation was found
also in the unjustified self-restraint of a Court from exercising full jurisdiction.
306
Cf. Menarini Diagnostics S.r.l., §§ 64–67. See also Lamandini et al (2015), p. 92, highlighting
how, in that case, “The ECtHR even opened the possibility for due process rights to be calibrated
in the context of an administrative procedure with independent authorities”.
a full judicial review in the ECtHR meaning, and the right to an effective remedy
provided for by Article 13 of the Convention.307
In the 2014 Telefónica case, in particular, the Court of Justice recognized how the
application of a “penalty” by administrative authorities which do not themselves
satisfy the requirements laid down in Article 6(1) ECHR is “possible” as long as the
decisions taken could “be subject to subsequent review by a judicial body endowed
with unlimited jurisdiction”, that is entrusted with “the power to quash in all
respects, on questions of fact and law, the decision at issue”.308
Against this background, it shall be examined whether it is possible to consider
the Court of Justice a tribunal with unlimited jurisdiction for the sanctions applied
by the ECB in its supervisory capacity. Following the very broad provision of
Article 24(11) SSM R, in fact, proceedings may be brought before the CJEU “in
accordance with the Treaties”.
According to Article 263 TFEU, the Court is entitled to “review the legality of
legislative acts” (italics added) issued by EU institutions, bodies, offices or agencies
of the Union “intended to produce legal effects vis-à-vis third parties”—a jurisdic-
tion that therefore apparently excludes the merit from its scope. This conclusion
seems to be supported by the provision of Article 261 TFEU, according to which the
Court may, in any case, be conferred unlimited jurisdiction in regulations adopted
jointly by the European Parliament and the Council, and by the Council, with regard
to the penalties there provided.
Standards of review under Article 263 TFEU are particularly relevant in areas
“giving rise to complex economic assessments”, examined by the CJEU for instance
in Henri de Compte (1991 and 1994), according to which the merit of administrative
discretionary acts cannot be challenged before the Court, unless they are “mani-
festly disproportionate”.309 In more recent case-law, however, such as Chalkor and
KME (both from 2011), and again in Telefónica (2014), the Court also affirmed that
such margin of appreciation deriving from the exercise of discretionary powers
“does not mean that the Courts of the European Union must refrain from reviewing
the [Commission’s] interpretation of information of an economic nature […] The
EU judicature must, among other things, not only establish whether the evidence put
forward is factually accurate, reliable and consistent, but must also determine
whether that evidence contains all the relevant data that must be taken into consid-
eration in appraising a complex situation and whether it is capable of substantiating
307
Chalkor v. Commission, C-386/10 P, § 47; Schindler Holding Ltd and others, § 36.
308
Telefónica SA and Telefónica de España SAU v European Commission, Case C-295/12 P, 10.07.
2014, ECLI:EU:C:2014:2062, §§ 51-52. Cf. also Jones and Sufrin (2016), p. 898.
309
Cf. also, e.g., Henri de Compte v European Parliament, Case T-26/89, 17.10.1991,
ECLI:EU:T:1991:54, § 220 and case-law there mentioned, according to which “The Court cannot
substitute its own judgment for that of the appointing authority except in the case of a manifest
error or misuse of powers”; Henri de Compte v European Parliament, C-326/91 P, 2.06.1994,
ECLI:EU:C:1994:218, § 115. With a substantially similar view, on the ECtHR side, the dissenting
opinion of Jusdges Villiger, Yudkivska and Pejchal in Delta Pekárny A.S. v Czech Republic,
2.10.2014, Application no. 97/11.
the conclusions drawn from it”.310 Nonetheless, when it came to assess the compli-
ance of judicial review systems with Article 47 CFREU, the CJEU required, with
regard to competition law, a combination of the “review of legality provided for
under Article 263 TFEU” to be supplemented by “the unlimited jurisdiction in
respect of the amount of the fine”.311 This model, however, differes from that of the
Single Supervisory Mechanism.
Indeed, against a decision-making body not completely in compliance with the
parameters of independence and impartiality, and with a sanctioning procedure that
mentions but does not guarantee the right to an oral hearing, the SSM Regulations
do not always provide for a full or unlimited judicial review to all the sanctions with
a substantial criminal nature imposable by the ECB.
This consideration holds true even though no less than three reviewing bodies
may be involved in the SSM supervisory sanctioning proceedings: National judicial
authorities, the Administrative Board of Review, and the Court of Justice.312
National courts may be addressed in two cases, one concerning investigative
measures, the other concerning sanctions. In the first case, as already anticipated,
the SSM Regulation does not require a prior judicial authorization, unless so
required at the national level.313 This feature has been already found by the court in
Strasrboug to be in compliance with the Convention in the field of competition law
on dawn raids in Delta Pekárny, as long as such a lacuna is balanced by an effective
ex post judicial review that covers both legality and merit.314 Whether judicial review
may be considered so in the SSM legal framework, however, appears dubious, at
least with regard to some of the ECB powers. According to Article 13 SSM R,
national judges may play a marginal role in the ex post judicial review of some SSM
investigating acts, as they are the only authorities directly involved in conferring
prior authorizations to on-site inspections carried out by the ECB, when such mea-
sures so requires under domestic law. This provision has been considered a “fair
compromise between the values involved, since it preserves the effectiveness of the
310
Cf., e.g., Chalkor v. Commission, Case C-386/10 P, § 54; KME and Others v. Commission, Case
C-272/09, 8.12.2011, ECLI:EU:C:2011:816, § 94; Europese Gemeenschap v Otis NV and Others,
Case C-199/11, § 59; Telefónica SA, Case C-295/12 P, § 54; Commission v Tetra Laval, Case
C-12/03 P, 15.02.2005, ECLI:EU:C:2005:87, § 39. Affirming the relevance of this case-law in the
ECB supervisory procedures Ligeti and Robinson (2017), p. 232.
311
Cf. KME Germany AG, KME France SAS and KME Italy SpA v European Commission, Case
C-272/09 P, 8.12.2011, ECLI:EU:C:2011:810. Cf. also Lenaerts et al (2014), p. 394; Lamandini
et al (2015), p. 87.
312
Cf. Ter Kuile et al. (2015), p. 182 et seq.
313
Cf. above, Sect. 4.4.3. and study there mentioned reporting that this occurs only in very few
cases in the Eurozone.
314
Delta Pekárny A.S. v Czech Republic, 2.10.2014, Application no. 97/11, §§ 87–91, concerning
on site-inspections in competition law; cf. also Neruda and Barinka (2015), 412. Cf. also Ste Colas
Est, 16.04.2002, Application no. 37971/97; Ravon, 21.02.2008, App. no 18497/03; Primagaz,
21.12.2010, Application no. 29613/08; Canal Plus, 21.12.2010, Application no. 29408/08; Vinci
Construction and o. v France, 2.04.2015, Application nos. 63629/10 and 60567/10.
ECB’s supervisory powers without prejudice to the protection of business premises

to the extent that it is recognized in the relevant national law”.315
Even in the rare cases where at the national level judicial control is required,
however, national authorities do not enjoy full reviewing powers over on-site inspec-
tions. That is because, under Article 13(2) SSM R, national judges are entrusted
only with the control over the proportionality of the measure adopted, exclusively in
order to assess whether the ECB decisions are arbitrary or excessive. They are how-
ever excluded from any review on the matter, that is, for instance, on the necessity
to enforce an on-site inspection with regard to the specific subjects involved, and on
the aims pursued—which remain under the sole discretion of the ECB.
In this sense, whilst national judges may ask the ECB for detailed explanations
relating to the grounds for suspecting that an infringement has occurred, to the seri-
ousness of the suspected infringement and to the nature of the involvement of the
person subject to the coercive measures, the same authorities are not entitled to
review any of these parameters, nor allowed to be shown the ECB’s files on the
matter.316
From one side, this allocation of competence appears in line with the margin of
appreciation recognized by the Court in Strasbourg in case of decisions to be taken
in areas in which discretion plays a relevant role.317
Such a relationship between national and European bodies also seems to mirror
the competition case-law of the Court of Justice established by Roquette Frères,
according to which “competent national court, when considering the matter, may
not substitute its own assessment of the need for the investigations ordered for that
of the Commission, the lawfulness of whose assessments of fact and law is subject
only to review by the Community judicature […] The review carried out by the
competent national court […] may not go beyond an examination, as required by
315
316
Similarly, in this sense, also the new supervisory powers conferred to ESMA with regard to
equity and lending crowdfunding activities, cf. Article 24(9) to (11), Commission Proposal for a
Regulation of the European Parliament and of the Council on European Crowdfunding Service
Providers (ECSP) for Business, Brussels, 8.3.2018 COM(2018) 113 final. Partially derogating to
this approach is instead another case concerning down raids and specifically inspections (Deutsche
Bahn AG and o., Case C‑583/13 P, 18.06.2015, ECLI:EU:C:2015:404, §§ 34–37). There the CJEU
argued that such a review carries out «an in-depth review of the law and of the facts on the basis of
the evidence adduced by the applicant», so as to satify both what required by Articles 7 and 8
ECHR, and Article 7 CFREU. The scope of such a review, however, did not extend as to the power
to return documents seized in the inspection or order the destruction of unlawfully seized material.
Such allocation of competence appears more demanding compared to the aforementioned ECtHR
case-law Delta Pekárny, as well as with other CJEU jurisprudence concerning dawn raids; cf.
Steene (2016), p. 185 et seq.; Di Federico (2013), p. 31; and Neruda and Barinka (2015), p. 413.
Relying more on the margin of appreciation doctrine, cf. e.g. Funke v. France, § 55; Camenzind v
Switzerland, 16.12.1997, Reports of Judgments and Decisions 1997-VIII, § 45; Société Colas Est
and others v France, 16.04.2002, Application no. 37971/97, §§ 47.
317
In this sense, see Funke v. France, § 55; Camenzind v Switzerland, 16.12.1997, Reports of
Judgments and Decisions 1997-VIII, § 45; Société Colas Est and others v France, 16.04.2002,
Application no. 37971/97, §§ 47.
Community law, to establish that the coercive measures in question are not arbitrary
and that they are proportionate to the subject-matter of the investigation. Such an
examination exhausts the jurisdiction of that court as regards the review of the jus-
tification of the coercive measures applied”.318
The second case in which national judges could be involved as a reviewing juris-
diction, even if not explicitly mentioned in the SSM Regulations, concerns the three
complex situations previously illustrated, in which the ECB enjoys some powers
under national law, at least to a certain extent: i) When the ECB exercises indirect
sanctioning powers under Article 18(5) SSM R, requiring the competent NCA to
proceed according to its national framework; ii) under Article 4(3) SSM R, when the
ECB is entitled to directly apply national law implementing EU directives or exer-
cising options and discretions; or iii) when the ECB applies supervisory measures
under Article 9 SSM R, instructing NCAs to make use of their powers, under and in
accordance with the conditions set out in national law.
These cases, as already argued,319 may result particularly sensitive in practice
since they involve national and Union authorities, that theoretically could both
claim competence to review the adopted measures. In this context, however, it is
possible to apply the case-law of the Court of Justice, mostly developed in the fields
of State aid and competition law, according to which the allocation of full reviewing
powers depends upon which authorities is entitled to exercise discretion in the
proceeding,320 that is, in the SSM context, on whether the ECB or the NCA are
granted discretion in imposing a certain measure.
In light of the reconstruction of the SSM sanctioning and supervisory powers
illustrated above,321 in case i) it could be affirmed (still in lack of CJEU decisions on
the matter directly applicable to the ECB), that the discretion in imposing sanctions
under Article 18(5) SSM R remains exclusively in the hands of the NCAs. The latter
have to start a proceeding after the ECB requests so, but are not bound by any obli-
gation as to result to be achieved. In this situation, therefore, national courts should
be the only authorities competent to adjudicate, with full jurisdiction, the sanctions
potentially imposed.322
Opposite conclusions, on the other side, shall be drawn for case ii), since there it
is the ECB which seems to retain substantial discretion in the application of the
318
Roquette Frères SA v Directeur général de la concurrence, de la consommation et de la répres-
sion des fraudes, and Commission of the European Communities, Case C-94/00, 22.10.2002,
ECLI:EU:C:2002:603, §§ 39–40. Cf. also Lamandini et al (2015), p. 73 et seq.
319
Cf. Sects. 4.4 and 4.4.1.
320
As discussed in Sect. 4.4.1. See also Stichting Woonlinie et al v Commission, Case C-133/12 P,
27.02.2014, ECLI:EU:C:2014:105, § 55 et seq.; NV International Fruit Company v Commission,
Cases 41-44/70, 13.05.1971, ECLI:EU:C:1971:53, §§ 25–26. For further analysis, see Arons
(2015), p. 445 et seq.
321
Cf. Sect. 4.4. Cf. also Voordeckers (2019).
322
In this sense, see Fernandez-Bollo (2015), p. 143.
measure(s): This situation hence follows under the jurisdiction of the Court of
Justice.323
Confirmation in this sense arrives from the 2018 joined cases concerning la
Caisse régionale de crédit agricole mutuel, in which the CJEU was called to decide
on an ECB decision based on Article 4(3) SSM R. The case concerned the applica-
tion, by the SSM, of French national law transposing provisions of CRD IV regard-
ing good governance of credit institutions (and in particular Article L. 511-13 of the
French Code monétaire et financier), which brought the ECB to oppose the appoint-
ment of a number of subject as ‘effective directors’, for violation of the rules requir-
ing a separation between the exercise of executive and non-executive functions
within a credit institution’s management body.
In assessing the case, the Court of Justice had therefore to interpret French
national law although, according to its settled case-law,324 taking into account “the
interpretation given to them by national courts”.325
Case iii), on the other side, remains an open issue. As will be argued below, in
fact, here the potential jurisdiction of the CJEU seems at the same time uncertain,
and harbinger of revolutionary changes to the role of the Court itself in the balance
of powers within Union.326
Against this background, anyway, at present national judicial authorities can be
considered a body with “full jurisdiction” as required by Articles 6 ECHR and 47
CFREU only for the case of Article 18(5) SSM R (if the Court of Justice will con-
firm that NCAs do retain discretion in their action in this context), of course assum-
ing that further limitations to the scope of the review granted before national
authorities are not provided for in national law.
On a different level, little contribution to the compliance of the SSM sanctioning
proceedings with the right to a full judicial review comes from the Administrative
Board of Review (ABoR).
As already illustrated, the nature of the Board itself is rather controversial, since
it presents a unique and hybrid model which has so far no comparison in other so-
323
In this sense, see also Allegrezza and Rodopoulos (2017), p. 245; see also Allegrezza and
Voordeckers (2015), p. 159; Arons (2015), p. 442.
324
Cf., e.g., Criminal proceedings against Rémy Schmit, Case C-240/95, 27.06.1996,
ECLI:EU:C:1996:259, § 14; European Commission v Slovak Republic, Case C-433/13, 16.09.2015,
ECLI:EU:C:2015:602, § 81.
325
Caisse régionale de crédit agricole mutuel Alpes Provence and Others v European Central
Bank, Joined Cases T-133/16 to T-136/16, 24.04.2018, ECLI:EU:T:2018:219, §§ 84-88. See
Lamandini (2015), p. 130 et seq., according to: “Another possibility would be to read the provi-
sions as meaning that, through the application of the ECB, national law becomes EU law. In such
case the CJEU would be entitled to make the authoritative interpretation, and could well answer
the preliminary reference without having to make the balancing act of all the superimposed layers
of competences. However, this would strain the express language of the provision, which refers to
“national law”; it would also put the CJEU in the extremely uncomfortable position of having to
determine the authoritative interpretation of domestic law, something that the Court was extremely
unlikely to do and careful in avoiding so far”.
326
See also above Sect. 4.4.1.
called “quasi-judicial” European reviewing bodies.327 Far from exercising an

“unlimited jurisdiction”, the Board may only express an opinion on the legitimacy
of the draft decision adopted by the Governing Council, without any competence to
question its merit unless manifestly wrong or disproportionate.328
In light of Article 47 CFREU, moreover, the ABoR cannot be identified as a
proper “tribunal” either. Indeed, contrary for instance to the ESAs Joint Board of
Appeal, whose decisions are binding for the Authority that issued the challenged
act,329 the ABoR does not have any legal decision-making power.
Following the Board’s review, the Supervisory Board has to submit a new draft
decision for the non-objection procedure, in which the opinion of the ABoR shall be
taken into account: That does not mean, however, that the Supervisory Board is in
any way bound to align the content of the new decision to the furnished opinion.330
Against this background, therefore, the current structuring of the Administrative
Board of Review is not capable to provide a remedy to comply with the “unlimited”
or “full judicial review” required under Articles 6 ECHR and 47 CFREU. Besides
for national courts, therefore, the only other “tribunal” which is conferred jurisdic-
tion in reviewing the lawfulness of the acts adopted by the ECB remains, according
to Articles 13 and 24(11) SSM R, the Court of Justice.331
The jurisdiction of the CJEU with regard to the Single Supervisory Mechanism,
however, appears critical under several perspectives. A first, more general issue,
already raised, concerns the scope of jurisdiction of the Court when it examines
measures adopted by the SSM under Article 4(3) or Article 9(1) SSM R in applica-
tion of national law.
In particular, the Court could be called to question national law both in case the
latter is wrongly applied by the ECB, or when its application, although correct at the
domestic level, results in contrast with EU law.332 In line with what already argued
concerning the possibility for an EU institution to apply national law,333 the case of
Article 4(3) SSM R appears less problematic in light of the balance of powers cur-
rently established in the EU. Indeed, even though reviewing national law generally
327
See above Sect. 4.4.3, leaving the ABoR’s structure open to possible reforms in the future, in
which the Board might be required either to reduce its action to internal advisory functions, or to
extend to an (at least more) judicial set-up. See also Brescia Morra (2016); Brescia Morra et al
(2017).
328
Idem.
329
Cf. Article 60(5) ESAs Regulations. Contrary to the ABoR, however, the ESAs Joint Board of
Appeal cannot rule on the merit of the assessment, as it may only “confirm the decision taken by
the competent body of the Authority, or remit the case to the competent body of the Authority”, cf.
Looseveld (2013a), p. 9. See above, Sect. 4.4.3. Cf. also Chirulli and De Lucia (2015).
330
Cf. Article 24(7) SSM R as discussed above in Sect. 4.4.3.
331
The CJEU jurisdiction is also provided for by Article 35 of the Statute of the European System
of Central Banks. On this point see also Looseveld (2013b), p. 425.
332
Cases identified by Magliari (2015), p. 1371 et seq. In the first case, in fact, a violation of
national law would represent a violation of Article 4(3) SSM R, therefore challengeable before the
ECJ according to Article 263 TFEU.
333
See above Sects. 4.4 and 4.4.1.
remains in the exclusive competence of national authorities, the possibility for a

supranational court to apply, and therefore interpret, domestic provisions is not
unprecedented in the European context.
Examples of it may be found for instance in patent law, where the Unified Patent
Court is authorized to apply national law, besides for EU law and relevant interna-
tional sources,334 and also in the same jurisdiction of the Court in Strasbourg, which,
in examining the compliance of domestic systems with the Convention, often has to
interpret the first before carrying out its assessment.
Similar cases already exist also with regard to the same CJEU: Here the refer-
ence goes to Article 272 TFUE, that allows the Court of Justice to apply national
law when deciding pursuant to an arbitration clause,335 and to the already mentioned
sector of trade marks protection.336
Indeed, according to Article 65(2) of Regulation 207/2009, decisions of the
Boards of Appeal concerning actions taken by the European Union Intellectual
Property Office (EUIPO) may be challenged before the CJEU on ground of “lack of
competence, infringement of an essential procedural requirement, infringement of
the Treaty, of this Regulation or of any rule of law relating to their application or
misuse of power”. Since, according to Article 53(2) of the same Regulation, national
law is among the sources of law which may be used to declare a trade mark invalid,
the interpretation and application of domestic law also fall under the scope of review
of the Court of Justice. Similar considerations could thus be referred also to the
ECB application of national law under Article 4(3) SSM R.
Much more critical, instead, appears the possibility for the CJEU to review
national legal acts adopted upon ECB instructions under Article 9(1) SSM R.
As already mentioned, in light of the case-law concerning “composite proceed-
ings”, the lack of discretion that (from the wording of Article 9) seems to character-
ize the action of national authorities, might indicate that also this case falls under the
jurisdiction of the Court of Justice.337 This approach, however, would cause the
CJEU to be competent also in reviewing legal acts issued (at least formally) by
national authorities, a power that so far remained under the exclusive competence of
national courts. Indeed, in the case of Article 4(3) SSM R, or in trademarks law, the
(already exceptional) CJEU jurisdiction over national law is determined by specific
references made to the latter in EU law.
From Article 9, however, a much more revolutionary principle may be deduced,
according to which the Court of Justice could be competent to review legal acts
issued by national authorities, as long as an EU institution may instruct national
authorities to act in its name, and the matter concerned falls within the competence
of the Union. This new model of review would radically challenge also the prelimi-
334
Cf. Article 24(1) let. e), Agreement on a Unified Patent Court (UPC Agreement) of 19.02.2013,
OJ EPO 2013, 287.
335
Cf. Kornezov (2016), p. 270.
336
See above Sects. 4.4 and 4.4.1.
337
Cf. International Business Machines Corporation v Commission of the European Communities,
Case 60/81, § 10, as discussed above in Sect. 4.4.1.
nary ruling mechanism, which founds one of raisons d’être precisely in the separa-
tion of jurisdiction between the Union and the national level. Whether the Court will
pursue this federally-oriented interpretation, and accept standing for decisions
adopted under Article 9(1) SSM R is hard to be foreseen at present, especially tak-
ing into account the political difficulties of the European integration process over
the last few years.
The judges in Luxembourg could perhaps avoid to state on the matter applying a
stricter interpretation of the Plaumann test,338 denying as such “direct” character
before the Court to the “concerns” of the individuals affected by a legal acts adopted
by a national authority following the ECB instructions, and therefore declaring the
inadmissibility of such actions to bring proceedings.
However, given the novelty of this provision, the issue remains presently open,
and it will be possible to fully understand how, and with which implications it could
be solved, only once the CJEU will start issuing decisions on the matter.
A second critical issue concerning the role of the Court of Justice as an authority
capable of providing a “remedy” to fair trial lacunas in the SSM sanctioning pro-
ceedings, regards the very scope of the CJEU jurisdiction. Indeed, as anticipated,
according to Article 261 TFEU, Regulations adopted by the Council (such as the
SSM Regulation) may confer unlimited jurisdiction to the Court upon the penalties
there included.
Currently, however, and contrary for instance to other comparable legislation,339
no such a provision may be found in the SSM Regulations, with the single exception
of Article 18(7) SSM R.
This provision recalls Regulation 2532/98, which at Article 5, actually estab-
lishes that—for final decisions whereby a sanction is imposed—full jurisdiction is
granted to the Court of Justice. Against this background, therefore, to date the CJEU
appears to be granted full jurisdiction only with regard to the cases recalled by
Article 18(7) SSM R, that is periodic pecuniary penalties and other pecuniary penal-
ties applied due to a violation of an ECB decision.
Without circumventing the wording of Article 18(5) SSM R, in fact, it seems
unlikely that Article 5 Regulation 2532/98 might be extensively applied also to the
other hypothesis of Article 18.340
338
See above, Sect. 6.3.2.
339
Cf., e.g., Regulation 1/2003 in antitrust proceedings, that will be examined at the end of the
paragraph. Unlimited jurisdiction for the CJEU may be found also in the Commission’s Proposal
to reform the ESAs (Brussels, 20.9.2017 COM(2017) 536 final 2017/0230 (COD) cit., and in
Article 33 of the Commission Proposal for a Regulation on Crowdfunding Service Providers, cit.,
according to which “The Court of Justice shall have unlimited jurisdiction to review decisions
whereby ESMA has imposed a fine or a periodic penalty payment or imposed any other sanction
or administrative measure in accordance with this Regulation. It may annul, reduce or increase the
fine or periodic penalty payment imposed”.
340
In this sense, it is worth recalling that the 2017 Commission’s Proposal to reform the ESAs
(Brussels, 20.9.2017 COM(2017) 536 final 2017/0230 (COD) cit.) provides for an explicit intro-
duction of the clause of CJEU unlimited jurisdiction.
In particular, Article 18(4) establishes that “The ECB shall apply this Article in
accordance with the acts referred to in the first subparagraph of Article 4(3) of this
Regulation, including the procedures contained in Regulation (EC) No 2532/98, as
appropriate”. As it has been pointed out, however, Article 5 Regulation 2532/98 “is
not strictly speaking a rule of procedure that ECB is bound to apply”.341
Indeed, the possibility that the choice of granting the CJEU full jurisdiction
could be (more or less implicitly) framed in “the procedures contained in Regulation
2532/98”, when the Treaty requires an explicit indication to achieve so, appears
uncertain,342 especially considering that this “unintended” consequence might have
great practical and political impacts both on the ECB and the CJEU workload.343
This conclusion seems to find confirmation also in Article 6 Regulation 2532/98,
according to which «in the event of a conflict between the provisions of this
Regulation and provisions of other Council Regulations [as it is the case of the SSM
R] enabling the ECB to impose sanctions, the provisions of the latter shall
prevail».
In light of the express request of Article 261 TFEU, it could be argued that the
silence of the SSM Regulation on the matter of unlimited jurisdiction to the CJEU
is able to cause a “conflict” between the two regulations when it comes to sanctions
imposed under Article 18(1) SSMR. A conflict which according to the aforemen-
tioned Article 6, shall be solved in favour the SSM R.344
In this sense, it is worth reminding that the extension of the Court’s competences
established by the Lisbon Treaty has already increased the workload of the CJEU,
raising multiple concerns about the capability of the Court to deal with a constantly
increasing number of pending cases in a reasonable time345—and these concerns
endure also after the last recent reform of September 2016, that brought to the aboli-
tion of the Civil Service Tribunal and to the hiring of new judges.346
341
342
Cf. Lamandini (2015), p. 137; Lamandini et al (2015), p. 91 et seq., defining this lack of explicit
full jurisdiction as a “subtle ‘courts unwelcome’ sign in the SSM framework”. Opting for a positive
answer Ligeti, Robinson (2017), p. 232.
343
Cf. Lamandini (2015), p. 137. Opting for a positive answer Ligeti and Robinson (2017), p. 232.
344
Cf. also Article 121 SSM FR, that seems to distinguish the relationship of the SSM FR with
Regulation 2532/98 for the purpose of applying sanctions under Article 18(1) and 18(7) SSM
R. Cf. also Lamandini et al. (2015), p. 92 highlighting how the ECB did not list among the conflicts
between the SSM rules and Reg. 2532/98 the issue of judicial review, see ECB Proposal for
amending Regulation (EC) No 2532/98 concerning the powers of the European Central Bank to
impose sanctions, OJ C 144/6 15 April 2014.
345
See, e.g., House of Lords (2013), following a first report in 2011 and still maintaining some
concerns about the capability of the new structure to deal with its workload. In 2016, the average
duration of review proceedings (direct action) was 19.3 months; of appeal proceedings was
12.9 months; of preliminary rulings proceedings was 15 months (2.7 in case of urgent procedures),
source: CJEU (2016), p. 100. Questioning the lack of specialisation in the criminal matter within
the CJEU, Manacorda (2013), p. 244.
346
See Regulation (EU, Euratom) 2015/2422 of 16.12.2015 amending Protocol No 3 on the Statute
of the Court of Justice of the European Union, and Regulation (EU, Euratom) 2016/1192 of
6.06.2016 on the transfer to the General Court of jurisdiction at first instance in disputes between
the European Union and its servants.
This is especially critical since it appears obvious that (if the Eurozone endures
too) litigations involving the ECB and specifically the SSM are intended to rapidly
increase.
In this sense, it should be enough to consider that, only in 2015–2019, several are
already the causes lodged before the CJEU and the number appears destined to
grow.347
In the first case of July 2017 (now final), the Irish bank Permanent tsb Group
Holdings plc was imposed pecuniary fines under Article 18(7) SSM R for an overall
amount of EUR 2.5 million for failure to comply with two ECB decisions imposing
specific liquidity requirements.348
In the second case, of August 2017, the Italian Banca Popolare di Vicenza S.p.A.
(currently wound up) was fined under Article 18(1) SSM R for an overall amount of
EUR 11.2 million for several breaches of the CRR prudential requirements.349 In
this specific case, the opportunity to examine the SSM sanctions under a criminal
law perspective seems to find a confirmation in the same ECB public announcement
of the decision, which highlighted how “although the banking license of Banca
Popolare di Vicenza S.p.A. in L.C.A was subsequently withdrawn, the penalties
imposed take into account the severity of the breaches and the degree of responsibil-
ity of the entity”—parameters which seems to closely mirror the two main Engel
criteria.350
In the third case, of 14 March 2018, Banco de Sabadell, S.A. was fined under
Article 18(1) SSM R for an amount of EUR 1.6 million for “continuous breach of
347
Among which: Landeskreditbank Baden-Württemberg - Förderbank v European Central Bank,
Case T-122/15; Caisse régionale de crédit agricole mutuel Alpes Provence and Others v European
Central Bank, Joined Cases T-133/16 to T-136/16; Crédit mutuel Arkéa v European Central Bank,
Case T-52/16, currently appealed before the Court in Crédit Mutuel Arkéa v ECB, Case C-153/18
P, 23.02.2018; Crédit mutuel Arkéa v European Central Bank, Case T-712/15, currently appealed
before the Court in Crédit mutuel Arkéa v ECB, Case C-152/18 P, 20.04.2018; and the following
pending [information not yet available]: Fursin and Others v ECB, Case T-247/16, Order
12.09.2017, Application of 8.07.2016, ECLI:EU:T:2017:623, currently appealed before the Court
in Case C-663/17 P, 24.11.2017 and in case Trasta Komercbanka AS, Ivan Fursin, Igors Buimisters,
C & R Invest SIA, Figon Co. Ltd, GCK Holding Netherlands BV, Rikam Holding SA v ECB, Case
C-669/17 P, 28.11.2017; Fursin and Others [former Trasta Komercbanka and Others] v ECB,
T-247/16 (Application of 08/07/2016) and T-698/16 (Application of 11/11/2016); Fininvest and
Berlusconi v ECB, Case T-913/16, of 10.02.2017; Comprojecto-Projectos e Construções, Lda and
Others v European Central Bank, Case T-22/16, Order of 9.03.2017, Application of 4.03.2016,
ECLI:EU:T:2017:172; Berlusconi and Fininvest, Case C-219/17, of 11.08.2017.
348
Cf. ECB, Imposition of administrative penalties on Permanent tsb Group Holdings plc,
13.07.2017 (published in August 2017). https://www.bankingsupervision.europa.eu/banking/sanc-
tions/shared/pdf/ssm.170828_publication_template.en.pdf. Accessed 17 July 2018.
349
In particular of Article 99(1)—referring to the own funds requirements of Article 92 CRR;
431 in connection with Article 437; and Article 395, cf. ECB, Imposition of administrative penal-
ties on Banca Popolare di Vicenza S.p.A. in liquidazione coatta amministrativa, 24.08.2017 (pub-
lished in September 2017). https://www.bankingsupervision.europa.eu/banking/sanctions/shared/
pdf/ssm.170911_publication_template.en.pdf. Accessed 17 July 2018.
350
ECB, Press release of 15.09.2017. https://www.bankingsupervision.europa.eu/press/pr/
date/2017/html/ssm.pr170915.en.html. Accessed 17 July 2018.
the own funds requirement”.351 This last decision was challenged by sanctioned
credit institution before the Court of Justice pursuant to Article 263 TFEU. In three
subsequent cases, of 16 July 2018, the ECB sanctioned CA Consumer Finance,
Crédit Agricole Corporate and Investment Bank, and Crédit Agricole, S.A also for
violations of own funds requirements. These decisions too were challenged before
the CJEU.
In December 2018, Novo Banco SA was fined by the ECB for “breaches of
reporting requirements” under Article 18(1) and then two times for violations of
ECB decisions under Article 18(7) SSM R.
Lastly (so far) in February 2019, Sberbank Europe AG was fined for “breaches
of the large exposure requirements” again under Article 18(1).352
It is possible, therefore, that in the next future the CJEU will have to take position
on the problem as to how far the legality review of Article 263 TFEU could be
stretched to tackle also profiles of merit (although for instance, in Banco de Sabadell
SA the main complaint concerned the lack of anonymization of the sanctions, while
the most critical aspect for the CJEU jurisdiction concerns instead the kind and the
amount of the penalty imposed).
A further and last hint of the limited nature of the jurisdiction of the CJEU in this
field seems to emerge also from the arguments expressed by the same Court in the
aforementioned cases Chalkor and Telefónica. It should in fact be reminded that the
CJEU considerations that the model of jurisdiction established under Article 263
TFEU allows the Court to “establish whether the evidence put forward is factually
accurate, reliable and consistent” and “determine whether that evidence contains all
the relevant data that must be taken into consideration”353 have all been made within
the specific matter of competition law. Antitrust Regulation No. 1/2003, which
under a different perspective provides for far less procedural guarantees than the
SSM Regulations, contrary to the latter however explicitly confers unlimited juris-
diction to the Court of Justice, as requested by the Article 261 TFEU.354
In lack of a correspondent provision in the SSM Regulations, and in light of
Recital (60) SSM R, according to which “pursuant to Article 263 TFEU, the CJEU
is to review the legality of acts of, inter alia, the ECB, other than recommendations
and opinions, intended to produce legal effects vis-à-vis third parties” (italics
added), the CJEU jurisdiction on the SSM decisions, appears confined to a narrower
interpretation of Article 263 TFEU, in which the merit of the sanction applied seems
hardly challengeable.
In the current wording of the SSM Regulations, therefore, the CJEU seems capa-
ble of nullifying a decision, even if containing a substantially criminal sanction,
only when it is manifestly wrong, which clearly does not constitute “full review” in
351
ECB, Imposition of administrative penalties on Banco de Sabadell, S.A., 14.03.2018 (published
in May 2018). https://www.bankingsupervision.europa.eu/press/pr/date/2018/html/ssm.pr180508.
en.html. Accessed 17 July 2018.
352
For reference and a complete and update list of sanctions imposed, see https://www.bankingsu-
pervision.europa.eu/banking/sanctions/html/index.en.html.
353
Cf., e.g., Telefónica SA, Case C-295/12 P, § 54.
354
Cf. Recital (33) and Article 31, Regulation 1/2003.
the sense of the Convention. In this sense, in fact, it seems irrelevant that the Court
could, in line with the approach chosen in competition law, self-restrict its scope of
review for particularly complex technical matters: What is relevant, for the compli-
ance with Article 6 ECHR is indeed the possibility for a judicial body to quash also
the merit of a decision (which, under the SSM Regulation, does not seem to cover
sanctions under Article 18(1) SSM R), and not the circumstance that such a review
is concretely carried out in the specific case.
Conferring the CJEU full jurisdiction through a legislative amendment to the
SSM Regulations appears therefore increasingly necessary and urgent, if the sanc-
tioning bodies and proceedings are maintaining the internal administrative struc-
ture, and the Engel case-law keeps holding also in the EU (not to mention if the EU
accesses the ECHR).355 The worst scenario, in fact, could see each and every sanc-
tion imposed by the SSM, even with the best reasons on the merit, being invalidated
due to procedural violations of fair trial rights that cannot be remedied before a
judge granted with powers of full judicial review.356
6.3.4 Right of Legal Assistance and Right to a Public Hearing
Two other fundamental fair trial rights, already applicable also to administrative
proceedings in light of the Charter, result also relevant in the SSM sanctioning pro-
cedure, that is the right to assistance, and the right to a public hearing.
According to Article 47(3) CFREU, everyone whose rights and freedoms guar-
anteed by the law of the Union are violated has the right to be “advised, defended
and represented”. In its application to the criminal matter, this right refers more
specifically to “legal” assistance, and is further detailed by Article 6(3)(c) ECHR,
and by Directive 2013/48/EU which implemented most of the ECtHR case-law. The
scope of the directive, however, refers (at least formally) only to the criminal matter
stricto sensu, and therefore has no explicit application to the matter of banking
supervision.357
355
Of this opinion, e.g., Arons (2015), p. 474; Ter Kuile et al. (2015), p. 183.
356
In this sense, it is worth reminding that one of the key issues that brought to the decision of non-
compliance of the proceedings before the Commission bancaire with Article 6 ECHR was pre-
cisely the absence of full jurisdiction in the judicial review then established for imposed supervisory
sanctions, cf. Dubus S.A. v France, §§ 65–71.
357
Directive 2013/48/EU of 22.10.2013 on the right of access to a lawyer in criminal proceedings
and in European arrest warrant proceedings, and on the right to have a third party informed upon
deprivation of liberty and to communicate with third persons and with consular authorities while
deprived of liberty, Official Journal of the European Union, L 294/1. Highlighting how the
Directive missed an opportunity in not extending its scope also to the administrative punitive mat-
ter, in light with the Engel case-law, Centamore (2016), p. 6.
The right to legal assistance plays a fundamental role to ensure that all other fair
trial rights are correctly applied, and to protect the accused against abusive coercion
on the part of the authorities.358
As recognized by the Court in Strasbourg, as well as by Directive 2013/48, in
criminal proceedings the right to legal assistance applies in favour of suspects from
the time when they are made aware by the competent authorities, by official notifi-
cation or otherwise, that they are suspected or accused of having committed a crimi-
nal offence, that is to say, also in pre-trial phases.359
Article 6(3)(c) ECHR, moreover, requires legal assistance to be “practical and
effective”, meaning that counselling conditions shall concretely allow the defendant
to enjoy this right without undue delay.360 Nonetheless, the right to legal assistance
is not considered absolute by the ECtHR case-law.
According to the test developed in Salduz, and in the following case-law (as well
as in Directive 2013/48, although not equally transposed by Member States361),
compliance with Article 6 ECHR shall be assessed on the basis of a double test, to
determine: (a) Whether there were “compelling reasons” to restrict access to legal
assistance; and (b) whether, even when a restriction on access to legal advice was
justified by compelling reasons, the admission of a statement made in lack of legal
358
Salduz v. Turkey, 27.11.2008, Application no. 36391/02, §§ 53-54; Ibrahim and others v. The
UK, 16.12.2014, Applications nos. 50541/08, 50571/08, 50573/08 and 40351/09 (hereinafter
“Ibrahim 2014”), § 192. On this line, Trechsel (2005), p. 245 (calling them “the Technical Aspect”
of the right to defence); with regard to the EU legal framework, Mosna (2017), p. 963; Symeonidou-
Kastanidou (2015), p. 69; Ðurðević (2016), p. 19 et seq.; Granner and Raschauer (2014), p. 676.
359
Cf., e.g., Salduz v. Turkey, § 50; Öcalan v Turkey, 12.05.2005, Application no. 46221/99, §§
131-135; Dayanan v Turkey, 13.10.2009, Application no. 7377/03, §§ 30-31; Imbroscia v
Switzerland, 24.11.1993, Application no. 13972/88, § 36; Campbell and Fell v the United Kingdom,
§ 99; Goddi v Italy, 9.04.1984, Application no. 8966/80, § 31. See also Article 2, Directive 2013/48,
and Trechsel (2005), p. 282 et seq.
360
Cf. Artico v Italy, 13.05.1980, Application no. 6694/74, § 33. Sayers (2014), p. 1340 et seq.;
Mosna (2017), p. 965; Trechsel (2005), p. 286 which assesses the issue of quality of defence.
The crucial debate about the waivers to the right of legal assistance, both in the ECtHR case-
law and in Directive 2013/48/EU of 22.10.2013, on the right of access to a lawyer in criminal
proceedings and in European arrest warrant proceedings, and on the right to have a third party
informed upon deprivation of liberty and to communicate with third persons and with consular
authorities while deprived of liberty, which represents a fundamental issue in criminal proceed-
ings, is not analysed in this work, as it does not appear relevant for the SSM sanctioning proceed-
ings; for a recollection of the legal debate on the matter however, see, among others, Tomkin
(2014), pp. 1377–1378; Centamore (2016); Mosna (2017), p. 965 et seq. The conditions from
which the right to legal assistance attached represent a fundamental critical problem in the defini-
tion of this right; however this profile does not raise special problems in the field of banking super-
vision. For an analysis of the critical issues related to it in criminal proceedings, especially with
regard to the suspect’s questioning when the defendant is deprived of its personal freedom, see,
among others, Mosna (2017), p. 967 et seq.; Tomkin (2014), pp. 1377–1378; Bubula (2013).
361
As acknowledged by both legal scholars (see, e.g. Anagnostopoulos (2014), p. 4 et seq.; Cape
and Hodgson (2014), pp. 462 and 476), and by the same Court in Strasbourg (A.T. v Luxembourg,
9.04.2015, Application no. 30460/13).
assistance would cause such an undue prejudice to the applicant, so as to undermine

the fairness of the proceedings as a whole.362
In the context of the SSM sanctioning proceedings, the right of legal assistance
is not provided for by the SSM Regulation (issued by the Council), that refers only
in general to “due process” rights, but in the SSM Framework Regulation, which is
a subordinated piece of legislation issued by the same ECB. There, this right is
established for all ECB supervisory procedures363 by Article 27 SSM FR. In case an
oral hearing is called by the Investigating Unit, the right is also provided for by
Article 126(3) SSM FR. In any case, legal assistance in ensured by the SSM FR
only to “parties” to the ECB supervisory procedures which, according to Article 26
SSM FR, do not seem to include all the subjects that may be interviewed by the
ECB (such as staff or representatives of the supervised entities, listed in Article 11
SSM R).
The relevance of this lacuna in assessing the fairness of the SSM sanctioning
proceedings shall not be underestimated; however, it should also be recalled that,
most of CRR violations which may be directly sanctioned by the ECB under Article
18(1) SSM R are “quantitative”, rather than “qualitative” breaches (such as irregu-
larities in liquidity, or capital buffer requirements). It is therefore reasonable to sup-
pose, that most evidence that will be needed to prove such infringements would be
represented by documents, rather than by oral testimony.
Moreover, natural persons which are interviewed by the ECB cannot in any case
become the target of a punitive proceeding in the SSM context, given the limitations
of supervisory sanctioning powers only against legal entities.364 Nonetheless, in
case their conduct could constitute suspicion of a crime (such as obstruction of
supervisory functions) these subjects may be held liable under national law.
According to Article 136 SSM FR, the ECB is indeed under a duty to refer suspects
of criminal activities to the competent NCA.365
The last fair trial right analysed here among those applicable both to criminal and
“purely” administrative proceedings, is the right to a public hearing. The rights
provided for by Article 47 CFREU and Article 6(1) ECHR, where, as mentioned
above, it is strictly linked with the right to an oral hearing.
A public hearing is a fundamental guarantee for the defendant, as it prevents to
deal litigations away from public scrutiny, therefore increasing the control over the
respects of fundamental rights, and contributing to maintain public confidence in
362
Cf. Salduz v Turkey, § 50; John Murray v The UK, 28.10.1994, Application no. 18731/91, § 63;
for a more recent application, in which the right was limited in the context of anti-terrorism inves-
tigations, see Ibrahim 2014, §§191 et seq. Among the many academic comments on the issue see,
e.g., Mosna (2017), p. 964; Trechsel (2005), p. 345; Tomkin (2014), pp. 1377–1378. Limitations
to the right of access to a lawyer are provided for also by Article 3 of Directive 2013/48. Critical
on these provisions Anagnostopoulos (2014), p. 12 et seq.; Symeonidou-Kastanidou (2015), p. 76
et seq.; Mosna (2017), p. 968 et seq.
363
Cf. Article 2(24) SSM FR; see also, however, Lamandini et al (2015), p. 75 et seq.
364
365
Cf. above, Sect. 6.1.3, and below, Sect. 6.3.6. See also Sect. 4.4.3.
the administration of justice.366 Derogations to the right to hold a public hearing are
however most common in administrative proceedings.
This includes the Single Supervisory Mechanism, as the SSM Framework
Regulation explicitly states that oral hearings, when they are set, “shall not be held
in public”.367
According to the ECtHR, a first remedy to such deficiency in the administrative
punitive matter is represented by the existence of the right to full judicial review
before a body granted with unlimited jurisdiction, in the terms described above.368
In this case, however, the lack of full judicial review for all types of SSM puni-
tive sanctions seems to bear consequences less severe than those foreseen for other
fair trial rights. Indeed, neither under the CJEU, nor under the ECtHR case-law on
criminal matter, the right to a public hearing is considered absolute,369 and deroga-
tions can be allowed in specific circumstances—mostly listed in Article 6(1)
ECHR—as long as they represent a proportionate response to pressing needs of a
democratic society.370
Among the reasons that justify not to hold a public hearing, particularly signifi-
cant for supervisory procedures is that jurisprudence of the ECtHR according to
which the open and public nature of proceedings may be limited in order to protect
particularly sensitive interests, such as morals, public order or national security in a
democratic society, or to the extent strictly necessary in the opinion of the court in
special circumstances where publicity would prejudice the interests of justice.371
Under this perspective, even though the “mere presence of classified information
in the case file does not automatically imply a need to close a trial to the public”,372
the extreme sensitiveness of the information dealt with by the ECB for the stability
of the whole European financial market, which are involved also in SSM sanction-
ing proceedings, might justify the need not to hold public hearings. This right, in
366
Cf. Pretto and Others v Italy, 8.12.1983, Application no. 7984/77, § 21.
367
Cf. Articles 24(2) and 126(3) SSM FR. Similarly also in Antitrust proceedings, see European
Commission (2012), p. 7/11—Right to be heard (3.2 at 32), according to which “The oral hearing
is not public”.
368
See before, Sect. 6.3.3. Cf. also Diennet v France, 26.09.1995, Application no. 18160/91, § 34;
Riepan v Austria, § 39.
369
Critical on the reasoning of the ECtHR in defending the value of this rights, Trechsel (2005),
p. 121, which underlines that “visitors are the exception, not the rule”, in judicial proceedings, and
that the assumption that if the public is represented “this will contribute to the fairness of the pro-
ceedings is somewhat naive”.
370
Taking inspiration from the limitations provided for by Articles 8-11 ECHR, see, e.g. Roman
Zakharov v. Russia, 4.12.2015, Application no. 47143/06, § 228 et seq.; see also Campbell and Fell
v the United Kingdom, § 86. For a detailed analysis of the ECtHR case-law on the exceptions and
limitations to this right, see Trechsel (2005), pp. 129–131; Harris et al. (2014), p. 433 et seq.
371
Such as the safety or privacy of witnesses or to promote the free exchange of information and
opinion in the pursuit of justice, cf. B. and P. v. the United Kingdom, 24.04.2001, Applications nos.
36337/97 and 35974/97, § 37. See also Riepan v Austria, § 27; Krestovskiy v Russia, 28.10.2010,
Application no. 14040/03, §24; Sutter v Switzerland, 22.02.1984, Application no. 8209/78, § 26;
Jussila v. Finland, §§ 41–43.
372
Belashev v. Russia, 4.12.2008, Application no. 28617/03, § 83; Welke and Białek v. Poland,
1.03.2011, Application no. 15924/05, § 77.
addition, may be also waived by the interested persons, as long as that occurs in an
unequivocal manner, and there is no important public interests to the contrary.373 In
this sense, it has been pointed out by legal scholars that the right to a public hearing
often does not represent a right for the accused—for whom, avoiding publicity
might frequently be an advantage—but rather an institutional guarantee, to be read
together with the right to freedom of expression set out in Article 10 ECHR.374
In the ECB supervisory proceedings, therefore, the non-public nature of oral
hearings does not seem to represent a critical issue neither for the rights of the par-
ties involved (which in supervisory matters could actually prefer hearings to be
private), nor for the fairness and efficiency of the SSM decisions, which should not
bear significant consequences in case hearing are not hold in public.
6.3.5 The Privilege Against Self-Incrimination
The assessment over the compliance of the SSM procedural safeguards with fair
trial rights appears instead especially critical with regard to the right not to incrimi-
nate oneself.
The privilege is already “one of the most complex guarantees in the entire body
of fundamental rights”375 in the context of criminal proceedings stricto sensu, due to
the difficulty in precisely defining the boundaries of this safeguard.
Even more so, in administrative proceedings re-classified as matière a coloration
pénale, the privilege against self-incrimination perhaps represents the right whose
application results most critical, in light of the traditional structure of administrative
investigations, and the procedural rights there provided.
In this context, the imputability of the privilege not only to the defence rights,376
but also to the presumption of innocence—underlined both at the academic level,377
by the case-law of the Court of Strasbourg,378 and clearly affirmed in Directive
373
Cf., e.g., Hakansson and Sturesson v Sweden, 21.02.1990, Application no. 11855/85, § 66;
Schuler-Zgraggen v Switzerland, 24.06.1993, Application no. 14518/89, § 58; Pauger v Austria,
28.05.1997, Application no. 16717/90, § 58.
374
Cf. Trechsel (2005), pp. 121–123.
375
Cf., e.g., Telfner v Austria, 20.03.2001, Application no. 33501/96, § 15; John Murray v. the UK,
08.02.1996, Application no. 18731/91, § 54; Melo Tadeu v Portugal, 23.10.2014, Application no.
27785/10, § 60; Vassilios Stavropoulos v Greece, 27.09.2007, Application no. 35522/04, § 39;
Barberà, Messegué and Jabardo,§ 77; Poletan e Azirovik v. Macedonia,12.05.2016, Application
nos. 26711/07, 32786/10 e 34278/10, § 64; Grande Stevens,§ 159.
376
See, e.g., Viering (2006), p. 626; Grevi (1972), p. 49 et seq.
377
See, among others, Trechsel (2005), p. 166; Nehl (2014), p. 1277 et seq.; Sayers (2014), p. 1303
et seq.; Illuminati (1979), p. 191 et seq.; Chenal and Tamietti (2012), p. 222 et seq.; Balsamo
(2015), p. 134 et seq. The inclusion of the privilege within the presumption of innocence is not
universally shared in the EU legal context see, e.g., Stumer (2010); Allegrezza (2017), p. 952;
Balsamo (2015), pp. 131–134.
378
Cf., e.g., Saunders v the UK, 17.12.1996, Application no. 19187/91, § 68; O’Donnell v the UK,
7.07.2015, Application no. 16667/10, concurring opinion of Judge Wojtyczek, § 3; Heaney and
2016/343 on the strengthening of certain aspects of the presumption of inno-

cence379—appears especially significant.
Since its very first wordings, in fact, the presumption of innocence has played an
essential role in ensuring that punitive proceedings comply with the principle of
human dignity and with the other fundamental rights of the parties potentially
affected.380
Such relevance, currently enshrined by most international legal sources dealing
with human rights protection,381 does not however always find an explicit and equiv-
alent recognition in all the domestic legal systems.382 This circumstance brought to
rather diverging results in different legal contexts.
In the US, for instance, where it is not covered by a specific Constitutional provi-
sion, the presumption faced a drastic downsizing of its scope in the last century,
passing—especially after the 1979 Supreme Court decision Bell v. Wolfish383—from
a fundamental bulwark of the individual’s rights against State abuses to a mere evi-
dentiary rule with generally no application to pre-trial proceedings.384
On the contrary, even before the entry into force of the Lisbon Treaty, several EU
Member States lacking an explicit indication of the presumption at the constitu-
tional level, have nonetheless been conferring it a constitutional relevance, and had
it play a fundamental role in safeguarding suspects and defendants.385
McGuinness v Ireland, 21.12.2000, Application no. 34720/97, § 40; Quinn v. Ireland, 21.12.2000,
Application no. 36887/97, § 40.
379
Cf. Recital (25) and Article 7. For the first general comments on the Directive see, e.g., Sayers
(2015); Cras and Erbežnik (2016), p. 25 et seq.; Lamberigts (2016a), p. 36 et seq.; Lamberigts
(2016b); Camaldo (2016); Canestrini (2016), p. 2224 et seq.; Lippke (2016). Cf. also Commission
Green Paper of 26 April 2006 on the presumption of innocence, COM (2006) 174 final.
380
For a reconstruction of the origin of the principle since ancient times, with a special focus on the
French and Anglo-American legal systems, see Quintard-Morénas (2010), pp. 107–149. See also
Helmholz et al. (1997); Baughman (2011); O’Boyle (2000), p. 1021.
381
Cf., e.g., Article 11(1) of the Universal Declaration of Human Rights of 1948; Article 14(2) of
the International Covenant on Civil and Political Rights of 16.12.1966; Principle 36, of the UN
Body of Principles for the Protection of All Persons under Any Form of Detention or Imprisonment;
Human Rights Committee, General Comment on Article 14: Communication No 770/1997, Gridin
v Russian Federation, § 3.5. and 8.3.
382
Cf. Lupária (2017), pp. 919–920.
383
Bell v. Wolfish, 441 U.S. 520, 545 (1979). In a public statement following his dissenting opinion,
Justice Marshall concluded that with this decision, “the Supreme Court decided the presumption
didn’t exist at all”, cf. Goldstein (1979), while traditionally the presumption of innocence was
granted a fundamental rule of common law systems (see, e.g., In re Winship, 397 U.S. 358, 1970).
384
In this sense, Quintard-Morénas (2010), p. 141 et seq., highlighting how “Thirty years after Bell
v. Wolfish, the distinction between accused persons and convicted offenders has become stagger-
ingly blurred in the United States” (p. 147).
385
This is, for instance, as reported by Lupária (2017), p. 919, the case of Germany (Weigend 2014,
p. 286 et seq.; Bohlander 2012, p. 21 et seq.), and Belgium (Caterini 2015, p. 24 et seq.; Paulesu
2009, p. 7 et seq.). Similar consideration, although highly debated, has been recognized in Italy
too, where Article 27(2) of the Constitution makes explicit reference not to the presumption of
innocence but to the right not to be considered guilty until the conviction is definitive (Gialuz 2008,
p. 273 et seq.; Dominioni 1991, p. 194 et seq). Supporting the deductibility of the presumption of
innocence from Article 27(2) of the Italian Constitution, e.g., Garofoli (1998), p. 1195 et seq.;
Illuminati (1979), p. 28 et seq.; Paulesu (2009), p. 57 et seq.; interpreting Article 27(1) more as a
Against this background, in 2012 the Court of Justice recognized the presump-
tion of innocence as “a feature of the constitutional traditions common to the
Member States”.386 The relevant role (at least if compared to the American system)
played by the presumption in many EU Member States, however, did not entail a
shared and transnational understanding of its notion, which continued, and continue
to highly vary from State to State according to the specific legal tradition.
In this framework, extremely relevant was then the explicit introduction of the
presumption in Article 48(1) of the Charter, which states that “Everyone who has
been charged shall be presumed innocent until proved guilty according to law”.
Thanks to the equivalence clause of Article 52(3) CFREU, this provision has the
same content of Article 6(2) ECHR, according to which “Everyone charged with a
criminal offence shall be presumed innocent until proved guilty according to law”.387
Compared to Article 6 ECHR, however, the wording of Article 48(1) CFREU—
although repeatedly challenged during the negotiations that brought to the establish-
ment of the Charter388—maintains a “neutral” connotation with regard to its subject
matter (“charged” vs “charged with a criminal offence”).
Thanks to it, at least for part of its content, the scope of this provision in the cur-
rent case-law is not strictly confined to the criminal matter. As already mentioned in
fact, although never admitting a substantial criminal nature to competition fines, the
CJEU had, even before the entry into force of the Charter, recognized the need to
apply the implications of the presumption of innocence with regard to rules on
adducing evidence in competition law proceedings ending up with sanctions char-
acterized by a certain “nature and degree of severity”.389
Application of the presumption of innocence in the Union legal framework,
moreover, has been raised also in other fields of EU law with a certain kinship with
the criminal matter, such as in administrative measures adopted in the fight against
terrorism.390 Compliance with different aspects of the presumption are also explic-
mere presumption of no guilt, instead, Amato (1967), p. 379 et seq.; Grevi (1976), p. 39 et seq. For
a more neutral, or restrictive interpretation of the principle deductable from the Constitution, see
Ferrua (2015), p. 52; Marzaduri (2010), p. 308 et seq.
386
Criminal proceedings against Marcello Costa and Ugo Cifone, Joined Cases C-72/10 and
C-77/10, 16.02.2012, ECLI:EU:C:2012:80, § 86.
387
As explicitly stated also under Article 48 in the Explanation relating to the Charter of
Fundamental Rights, cit.; see also Draft Charter of Fundamental Rights of the European Union,
Note from the Praesidium, Brussels, 11.10.2000 (18.10) CHARTE 4473/00 CONVENT 49.
388
For the numerous proposal to amend Article 48 during the negotiations see Draft Charter of
Fundamental Rights of the European Union, Note from the Praesidium, Brussels, 25.05.2000
CHARTE 4332/00 CONVENT 35, and in particular Amendments no. 164 (Michael O’Kennedy)
and no. 167 (Piero Melograni) proposing the following wording “Everyone who has been charged
with a criminal offence shall be presumed innocent until proved guilty according to law”.
389
Hüls v Commission, Case C-199/92, § 150; Montecatini v Commission, Case C-235/92 P, §§
175–176; Groupe Danone v Commission, Case T-38/02, §§ 215–216; Romana Tabacchi Srl v
European Commission, Case T-11/06, §§ 129. See also above, Sect. 6.2.
390
Cf. Jose Maria Sison v Council of the European Union, Case C-266/05 P, 1.02.2007,
ECLI:EU:C:2007:75, §§ 92-96, where the applicant indicated a violation of the presumption of
innocence in the limitation of his right of access to documents which had led the Council to adopt
itly required by the procedural rules applicable in OLAF administrative investiga-

tions.391 In light of the above, to date two profiles of the presumption of innocence
(rules on adducing proofs, and rules on treatment) are considered applicable to all
fields of law where sanctions are applied, including “purely” administrative
proceedings.392
So far, on the contrary, there are still no CJEU decisions specifically concerning
the third aspect of the presumption, that is the privilege against self-incrimination,
which traditionally was recognized only in criminal proceedings stricto sensu.393
In this sense, the interpretation of the broad wording of Article 48(1) CFREU
shall today also take into account Directive 2016/343, which under several aspects,
as will be further discussed, does not seem to meet the expectations of those who
invoke the need to provide a high standard of protection for such fundamental prin-
ciple in the EU.
In dealing with the compliance of the SSM sanctioning proceedings with fair
trial rights, the present analysis focuses therefore mainly on the privilege against
self-incrimination, as this is the most controversial profile in administrative punitive
contexts. The two other main aspects of the presumption of innocence, although
both applicable to the context of banking supervision, result instead less relevant or
problematic in light of the current European case-law.
As recognized by both the CJEU and in the ECtHR, applying the presumption of
innocence brings, first of all, relevant consequences to the rules on adducing proofs,
and especially on the standard, and on the burden of proof.394 Under this profile, the
presumption requires decision-making bodies to match the “beyond any reasonable
doubt test” in order to apply a sanction.
According to the CJEU, that reaffirms the standards already established under
Article 6(2) ECHR as interpreted by the judges in Strasbourg,395 a court cannot
establish the existence of an infringement “to the requisite legal standard if it still
entertains any doubts on that point, in particular in proceedings for annulment of a
decision imposing a fine”. Therefore, “any doubt in the mind of the Court must
a series of specific restrictive measures directed against certain persons and entities with a view to
combating terrorism. The Court declared this ground of appeal inadmissible, and therefore did not
ruled on the application of the presumption in the specific case. See also Nehl (2014), p. 1278.
391
Cf. Article 9(1), Regulation No 883/2013, according to which “In its investigations the Office
shall seek evidence for and against the person concerned. Investigations shall be conducted objec-
tively and impartially and in accordance with the principle of the presumption of innocence and
with the procedural guarantees set out in this Article”.
392
Cf. Lupária (2017), p. 917, and pp. 940–941; Nehl (2014), p. 1280.
393
The Court has only just recently started to deal with the presumption of innocence ex Article 48
CFREU as such outside the field of competition law, see, e.g., Criminal proceedings against Emil
Milev, Case C-439/16 PPU, 27.10.2016, ECLI:EU:C:2016:818.
394
Cf. Ubertis (2017), p. 227 et seq.
395
Cf., e.g., Barberà, Messegué and Jabardo v. Spain, 6.12.1988, Application no. 10590/83, § 77;
Cleve v. Germany, 15.01.2015, Application no. 48144/09, § 52, according to which the principle
“in dubio pro reo” “constitutes a specific expression of the presumption of innocence”.
operate to the advantage of the undertaking to which the decision finding an infringe-
ment was addressed”.396
Strictly related with this aspect, the presumption of innocence imposes an alloca-
tion of the burden of proof, according to which risks of facts remaining unresolved
or allegations unproven must benefit the person under investigations. This content
of the presumption was affirmed by both European Courts. In particular, the Court
in Strasbourg repeatedly stated how Article 6(2) ECHR is not only requiring the
tribunal to impartially examine the defendant (avoiding to consider him or her guilty
for the mere fact of being suspected),397 but also that “the burden of proof is on the
prosecution, and any doubt should benefit the accused […] Thus, the presumption
of innocence will be infringed where the burden of proof is shifted from the prose-
cution to the defence”.398
This application of the presumption has been recognized by the Court of Justice
especially with regard to competition proceedings.399 Such case-law has been also
integrated in Regulation No. 1/2003, according to which to date “the burden of
proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on
the party or the authority alleging the infringement”.400
The reference to both standard and burden of proof under the presumption of
innocence is only partially enshrined in Directive 2016/343. The latter, indeed, at
Article 6 explicitly refers to the burden of proof, literally transposing into EU law
its notion as developed by the European Courts.401
396
Dresdner Bank AG and Others v Commission, Joined cases T-44/02 OP, T-54/02 OP, T-56/02
OP, T-60/02 OP and T-61/02 OP, 27.09.2006, ECLI:EU:T:2006:271, § 60; see also, among others,
Toshiba Corp. v Commission, Case T-104/13, 9.09.2015, ECLI:EU:T:2015:610, § 50; Panasonic e
MT Picture Display Co. Ltd v Commission, T-82/13, 9.09.2015, ECLI:EU:T:2015:612, § 7;
Telefónica e Telefónica de España v. Commission, Case T-336/07, 29.03.2012, ECLI:EU:T:2012:172,
§§ 67-72 and case-law there mentioned (hereinafter “Telefónica (2012)”); Franchet and Byk v.
Commission, Case T-48/05, 8.07.2008, ECLI:EU:T:2008:257, § 310; Toshiba Corp. v. Commission,
Case T-519/09, 21.05.2014, ECLI:EU:T:2014:263, § 36. See also Nehl (2014), p. 1284 et seq.;
Illuminati (1979), p. 164 et seq.
397
Cf. Trechsel (2005), p. 164 et seq.
398
Cf., e.g., Telfner v Austria, 20.03.2001, Application no. 33501/96, § 15; John Murray v. the UK,
28.10.1994, Application no. 18731/91, § 54; Melo Tadeu v Portugal, 23.10.2014, Application no.
27785/10, § 60; Vassilios Stavropoulos v Greece, 27.09.2007, Application no. 35522/04, § 39;
Barberà, Messegué and Jabardo, § 77; Poletan e Azirovik v. Macedonia, 12.05.2016, Application
nos. 26711/07, 32786/10 e 34278/10, § 64; Grande Stevens, § 159.
399
Cf., e.g., Baustahlgewebe GmbH v Commission of the European Communities, Case C-185/95
P, 17.12.1998, ECLI:EU:C:1998:608, § 58; Telefónica (2012), § 67; GlaxoSmithKline Services
Unlimited and o. v Commission of the European Communities and o., Joined cases C-501/06 P,
C-513/06 P, C-515/06 P and C-519/06 P, 6.10.2009, ECLI:EU:C:2009:610, §§ 82–83. For an
application of presumption in another field (protection of specimens) see Criminal proceedings
against Tomasz Rubach, Case C-344/08, 16.07.2009, ECLI:EU:C:2009:482, §§ 31–34.
400
Article 2, Regulation No. 1/2003; see also Recital (5) Regulation No. 1/2003. On the issue, see
also Castillo De La Torre (2009), p. 521 et seq.; Melícias (2012), p. 473 et seq.
401
“1. Member States shall ensure that the burden of proof for establishing the guilt of suspects and
accused persons is on the prosecution. This shall be without prejudice to any obligation on the
judge or the competent court to seek both inculpatory and exculpatory evidence, and to the right of
A specific reference to the presumption as a standard of proof, on the contrary,

cannot be found in the final text of the Directive, whereas the initial provision of
Article 5(3), as proposed by the Commission, was explicitly stating that “Member
States shall ensure that where the trial court makes an assessment as to the guilt of
a suspect or accused person and there is reasonable doubt as to the guilt of that per-
son, the person concerned shall be acquitted”.402
According to all the legal sources mentioned so far, the rule posed by the pre-
sumption of innocence with regard to the burden of proof is not considered absolute,
and may therefore bear exceptions.
In particular the Court in Strasbourg famously affirmed in Salabiaku v France,
and in the following case-law, that Article 6(2) ECHR, although does not “regard
presumptions of fact or of law provided for in the criminal law with indifference”
does not prohibit in principle presumptions in malam partem, as long as they have
a relative, and not absolute nature (or, in the words of the Court, as long as they are
not irrebuttable403). The Convention, “does, however, require the Contracting States
to remain within certain limits in this respect as regards criminal law”, taking into
account “the importance of what is at stake”, and “the rights of the defence”.404
Similar approach has been adopted quite literally by the Court of Justice, accord-
ing to which “a presumption, even where it is difficult to rebut, remains within
acceptable limits so long as it is proportionate to the legitimate aim pursued, it is
possible to adduce evidence to the contrary and the rights of the defence are
safeguarded”.405 This jurisprudence found a specific application in competition
the defence to submit evidence in accordance with the applicable national law. 2. Member States
shall ensure that any doubt as to the question of guilt is to benefit the suspect or accused person,
including where the court assesses whether the person concerned should be acquitted”.
402
Cf. Proposal for a Directive of the European Parliament and of the Council on the strengthening
of certain aspects of the presumption of innocence and of the right to be present at trial in criminal
proceedings, Bruxelles, 27.11.2013 COM(2013) 821 final; see also Presidency note, Brussels,
13538/14, 30.09.2014.
403
Salabiaku v France, 7.10.1988, Application no. 10519/83, § 28. See also Vos v. France,
5.12.2006, Application no. 10039/03; Radio France and others v France, 30.03.2004, Application
no. 53984/00, § 24; Pham Hoang v. France, 25.09.1992, Application no. 13191/87, § 36. On this
issue, see also Abbadessa (2011), p. 381 et seq; Chiavario (2001), p. 218.
404
Salabiaku v France, § 28. On the point, see also Blum v Austria, 3.02.2005, Application no.
31655/02, § 27; Weh v Austria, 8.04.2004, Application no. 38544/97, § 46; Navalnyy and Ofitserov
v. Russia, 23.02.2016, Application nos. 46632/13 and 28671/14, § 98; Västberga Taxi Aktiebolag
and Vulic v. Sweden, 23.07.2002, Application no. 36985/97, § 113; Phillips v UK, 5.07.2001,
Application no. 41087/98, § 40, and, among legal scholars, Castillo De La Torre (2009), p. 513;
Abbadessa (2011), p. 381 et seq.; Caterini (2015), p. 36 et seq.
405
Cf., e.g., Elf Aquitaine SA v European Commission, Case C-521/09 P, 29.09.2011,
ECLI:EU:C:2011:620, § 62, (with reference to Spector, § 43–44).
law,406 where several presumptions exist which consent to infer the existence of
antitrust breaches committed by undertakings.407
The compatibility of presumptions with Article 48(1) CFREU has been recently
affirmed also by Directive 2016/343 which, at Recital (22), states that the presump-
tion of innocence is not as such prejudiced by “the use of presumptions of fact or
law concerning the criminal liability of a suspect or accused person”, if they are
“rebuttable”, “used only where the rights of the defence are respected”, and “con-
fined within reasonable limits, taking into account the importance of what is at stake
and maintaining the rights of the defence, and the means employed should be rea-
sonably proportionate to the legitimate aim pursued”.408
The second profile of the presumption of innocence relatively less critical for the
SSM sanctioning proceedings concerns rules on treatment establishing that a sus-
pect or an accused person shall not be presented as guilty neither within nor outside
the proceeding, as long as s/he has not been proved guilty according to law (e.g. in
public announcements, press release, or in statements by police of the judiciary).409
406
Cf., e.g., ThyssenKrupp Liften Ascenseurs NV and others v. Commission, Joined cases T-144/07,
T-147/07, T-148/07, T-149/07, T-150/07 e T-154/07, 13.07.2011, ECLI:EU:T:2011:364, § 114;
Spector, § 44; Opinion of Advocate General Kokott, delivered on 4.06.2009, in TMobile
Netherlands and o., Case C-8/08, 4.06.2009, ECLI:EU:C: 2009:343, § 93.
407
See, among others, the possibility to deduce anti-competitive consent from the participation in
a cartel meeting (e.g. Commission of the European Communities v Anic Partecipazioni SpA, Case
C-49/92 P, 8.07.1999, ECLI:EU:C:1999:356, §§ 83-87); the existence of dominant position in
market share above 50% (e.g. AKZO Chemie BV v Commission of the European Communities,
Case C-62/86, 3.07.1991, ECLI:EU:C:1991:286, § 60), or the control over subsidiary on the mar-
ket from the 100% ownership of its parent company (e.g. Akzo Nobel NV and Others v Commission
of the European Communities, Case C-97/08 P, 10.09.2009, ECLI:EU:C:2009:536, §§ 60–63; see
also Bronckers and Vallery (2011), pp. 547–557. For more cases, see Nehl (2014),
pp. 1285–1286.
408
The provision appears in line with point 2.3 of the Green paper on the presumption of
innocence.
409
Cf. Recitals (16) to (19) Directive 2016/343. Among legal scholars, see e.g. Lamberigts (2016b);
Lupária (2017), pp. 927–936; Trechsel (2005), p. 164; Ubertis (2017), p. 232 et seq. A main field
of application of these rules in criminal proceedings concerns the delicate issue of pre-trial mea-
sures, which however is not relevant to sanctioning proceedings carried out in banking supervision,
cf. especially requiring to treat inmates awaiting for trial, or whose sentence is not final yet, differ-
ently from convicted ones, for instance establishing different rules and spaces in the detention
structures, see e.g., Article 10 of the International Covenant on Civil and Political Rights of
16.12.1966; Green paper on the presumption of innocence, § 2 and 2.2; Green Paper on the appli-
cation of EU criminal justice legislation in the field of detention (COM (2011) 327 def.), § 4;
Resolution of the European Parliament of 15 December 2011 on detention conditions in the EU
2011/2897/RSP. In this sense, also Fahas v Council, Case T-49/07, 7.12.2010, ECLI:EU:T:2010:499,
§ 64; El Morabit v Council, Joined cases T-37/07 and T-323/07, 2.09.2009, ECLI:EU:T:2009:296,
§ 40. Contra, in these terms, Trechsel (2005), p. 181 et seq., ECtHR, Peers v. Greece, 19.04.2001,
Application no. 28524/95, § 78; Jiga v. Romania, 16.03.2010, Application no. 14352/04, § 100,
although “il convient toutefois de s’assurer que les mesures prises à l’égard des détenus à titre
provisoire ne sont pas de nature à porter atteinte au principe de la présomption d’innocence”;
Iwańczuk v. Poland, 15.11.2001, Application no. 25196/94, § 53. Another important application of
the presumption in this field concerns the prohibition to keep the defendant with handcuffs or jail
uniform during the trial hearing cf., e.g., ECtHR, Jiga v. Romania, § 103, and Samoilă and Cionca
This issue has been addressed by both European Courts, as well as by Directive
2016/343.
The ECtHR, in particular, in line with other pieces of soft-legislation issued by
the Council of Europe,410 repeatedly ruled on this subject, affirming how the pre-
sumption of innocence “serves mainly to guarantee the rights of the defence and at
the same time helps to preserve the honour and dignity of the accused”.411
While, according to a certain interpretation, the moment in which this profile of
the presumption attaches shall be left to the applicable national law,412 the ECtHR
has partially limited the margin of appreciation of national authorities, requiring for
instance that the presumption shall continue to apply also in appeal proceedings
following a conviction, although already enforceable.413
According to the Court, in any case, Article 6(2) ECHR “by no means” prevents
“the authorities from informing the public about the criminal conviction concerned,
nor prevent discussion of the subject by the media or the general public […]
Nonetheless, such reference should be made with all the discretion and restraint
which respect for the presumption of innocence demands”.414
When media are involved, moreover, the presumption of innocence needs to be
balanced with the right to freedom of expression, protected by Article 10 ECHR,
since Article 6(2) ECHR cannot “prevent the authorities from informing the public
about criminal investigations in progress, but it requires that they do so with all the
discretion and circumspection necessary if the presumption of innocence is to be
respected”.415
This interpretation of the presumption of innocence as a rule of treatment is mir-
rored by Article 4 of Directive 2016/343, according to which “Member States shall
v. Romania, 4.03.2008, Application no. 33065/03, §§ 98-101. See also Article 5(1) and Recitals
(20)-(21) Directive 2016/343.
410
Cf. CoE Recommendation Rec (2003) 13 on the Provision of Information through the Media,
Principles 1 and 2; Guidelines on human rights and the fight against terrorism adopted by the
Committee of Ministers on 11.07.2002.
411
Konstas v Greece, 24.05.2011, Application no. 53466/07, § 32; Pandy v. Belgium, 21.09.2006,
Application no. 13583/02, § 43; Karaman v. Germany, 27.02.2014, Application no. 17103/10, §
63; Poncelet v. Belgium, 30.03.2010, Application no. 44418/07, § 51; Allenet de Ribemont v.
France, 10.02.1995, Application no. 15175/89, § 35; Minelli v Switzerland, 25.03.1983, Application
no. 8660/79, § 37. Daktaras v. Lithuania, 10.10.2000, Application no. 42095/98, § 43; Konstas v
Greece, § 33; Adolf v. Austria, 26.03.1982, Application no. 8269/78, §§ 36–41.
412
In this sense, Illuminati (1991), p. 22 et seq. On the topic, see also Paulesu (2009), p. 82 et seq.
El Kaada v. Germany, 12.11.2015, Application no. 2130/10, § 54; Iwańczuk v. Poland, § 53;
Sekanina v. Austria, 25 August 1993, Application no. 13126/87, § 30; Rushiti v. Austria, 21.03.2000,
Appication no. 28389/95, § 31.
413
See, Trechsel (2005), p. 163 et seq., and, e.g., Konstas v. Greece, § 36; Perica Oreb v. Croatia,
31.10.2013, Application no. 20824/09, § 146; Iwańczuk v. Poland, § 53.
414
Konstas v. Greece, § 34; Peša v. Croatia, 8.04.2010, Application no. 40523/08, § 139.
415
ECtHR, Y.B. and others v. Turkey, 28.10.2004, Application nos. 48173/99 and 48319/99, § 48;
Allenet de Ribemont v. France, § 38; ECJ, Franchet and Byk v. Commission, § 212. See also
Recommendation Rec (2003) 13 of the Committee of Ministers to member states on the provision
of information through the media in relation to criminal proceedings.
take the necessary measures to ensure that, for as long as a suspect or an accused
person has not been proved guilty according to law, public statements made by pub-
lic authorities, and judicial decisions, other than those on guilt, do not refer to that
person as being guilty”, without that being an obstacle in preventing “public author-
ities from publicly disseminating information on the criminal proceedings where
strictly necessary for reasons relating to the criminal investigation or to the public
interest”.416
According to Article 2 of the Directive, the scope of this provision, similarly to
the other profiles of the presumption of innocence, shall cover “all stages of the
criminal proceedings, from the moment when a person is suspected or accused of
having committed a criminal offence, or an alleged criminal offence, until the deci-
sion on the final determination of whether that person has committed the criminal
offence concerned has become definitive”. In dealing with these rules on treatment
under EU law, particularly interesting for the analysis of the SSM sanctioning pow-
ers—still lacking decisions on the matter directly concerning Directive 2016/343417—
is especially that CJEU case-law concerning the relationship between the
presumption of innocence and the publication of decisions imposing penalties to
undertakings in breach of competition law.418
Indeed, as already mentioned, both Article 68 CRD IV/V, Article 18(6) SSM R
and Article 1a(3) Regulation 2532/98 establish for decisions applying penalties to
be published.419
Restating its previous jurisprudence on the applicability of the presumption to
the procedures against infringements of competition law that may result in the
imposition of fines or periodic penalty payments,420 the Court in Pergan Hilfsstoffe
(2007) found that, until guilt has been established according to law, the presumption
“precludes any formal finding and even any allusion to the liability of an accused
person for a particular infringement”, and any findings shall “in principle, be
regarded as confidential as regards the public, and therefore as being of the kind
covered by the obligation of professional secrecy” in order to safeguard the “reputa-
416
Recital (17) of the Directive indicates ‘public statements made by public authorities’ should be
understood broadly as covering all authorities involved in criminal proceedings, such as “judicial
authorities, police and other law enforcement authorities, […] ministers and other public
officials”.
417
For the most recent cases, see the already mentioned Criminal proceedings against Emil Milev,
Case C-439/16 PPU, which however was issued after the approval of the Directive but before the
expiration of the deadline for the transposition at national level.
418
Cf. Nehl (2014), p. 1283 et seq. See, e.g., Franchet and Byk v. Commission, § 210; Nanopoulos
v. Commission, Case F-30/08, 11.05.2010, ECLI:EU:F:2010:43, § 185; Nikolaou v. European
Court of Auditors, Case C-220/13 P, 10.07.2014, ECLI:EU:C:2014:2057, § 34 et seq.
419
Cf. above, Sects. 4.3 and 4.4.2. The issue with regard to Article 18(6) SSM R is raised in
Allegrezza and Voordeckers (2015), p. 158.
420
Cf., e.g., Hüls v Commission, Case C-199/92, § 150; JFE Engineering and others v Commission,
Joined Cases T-67/00, T-68/00, T-71/00 and T-78/00, 8.07.2004, ECLI:EU:T:2004:221, § 178;
Sumitomo Chemical and Sumika Fine Chemicals v Commission, Joined cases C-403/04 P and
C-405/04 P, 25.01.2007, ECLI:EU:C:2007:52, §§ 104–105; BASF v Commission, Case T-15/02,
15.03.2006, ECLI:EU:T:2006:74, § 604.
tion and dignity of the person concerned as that person has not been finally found
guilty of an infringement”.
According to the same case-law, “the guilt of a person accused of an infringe-
ment is established definitively only where the decision finding that infringement
has acquired the force of res judicata, which implies either the absence of an appeal
against that decision by the person concerned […] or, after such an appeal, the
definitive closure of the contentious proceedings, in particular, by a judicial deci-
sion confirming the lawfulness of that decision”. Before that moment, “there is
therefore no public interest in publishing the disputed information that is capable of
prevailing over the applicants legitimate interest in having such information
protected”.421
Similar precautions find application also in other fields of EU law, for instance in
the protection of the financial interests of the Union, and in particular during OLAF
investigations. In that regard, the CJEU ruled that the presumption of innocence
confers rights on suspected individuals “in so far as they are entitled to expect that
the investigations concerning them will be conducted in a manner that respects their
fundamental rights”, which would be seriously violated in case the Office would
“named them publicly—including by the leaks in the press—as guilty of a number
of criminal offences”.422
In light of the above, the sanction provided for by Article 68 CRD IV/V does not
seem to raise particular problems against the presumption of innocence, since pub-
lication duties concern only administrative penalties for CRD IV/V or CRR
breaches, against which there is no appeal, or the latter is no longer available.
In case Member States would opt to extend the publication duty also to decisions
which may still be appealed, moreover, the communication shall include informa-
tion on the appeal status and outcome thereof. Therefore, it appears that CRD IV/V
on the matter remains in line with the case-law of the European Courts, and the
applicable legal framework.
Similar conclusions may be drawn also with regard to Article 18(6) SSM R and
Article 1a(3) Regulation 2532/98 which do not explicitly require a decision to be
final before making its publication compulsory (although, if the decision has been
appealed, that status and its outcome should also be published).
Indeed, SSM Regulations require that in cases where the publication including
information on the type and nature of the breach and the identity of the supervised
entity concerned would either (a) jeopardise the stability of the financial markets or
an on-going criminal investigation; or (b) cause, insofar as it can be determined,
disproportionate damage to the supervised entity concerned, the decision to be pub-
lished shall be anonymised.
421
Pergan Hilfsstoffe für industrielle Prozesse GmbH v Commission, Case T-474/04, 12.10.2007,
ECLI:EU:T:2007:306, §§ 75–77 and 80. See also Volkswagen AG v Commission, Case T-62/98,
6.07.2000, ECLI:EU:T:2000:180, § 281.
422
Yves Franchet and Daniel Byk v Commission of the European Communities, Case T-48/05,
8.07.2008, ECLI:EU:T:2008:257, § 215.
Alternatively, if such circumstances are likely to cease within a reasonable period

of time, publication may simply be postponed (Article 132 SSM FR). Such sanc-
tions remained also bound by the “conditions set out in relevant Union law”, and
therefore also the case-law interpreting the latter.
Against this background, the practice, so far carried out by the ECB, to publish
penalties imposed upon credit institutions only after the expiration of the terms to
ask for a review before the ABoR, or at the end of this internal reviewing procedure,
and (if that is the case), with a clear statement concerning the possibility for them to
be still challenged before the Court of Justice, seems to be in compliance with the
precautions imposed by both European Courts to safeguard the reputation and dig-
nity of the persons involved in the proceedings.
Much more critical considerations shall be drawn, instead, with regard to the
presumption of innocence meant as the privilege against self-incrimination, accord-
ing to which suspects and accused persons have the right to remain silent, and not
to incriminate themselves in relation to the charges they are suspected or accused of
having committed.
In line with the approach followed by the Court in Strasbourg and by Directive
2016/343, the expression “privilege against self-incrimination” is here understood
to include only the “right to silence”, and not also,423 the right of the defendant not
to state the truth before a request of public authorities. Indeed, in the field of bank-
ing supervision, it does not seem appropriate, on the other side, to extend also the
right to lie before public authorities to the production of documents, as the possibil-
ity to produce false documents would definitely undermine any system of public
trust.
Contrary to the other aspects of the presumption of innocence, the privilege is
not expressly mentioned in the European Convention on Human Rights. It however
finds its legal basis in paragraph 1 of Article 6 ECHR, together with the other fair
trial rights, with whom it is strictly related.
Especially evident is the link with the rights of legal assistance, which is the
basic condition to effectively invoke all other procedural rights,424 and with the right
423
See, e.g., Grevi (1972), pp. 2–4, and 47 et seq.; Illuminati (1979), p. 193. Contra Trechsel
(2005), p. 342, according to which these two guarantees “must be seen as being represented by two
partly overlapping circles”. However, differentiating in fact the scopes of the two expressions
according to their reference to verbal or non-verbal expressions (such as documents), or on the fact
that they cover all statements, or only those detrimental to the person concerned, seems a classifi-
cation hardly applicable into practice, and a solution leaving the way open to possible restriction
to the safeguarding impact of the principle. See e.g., Saunders v the UK, § 71: “the right not to
incriminate oneself cannot reasonably be confined to statements of admission of wrongdoing or to
remarks which are directly incriminating. Testimony obtained under compulsion which appears on
its face to be of a non-incriminating nature-such as exculpatory remarks or mere information on
questions of fact-may later be deployed in criminal proceedings in support of the prosecution case,
for example to contradict or cast doubt upon other statements of the accused or evidence given by
him during the trial or to otherwise undermine his credibility. Where the credibility of an accused
must be assessed by a jury the use of such testimony may be especially harmful”.
424
See, e.g., Illuminati (1979), p. 192.
to information, which requires suspects to be promptly warned also of their right to

remain silent.425
According to the ECtHR case-law, the privilege does not directly belong to the
presumption of innocence. However, the privilege not only lies “at the heart of the
notion of a fair procedure under Article 6 ECHR”, avoiding that the accused is sub-
ject to “improper compulsion by the authorities” and contributing in reducing mis-
carriages of justice,426 but, as repeatedly affirmed since the notorious decision
Saunders v UK, it is also “is closely linked to the presumption of innocence con-
tained in Article 6 para. 2 of the Convention (art. 6-2)”.427
At the EU level, even if also the Charter does not make any express reference to
it, the privilege against self-incrimination is instead considered covered by the pre-
sumption of innocence. A confirmation in this sense comes also from Directive
2016/343.
Article 7 of the Directive, indeed, puts the right to remain silent within the scope
of the presumption of innocence, and grounds its legal basis in Article 48(1)
CFREU.428 However, at least in its current interpretation, the objective and subjec-
tive scope of the privilege under the Directive does not coincide with that recognized
by the Court in Strasbourg, with differences extremely relevant when it comes to
analyse the application of this right to the matter of punitive banking supervision.
Under an objective perspective, and despite the “neutral” and broad wording of
Article 48, in fact, it remains controversial whether the privilege may find applica-
tion outside the criminal matter stricto sensu, and in particular to administrative
punitive contexts.429 In truth, recognizing, the application of the privilege to the
administrative matters (also with regard to banking supervision) results especially
critical, as it risks nullifying the very reporting mechanism employed by administra-
tive independent authorities, that is the duty of supervised entities to report and
provide the requested information, to their supervisors and the existence of forms of
liability in case of non-compliance.
Nonetheless, according to the ECtHR case-law, if a substantial criminal nature is
to be recognized in application of the Engel criteria, all rights established by Article
6(1) ECHR shall apply from the moment criminal charges are formulated against
425
Cf. also Article 3(1) let. e), and Article 4(2), Directive 2012/13/EU on the right to information
in criminal proceedings, to which Recital (32) of Directive 2016/343 refers to (directly to Article
4, indirectly to Article 3). Critical on this inclusion, since “it is not easy to imagine a case which
could give the Court in Strasbourg the opportunity to find a violation of the right to a fair trial due
to the absence of a proper warning”, Trechsel (2005), p. 352.
426
Ibrahim 2016, § 266; see also Gäfgen v. Germany, 1.06.2010, Application no. 22978/05, § 168;
John Murray v The UK, § 45; Jalloh v. Germany, 11.07.2006, Application no. 54810/00, § 100; and
Bykov v Russia, 10.03.2009, Application no. 4378/02, § 92.
427
Saunders v the UK, § 71; O’Donnell v the UK, concurring opinion of Judge Wojtyczek, § 3;
Heaney and McGuinness v Ireland, § 40; Quinn v. Ireland, § 40.
428
Cf. Recital (1), Directive 2016/343.
429
Drastically contrary to this option Trechsel (2005), p. 349 according to which “There can be no
doubt that the privilege does not apply outwith the criminal law-a fact evidenced by the very term
self-incrimination”; contra Veenbrink (2015), p. 120 et seq. See also Scarparone (1995).
the accused, thus including also pre-trial phases.430 No exclusion of the privilege
from the punitive administrative matter finds therefore grounds in the ECtHR case-
law, at least with regard to the right to remain silent. Similar conclusions should be
drawn also with regard to the EU legal framework.
Indeed, Article 2 of the Directive establishes that the privilege applies to “sus-
pects or accused persons in criminal proceedings”, and Recital (11) specifies that it
“should not apply to civil proceedings or to administrative proceedings, including
where the latter can lead to sanctions, such as proceedings relating to competition,
trade, financial services, road traffic, tax or tax surcharges, and investigations by
administrative authorities in relation to such proceedings”. While this provision
seems to deny the application of the Engel case-law to the matter, the Recital then
continues affirming, not without some contradictions, that the Directive shall how-
ever apply to “criminal proceedings as interpreted by the Court of Justice of the
European Union without prejudice to the case-law of the European Court of Human
Rights”, which seems to bring Engel back on the field.
A similar limitation to the scope of the privilege, in any case, besides for raising
concerns for the coherence of the interpretation of fundamental rights in the EU,
does not find legal basis in the neutral wording of Article 48 (1) CFREU (which
refers to “everyone who has been charged”, and not specifically to defendants).
And, it worth recalling, the provisions of the Directive are hierarchically subordi-
nated to the principles of the Charter.
Relevant differences of approaches between the ECtHR and Directive 2016/343
may be found also analysing the privilege under a subjective point of view, that is
with regard to the subjects who may invoke it.
Indeed, as already mentioned, the Court in Strasbourg has generally not differen-
tiated the application of fair trial rights between natural and legal persons, although
it has not explicitly ruled on the application of the right to remain silent to legal
persons as yet.431
A similar interpretation should be attached also to Article 48 CFREU, whose
wording does not differentiate between natural and legal persons (“everyone”).432
This would be coherent as well with, the application of the other profiles of the
presumption of innocence (standard and burden of proof, and rule on treatment) to
legal entities, which has been so far undisputedly admitted by the Court of Justice.433
Against this background, however, the Directive explicitly excludes all the rights
related to the presumption of innocence with regard to legal persons. According to
Article 2, in fact, this piece of legislation applies to “natural persons who are sus-
430
See, e.g., Ibrahim and others v. The UK, 13.09.2016, Applications nos. 50541/08, 50571/08,
50573/08 and 40351/09 (hereinafter “Ibrahim 2016”), § 249.
431
See e.g., Menarini Diagnostics v Italy, § 44, and above, Sect. 6.2. At the academic level see
Lamberigts (2016a), p. 36 et seq.; Oliver (2015), p. 685; Van Kempen (2011), p. 373.
432
On this opinion also Nehl (2014), p. 1282; Allegrezza (2017), p. 950. See also O’Connel (2006).
433
Cf., recently, Eturas and others v Lietuvos Respublikos konkurencijos taryba, Case C-74/14,
21.01.2016, ECLI:EU:C:2016:42, § 38.
pects or accused persons in criminal proceedings”.434 Recitals (13) and (14) further
specify that the “Directive acknowledges the different needs and levels of protection
of certain aspects of the presumption of innocence as regards natural and legal per-
sons” and that “at the current stage of development of national law and of case-law
at national and Union level, it is premature to legislate at Union level on the pre-
sumption of innocence with regard to legal persons. This Directive should not,
therefore, apply to legal persons”.
With another ambiguous clause, Recital (14) then affirms that “This should be
without prejudice to the application of the presumption of innocence as laid down,
in particular, in the ECHR and as interpreted by the European Court of Human
Rights and by the Court of Justice, to legal persons”. In light of the above, Recital
(15) concludes that “the presumption of innocence with regard to legal persons
should be ensured by the existing legislative safeguards and case-law, the evolution
of which is to determine whether there is a need for Union action”.
This exclusion raises several doubts if looked from a systematic perspective,
both within and outside the EU legal framework.
From an external perspective, as increasingly observed by legal scholars,435 this
interpretation appears to contrast with the case-law of the Court in Strasbourg, set-
ting a lower level of protection in the EU for legal persons. This result should be
barred by Article 52(3) CFREU, which requires a standards at least as high as those
granted by the Convention.436
From an internal perspective, the exclusion appears first in contrast to the other
procedural directives adopted in light of the Stockholm Roadmap for strengthening
procedural rights in criminal proceedings, in which no explicit restriction has been
established according to the type of subject they refer to.437
Moreover, excluding legal persons not only from the privilege against self-
incrimination, but also from all the other profiles of the presumption of innocence
434
During the negotiations, the European Parliament tried to broaden the scope of the Directive
also to include legal persons, but the attempt failed, see Amendments no. 9, 10, 39, in European
Parliament, I Report on the proposal for a directive of the European Parliament and of the Council
on the strengthening of certain aspects of the presumption of innocence and of the right to be pres-
ent at trial in criminal proceedings (COM(2013)0821—C7-0427/2013—2013/0407(COD))
Committee on Civil Liberties, Justice and Home Affairs (Rapporteur: Nathalie Griesbeck),
A8-0133/2015, 20 April 2015. http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//
TEXT+REPORT+A8-2015-0133+0+DOC+XML+V0//EN. Accessed 20 July 2018.
435
Calzado and De Stefano (2012), pp. 423–427; Van Overbeek (1994), pp. 127–133; Willis
(2001), pp. 313–321; Belluta (2018), pp. 72–77; Veenbrink (2015), p. 128 et seq.
436
“In so far as this Charter contains rights which correspond to rights guaranteed by the Convention
for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those
rights shall be the same as those laid down by the said Convention. This provision shall not prevent
Union law providing more extensive protection”.
437
Resolution of the Council of 30.11.2009 on a Roadmap for strengthening procedural rights of
suspected or accused persons in criminal proceedings (better known as the “Stockholm
Programme”), O.J. C 295, 4.12.2009, p. 1; on the point see Lamberigts (2016a), p. 36. On a general
brief recollection of the measures derived from the Programme see Sayers (2014),
pp. 1311–1312.
appears to contrast with both the wording of Article 48(1) CFREU (which, again,
does not contain any specific reference in this sense), and with the consolidated
jurisprudence of the CJEU. The latter indeed actually developed its case-law on the
matter in competition law where most undertakings are precisely legal persons.438
In this respect, finally, the reference of Recital (14) to the fact that “the Court of
Justice has, however, recognised that the rights flowing from the presumption of
innocence do not accrue to legal persons in the same way as they do to natural per-
sons”, used in the Directive as a justification to exclude legal persons from its scope,
needs to be carefully put into context. Indeed, it is true that the Court (before the
entry into force of the Lisbon Treaty, and, again, mostly in competition law) has
recognized the applicability of the presumption of innocence to undertakings only
with some limitations, arguing that the acknowledgement of the existence of a
broader right “would go beyond what is necessary in order to preserve the rights of
defence of undertakings, and would constitute an unjustified hindrance with the
Commission’s performance of its duty”.439
In this sense, however, it should first be reminded that even if there is not a clear
definition of “undertaking” under antitrust law, the notion is commonly referred not
only to legal, but also to natural persons or group of persons. Therefore, it is not
possible to conclude that the restrictive approach developed by the CJEU derives
from the need to differentiate between natural and legal persons.440
In any case, even the consideration that the level of protection might not be the
same for natural and legal persons does not per se imply that the latter should be
excluded completely from its scope. For instance, the right to be silent has never
been recognized as absolute for natural persons by the ECtHR, but this was never
used as an argument to exclude natural persons from the scope of the privilege.
Moreover, the cases of the CJEU to which the Directive refers to in Recital (14)
mostly concern competition law, which is a field that so far has never been recog-
nized by the Court as substantive criminal matter.441 It is not clear, therefore, as
highlighted by some scholars, how limitations in non-criminal fields of law may be
used as a model to define the standard of protection for defendant in criminal
proceedings.442
The limited scope of the Directive also seems to contrast with other policy indi-
cations coming from the EU, which in several legal acts strongly encouraged and
promoted the establishment of forms of liability towards legal persons responsible
438
Cf. Eturas and others v Lietuvos Respublikos konkurencijos taryba, Case C-74/14.
439
Commission of the European Communities v SGL Carbon AG, Case C-301/04 P, 29.06.2006,
ECLI:EU:C:2006:432, § 402; Mannesmannröhren-Werke v Commission, Case T-112/98,
20.02.2001, ECLI:EU:T:2001:61, §§ 66 and 67. See also Nehl (2014), p. 1293.
440
Jones (2012), pp. 301–331.
441
See above, Sect. 6.2. Of this opinion, for instance, Nehl (2014), p. 1294 according to which the
Court of Justice could even adopt a higher standard of protection, “as long as the ECtHR does not
expressly extend the scope of protection under Article 6 of the ECHR to legal persons in competi-
tion proceedings”.
442
Lamberigts (2016a), p. 37.
of having committed crimes.443 For instance, the 2017 Directive for the protection
of the financial interests of the EU (PIF Directive)444 or the 2014 Market Abuse
Directive and Regulation445 require to include legal persons among the subjects
which may be prosecuted and sanctioned for criminal behaviours: Against this
background, the choice of the same EU legislator to completely deprive the same
subjects from one of the core rights of fair trial is, at the very least, contradictory.
The exclusion of legal persons from the scope of the Directive appears even less
justifiable taking into account that, for natural persons, the level of protection pur-
sued by this legal text is already very “minimal”, and an extension to legal entities,
as already pointed out in the academic debate, would not have probably been much
more than a statement of principle.446 In fact, as anticipated, nowhere in the Directive,
(on this in line with the Court in Strasbourg)447 the right not to incriminate oneself
is established as an absolute right.
Limitations to the privilege invokable by natural persons may be found, first of
all, with regard to the type of information that the proceeding authority is requiring
to provide, and especially to the difference between oral statements and documents.
Indeed, while the first are usually covered by the privilege, a much stricter interpre-
tation is applied with regard to documents.
The case-law of the Court in Strasbourg concerning this profile is especially
ambiguous. In a number of cases, starting from the 1993 landmark decision Funke
v France, the Court recognized that requesting the accused to give evidence at his
own trial, through the production of pre-existing documents from which evidence
emerges of the offences allegedly committed, may be considered as a violation of
the privilege against self-incrimination. In particular, the ECtHR recognised a viola-
tion in the use of production orders aimed at obtaining documents which the inves-
tigating authorities believed must exist, although without being certain about it:
“Being unable or unwilling to procure them by some other means, they attempted to
compel the applicant himself to provide the evidence of offences he had allegedly
committed”.448
443
Cf. Sect. 2.2.
444
Cf. Article 2, Directive 2017/1371 (“PIF”).
445
Article 8, Directive 2014/57/EU on criminal sanctions for market abuse, and Article 3(1), no. 13,
Regulation (EU) No 596/2014.
446
Lamberigts (2016a), p. 40, who notices also that none of the really critical profiles concerning
the application of the right to remain silent to legal persons is addressed by the Directive, such as
“the definition of persons who may exercise this right on behalf of the legal person. Is it limited to
a very select group of employees or officials of the legal person, or can it be invoked on behalf of
the legal person by a broad circle of individuals? Member States could have answered this question
restrictively, thereby limiting the impact of the Directive in practice”.
447
“Not only the ECtHR’s case law on the issue of documentary evidence, but also its case law on
the right to silence in general is at times confusing”, Lamberigts (2016a), p. 39.
448
Funke v France, 25.02.1993, Application no. 10828/84, § 44 “The Court notes that the customs
secured Mr Funke’s conviction in order to obtain certain documents which they believed must
exist, although they were not certain of the fact. Being unable or unwilling to procure them by
some other means, they attempted to compel the applicant himself to provide the evidence of
Few years later, however, in Saunders v UK (1996), the Court specified and
restricted the scope of the privilege, clearly stating that it “does not extend to the use
in criminal proceedings of material which may be obtained from the accused
through the use of compulsory powers but which has an existence independent of
the will of the suspect such as, inter alia, documents acquired pursuant to a warrant,
breath, blood and urine samples and bodily tissue for the purpose of DNA testing”.449
A special attention, for the purpose of this work, shall be put on the expression
“documents acquired pursuant to a warrant”, which seems to imply that practices
requiring suspects to hand over documents, although self-incriminating, should not
be considered in violation of the right to remain silent, as long as the person is not
required to create new documents.450
This test seemed then to get softened again by the Court in J.B. v Switzerland
(2001), where a fine was imposed on the claimant for failure to produce some
documents concerning the companies in which he had invested money. Those docu-
ments, although required by several production orders by the competent tax authori-
ties, were not considered by the Court to be falling under the Saunders test.451
Similar approach was adopted also in Jalloh (2006), where the ECtHR recog-
nized the “principle of self-incrimination as protected under Article 6 § 1 a broader
meaning so as to encompass cases in which coercion to hand over real evidence to
the authorities was in issue”.452 More recently, in Chambaz v Switzerland (2012),
the Court made again a broad application of the privilege, recognizing that fining
the applicant to pressure him to submit documents potentially harming his position
not only before the tax authorities but also in a criminal proceeding constituted a
violation of the right to remain silent.453
At the EU level, the Saunder test was literally transposed in Article 7(3) of
Directive 2016/343, which explicitly refers to evidence “which may be lawfully
obtained through the use of legal powers of compulsion and which has an existence
independent of the will of the suspects or accused persons”.
offences he had allegedly committed. The special features of customs law (see paragraphs 30–31
above) cannot justify such an infringement of the right of anyone “charged with a criminal
offence”, within the autonomous meaning of this expression in Article 6 (art. 6), to remain silent
and not to contribute to incriminating himself. There has accordingly been a breach of Article 6
para. 1 (art. 6-1)”.
449
Saunders v the UK, § 69; cf. Veenbrink (2015), p. 125 et seq.
450
In this sense, also Lamberigts (2016a), p. 39; Ashworth (2008), pp. 770–771.
451
J.B. v Switzerland, 3.05.2001, Application no. 31827/96, § 68.
452
Jalloh v Germany, 11.07.2006, Application no. 54810/00, § 110.
453
Chambaz v Switzerland, 5.04.2012, Application no. 11663/04, §§ 50-58, and in particular § 54
and 58: “La Cour observe, par ailleurs, que le requérant ne pouvait exclure que toute information
relative à des revenus supplémentaires de sources non imposées l’exposait à être accusé d’avoir
commis l’infraction de soustraction d’impôt (J.B. c. Suisse, précité, § 65) et était de nature à com-
promettre sa position dans l’enquête pour soustraction d’impôts […] Ces éléments suffisent à la
Cour pour conclure que le droit de ne pas être contraint de s’incriminer soi-même, tel que garanti
par l’article 6 § 1 de la Convention, a été violé en l’espèce”.
The ambiguity of this expression, already visible in the ECtHR jurisprudence,

clearly emerges from the combined reading of Recital (29) and (25) of the Directive.
According to the first, this exception should refer to evidence “such as material
acquired pursuant to a warrant, material in respect of which there is a legal obliga-
tion of retention and production upon request, breath, blood or urine samples and
bodily tissue for the purpose of DNA testing”. However, Recital (25) states that
“suspects and accused persons should not be forced, when asked to make statements
or answer questions, to produce evidence or documents or to provide information
which may lead to self-incrimination”.
The balance between these two interpretative criteria is not clearly identified in
the Directive. On one side, in line with the stricter interpretation of Saunders, it
could be concluded that “the privilege only covers assistance from the suspect
which could not be substituted by employing direct force”, therefore including only
documents which are still not existing at the moment of the request.454
In light of the reference of Recital (29) to the “material in respect of which there
is a legal obligation of retention and production upon request”, however, a broader
and more safeguarding interpretation could also be raised. It could be concluded, in
fact, without any reason to distinguish between natural and legal persons, that the
privilege covers not only declarations but also the production of documents, with
the exclusion of those for which a positive obligation of retention exists (e.g.
accounting records).455
Some limitations to the privilege against self-incrimination applicable to natural
persons may be found also with regard to oral statements.
Already under Article 6(1) ECHR, in fact, not every form of compulsion adopted
by public authorities to obtain statements from the persons under investigations is
considered to be a violation of the right to remain silent.456
To assess so, it is necessary for the ECtHR to examine several concrete parame-
ters such as “the nature and degree of compulsion used to obtain the evidence; the
weight of the public interest in the investigation and punishment of the offence in
issue; the existence of any relevant safeguards in the procedure; and the use to which
any material so obtained is put”.457
While the legal classification, seriousness or complexity of certain types of
crime, such as corporate crime, or terrorism, cannot per se justify a restriction of the
privilege,458 the Court, taking into account the nature and the degree of the coercion,
454
Trechsel (2005), p. 354.
455
Along the same line, overseas, SEC (2017), p. 73.
456
Cf., e.g., John Murray v the UK, § 47; Heaney and McGuinness v Ireland, § 47; Weh v. Austria,
8.04.2004, Application no. 38544/97, § 46; O’Halloran and Francis v The UK, 29.06.2007,
Applications nos. 15809/02 and 25624/02, § 53; Adetoro v. the UK, 20.04.2010, Application no.
46834/06, § 47; O’Donnell v. the UK, § 48.
457
See, e.g., Jalloh v Germany, §§ 97, 101 and 117.
458
Cf., e.g., Marttinen v Finland, 21.04.2009, Application no. 19235/03, § 75; more recently see
Ibrahim 2016, §§ 298-300, where the qualification of the offence as terrorism had indeed a relevant
weight in the assessment of the Court.
and starting from John Murray v UK (1996), worryingly distinguished between

“proper” forms of compulsion, which do not represent a breach of the privilege, and
“improper” forms of compulsion, in which the degree of coercion applied is so that
it “destroys the very essence of the privilege against self-incrimination”.459
Besides for cases in which the compulsion results in a violation of Article 3
ECHR and Article 4 CFREU, however, defining what represents a “proper” form of
compulsion is far from being straightforward. Aware of this, for what specifically
concerns pre-trial phases, which are perhaps the most delicate stage for the pre-
sumption of innocence also in “punitive” administrative proceedings, in its case-law
the ECtHR has identified a non-exhaustive list of factors which shall be examined
to determine whether the compulsion has been improper,460 including (i) the poten-
tial vulnerable status of the accused; (ii) compliance of the investigative act with the
legal framework governing the pre-trial proceeding—and if evidence was obtained
unlawfully, the nature of the unlawfulness in question; (iii) the possibility for the
accused to challenge the authenticity of the evidence so obtained and oppose its use
(and in case of statement, whether it was promptly retracted or modified by the
accused); (iv) the analysis on whether the circumstances in which evidence was
obtained cast doubt on its reliability or accuracy; (v) the weight of the evidence so
obtained in supporting a conviction, and the strength of the other evidence in the
case; and (vi) the weight of the public interest in the investigation and punishment
of the particular offence in issue.461 Particular attention was also put by the Court on
the will of the suspected person.462
In Ibrahim (2016) however the Court recalled that there are “at least three kinds
of situations which give rise to concerns as to improper compulsion”463: Where the
suspect is obliged to testify under threat of sanctions and either testifies in conse-
quence, or is sanctioned for refusing to testify464; where physical or psychological
pressure, often in the form of treatment which breaches Article 3 of the Convention,
is applied to obtain real evidence or statements465; or where the authorities use sub-
terfuge to elicit information that they were unable to obtain during questioning.466
459
John Murray v the UK, § 49; O’Halloran and Francis, § 53–55; Heaney and McGuinness, §§
54-55; Bykov, § 92; cf. also Balsamo (2015), pp. 134–136, and Veenbrink (2015), p. 122 et seq. and
literature there mentioned.
460
As it not necessarily derives only by the use of physical force, cf. an oath to tell the truth (Brusco
v. France, 14.10.2010, Application no. 1466/07); a rule permitting to draw adverse inferences from
the exercise of the right to remain silent (Condron v the UK, 2.05.2000, Application no. 35718/97),
or the use of an undercover agent (Allan v. the United Kingdom, 5.11.2002, Application no.
48539/99).
461
The criteria have been summarized in Ibrahim 2016, § 274.
462
Jalloh v Germany.
463
Cf. Ibrahim 2016, § 267.
464
See, for example, Saunders; Brusco v. France; Heaney and McGuinness.; Weh v. Austria.
465
See, e.g., Jalloh v. Germany; Magee v The UK, 9.06.2000, Application no. 28135/95; and
Gäfgen v. Germany, 1.06.2010, Application no. 22978/05.
466
See Allan v. the UK.
Of these three circumstances, the first is particularly relevant in case of adminis-

trative (punitive) proceedings in general, and of the SSM sanctioning proceeding in
particular, as it concerns the case in which a suspect is obliged to testify under threat
of sanctions and either testifies in consequence, or is sanctioned for refusing to tes-
tify.467 This profile is also linked with another critical issue related to the privilege
against self-incrimination, that occurs when oral statements are compelled under
administrative proceedings, and then used against the declarant in a criminal (or
punitive) trial.
This case is left unanswered by Directive 2016/343. In Saunders, however, the
Court in Strasbourg rejected the Government’s position that the privilege can “rea-
sonably be confined to statements of admission of wrongdoing or to remarks which
are directly incriminating. Testimony obtained under compulsion which appears on
its face to be of a non-incriminating nature—such as exculpatory remarks or mere
information on questions of fact—may later be deployed in criminal proceedings in
support of the prosecution case, for example to contradict or cast doubt upon other
statements of the accused or evidence given by him during the trial or to otherwise
undermine his credibility”. From that, “it follows that what is of the essence in this
context is the use to which evidence obtained under compulsion is put in the course
of the criminal trial”, and that “public interest cannot be invoked to justify the use
of answers compulsorily obtained in a non-judicial investigation to incriminate the
accused during the trial proceedings”.468 Therefore, it seems that if the information
gathered might be relevant for criminal proceedings, due attention should be paid on
the use of form of compulsion also in administrative proceedings.469
This approach to the right to remain silent was applied by the CJEU also towards
legal persons, mainly in competition law cases. There, the Court further distin-
guished between requests for information, and decisions requiring information
which may also impose a penalty to the undertaking in the event of a refusal to
reply, considering only the latter relevant for the scope of the privilege.470
Within this perspective, the CJEU has repeatedly affirmed, since its landmark
case Orkem, that duty to cooperate and provide information is considered legitimate
only as long as that does not “undermine the rights of defence of the undertaking
concerned and compel it to provide answers which might involve an admission on
its part of the existence of an infringement which it is incumbent on the Commission
to prove”.471
467
Cf., e.g., Saunders v The UK, § 65; Heaney and McGuinness, §§ 48–49; Brusco v. France, § 54.
468
Sanders v The UK, §§ 71 and 74.
469
On this point see also Lamberigts (2016a), p. 37.
470
Limburgse Vinyl Maatschappij NV (LVM) and others v Commission of the European
Communities, Joined cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to
C-252/99 P and C-254/99 P, 15.10.2002, ECLI:EU:C:2002:582, §§ 274 and 279.
471
Société Générale v Commission of the European Communities, Case T-34/93, 8.03.1995,
ECLI:EU:T:1995:46, §§ 74-76. See also Orkem v Commission, § 35 “Commission may not compel
an undertaking to provide it with answers which might involve an admission on its part of the
existence of an infringement which it is incumbent upon the Commission to prove” (quoted also in
the Green paper on the presumption of innocence, § 2.5); Solvay v Commission, Case 27/88,
The Court, however, in line with the standards already established by the ECtHR
(with regard to natural persons) in John Murray v UK,472 established that protection
shall be granted only for “strictly” self-incriminating questions, and not where “the
answers requested are none the less purely factual”.473 The difference between
the two hypothesis, however is not always precisely identifiable, and very much
depends on the specific circumstances of the case.
This case-law was later incorporated by Regulation No 1/2003, that at Recital
(23) recognizes a need to safeguard also legal persons, stating that “when comply-
ing with a decision of the Commission, undertakings cannot be forced to admit that
they have committed an infringement, but they are in any event obliged to answer
factual questions and to provide documents, even if this information may be used to
establish against them or against another undertaking the existence of an
infringement”.474
The blurred, and limited safeguards conferred in the European legal framework
to the right to remain silent are also magnified by the lack of exclusionary rules in
case of its violation.
This approach does not represent an unicum in the jurisprudence of the ECtHR,
which since the 1988 decision Schenk, has steadily affirmed that “while Article 6
(art. 6) of the Convention guarantees the right to a fair trial, it does not lay down any
rules on the admissibility of evidence as such, which is therefore primarily a matter
for regulation under national law”.475 In the context of the right to remain silent, this
interpretation is reflected in the conclusion that not all direct forms of compulsion
lead to a violation of Article 6 ECHR, but only those which may be defined as
“improper”. As repeatedly affirmed by the Court in John Murray and in the follow-
18.10.1989, ECR 3355, summary publication; Mannesmannröhren-Werke v Commission, Case

T-112/98, § 66; Tokai Carbon Co. Ltd and Others v Commission of the European Communities,
Joined cases T-236/01, T-239/01, T-244/01 to T-246/01, T-251/01 and T-252/01, 29.04.2004,
ECLI:EU:T:2004:118, §§ 402-406; Commission of the European Communities v SGL Carbon AG,
Case C-301/04 P, §§ 35-49; Limburgse Vinyl Maatschappij NV (LVM) and others v Commission of
the European Communities, Joined cases C-238/99 P, § 274; Dalmine SPA v. Commission, Case
C-407/04 P, 25.01.2007, ECLI:EU:C:2007:53, § 34. For a comparative analysis of the privilege in
competition law, see Veenbrink (2015), p. 133 et seq.
472
Cf. John Murray, § 47; O’Halloran and Francis, § 55; Bykov, § 104.
473
Société Générale, § 75; cf. also Amann & Söhne GmbH & Co. KG and Cousin Filterie SAS v
European Commission, Case T-446/05, 28.04.2010, ECLI:EU:T:2010:165, § 328 “the mere fact of
being obliged to answer purely factual questions put by the Commission and to comply with its
request for the production of documents already in existence cannot constitute a breach of the
principle of respect for the rights of the defence or impair the right to fair legal process, which
offer, in the specific field of competition law, protection equivalent to that guaranteed by Article 6
of the ECHR. There is nothing to prevent the addressee of a request for information from showing,
whether later during the administrative procedure or in proceedings before the Community judica-
ture, when exercising its rights of defence, that the facts set out in its replies or the documents
produced by it have a different meaning from that ascribed to them by the Commission”.
474
Cf. Recital (23), Regulation No. 1/2003. See also Veenbrink (2015), p. 131 and 137 ff. Talking
about a «discrete exception», Ashworth (2008), p. 771.
475
Schenk v. Switzerland, 12.07.1998, Application no. 10862/84, §§ 50-51; see also Trechsel
(2005), p. 162 et seq.
ing case-law (interestingly almost exclusively based on the British or Irish legal
systems476), this perspective de facto allows also to draw adverse inferences from
the silence of the accused. Whether that represents an infringement of Article 6 shall
“be determined in the light of all the circumstances of the case, having regard to the
situations where inferences may be drawn, the weight attached to them by the
national courts in their assessment of the evidence and the degree of compulsion
inherent in the situation”.477
Such an approach, coherent with the comprehensive perspective adopted for all
the rights included in Article 6 ECHR (if not violating also Article 3478), results
however rather critical if applied to procedural rights, such as access to a lawyer or,
precisely, the privilege against self-incrimination, that represent the core of fair trial
and on which most of the other relevant procedural safeguards depends upon.479
The lack of exclusionary rules is mirrored also in Directive 2016/343.480
476
With some few exceptions, see e.g. Telfner v Austria, § 17, where the Court considered “that the
drawing of inferences from an accused’s silence may also be permissible in a system like the
Austrian one where the courts freely evaluate the evidence before them, provided that the evidence
adduced is such that the only common-sense inference to be drawn from the accused’s silence is
that he had no answer to the case against him”.
477
John Murray v the UK, § 47; Averill v. The UK, 6.06.2000, Application no. 36408/97, § 44.
478
Gäfgen v. Germany, § 168. As recently reaffirmed in Ibrahim 2016, § 254 “As the Court has
explained on numerous occasions, it is not the role of the Court to determine, as a matter of prin-
ciple, whether particular types of evidence, including evidence obtained unlawfully in terms of
domestic law, may be admissible. As explained above (see paragraph 250), the question which
must be answered is whether the proceedings as a whole, including the way in which the evidence
was obtained, were fair […] However, an exception to this approach applies in the case of confes-
sions obtained as a result of torture or of other ill-treatment in breach of Article 3”.
479
Cf. with regard to Directive 2016/343, Lamberigts (2016a), p. 39. In general terms on the issue
see, e.g., Illuminati (1979), p. 5; Amodio (1974); Pulitanò (1999). The dependence of other fair
trial rights upon the correct exercise of the right to remain silent, in connection with the access to
a lawyer, although without getting to the creation of exclusionary rules, has been recognized also
by the same ECtHR in John Murray, § 66, according to which “at the beginning of police inter-
rogation, an accused is confronted with a fundamental dilemma relating to his defence. If he
chooses to remain silent, adverse inferences may be drawn against him in accordance with the
provisions of the Order. On the other hand, if the accused opts to break his silence during the
course of interrogation, he runs the risk of prejudicing his defence without necessarily removing
the possibility of inferences being drawn against him. Under such conditions the concept of fair-
ness enshrined in Article 6 (art. 6) requires that the accused has the benefit of the assistance of a
lawyer already at the initial stages of police interrogation. To deny access to a lawyer for the first
48 hours of police questioning, in a situation where the rights of the defence may well be irretriev-
ably prejudiced, is - whatever the justification for such denial - incompatible with the rights of the
accused under Article 6”.
480
As well as in all procedural Directives, due to their compromised origin, in this sense see
Caianiello (2014b), p. 317 et seq.; Allegrezza (2017), pp. 970–971, which reminds that the process
of EU integration has always developed with small steps, and that much of the effectiveness of the
recent European rules will depend on their correct implementation at the national level, and on the
will of the Court of Justice in providing a safeguarding interpretation of the texts of the
directives.
Indeed, Article 7(5) only provides that “The exercise by suspects and accused
persons of the right to remain silent or of the right not to incriminate oneself shall
not be used against them and shall not be considered to be evidence that they have
committed the criminal offence concerned”.
Although this provision seems to raise the level of protection recognized by the
ECtHR, its scope in practice results rather downsized if read in light of the whole
Directive.
Contrary to the Commission’s proposal, in fact, the approved text of this legisla-
tion does not contain any more an exclusionary rule for the evidence gathered in
violation of the privilege.481
According to Article 10(2) of the Directive, what must be always respected, is
“only” the fairness of the proceedings and the rights of the defence. This expression,
as pointed out by legal scholars, is less strong than an absolute exclusionary rule,
and actually seems to implicitly allow the use of evidence collected in violation of
the right to remain silent, although with some cautions, such as the right to an effec-
tive remedy (also not defined in the Directive).482
Recital (28), moreover, specifies that the exercise of the right to remain silent
“should not, in itself, be considered to be evidence” but that “this should be without
prejudice to national rules concerning the assessment of evidence by courts or
judges, provided that the rights of the defence are respected”. The Directive, there-
fore, does not really require any substantial strengthening of the standards of protec-
tion already established in this field at the national level.483
6.3.6 T
he Right to Remain Silent in the SSM Legal
Framework
Against this legal, and often rather confused background, the level of safeguards
provided for in the SSM sanctioning proceedings appears rather problematic.
Indeed, although Article 22(2) SSM R requires to comply with due process rights
in the adoption of all supervisory decisions, including sanctioning proceedings, not
all the guarantees of fair trial find an explicit recognition in the SSM Regulations—a
fact which appears particularly thorny when it concerns fundamental principles,
such as the privilege against self-incrimination.
As anticipated, the SSM may investigate over all financial institutions under its
jurisdiction, all persons belonging to them, and third parties to whom the same enti-
481
Cf. Article 7, Directive 2016/343 with Article 4, European Commission, Proposal for a Directive
of the European Parliament and of the Council, cit.
482
Lamberigts (2016a), p. 38.
483
The fact that silent might represent an evidence, is also confirmed by Article 7(4) of the Directive,
according to which “when sentencing, cooperative behaviour of suspects and accused persons”
may be taken into account by judicial authorities, therefore seeming to imply, a contrario, that
silent may have detrimental effects on the defendant. Lamberigts (2016a), p. 38; Mazza (2014), p.
1407.
ties have outsourced functions or activities.484 According to Article 11 SSM R, writ-

ten or oral explanations may be obtained from any of these subjects, their
representatives or staff. The SSM may also interview any other person “for the
purpose of collecting information relating to the subject matter of an investigation”.485
While the interview of third persons requires their consent to be legally carried
out, the picture looks quite different when it comes to the subjects under investiga-
tion. Indeed, Articles 28 and 29 SSM FR establish that these parties are required to
participate to the ECB supervisory procedure, and to provide assistance clarifying
the facts under investigation. Upon request, the same subjects may also be com-
pelled (“shall”) to provide any information that “is necessary in order to carry out
the tasks conferred on it by” the SSM Regulations. The ECB may set a time-limit
by which evidence shall be provided, and “subject to the limits relating to sanction-
ing procedures under Union law”, the parties shall “state truthfully the facts known
to them”.486
If a person obstructs the conduct of the investigation, the SSM may require the
necessary assistance by the National Competent Authority of the participating
Member State where the relevant premises are located.487 Secrecy law plays a very
restricted role in this field, since, according to Article 10(2) SSM R, it neither
exempts banks from their disclosing duty, nor represents a cause for invoking a
breach of professional secrecy.
The situation is then different for natural and legal persons. According to Recital
(53) SSM R, the ECB may not impose penalties upon natural persons. In this case,
therefore, non-compliance with the obligation to state the truth and cooperate with
the investigations cannot be sanctioned directly by the SSM.
The issue is then determined by national law, which the ECB, according to
Article 11(2) SSM R, may ask the competent NCA to apply (apparently without any
discretion of the latter whether to so do or not, since paragraph (2) prescribes that
NCAs “shall afford” the request assistance to the ECB).
Where the national legal framework provides for penalties in case of non-
compliance with the regulator, for instance where that is interpreted as an obstruc-
tion to the supervisory functions,488 natural persons may then be sanctioned for their
non-cooperation in supervisory activities. This has major implications on the effec-
tivity of their privilege against self-incrimination especially when such sanctions
are established as criminal.489
As for legal persons, the possibility to apply sanctions for non-compliance is
more straightforward. Article 122 SSM FR, in fact, provides that in case of failure
to comply with obligations under ECB regulations or decisions, legal entities may
484
Article 10 SSM R. For a complete illustration of the SSM investigative powers mentioned here,
cf. above, Sect. 4.4.3.
485
Article 11(1) (c)-(d) SSM R.
486
Article 28(3) and Article 29(2) SSM FR.
487
Article 10(1)-(2) SSM R.
488
As it is the case in several Member States, cf. Lasagni and Rodopoulos (2019).
489
Such as in Italy, cf. Article 7(1)(2) of Legislative Decree no. 385, of 1.09.1993 (TUB).
be sanctioned according to Article 18(7) SSM R, which refers to Regulation

2532/98. The duty to state the truth and supply the information requested, estab-
lished by Articles 10(2) SSM R and 29 SSM FR, seems to represent an obligation
established by ECB Regulations Investigatory measures are also adopted on the
basis of an ECB decision which, according to Article 142(c) SSM FR, shall also
specify that any obstruction constitutes a breach under Article 18(7). Therefore, in
case of non-compliance, the SSM has the power to impose significant enforcement
measures or even trigger the initiation of a specific sanctioning procedure against
the subjects under investigation.
In light of the privilege against self-incrimination, this legal background presents
several critical points. In general terms first of all, the ECB should perhaps not rely
too easily on the aforementioned CJEU case-law, about the privilege in competition
law proceedings (that acknowledging the existence of a broader right “would go
beyond what is necessary in order to preserve the rights of defence of undertakings,
and would constitute an unjustified hindrance with the Commission’s performance
of its duty”).490 Although investigations carried out by DG Comp seems rather com-
parable with those of the SSM (both EU institutions with investigating powers, both
formally administrative but—likely—with punitive character, both with sanctioning
powers applicable upon legal persons491), there are solid arguments suggesting the
need to differenciate.
First, so far there is no evidence that the Court of Justice will extend its “excep-
tionalism” also towards authorities other than DG-COMP, that is to say, that the
CJEU will maintain also for the ECB the ambiguity of classification reserved until
now only to antitrust proceedings. In the latter, as previously illustrated, the Court
repeatedly acknowledged the severity of the imposable fines (one of the Engel cri-
teria), and therefore the need to comply with some fundamental procedural rights,
such as rules on adducing proofs and on treatment deriving from the presumption of
innocence, but it never recognized the Commission as a tribunal in the meaning of
Article 6 ECHR, nor the subject matter to be of substantive criminal nature, without
providing a clear legal reasoning behind such interpretation.492 However, as already
argued, competition law retains a sui generis treatment mostly thanks to historical
and pragmatic rather than legal reasons, not easily transferrable to the post-Lisbon-
established Single Supervisory Mechanism.493
A reason to exempt the SSM sanctioning proceedings from the need to comply
with the right to remain silent could not be grounded either on the fact that targets
of the SSM may be only legal persons, and that these subjects enjoy only a limited
490
Commission of the European Communities v SGL Carbon AG, Case C-301/04 P, § 402;
Mannesmannröhren-Werke v Commission, Case T-112/98, §§ 66-67. Cf. also Nehl (2014), p. 1293.
491
Affirming that competition law represents a “privileged field” for reconstructing the framework
of defence safeguards in the EU, Allegrezza (2017), p. 953.
492
In this sense, also the Commission’s prerogative to fine undertakings for non-cooperating con-
ducts could likely be increasingly undermined and challenged by national parties in the next future,
see, e.g., Slater et al. (2008); cf. also Sects. 6.2 and 6.3.5.
493
amount of guarantees under the CJEU case-law developed in the field of competi-
tion law. Indeed, as it was previously illustrated, the jurisprudence of the Court of
Justice on the matter is not exclusively referred to legal persons.494
The subjective scope of the privilege against self-incrimination represents
another critical issue in the analysis of the SSM sanctioning proceedings under
Article 6(1) ECHR and Article 48 CFREU, especially for the possibility of sanc-
tioning legal entities under Regulation 2532/98 in case of failure to comply with an
ECB information request. In fact, against the broad wording of Article 48 CFREU
(“everyone”), and the ambiguous reference illustrated above, of Recitals (13) to
(15) Directive 2016/343, to the evolving jurisprudence of the European Courts, the
exclusion of legal persons from the scope of the privilege does not appear justified.
This is even more true looking at the case-law of the Court in Strasbourg, whose
interpretation, according to Recital (14) should not be prejudiced by the Directive,
and that, as discussed above, has already, and repeatedly decided in favour of the
recognition of fair trial rights also towards legal persons.495
Critical profiles in the SSM investigating proceedings emerge also with regard to
natural persons listed under Article 10(1) SSM R (persons belonging to credit insti-
tutions, mixed financial holding companies, mixed-activity holding companies
established in the participating Member States, or their representatives or staff),
who according to paragraph (2) of the same article, and paragraph (2) of Article 11
SSM R, cannot refuse to provide the information requested.
In particular, especially problematic in light of the jurisprudence of the European
Courts and of Article 7(5) of Directive 2016/343, is the possibility for these subjects
to be sanctioned for their refusal to provide (potentially self-incriminating) informa-
tion, even though in this case the competence relies at national level.
In light of the above, both with regard to natural and legal persons, the power to
impose sanctions in case of mere refusal shall be interpreted and applied with
extreme caution by the ECB. In particular, to comply with the right to remain silent,
sanctions should never be imposed for the refusal of the requested person to provide
statements, which might involve an admission of the existence of an infringement
incumbent upon the ECB to prove.
A similar restrictive approach, in light of the aforementioned jurisprudence of
the European Courts, should be also applied with regard to requests to produce
documents, avoiding to impose sanctions in case of refusal to cooperate, when there
is no legal obligation for the subject required to keep such documents (e.g. docu-
ments other than accounting). This clarification appears necessary even though
most of the sanctions directly applicable by the ECB (Article 18(1) SSM R) concern
breaches of “quantitative” requirements (such as capital buffers, or liquidity
Cf. Jones (2012).

494
See above, Sect. 6.2, e.g., Menarini Diagnostics v Italy, § 44; Zegwaard & Segwaard B.V. v the
495
Netherlands, 9.09.1998, Application no. 26493/95, §§ 34–51. The need for such a non-discrimina-
tory approach also within the EU will certainly be accelerated in case the Union would finally
access the European Convention, under which no apparent distinction is made between legal and
natural persons, a process which, after the stop of the ECJ in 2012, might still be resumed.
thresholds)496: In these cases, in fact, it is likely that the investigations may be car-
ried out exclusively requiring the supervised entity to produce information which
the latter is under a general obligation to keep.
Most of “qualitative” prudential requirements (e.g. concerning governance), for
which it is more likely that also interviews as well as the production of documents
other than accounting ones could be necessary are instead provided for by CRD
IV. Hence, in case of breaches, investigations rely upon the NCAs, and not the ECB.
Nonetheless, also CRR provides for additional disclosure obligations, and pre-
scribes conducts for the management of risk. For the investigation of these breaches,
examining accounting or similar documents may likely not be always sufficient.
Moreover, the content of CRR is not immutable as the approval of CRR II clearly
shows and it could be subject to amendment in the future, that might include also
“qualitative” obligations.
Lastly, “qualitative” assessments are also required in some supervisory proceed-
ings which might end up with the application of measures characterized by a sub-
stantial criminal nature in light of the Engel criteria (such as the removal of members
from the management body of credit institutions ex Article 16(2)(m SSM R)497).
Also when supervisory measures cannot be classified as criminal, the need to
comply with the privilege against self-incrimination shall be taken into account.
Indeed, no clear distinction really exists between ordinary and sanctioning supervi-
sory activities with regard to the right to remain silent. Information collected for
“daily” supervisory tasks could then be easily used by the same ECB to apply puni-
tive measures on a later stage. Moreover, in performing the SSM supervisory and
investigating tasks, suspicious elements of a crime may emerge.
In this case, examined above, the SSM has the duty, according to Article 136
SSM FR, to refer the matter to the competent NCA, which shall refer it to the
national judicial authorities according to national law.498 As already mentioned,
however, the Court of Justice in the 2015 case WebMindLicence conditioned the
possibility of using evidence gathered in other proceedings to a double proportion-
ality and compliance check.499
Although the principle affirmed there was referred to the case in which evidence
gathered in a criminal proceeding had to be used in an administrative one, the need
to comply with this test seems even more necessary in the opposite case, taking into
account the stricter criteria for the admission of evidence usually established in
criminal procedural law.500 Even besides for the recognition of substantial criminal
nature to some sanctions, therefore, the possibility of using the information gath-
ered by the SSM as evidence in criminal proceedings should be conditioned to its
496
The differentiation between “quantitative” and “qualitative” requirements is used here only to
understand the practical impact of the provisions under analysis, but it does not find a specific
recognition in CRR or CRD IV.
497
498
Cf. above, Sect. 6.1.3, and Sect. 4.4.3.
499
Cf. WebMindLicence, Case C-419/14, §§ 75 and 82.
500
See Tesoriero (2016), p. 1540.
compliance, during the administrative investigations, with the fundamental rights of

the defendant, including the privilege against self-incrimination.
Both for natural and legal persons, moreover, other critical issues arise from the
analysis of the SSM Regulations in light of the right to silence. First, as already
discussed above under the profile of the dissemination of information,501 “compul-
sory” requests for information result critical also for the safeguard of professional
secrecy. According to Article 10(2) SSM R, indeed, «professional secrecy provi-
sions do not exempt» the subjects under investigations «from the duty to supply that
information. Supplying that information shall not be deemed to be in breach of
professional secrecy».
As already mentioned, the analysis of the professional secrecy of ECB members
of staff goes beyond the remit of this work, as it will require an in-depth exam of the
privileges and immunities to the ECB members of staff, still in lack of specific case-
law on the matter.502
For the purposes of this analysis, focused on the privilege against self-incrimina-
tion, it shall however be reminded that the definition of the boundaries of the legal
professional privilege appears problematic.
Legal professional privilege does not find a specific protection under the SSM
Regulations, although Recital (48) SSM R recognizes it as “a fundamental principle
of Union law” in line with the importance of the principle enshrined in Article 41(2)
CFREU,503 and “in accordance with the conditions laid down in the case-law of the
Court of Justice”. The CJEU, however, although acknowledged in the past that this
right represents an “essential corollary to the rights of the defence”,504 has more
recently adopted a rather narrower interpretation. In the leading case Akzo Nobel
Chemicals, indeed, the Court concluded that “legal professional privilege does not
cover exchanges within a company or group with in-house lawyers”.505
Such a strict interpretation raises several issues with regard to the effectiveness
of defence rights, although a limited protection of the legal professional privilege is
not unheard of in the field of banking or financial supervision.
In the US, for instance, both the attorney-client privilege and the work product
doctrine receive a special benefit in the context of banking supervision. Indeed,
according to it, disclosing information to supervisors is exceptionally not consid-
ered as a waiver to these protections (meaning that providing information to the
supervisors should not generally expose the bank to the obligation of discovering
that material during private litigations).506
501
502
503
According to which in the right to good administration is included “the right of every person to
have access to his or her file, while respecting the legitimate interests of confidentiality and of
professional and business secrecy”.
504
Since AM & S Europe Limited v Commission of the European Communities, Case 155/79,
18.05.1982, ECLI:EU:C:1982:157, § 18 et seq. especially § 23.
505
Cf. Akzo Nobel Chemicals Ltd, Akcros Chemicals Ltd v European Commission, Council of the
Bars and Law Societies of the European Union, Algemene Raad van de Nederlandse Orde van
Advocaten, Association européenne des juristes d’entreprise (AEJE), American Corporate Counsel
Association (ACCA), Case C-550/07 P, 14.09. 2010, ECLI:EU:C:2010:512, § 44.
506
Cf. 12 U.S.C. § 1828 (x).
Banks, moreover, can also benefit from the Bank Examination Privilege, accord-
ing to which also communications between credit institutions and their supervisors
are protected from disclosure duties towards third parties.507
Against this background, however, several are the flows which significantly
weaken the effectiveness of all these privileges in banking supervision in the US.
First, the Bank Examination Privilege is qualified, meaning it does not apply to
“purely factual material” (which is sometimes broadly interpreted by the courts)
and may be overridden by a court upon demonstration of “good cause”.508
Secondly, all these privileges cover only the bank, and not employees. The latter
should be informed of the risk they incur while cooperating to internal investiga-
tions (according to the so-called “Upjohn wanrning”509), but distinctions of roles
within the company is not always straightforward in practice.
Lastly, unless the credit institution secures a specific confidentiality agreement
with the supervisor, the mere existence of the privileges does not always success-
fully bind the regulator from disclosing the information received to third parties.510
In a context, like the EU, where some of the sanctions applicable by banking
supervisors may be attributed a substantial criminal nature, however, notable com-
pressions of defence rights could become definitely critical, considering that the
Convention provides on the matter a much wider level of protection.511
Finally, the SSM Regulations do not consider at all the position of the subject
(natural or legal person) who, first interviewed as a simple witness, issues state-
ments with a self-incriminating character in the course of the interview. This situa-
tion was however repeatedly examined by the ECtHR, which for instance in the
2016 decision Ibrahim (partially overruling in appeal the 2014 decision512) consid-
ered an infringement of Article 6 ECHR using the statements so obtained as evi-
dence, in lack of an adequate demonstration by the Government that “the overall
fairness of the trial was not irretrievably prejudiced by the decision not to caution”
the applicant.513
Regardless of this jurisprudence, on which the CJEU has not had a chance yet to
take position, procedural rules dealing with similar situations have been already
507
In re Bankers Trust Co., 61 F.3d 465, 471 (6th Cir. 1995); In re Subpoena Served Upon
Comptroller of Currency & Sec’y of Bd. of Governors of Fed. Reserve Sys., 967 F.2d 630, 634
(D.C. Circ. 1992).
508
Cf. Lambrakopoulos et al. (2017), p. 6 and 14 et seq.
509
Upjohn Co. v. United States, 449 U.S. 383, 394–95 (1981).
510
Cf. Lambrakopoulos et al. (2017), p. 9 et seq.
511
Under the Article 8 ECHR, see, e.g., Brito Ferrinho Bexiga Villa-Nova v. Portugal, 1.12.2015,
Application no. 69436/10, § 59; Niemietz v. Germany, §§ 30–33; André and Another v. France,
24.07.2008, Application no. 18603/03, § 41; Xavier Da Silveira v. France, 21.01.2010, Application
no. 43757/05, §§ 37, 42 and 48 (requiring “special procedural guarantees”, and the possibility for
the lawyer to have access to “effective scrutiny” to contest them). The issue has been pointed out
by Allegrezza and Voordeckers (2015), p. 154. See also Nehl (2014), p. 1301.
512
Cf. Ibrahim and others v. The UK, 16.12.2014, Applications nos. 50541/08, 50571/08, 50573/08
and 40351/09.
513
Ibrahim 2016, § 271-273; Serves v France, 20.10.1997, 82/1996/671/893, § 42.
provided for in 2013 by Article 9(2) of the OLAF Regulation, which requires that
“where, in the course of an interview, evidence emerges that a witness may be a
person concerned, the interview shall be ended. The procedural rules provided for
[…] shall immediately apply. That witness shall be informed forthwith of his rights
as a person concerned and shall receive, upon request, a copy of the records of any
statements made by him in the past. The Office may not use that person’s past state-
ments against him without giving him first the opportunity to comment on those
statements”.514
A similar safeguard has not been replicated in the SSM Regulations, in which the
position of the declarant that becomes target of the investigations at a later stage is
not supported by any specific right.
Against this background, as already highlighted by scholars,515 inserting in the
SSM Regulations a provisions similar to that of Article 9(2) OLAF Regulation
appears necessary and appropriate, at least to impose a duty upon the proceeding
officer(s) to inform not only the undertakings subject to supervisory investigations,
but also the subjects who consent to be interviewed (ex Article 11(1)(d) SSM R) as
third parties of their rights, including the privilege against self-incrimination, shield-
ing them from any form of “improper” coerced admissions of responsibility. In
order to keep a record of this warning, it may be useful to request the interviewee
also to sign a statement acknowledging that he/she has been expressly informed on
his/her rights.
Lastly, taking into consideration that Joint Supervisory Teams provide the
Investigating Unit with most of substantive relevant information for the investiga-
tions, it should be advisable that similar safeguards apply also in the course of their
supervisory tasks (at least to those referred to “qualitative” assessments), to avoid
subsequent problems in using such information as grounds to impose (substantially
criminal) sanctions. After all, the necessity to notifying suspects of their rights is not
coming just from the case-law of the ECtHR, but has also been recognized in the EU
legal framework by Directive 2012/13/EU on the right to information in criminal
proceedings, which includes the right to remain silent among the procedural rights
that a suspect shall be informed about.516
Again similarly to Article 9(2) OLAF Regulation, this obligation shall be
extended towards those subjects which are heard only as persons informed about the
514
Cf. Article 9, Regulation No 883/2013. Interestingly, this provision applies also when the person
has given his or her consent to be interviewed, as interviews carried out by OLAF are voluntary (at
least for external investigations, while for internal investigations this provision shall be interpreted
also taking into account Article 16 of the OLAF Guidelines on Investigation Procedures for OLAF
Staff (1 October 2013) according to which “officials or other servants should also be informed that
they have a duty to cooperate with the OLAF investigation”. Cf. also Guidelines on Digital
Forensic Procedures for OLAF staff, referring to the leaflet wito be given to the investigated sub-
ject containing reference to his/her rights.
515
Wissink et al. (2014), p. 114; of the same position also Allegrezza and Voordeckers (2015),
p. 157.
516
Cf. Article 3, Directive 2012/13/EU.
matter of the investigation, as soon as evidence emerges from their statements that
they might also be held responsible for breaches.
If that raises potential inculpatory profiles also against the natural person inter-
viewed (and not only for the legal person represented), the interview should be
interrupted to warn the subject of the change in its legal standing. The case file
would then likely be transmitted to the competent national authority, as the SSM has
no competence to sanction natural persons. The abovementioned safeguards should
be accordingly respected during on-site inspections too, considering that, under
Article 12 SSMR and Article 143 SSM FR, the ECB may request information and
oral explanations also in that circumstances. All these profiles require therefore a
special attention both from the ECB and NCAs to the potential uses of the informa-
tion collected, especially when it is likely to be put at the basis of a punitive
decision.517
6.3.7 The Protection from Bis In Idem
Finally, since relevant administrative penalties applicable by the SSM may present
a substantial criminal nature, and the principle of ne bis in idem (still) applies to all
sanctions a coloration pénale and (at least formally) to the related proceedings
according to the Engel criteria, the compliance of the SSM sanctioning procedure
with the double jeopardy clause shall also be examined. The analysis of this profile,
however, collides with the great interpretative uncertainty left in Europe after the
ECtHR revirement in A and B, as followed by the 2018 CJEU decisions on the same
matter.518 Also in banking supervision, in fact, the overruling of the ECtHR and the
restrictive interpretation to this right resulting from the interpretation of the Court of
Justice, significantly risk to undermine at the very basis the possibility to grant indi-
viduals effective protection.
In particular, the persistence of double-track systems in punitive contexts appears
even more critical when multiple sanctions or proceedings may be applied to sub-
jects with a great social impact, like credit institutions. Especially in this field
indeed, adverse consequences (as tragically exemplified in the Arthur Anderson
LLP (Enron) case519) should be carefully considered before endorsing a system
towards credit institutions (and therefore, above all, shareholders and depositors) in
517
Cf. Bontempelli (2009) and Orlandi (1992).
518
For a detailed analysis of the development in the jurisprudence of the ECtHR and of the CJEU
on the ne bis in idem, and its relevance in the administrative punitive matter see Chap. 2, respec-
tively Sects. 2.3.2 and 2.3.3.
519
Cf. Sect. 2.2. Another relevant profile, which goes beyond the remit of this work, as it may rep-
resent the subject of a whole separate analysis, could concern the potential implications of ne bis
in idem in the application of supervisory punitive sanctions and precautionary punitive measures
applied either by national judicial authorities or by national administrative authorities (if consid-
ered to be falling under Article 6 ECHR).
which duplication of proceedings bears almost no limits and standards of protection

are virtually unpredictable.
In addition to this precarious case-law, the SSM Regulations do not foresee any
specific rule or remedy to address issues related to the ne bis in idem.520 Only a few
provisions in fact address the possibility of multiple proceedings, but without pro-
viding any substantial guarantees for the affected subjects. This is the case of Article
130(5) SSM FR, according to which, in case a criminal proceeding is pending
against the supervised entity “in connection with the same facts”, the limitation
period to impose penalties shall be suspended for the duration of the latter.
Slightly different terms are instead employed in Article 4c(3)(b) Regulation
2532/98, according to which the limitation period within which the ECB may
impose a sanction for the breach of one of its decisions or of a regulation relating to
its supervisory tasks (Article 18(7) SSM R), can be extended in case “criminal pro-
ceedings are pending against the concerned undertaking in connection with the
same facts” until the conclusion of the latter.
Also in this field, therefore, as more generally noticed for all the matter of admin-
istrative punitive proceedings, the protection from bis in idem seems to have flat-
tened out on the principle of proportionality of sanctions.
This principle, explicitly mentioned by both Articles 18(3) SSM R and 2(2) and
(3) Regulation 2532/98, however, does not cover also the procedural notion of ne
bis in idem, that is the protection from being subject to multiple proceedings for the
same illicit conduct.
Only in Article 2 Regulation 2353/98, moreover, it is clearly affirmed that, in
deciding the amount of a sanction to be imposed, the ECB shall consider “prior
sanctions imposed by other authorities on the same undertaking and based on the
same facts”. This precaution, therefore, results mandatory for the ECB, at least
explicitly, only for penalties under Article 18(7), and not for those of Article 18(1).521
Against this background, several are the issues which remain currently unanswered,
and for which providing solutions is to date highly speculative. In lack of ECB spe-
cific case-law on the matter by the Court of Justice, what can be already done,
however, is first to identify which are the relationships between authorities relevant
for the Eurozone enforcement systems (SSM, NCAs, national judicial authorities,
other national administrative authorities, the CJEU) which may give rise to a risk
under a ne bis in idem perspective (for instance, a violation of the double jeopardy
520
Under this perspective, some author has affirmed that the role of supremacy of the EU law as
established in Walt Wilhelm will apply, cf. Walt Wilhelm and others v Bundeskartellamt, C-14-68,
13.02.1969, ECLI:EU:C:1969:4, in D’Ambrosio (2013), p. 81. A provision explicitly requiring to
“shall refrain from imposing fines or periodic penalty payments where a prior acquittal or convic-
tion arising from identical fact or facts which are substantially the same has already acquired the
force of res judicata as the result of criminal proceedings under national law” has been explicitly
introduced with regard to ESMA sanctioning powers in crowdfunding services by Article 31(11)
of the Commission Proposal for a Regulation on Crowdfunding Service Providers, cit.
521
See also D’Ambrosio (2017), pp. 1037–1038, underlying how the SSM Regulation does not
provide for any safeguard clause to reduce the amount of the sanctions potentially imposable in
light of the proportionality principle.
clause is not foreseeable between the CJEU and national courts, besides for the
extremely unlikely hypothesis in which both would declare competent for to adju-
dicate on acts issued under Article 9(1) SSM R).
In the current legal framework, as reconstructed in the analysis carried out so far,
they can be grouped as those among: (i) The SSM and national judicial authorities;
(ii) the NCAs and national judicial authorities; (iii) the SSM and the NCAs; and (iv)
the SSM or the NCA and other relevant administrative national courts (e.g. in tax or
financial law).
Two further potentially critical profiles of ne bis in idem are also here examined,
respectively originated (v) within the same SSM, or (vi) by the difficulty in identify-
ing precisely who is the subject that should be held liable for prudential breaches.
Of course, further relationships could emerge in practice following the development
of the supervisory activities both at the national and at EU level.
Scenario (i)—SSM and National Judicial Authorities
In case breaches of prudential requirements committed by banks are also represent-

ing criminal offences at national level,522 two are the main factual scenarios that
could be covered by this first hypothesis.
1. The case of the ECB directly imposing punitive sanctions/starting a sanctioning
procedure under Article 18(1) or (7) SSM R, for a breach that is also considered
a criminal offence in national law.—This represent the situation with the highest
risk of originating violations of the principle of ne bis in idem, since credit insti-
tutions could be charged under two different forms of punitive liability for the
same conduct: At the EU level by the SSM (with punitive administrative sanc-
tions), and at the national level, by a national court, under the applicable criminal
law.
To this case, therefore, it is necessary to apply all the considerations illustrated in
Chap. 2 with regard to the uncertain current legitimacy of parallel proceedings, and
more in general of all double-track systems.
In light of the current case-law, in fact, the duplication of criminal and adminis-
trative proceedings originated from the same fact are considered legitimate by the
Court of Justice, as long as they present a sufficiently closely connection in sub-
stance; pursue an objective of general interest that justifies such a duplication; con-
tain rules ensuring coordination which limit to what is strictly necessary the
additional disadvantage for the persons concerned; and provide for rules making it
possible to ensure that the severity of all of the penalties imposed is limited to what
is strictly necessary in relation to the seriousness of the offence concerned.523
In this sense, it is necessary to recall that, contrary to other fields of law (such as
the protection of the EU financial interests, or the regulation of credit rating agen-
522
Cf. Lasagni and Rodopoulos (2019).
523
Cf., e.g., Menci, Case C-524/15, § 63; see also Sects. 2.3.2 and 2.3.3.
cies), the power of the ECB to impose sanctions is not assisted by safeguard clauses
which impose to take into account sanctions already ordered under a different pro-
ceeding besides for the case of Article 18(7) SSM R, or to suspend the administra-
tive proceeding in case a criminal one is carried out.524 It seems, therefore, that not
even under the mild conditions currently required by the European Courts, to recog-
nize a violation of ne bis in idem, it is possible to exclude potential violations to
Article 50 CFREU in the SSM enforcement system. To this aim, however, it shall
also be reminded that—at present—potential violations of ne bis in idem could
emerge under this profile only for those States where forms of criminal liability for
legal entities have been established.525 Only subject to a reclassification of hybrid or
administrative forms of liability under the Engel case-law, it might indeed be pos-
sible to extend this consideration also to those States where sanctions for legal enti-
ties are not formally criminal.
2. The case of the SSM directly imposing punitive supervisory measures/
starting punitive proceedings to apply punitive supervisory measures for a
breach that is also considered a criminal offence in national law.—This situation
could be assimilated to the previous one; nonetheless, it is useful to examine
separately it as the punitive nature of the supervisory measures provided for by
Articles 14 and 16 appears more uncertain than that of those of Article 18 SSM
R.526 If, however, measures such as the removal of members from the manage-
ment body of credit institutions, and the withdrawal of a banking licence will be
confirmed as substantially punitive in future case-law, even only in certain
circumstances,527 the same considerations illustrated in point 1 above shall apply.
In both situations (1-2), critical appears the identification of the court before
which such transnational violations of ne bis in idem should be raised.
This could indeed represent a further implicit case in which the CJEU might have
to extend its scope of review also over national law, with all the implications
described above. However, the Court could rule on the existence of a violation to the
principle, but perhaps not—at least for cases of Article 18(1) SSM R, where it lacks
unlimited jurisdiction—on the amount of the penalty to be finally imposed to the
supervised entity.
524
The reference goes here to Article 23-sexies, § 8, Regulation (EU) No 513/2011 of 11.05. 2011
amending Regulation (EC) No 1060/2009 on credit rating agencies, and to Article 6, Council
Regulation (Ec, Euratom) No 2988/95 of 18.12.1995 on the protection of the European
Communities financial interests. Cf. on this issue, D’Ambrosio (2017), pp. 1038–1039; Tomkin
(2014), pp. 1377–1378.
525
Cf. Sect. 2.2.
526
527
Cf., e.g., Van Bockel (2015), p. 114, highlighting how “the concurrence of the withdrawal of a
license and the imposition of a fine is not necessarily problematic as long as the withdrawal of the
license (and therefore not the imposition of a fine, due to its necessarily punitive nature) forms the
immediate and foreseeable consequence of a decision sanctioning certain conduct”.
Scenario (ii)—NCAs and National Judicial Authorities
This case covers the factual scenarios in which an NCA is either imposing punitive
sanctions/starting a sanctioning punitive proceeding on less significant credit insti-
tutions, OR is imposing punitive sanctions/starting a sanctioning punitive proceed-
ing on significant credit institutions following the SSM request under Article 18(5)
SSM R, OR is instructed to apply a supervisory measure against a significant credit
institution under Article 9 SSM R, for a breach that is also considered a criminal
offence in national law.
Such situations appear similar to the cases of double-track systems examined
above, and clearly fall in the interpretative uncertainties opened at the national level
on the matter by the ECtHR after the revirement in A and B. Considerations expressed
above with regard to the existence of forms of criminal liability against legal entities
shall also apply. In these cases, issues related to the ne bis in idem could not only be
raised before national courts, but also to before the European Court of Human
Rights, at least in those States that did ratify Protocol No. 7 to the Convention.
Scenario (iii)—SSM and NCAs
At least at theoretical level, this case should not originate violations of ne bis in
idem, as the SSM Regulations allow only for a very limited risk of overlapping
competences between the ECB and the NCAs, thanks to the “significance” criterion
established by Article 6 SSM R.528 As carefully pointed out, however, “similarly to
competition law, the division of tasks and competences between the ECB and the
NCAs within the enforcement architecture of the SSM is not characterized by ‘hard’
legal formalism, but could be described as a system of regulated and centralized
cooperation between authorities”.529
Indeed, regardless of the delegation of supervisory competences to NCAs pro-
vided for by Article 6 SSM R, it is the ECB which remains the entity responsible for
the overall functioning of the system. However, contrary to competition law, penal-
ties imposed by the SSM or the NCAs “do not supposedly reflect the impact of an
infringement on affected markets, but are determined according to the subjective
gain had by a bank through the infringement”, a difference which in practice should
work “to limit the potential for ne bis in idem violations”.530
Therefore, if the coordination between SSM and NCAs works also in practice,531
potential violations of the double jeopardy clause under this profile should possibly
528
In this sense, see also Senkovic (2015), p. 101; see also above, Sect. 4.4.
529
Van Bockel (2015), p. 114.
530
Van Bockel (2015), p. 120; see also p. 104, where the author concludes that “the SSMR appears
rather ‘ne bis in idem proof’ compared to competition law as far as the penalties of Article 18(1)
are concerned”.
531
Cf. Lamandini et al (2015), p. 98, according to whom “The risk of falling within the ne bis in
idem principle, however, can be further mitigated through the development not only of a coordi-
nated investigatory practice, but also the coordinated imposition of penalties.”
be avoided, as there are no cases provided for by the SSM Regulations, where the
ECB and the NCA are entitled to both sanction the same subject(s) for the same
breach(es).
cenario (iv)—SSM or NCAs and Other Relevant Administrative National

S
Authorities or Courts
Lastly, a potential ne bis in idem issue can be identified in the interaction between
punitive penalties imposed under banking supervisory regulations—either by the
SSM (under Article 14(5), 16(2) let. m), 18(1) or partially, by 18(7) SSM R) or
NCAs (under Article 18(5) SSM R,532 or other applicable national law)—and other
administrative punitive penalties imposed by national administrative authorities or
courts.
This hypothesis is of course limited to cases in which the two forms of liability
originate from the same conduct committed by the same subject shall be considered
substantially criminal in light of the Engel criteria. This could, for instance, be the
case of punitive sanctions imposed by national authorities under resolution law (e.g.
Article 110 of BRRD533), or under AML regulations for failure to comply with dis-
closure duties required both for banking supervision, and for resolution or AML
purposes. Violation of the ne bis in idem could in these cases be raised both the
Court of Justice (if the SSM is involved), or before national courts or the ECtHR
(where the conflict remains at domestic level).
Scenario (v)—Potentially Critical Profiles Originated Within the SSM
Potential causes of non-compliance with the principle of ne bis in idem may also
arise from the (unlikely) concurrent application of more supervisory punitive penal-
ties for the same breach, and over the same legal entity, by the same SSM.
This could happen, for instance, in case the ECB is exercising both its direct
sanctioning powers under Article 18(1) SSM R, and its supervisory punitive powers,
for instance the withdrawal of the banking licence against the same entity under
Article 14(5) SSM R. Such cases, which would presumably fall under the jurisdic-
tion of the Court of Justice, can however be avoided by the SSM both ex ante,
with an adequate organization of its internal structures and decision-making
proceedings,534 and (eventually) ex post, applying the principle of proportionality in
the amount of the penalty imposed in light of the case-law of the European Courts.535
532
This hypothesis related to the NCAs is of course subject to the recognition of a criminal nature
also to the penalties provided by the specific national law, applicable under Article 18(5) SSM R.
533
Directive 2014/59/EU of 15.05.2014, cit.
534
In this sense see, e.g., Van Bockel (2015), p. 120.
535
E.g., A and B v Norway, § 132. On the proportionality principle, cf. Caianiello (2014a), p. 143.
References 271
cenario (vi)—Potentially Critical Profiles in the Identification

S
of the Subject Under Investigations
Lastly, further critical profiles on ne bis in idem may also emerge with regard to the
very targets of supervisory sanctions, that is credit institutions.
While the concurrent liability of the bank and its employees and/or CEOs does
not raise any double jeopardy issue, since they certainly represent different and
separate subjects, a far more blurred situation is that of banking groups.
In this last case, indeed, it could be possible to identify each single entity (parent
or subsidiary) as a separate subject, or to consider the group as such (including
therefore, the parent company holding the group) as a single liable subject. Only in
the first case, it would be possible for the SSM to sanction for the same fact both the
parent and one or more subsidiaries without incurring in any violation of the ne bis
in idem.
To solve this issue, it has been reasonably proposed to adopt for the ECB super-
visory sanctioning proceedings the same rule applied in competition cases.536 There,
with regard to the relations between holders of concessions belonging to the same
group, the CJEU has repeatedly affirmed that “if the undertakings form an eco-
nomic unit within which the subsidiary has no real freedom to determine its course
of action on the market”,537 the latter cannot be treated as separate culpable subjects.
If that approach would be upheld also in banking supervision, this would imply that
if a sanction is imposed on a parent company, subsidiaries shall be protected under
the double jeopardy clause against punishment for the same fact.
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Chapter 6

The Hybrid Nature of Banking Supervision

Independence and accountability, standards in information sharing, nature of super-

© Springer International Publishing Switzerland and G. Giappichelli Editore 2019 161

well positioned to gather organizational resources—which might be especially

6.1.1 I ndependence and Accountability of Banking

According to the standards developed by the Basel Committee, independence and

To establish good relationships, and exchange of information with the other EU

visors less likely to be unduly influenced by industry or governmental interests, in

Indeed, the regulatory model overseas presents not only a distinction—and

Against this background, compliance with Core Principle 3 requiring effective

Such Memoranda, to be reviewed on a regular basis, shall assure that disclosure

As renowned however, at least in Europe the classification made at statutory

improvement for the position of the subjects of punitive administrative investiga-

rather evident: Indeed, extending also to administrative bodies the application of

Köllensperger and Atzwanger, Case C-103/97, 4.02.1999, ECLI:EU:C:1999:52, § 21.

ing of the investigating procedures. Moreover, causes for such an exceptionalism in

6.3.1 The Right to an Impartial Tribunal

pages: The proceeding authority is instead required to provide a comprehensible

6.3.3 Right to a Full Judicial Review

ECB’s supervisory powers without prejudice to the protection of business premises

called “quasi-judicial” European reviewing bodies.327 Far from exercising an

remains in the exclusive competence of national authorities, the possibility for a

6.3.4 Right of Legal Assistance and Right to a Public Hearing

assistance would cause such an undue prejudice to the applicant, so as to undermine

6.3.5 The Privilege Against Self-Incrimination

2016/343 on the strengthening of certain aspects of the presumption of inno-

itly required by the procedural rules applicable in OLAF administrative investiga-

A specific reference to the presumption as a standard of proof, on the contrary,

Alternatively, if such circumstances are likely to cease within a reasonable period

to information, which requires suspects to be promptly warned also of their right to

The ambiguity of this expression, already visible in the ECtHR jurisprudence,

and starting from John Murray v UK (1996), worryingly distinguished between

Of these three circumstances, the first is particularly relevant in case of adminis-

18.10.1989, ECR 3355, summary publication; Mannesmannröhren-Werke v Commission, Case

ties have outsourced functions or activities.484 According to Article 11 SSM R, writ-

be sanctioned according to Article 18(7) SSM R, which refers to Regulation

Cf. Jones (2012).

compliance, during the administrative investigations, with the fundamental rights of

6.3.7 The Protection from Bis In Idem

which duplication of proceedings bears almost no limits and standards of protection

Scenario (i)—SSM and National Judicial Authorities

In case breaches of prudential requirements committed by banks are also represent-

Scenario (ii)—NCAs and National Judicial Authorities

Scenario (iii)—SSM and NCAs

 cenario (iv)—SSM or NCAs and Other Relevant Administrative National

Scenario (v)—Potentially Critical Profiles Originated Within the SSM

 cenario (vi)—Potentially Critical Profiles in the Identification

In this sense, see Van Bockel (2015), p. 109.

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6.1.1 I ndependence and Accountability of Banking

6.3.1 The Right to an Impartial Tribunal

6.3.3 Right to a Full Judicial Review

6.3.4 Right of Legal Assistance and Right to a Public Hearing

6.3.5 The Privilege Against Self-Incrimination

6.3.7 The Protection from Bis In Idem

Scenario (i)—SSM and National Judicial Authorities

Scenario (ii)—NCAs and National Judicial Authorities

Scenario (iii)—SSM and NCAs

cenario (iv)—SSM or NCAs and Other Relevant Administrative National

Scenario (v)—Potentially Critical Profiles Originated Within the SSM

cenario (vi)—Potentially Critical Profiles in the Identification