1. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti1 The Constitutionalisation and Evolution of Penal Law and Control Policy in the European Integration Lecture reader for the series of lectures Part II Evolution of Penal and Penal administrative approach in the context of the Common Markets and European Community Law by Counsellor, docent, Dr Tuomas Pöysti

2. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti2 Penal Law and the project of Community Internal Markets The European Community law has gradually expanded its impact on some special parts of the national penal law Removal of the legal barries of the use of internal market freedoms Neutralization of the sanctions & level of the sanctions Prohibition of discrimination An efficient use of the internal market freedoms should be possible Member States may not use their sovereignty and penal law to establish barriers or unproportionate obstackles to the use of internal market freedoms which enjoy the status of constitutional economic rights => the negative effect or neutralisation of the Community law to the national penal law

3. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti3 The posivitive effect or the call for sanctioning The internal markets are a dynamic and constantly changing project where Community action enters new spaces or covers new activities as the level of ambition raises and as the needs and working environment of economic life and related phenomena changes The Community law calls for sanctions and penalties in order to promote or to safeguard the proper functioning of the internal markets or generally the attainment of the Community objectives. The Community law starts to establish a control policy of its own and establishes principles for the national legislators to implement effective, dissuasive and proportionate sanctions => Principle of assimilation, positive effect of the Community law to national penal law

4. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti4 Examples General principle of Community loyality requires efficient sanctioning of the infringements of the Community law Effective, dissuasive and proportionate santions Greek case Money laundering directive 91/308/EC, amended by directive 2001/97/EC Article 24 of the Personal Data Directive (Data Protection Directive) Articles 4 and 5 of the Conditional Access Directive Infosoc –directive, Copyright in the Information Society Directive 2001/29/EC articles 6 – 8, in most jurisdictions will be partly done by the means of penal law Market Manipulation Directive 2003/6/EC The question of the environmental crime directive vs. Framework decision under the JHA co-operation (3 rd pillar instrument)

5. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti5 Administrative penal law – some general features Principle of efficient information exchanges between Member States authorities and Commission / Community bodies operational and strategic European enforcement agencies in limited domains Established doctrine of administrative offences and requirements for national administrative investigations and sanctioning Expansion of pre-trial investigation powers entrusted to the administrative authorities OLAF Securities markets, financial supervisory authorities (market manipulation directive) Efficiency the leading legitimacy principle financial interests investor protection

6. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti6 Penal and administrative law and the problem of non-compliance Social Problems of fraud and non-compliance concern for the legal efficiency of Community law Case 240/90 in the ECJ administrative sanctions in the community competence Third pillar of the Union; Co-operation in the Justice and Home Affairs (JHA) penal provisions resulting from intergovernmental co- operation Currently often combined approach in which administrative and penal investigations administrative sanctions under Community law and penal sanctions under JHA instruments

7. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti7 Protection of euro against counterfeiting is a good example of double approach Framework decision on the penal law protection of euro, OJ L 140, 147.6.2000 penal provisions offences effective, dissuasive and proportionate sanctions, including imprisonenment minimum level of the maximum penalty (8 years) Regulation 1338/2001 on the protection of euro national and European analyses centres co-operation between authorities analysing counterfeited banknotes and coins duty to inform and duty to collect counterfeighted or suspicious banknotes and coins from circulation credit institutions effective, dissuasive and proportionate sanctions for the breaches of that obligation

8. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti8 Market manipulation directive Objective of the directive is to promote integrated and efficient financial markets in Europe by guaranteeing market integrity. Market integrity is necessary for investor / consumer confidence. Directive particularly addresses market manipulaton and insider dealing Directive defines market manipulation and insider dealing and requires Member States to prohibit those activities Member states shall designate an administrative authotity to ensure that the provision adopted on the basis of the directive are applied. The authority shall have all supervisory and investigative powers necessary for the exercise of its functions (article 12) Member states shall ensure appropriate administrative sanctions and measures Particular co-operation duties between Member States authorities A practical problem is the availability and expertice of police services and judicial authorities to investigate and prosecute market manipulation and insider dealing. Special expertice required is the argument for the wide use of administrative investigations compare: U.S. experience

9. MINISTRY OF FINANCE 4-7.11.2003Counsellor, docent, Dr Tuomas Pöysti9 The End Station ? Penal law provisions in the Community common markets legislation ? Recent interesting proposals from the Commission Commission proposal for the environmental crime directive concern for the efficiency of the environmental regulation of the EC effective, dissuasive and proportionate sanctions minimum criteria for definitions of the offences of environmental crimes Council enacted a framework decision under 3rd pillar Commission, supported by the Parliament, has brought an action of annulment against the Council Commission proposal for the PIF directive interpretation of article 280 of the EC Treaty concern for the slow ratification of the PIF convention The Draft Constitutional treaty, article III-172 (2). The Union may establish minimum rules by European framework law on the definition of crimes and penalties if this is necessary in order to ensure effective implementation of the Union policies same legislative procedure as the in the harmonisation instruments to which sanctioning is attached (often qualified majority voting) would be an open-ended mandate for harmonisation of special parts of criminal law