The Autorité des Marchés Financiers (“AMF”) has effective methods for achieving preferable results, particularly in the context of investigations, but also for imposing sanctions.[1]

On the basis of this investigative prerogative, the AMF monitors the regularity of offers and transactions on financial markets and the compliance of regulated persons with their professional obligations.[2] In order to do so, it may request the disclosure of any document or conduct hearings and home visits.[3]

The French lawmaker has established a framework to address the obstruction of AMF inspections and investigations, by a person under inspections, and has provided a penalty for such obstruction. The latter means obstructing an inspection or investigation or providing false information to the AMF.[4] Therefore, this sanction for obstruction raises concerns regarding the right of a person subject to such an investigation to remain silent before the administration.

I. The duty to cooperate and the right to silence

The Conseil Constitutionnel has recognized that the right to remain silent and the right not to incriminate oneself derive directly from article 9 of the DDHC.[5] Thus, the Conseil found the articles of the code of criminal procedure relating to police custody to be unconstitutional because of the lack of notification to the person’s right to remain silent.[6]

If international law does not contain an explicit statement of this principle, the case law has extensively affirmed that the right to remain silent derives directly from Article 6 of the ECHR[7]. Furthermore, the ECHR stated that the right against self-incrimination in police custody is intended to protect the accused from abusive coercion by the authorities and to avoid judicial mistakes[8]. Likewise, many other international laws recognize this principle and make it a mainstay of criminal procedure [9].

In order for the AMF to successfully exercise its investigative powers, the legislator has established a framework relating to potential obstruction of AMF controls by the supervised person. This means obstructing an inspection or investigation or failing to provide information[10].

This obstruction of investigations is sanctioned by a criminal[11] and an administrative sentence.[12] The administrative sanction was recently ruled unconstitutional due to a violation of the ne bis in idem principle concerning this accumulation of sanctions.[13]

Nevertheless, the punishment for obstruction remains and doesn’t seems to be contested as it provides significant leverage for AMF agents.[14]

The sanction of the supervised person who refuses to cooperate could be analysed as an infringement of the right to remain silent, since the person would be effectively coerced to cooperate to avoid the sentence.[15] Obstruction is also used in a very broad sense because third parties in the proceedings may be subject to a sanction.[16] Furthermore, this would constitute a violation of the right against self-incrimination.[17]

Moreover, the lack of cooperation is also a criteria use to determine the amount of the fine for non-cooperate, which is based on the principle of personality[18] and confers to the judge the power to assess the penalty.[19]

II. The applicability of the right to remain silent to financial issues

The duty to cooperate is emphasized in the financial sector, even more as there is no textual basis for the right to remain silent before AMF agents.[20]

The AMF Enforcement Committee has therefore considered the issue of the right to remain silent with respect to obstructing its inspections and investigations prerogatives if the respondent were to refuse to respond to its requests.

According to the AMF Commission, if the interviewee refused to cooperate with its agents, then the Commission members would be allowed to infer from this attitude all the consequences that are useful in forming their judgment.[21]

Furthermore, the Commission considers that if the sanction has been reminded to the individuals heard, then the right is not violated, even if they have not been reminded of the right to remain silent.[22]

The Conseil d’État was also required to consider this issue. The applicants argued that the lack of notification of the right to remain silent during a hearing by AMF officials constituted a violation of article 6 of the ECHR. However, the Conseil d’État explicitly stated that this right could not be guaranteed. As it applies only to criminal matters, it is not applicable to the administrative investigation procedure before the AMF.[23]

More recently, the Paris Court of Appeal ruled that the right to remain silent and not to incriminate oneself applies only if the sanction procedure was initiated by the notification of grievances.[24]

However, this decision is inconsistent with the jurisprudence of the ECHR, which considers that the right to remain silent is applicable to administrative procedures that may result in the application of sanctions in criminal matters.[25] Furthermore, the Enforcement Committee had ruled that the right to remain silent must be respected in the procedure preceding the referral to the Commission.[26]

The Court of cassation distinguishes the hypothesis, on the one hand, when the AMF investigators were instructed to collect the person’s confession, or in the other hand, when they wanted to obtain documents necessary for the investigation. Thus, it is only if the control is intended towards a confession that it is infringing the right not to incriminate oneself.[27]

The Court of cassation therefore strictly applied the fundamental right by limiting it to non-incrimination when it leads to a confession in order to promote the efficiency and speed of the investigation by the AMF agents[28].

As a result, the various decisions raised questions about their conformity with the Convention on Human Rights.[29] In addition, a recent decision of the Court of Justice of the European Union (“CJEU”) has considerably affected the landscape.

III. The impact of the European Court of Justice’s decision of February 2, 2021

Recently, in a ruling of February 2, 2021, the CJEU established the right to silence for natural persons in market abuse investigations.[30]

More specifically, the CJEU explicitly recognizes the right to silence for the person interviewed during an insider trading investigation. Moreover, this decision recognizes the right to silence for administrative sanctions of a criminal nature.[31]

In addition, the CJEU holds that an interviewee may rely on the right to remain silent in order to avoid giving answers that might result in liability,[32] without incurring criminal sanctions for obstructing investigations.[33]

Consequently, this decision marks a rupture with the above-mentioned national decisions because it recognizes the right to silence as a fundamental value by raising it to the level of a general principle.[34]

Consequently, the guarantees of a fair trial in matters of market abuse no longer raise uncertainty concerning the “quasi-criminal” field,[35] which recognizes that certain administrative sanctions have a criminal nature due to their seriousness.[36]

The lack of distinction between the right to remain silent during a hearing and the right to refuse to disclose incriminating documents is a matter of debate in the literature. Some believe that this omission extends the scope of the right to remain silent,[37] but others point out that this omission contributes to the uncertainty in this area.[38]

On the other hand, this decision limits the scope of the right to remain silent in the context of “quasi-criminal” authorities, since it cannot justify any lack of cooperation with the competent authorities in the case of their investigations.[39]

On the strength of this decision, the AMF has amended its investigation charter by citing the CJEU’s decision. The charter explicitly states, with regard to the guarantees of the person interviewed, that the right to silence cannot justify any failure to cooperate.[40]

As a result, while the AMF amended its investigation charter, it did not proclaim the right to remain silent or require agents to notify the public of this right during hearings.[41]

Therefore, even if the right to remain silent is now the principle, the practice still does not provide the same rights to criminal and “quasi-criminal” proceedings, as shown by this reform of the AMF’s investigation charter.