The recent news

Dec. 22, 2014

Breaking news

In regulating more than anywhere else, the most important is the time.

Operators can't endure uncertainty. The uncertainty of the litigation is probably the worst weapons that the controller can turn against them. So much so that The Economist, in its issue of August 30, 2014 estimated that US regulators have transformed the repression organized racket, operators to pay for stop procedures, the fact that they are right or wrong is no longer the issue.

Seen in banking and finance, seen here in telecommunications.

In July 2014, the Federal Trade Communication opens proceedings against T-Mobile, a subsidiary of Deutsche Telekom, for charging customers for services provided by external providers, unsolicited services. The company had immediately claimed not to have breached the rules.

Then, a first calculation of the prejudice of consumers has been calculated. Each subscriber aspiring to claim a possibly unwarranted addition of about $ 10 a month for many years, the amount of damages was very high , for example in connection with a class action.

The company chose to stop there and have a settelment for $ 90 million, attributable in part to consumers, but also to different states, also paying a transactional fine to the US federal treasury.

The case is therefore financially resolved. The Federal Communications Commission commented on the agreement stating that overcharging is "a major problem" for consumers.

The case has been conducted for this operator as it has been for AT & T in October 2014, concluding a similar agreement for $ 105 millions.


Should we rejoice or not?

One will rejoice if one believes that the key is to close the file and enable the company to return to its business.

The reference may be regrettable if we think:

  • Punishment must remain a matter for the courts;
  • The accused persons, even if they are companies, need time for the defense ;
  • Regulatory Law must issue rules and interpretations of the texts, the law is depleting by agreements that close the litigation, the main objective being ... never reach the judge.

Dec. 19, 2014

Breaking news

This is currently the great battle and no one knows the outcome.

By its jugdment Grande Stevens of 4 March 2014, the European Court of Human Rights held that a state can't punish a person for a criminal penalty and administrative penalty for the same fact, criticized in market matters.

In the movement of the "dialogue of judges," the Conseil d'Etat (French State Council) asked 27 July 2014 the Conseil constitutionnel (French Constitutional Counci) l the question of compliance from this addition to the French Constitution for financial penalty in the use of public funds. By a decision of 24 October 2014, the Constitutional Council considered that this combination was consistent with the Constitution, mainly because the administrative sanction would be a "different kind" as  punishment, because each pursues a different objective.

In turn, by a judgment of 17 December 2014, the Cour de cassation  (French Judicial Supreme Court) decided to refer to the Constitutional Council two priority issues of constitutionality.

The presentation of the problem by the Cour de Cassation is the following. By its terms, it shows the hostility of the Court of Cassation to the doctrine hitherto developed by the State Council and the Constitutional Council.

First, the interpretation of French law provides penal proceedings against a person for facts on which it has been exonerated by the financial regulator by the Sanctions Committee thereof. This may contradict the constitutional principle of res judicata, as incurred administrative penalties are comparable to penal sanctions.

Second, this possibility could also contradict the constitutional principles of equality, necessity of criminal law and respect of non bis in idem mechanism.

Certainly, cleverly, the Supreme Court asks not accumulated penalties but of double jeopardy, which when one went out to "turn" the other.

Will the Constitutional Council get easier in accordance with European design without recant ? For example, it could estimate that the cumulative sentences is eligible as soon as proportionality is respected, but the extinction of a case before a judge removes the ability to exercise the other?

Or shou Law open the wound? Finally decide to open rather multiple sides bear claw blows?

The Finance Committee of the Senate works to think in a more consistent way sanctioning powers of financial regulators need. Indeed, sanctions are tools that must be thought at first hand according to the goals that must be provided in the second part in relation to other tools the financial regulator has, in the third part in relation to the purposes and powers other authorities are responsible and have (supervisory authorities, European bodies, foreign and international judges, professional authorities).

It is in this overall vision that this storm that exceeds the glass of water must be replaced.


Dec. 18, 2014

Breaking news

Virtual currency is a perfect example of the difficulties of interregulation: indeed, the bitcoins are currencies created on the Internet, usually to play games, such as poker. Thus intersect banking regulation, banking supervision, regulation and control of the game, Internet regulation itself.

In the US, the situation is complicated in that banking regulation is exercised at the state level, while the Internet is subject to intervention by federal regulators, including the Federal Communication Commission.
To solve this problem, the solution is to create a network of states banking regulators and supervisors, who adopt common rules. This is why the Conference of State Bank Supervisors, which is the network of state banking supervisors, created in 1902, has prepared a draft regulation of virtual currency, published December 16, 2014 and submitted for consultation for a month.


Dec. 15, 2014

Breaking news

The European Directive of 22 October 2014 ot the European Parliament and of the Council as regard disclosure of non-financial and diversity information by certain large undertaking  and groupe  comes from afar.

Some present it as a step of an "irrestible rises  of Corporate Social Responsabilité.  This text would be a  a "step forward" and a "strong signal".

It is true the Directive of the European Parliament and the Council follows a consultation conducted for several years by the European Commission on the subject of Social Responsibility. Whatever might have said the "stakeholders", the Directive contains the same lines tham the European Commission Communication of 13 April 2011, adopted on 25 October 2011 on the topic.

It is difficult today to oppose "Hard Law" and "Soft Law": Law hardens gradually. Thus, from the "communication", we went to the "resolutions", whose status remains uncertain, both a communication firmer but less binding than a law, since resolution is only for its author ... Thus Parliament in its resolutions of 6 February 2013 'resolved' to design an "inclusive" vision of the corporate action, to dance together profitability and social justice. To get by,  it must suffice to say that the Social Responsibility Company is "multidimensional" ... Guidelines of the European Commission (non-binding) will explicit. Wait and see.

Following a series of obligations on information that companies must make available "to the public and authorities." Thus, companies must do the work instead of public authorities themselves. The provisions relating to non-financial information are mandatory and standardized. They are particularly demanding on the environment.

But when the text provides more substantial obligations, such as making the activity business less polluting, the Directive simply ask the member states to encourage companies to adopt "best practices" in the field. The market itself is incitative, in particular for making boards of large corporations more diverses. Because the principle is the belief that "investor access to non-financial information is a step towards achieving the goal of effective .... Europe in the use of resources," in a regulatory context of a "smart, sustainable and inclusive" growth".


Dec. 11, 2014


Dec. 10, 2014

Sectorial Analysis

Constitutional Law will have an increasingly important role to play in regulatory Law. This is especially true since the State Council uses its power to filter itself become a sort of Constitutional Court or maybe a Supreme Court.

One can think so reading the UBS decision on the 5th of November 2014.

Indeed, to refuse to transmit to the Conseil constitutionnel (French Constitutional Council)  the priority question of constitutionality formulated by UBS, the French Council of State gives what it believes to be the correct interpretation of the constitutional principle of legality of offenses and penalties in banking regulatory Law.

So to say there is no "question", the Conseil d'État says there is no "problem" because, through the interpretation it gives, the provisions of the Code Monétaire et Financier offers to the Supervisory Authority, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the power to sanction the bank for having not properly implemented its internal control, comply with the constitutional principle of legality of offenses and penalties, which is applicable in administrative repression.

But because to estimate that there is no "question", it must be said that there is no "problem", it is assumed that the High Administrative Court has acted as Constitutional Court.

We must take note. Is this really what the Constituent wanted by instituting a filter system by the constitutional law of the 23rd July 2008 establishing the priority question on constitutionality? Indeed, in this very sensitive and decisive question of repression in banking and finance, is it not at least to the French Constitutional Council itself to say the authoritative interpretation to remember that the constitutional text it is the guardian?

Dec. 9, 2014

Breaking news

The administration of President Barack Obama issued November 26, 2014 a draft of 25 November 2014, coming from the Environmental Protection Agency (EPA) and subject to contributions to regulate the emission of greenhouse gases.

Companies are protesting because this will increase the cost of regulation. We are now witnessing a clash between supporters of the economic strength of the country and the promoters of the environment.

The President's rationale is this: that environmental regulation is justified because it will prevent many diseases and even death from respiratory failure. However, social programs and Obamacare are the major challenges of his presidency.

Therefore, the discussion is about the relationship between "regulation" and "sector": if the Regulation is related simply to the environment, then the argument of additional financial regulation advanced by firms is relevant.

Indeed, the principle of proportionality being key in regulatory techniques, there is disproportionality between the means and the goal.

But if the charges have to end not only the preservation of the environment but also public health and human lives then more burdens on business are justified.
Thus, depending on whether one attaches one or more goals in a constraint, it justifies more or less charge. Companies have interest in claiming that the regulation serves only one purpose. The state has an interest in claiming that the regulation uses several if it wants additional burden on businesses.
This is the speech that President Barack Obama, whose political maneuvering margins are low, is being built.

Dec. 8, 2014

Breaking news

The Conseil d'État (French State Council)l issued a ruling Sept. 19, 2014, Agence pour l'enseignement français à l'étranger, which does not involve a regulated sector but is very instructive for all of them.

Indeed, the term "guidelines" is common in how each and designates certain documents prepared by the regulatory authorities. These give themselves this appellation to documents made ex ante to give operators the "outline" of the future action of the regulator. Thus, the "guidelines" would produce legal certainty while maintaining flexibility, since in the future the authority will continue to set its position on a case by case basis.

This convinced the Conseil d'État, which expressed his support for the "droit souple (soft law)" in its annual report in 2013.

Now comes the case: it was necessary that the "hard right" come bless the "soft law".

In this case, was challenged before the administrative judge an "instruction" from this Agency for French Teaching Abroad for the "consideration of the financial situation of the parents" seeking a scholarship to the child. A local agency for awarding grants had rejected a request no meeting the criteria developed in the statement. Parents have acted appeal for abuse of power. They both lost before the Cour administrative d'appel de Paris (Administrative Court of Pari) that before the Conseil d'État.

However, the Council recognizes that the Agence pour l'enseignement français à l'étranger  has no regulatory power. But the judgement takes in considération that:"l'instruction en cause a énoncé, à l'intention des commissions locales, des lignes directrices, sans fixer de normes à caractère général qui se serait imposée de matière impérative à ces commissions"!footnote-8 .


Triumph of soft law!

Thus, organizations, "agencies", may take "general guidelines" here which do not contain any threshold and generating no rights, on which the commission take real decisions. These are based on the first document, but because of the "flexibility" of it, the one whose solution is affected by the particular decision does'not have the right to appeal.

All the beauty and effectiveness of "soft law". The judge, after having boasted, now offers it royal way.