The New EU Criminal Law Competence in Action: The Proposal for a Directive on Criminal Sanctions for Insider Dealing and Market Manipulation

5 / 2013
Marta Miglietti

The aim of this paper is to analyse the proposed Directive on criminal sanctions for
insider dealing and market manipulation (COM(2011)654 final), which represents the
first exercise of the European Union competence provided for by Article 83(2) of the
Treaty on the Functioning of the European Union. The proposal aims at harmonising
the sanctioning regimes provided by the Member States for market abuse, imposing
the introduction of criminal sanctions and providing an opportunity to critically
reflect on the position taken by the Commission towards the use of criminal law.

The paper will discuss briefly the evolution of the EU’s criminal law competence,
focusing on the Lisbon Treaty. It will analyse the ‘essentiality standard’ for the
harmonisation of criminal law included in Article 83(2) TFEU, concluding that this
standard encompasses both the subsidiarity and the ultima ratio principles and
implies important practical consequences for the Union’s legislator.

The research will then focus on the proposed Directive, trying to assess if the
Union’s legislator, notwithstanding the ‘symbolic’ function of this proposal in the
financial crisis, provides consistent arguments on the respect of the ‘essentiality
standard’. The paper will note that the proposal raises some concerns, because of
the lack of a clear reliance on empirical data regarding the essential need for the
introduction of criminal law provisions. It will be stressed that only the assessment
of the essential need of an EU action, according to the standard set in Article 83(2)
TFEU, can guarantee a coherent choice of the areas interested by the harmonisation
process, preventing the legislator to choose on the basis of other grounds.