Earlier this month, the Court of Justice of the European Union held that natural persons enjoy a right to remain silent that precludes penalties being imposed on them for refusing to cooperate with competent authorities in an investigation or court proceeding, if their answers risk establishing their liability for an offense punishable by administrative sanctions of a criminal nature, or for a criminal offense.
The case arose following the imposition by the Commissione Nazionale per le Società e la Borsa (the Italian National Companies and Stock Exchange Commission) of a € 50,000 penalty on an individual for failing to cooperate in an insider dealing investigation. The penalty was imposed pursuant to a law adopted under European law (originally European Union Directive 2003/6, later Regulation 596/2014). The question whether this law is consistent with the Charter of Fundamental Rights of the European Union, which includes a right to remain silent, was referred to the Constitutional Court of Italy. The Italian court in turn referred the request for a preliminary ruling to the European Court of Justice.
The ECJ held that Directive 2003/6 and Regulation 596/2014 do lend themselves to an interpretation that is consistent with the right to silence, protected as essential to the right to a fair trial. However, the court added that members states must ensure that the provisions are not interpreted to allow silence to be penalized when the information sought could establish an individual’s liability for a criminal offense or an offense punishable by an administrative sanction of a criminal nature. The ruling of the ECJ clarifies the right to silence for natural persons under European Union law, and does not limit the right to proceedings under insider dealing or any other specific area of law.