White Collar Crime

A Comparative Perspective

Katalin Ligeti, Stanislaw Tosza, Katalin Ligeti, Stanislaw Tosza

• Publisher: Hart Publishing
• Year: 2018
• ISBN:
  9781509917907
• Edition: 1
• Topic: Derecho
• Subtopic: Derecho penal

White collar crime has expanded significantly over the course of the past two decades. Yet, not only as the amount of national and international legislation in the field grown, but it has also endured changes driving it away from the classic criminal law. These trends have been reflected in changes to national legislation, not infrequently prompted by supranational law, for example, in the financial or the environmental sector. New punishing regimes have emerged, such as UN blacklisting, smart sanctions, civil asset forfeiture, financial supervisory powers, compliance law, and anti-money laundering laws. Furthermore, the role of administrative sanctioning law has been growing as well as the role of private actors in the enforcement of punitive sanctions. The aim of this volume is to examine how various national criminal justice systems across Europe deal with the aforementioned challenges. In the first part, it takes a closer look at the following national systems: France, Germany, Poland and Sweden. Furthermore, it compares the European approach with the American one as a source of inspiration for unresolved difficulties and future developments. Further still, the authors explore those challenging issues regarding the field of economic and financial crime, including the Senior Managers Regime, corporate criminal liability, and whistle-blowers' protection. Timely and pertinent, this is an important new work in a fast-moving field.

1

Challenges and Trends in Enforcing Economic and Financial Crime

Criminal Law and Alternatives in Europe and the US

KATALIN LIGETI AND STANISŁAW TOSZA

I.The Need for Comparative Research in Economic and Financial Criminal Law

The aim of this chapter is to synthesise the findings of the comparative research project of which this book is the product. Economic and financial criminal law has expanded significantly over the course of the past two decades. Yet not only has the amount of national and international legislation in the field grown, but it has also endured changes driving it away from the classic criminal law. These trends have been reflected in changes to national legislation, not infrequently prompted by supranational law, eg, in the financial or the environmental sector. New punishing regimes have emerged, such as United Nations (UN) blacklisting, smart sanctions, civil asset forfeiture, financial supervisory powers, compliance law and anti-money laundering laws. Furthermore, the role of administrative sanctioning law has been growing as well as the role of private actors in the enforcement of punitive sanctions. All these trends require scrutiny and a coherent and comprehensive analysis in the light of procedural guarantees.

All systems that have been subject to the comparative analysis for this book (France, Germany, Poland, Sweden and the US) introduced reforms in recent years. Reforms in European countries are due to three main reasons: first, compliance with European requirements to regulate or criminalise certain behaviour; second, responding to crisis situations; and, third, compliance with requirements stemming from national and/or supranational courts as regards the level of fundamental rights protection, in particular the procedural safeguards applicable during administrative proceedings.

These three reasons are not of equal importance in each of the investigated countries or in all areas of economic and financial misconduct. They are also intertwined. For instance, in the area of competition law enforcement, the relevance and role of EU standards is more decisive than in environmental law or financial markets regulation. Similarly, the call for stronger fundamental rights protection in administrative proceedings is present in all areas, but the analysis of the national systems has clearly shown that it is mostly evoked in relation to financial crimes.¹ This high importance of the influence of EU law can be attributed to the harmonising and standard-setting of the EU in order to achieve a level playing field in the common market. This is certainly the case for competition law and is increasingly the case for the financial markets. However, the EU legislator is often rather reactive. In particular, the legislative intervention on market abuse and insider dealing has allegedly been triggered by the fact that prior to the financial crisis of 2008, national regulation and supervision of the financial markets have been too weak.

Furthermore, in addition to the above three reasons, there might be further motives that brought about change in the legislative framework or policies, such as the needs to simplify, modernise or rationalise the existing solutions. A good example of this tendency is the enforcement of environmental crimes in France, where the main reason for major recent reforms has been the outdated and overly complicated regulations in relation to environmental irregularities and offences.² And sometimes there has been a long doctrinal discussion at the national level, irrespective of EU policy or crisis situations, that eventually led to changes. For instance, Sweden, after decades of scholarly reflection, has introduced trading bans for competition law infringements.³

However, the search for more adequate ways to enforce economic and financial policy does not necessarily mean criminalisation. The study has demonstrated that within several national systems, the national legislator may explicitly opt for decriminalisation, especially in order to reinforce the ultima ratio nature of criminal law, maintaining criminal sanctions for the gravest infringements and moving minor infringements towards administrative sanctions. A good example of this is the area of environmental enforcement in Sweden.⁴

While the developments noted above have been the subject of countless publications, no comprehensive comparative research focusing on these changes has been produced since the seminal works led by Mireille Delmas-Marty⁵ and Klaus Tiedemann.⁶ This book is the second volume summarising the outcome of comparative research conducted at the University of Luxembourg on how various national criminal justice systems across Europe and the US deal with the challenges in economic and financial criminal law. The first volume was based on the papers presented at the ‘Global Challenges in the Field of Economic and Financial Crime in Europe’ conference, which took place on 2–3 December 2014 in Luxembourg.⁷ It dealt with a number of highly relevant topics, such as corporate monitors, compliance programmes, whistleblowing and leniency, negotiated justice, transnational multi-agency and multi-disciplinary investigations, and integrated enforcement models.

This volume is composed of two parts. The first part presents the findings of systematic comparative research into the five selected national systems, four of which are European (France, Germany, Poland and Sweden), with the fifth (the American approach) serving as a source of inspiration for unresolved difficulties and future developments. The four following chapters present the findings in each of these systems according to the following methodology.⁸

The field of economic and financial crime being vast and diverse, the research focused on three specific types of misconduct where the aforementioned challenges are clearly tangible and likely to receive varied answers:

•misconduct affecting the financial markets (in particular, securities fraud, insider dealing, market abuse and underground banking);

•misconduct affecting the environment (in particular, waste trafficking) and the trade in protected fauna and flora (also referred to as wildlife crime);

•misconduct affecting competition (in particular, cartel offences).

Within these types of misconduct, the analysis centred on special policies, rules and practices for economic and financial crime, in particular:

•substantive law, including the general and special parts of criminal law as well as the sanctions (eg, criteria for criminal liability, the adoption of new offences and special sanctions);

•criminal procedure (eg, a lower burden of proof, special investigative techniques and specific preventive measures);

•the administration of justice (eg, the interplay between different public enforcement mechanisms, the establishment of specialised investigative or prosecutorial authorities and the use of negotiated justice techniques); and

•cooperation between administrative and judicial authorities at the national and international levels (including jurisdictional issues).

The second part of the book is devoted to highly topical transversal issues in the field of economic and financial crime and the enforcement of economic policy, which provides more focused insight into issues shaping the field: substantive and procedural issues regarding corporate criminal liability and the use and protection of whistleblowers, as well as the senior managers regime.

This chapter provides a synthesis of the findings in both parts of the book and also draws upon the research published in the first volume. It will start by presenting the challenges in investigating and prosecuting economic and financial crime (section II) The analysis of the four national systems complemented by the information provided in the transversal chapters led to the identification of four major tendencies in the field in response to these challenges (section III): the swinging of enforcement strategies between prosecuting individuals or/and corporations (section III.A); the extension of punitive sanctions and the use of compliance programmes as punishment (section III.B); the extensive use of alternatives to criminal proceedings (section III.C); and the increased role of private actors in controlling economic and financial crime (section III.D). These responses will be scrutinised from the perspective of the human rights regime in the final section (section IV).

II.Investigating and Prosecuting Economic and Financial Crime: Where Does the Challenge Lie Today?

Rapid technological evolutions and socio-economic developments together with difficulties with attributing liability have been considered to be the most typical challenges that economic and financial criminal law has to face. Over the years, legal systems developed various techniques of overcoming these challenges, which, although controversial, were scrutinised and eventually accepted. They would affect the way in which offences are defined as well as the problems of attributing liability in a corporate context.

The fast pace of technological and socio-economic changes mostly affects the definition of misconduct. In response, legislators tend to use either vague notions or cross-references to non-criminal rules of conduct (blanket offence definitions), which give the authorities greater flexibility (to prevent or) to react to harmful behaviour.

Especially in Europe, the internationalisation and Europeanisation of criminal law considerably contributed to the use of vague notions and cross-referencing in economic and financial criminal law. Many of the provisions in this area stem from transposing EU legislation into national law. This practice encourages the use of cross-referencing as well as broad offence descriptions. Although transposing EU legislation is not exclusive to economic and financial criminal law, what one can observe in this area in some countries is a simple copy and paste of EU provisions. The problems linked with this technique are not limited to the field of economic and financial crime and raise a number of questions beyond this field (such as the discretionary margin available to the national legislator when implementing EU law and the question of ‘minimum’ harmonisation).⁹ However, highly technical aspects of this field ...

Table of contents

• Cover
• Title Page
• Foreword by John Vervaele
• Contents
• Table of Cases
• Table of Legislation
• Table of Treaties and Other International Instruments
• Notes on Contributors
• 1. Challenges and Trends in Enforcing Economic and Financial Crime: Criminal Law and Alternatives in Europe and the US
• 2. Enforcing Economic and Financial Policies in National Systems – Financial Markets Regulation, Environmental Law and Competition Law
• 3. Regulating Instead of Punishing: The Senior Managers Regime in the UK
• 4. Economic Crime in the UK: Corporate and Individual Liability
• 5. Corporate Criminal Liability and Groups of Corporations: A Need for a More Economic Approach?
• 6. The Privilege against Self-Incrimination of Corporations
• 7. The Criminalisation and Protection of Whistleblowers in the EU’s Counter-Financial Crime Framework
• Index
• Copyright Page