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Translated Summaries

In The Journal of Regulation the summaries’ translation are done by the Editors and not by the authors

ENGLISH

Thematic Report (Gambling): The European Commission, despite specific taxation measures, has approves the Danish law of liberalisation of online gambling.

On September 20th 2011, the European Commission declared the new law liberalising gambling in Denmark in line with EU rules. This law creates lower taxes for online casinos than for land-based one, and the Commission declared it compatible with European state aid rules, since the positive effects of the liberalisation of the sector outweigh potential distortions of competition.

ITALIAN

Relazione tematica (Scommesse): La Commissione europea, nonostante i provvedimenti di imposizione specifici, ha approvato la legge danese di liberalizzazione di scommesse online.

Il 20 settembre 2011, la Commissione europea ha dichiarato che la nuova legge che prevede la liberalizzazione delle scommesse in Danimarca è conforme alla legislazione europea. Questa legge crea delle tasse meno importanti per i casino online rispetto a quelle che colpiscono i casino fisicamente esistenti. La Commissione ha dichiarato che tale legislazione è conforme alla legislazione europea in materia di aiuti di stato, in quanto gli effetti positivi della liberalizzazione di questo settore hanno un’importanza maggiore delle potenziali distorsioni della concorrenza.

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Other translations forthcoming.

http://www.echr.coe.int/

This collective work describes the contours of French, European, and International healthcare regulation, and explores past, present, and future evolutions and tendencies in this sector. Original French title: Annales de la régulation, 2009, volume 2, sous la direction de Thierry Revet et Laurent Vidal, collection Bibliothèque de l'Institut de Recherche Juridique de la Sorbonne (IRJS) – André Tunc. (LGDJ)

Full reference: Frison-Roche, M.-A., Risk Mapping: is it legally different when it is made by Regulatory Bodies or by Regulated Enterprises?, in  Newsletter MAFR - Law, Compliance, Regulation, 17th of August 2020

Read, by freely subscribing, other news of the Newsletter, MAFR - Law, Compliance, Regulation

 

Summary of the news

Each year, the Autorité des marchés financiers (French financial markets regulator), the European Central Bank and the Agence française anti-corruption (French anti-corruption agency) publish risk maps. At first glance, risk maps established by the regulator aim to both help regulator and the regulated company to face risks by anticipating them. These documents would only be an assistance brought to firms in their Compliance mission and not an injunction from the regulator to take into account the risks that it emphasizes.  

However, Law forces firms to do their own risk maps under penalty of sanctions. Since the regulator has previously published its own risk map, can companies, obliged to write theirs, deviate from it? If the firm follows the map published by the regulator, can it protect itself against this if it is accused of not having fulfilled its compliance obligations? On the contrary, if the operator does not follow regulator's risk map, can this be blamed on it? Formally, regulator's risk maps do not come with an injunction to take it into account but, as everyone knows, any recommendation from a regulator or supervisor must be taken into account.

The legal solution could here be the implementation of a system of "comply or explain" which would mean that if the firm decides to no follow the risk map established by the regulator, it must be able to justify its choice. 

 

To go further, read:

• Frison-Roche, M.-A., Legal Theory of Risk Mapping, center of Compliance Law, working paper, 2020

Bessy, Christian, Delpeuch, Thierry, Pélisse, Jérôme (dir.), Droit et régulations des activités économiques : perspectives sociologiques et institutionnalistes (English translation: Law and regulations of the economic activities: sociological and institutionalist prospects). Maison des sciences de l'homme- Réseau européen Droit et Société, coll. "Droit et Sociétés - Recherches et Travaux", t. 24, LGDJ, 2011, 320 p.

Full reference: Frison-Roche, M.-A., Why the decision of the French Constitutional Council of 7.08.2020 about authors of terrorist offences is so informative for Compliance & Criminal Law, Newsletter MAFR - Law, Compliance, Regulation, 13th of August 2020

Read, by freely subscribing, the other news in the Newsletter MAFR - Law, Compliance, Regulation 

 

Summary of the news

On 7th of August 2020, the Conseil Constitutionnel (French Constitutional Court) made a decision concerning the constitutionality of a French law implementing safety measures against authors of terrorist offenses after their sentence. The law permitting to impose, through an act from the administration, various controls or interdiction to communicate with some people for authors of terrorist offenses after the end of their sanction.  

Although the Conseil Constitutionnel estimated that such dispositions was disproportionate with regards to the objective, which prompted it to censor the text, it recognized that, since terrorism seriously disturbs public order through intimidation and terror, the fight against terrorism contributes to the objective of constitutional value consisting of preventing attacks on the public order. Thus it is not the nature but the intensity of the proposed measures which pushed the Conseil Constitutionnel to state this text not constitutional. By the way, the Conseil affirms that if the legislator submits it a law whose the measures are more proportionate to the goal, these, although Ex Ante and justified only by the existence of a risk, will be declared in conformity with the Constitution.

The Conseil Constitutionnel confirms here that the fight against terrorism financing is a "monumental goal" of Compliance Law. 

The Basel Committee on banking supervision issues regularly a monitoring report on the implementation of Basel III regulatory reforms.

In August 2016, the seventh issue was published by the Committee as to be taken into account for the upcoming G20 meeting: Implementation of Basel standards. A report to G20 Leaders on implementation of the Basel III regulatory reforms.

In this report, the Committee mesures how national systems gradually implement the prudential reforms they have informally elaborated in common. 

All the power derived from the Basel System stems indeed from the fact that it is concentrated; however, it still has to face a 'hard law' issue, as it is necessary to implement the reforms within the national systems in identical terms and in a constrained timeframe. 

The Committee indicates in its reports that some countries still face a number of issues regarding this implementation, whether these issues arise from the rules themselves or from the transposition period that the countries are given to implement them. Those same countries tend to justify themselves by saying that banks are to blame for these issues, since they report having trouble adjusting their information system as to satisfy the new requirements.

The Committee underlines the fact that this delay occurs in some countries whereas others are already compliant creates a situation of unfair 'jurisdiction' competition between them, which is all the more concerning since these national systems host international banks: "Delayed implementation may have implications for the level playing field, and puts unnecessary pressure on jurisdictions that have implemented the standards based on the agreed timelines. A concurrent implementation of global standards is all the more important, as many jurisdictions serve as hosts to internationally active banks.".

In order to improve an effective implementation of the whole system, the Committee proposed to implement instead a calculus method that would be less complex: "These proposals would constrain banks’ use of internal models and would reduce the complexity of the regulatory framework.".

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A few general observations can be drawn from this very specific Basel III issue underlined in the aforementioned report:

• soft law needs at some point to get concrete (which is closely monitored since the rules do need to be implemented), otherwise it is not law at all;   
• it is through implementation that the weight and the contours of common rules are actually being felt;
• this situation is a good reminder of the fact that competing jurisdictions are an actual thing and a issue to deal with;
• what is an argument based of complexity, or even impossibility, of the technical implementation of a requirement worth? 

This last question is crucial. Those who impose the requirement may consider that the non-enforcement for technical reasons cannot be accepted!footnote-68. Here, however, maybe since it is not a formal requirement as this is all soft law, and since there is a good communication between the supervisor and the executing agent (who is, at the same time, the one that is subject to the requirement, the one who elaborated it and the one who proposes to review it as to make it less complex).

Cass. R. Sunstein's last book was entitled Simpler. French Conseil d’État  (French administrative supreme court) conducts thorough work on the quality of laws and on their simplicity, both qualities that probably go hand in hand. The Basel Committee steps in the same directions...

The European Banking Union is based on supervision as much as on regulation: it concerns the operators as much as the structures of the sector, because the operators "hold" the sector.

This is why the "regulator - supervisor" holds the operators by the supervision and is close to them.

He meets them officially and in "soft law" relations. This is all the more necessary since the distinction between the Ex Ante and the Ex Post must be nuanced, in that its application is too rigid, in that it involves a long time (first of all the rules, then to apply them, then to notice a gap between rules and behaviors, then to repair it) is not appropriate if the system aims at the prevention of systemic crises, whose source is inside the operators.

This is why the body in charge of solving the difficulties of the systemic banks for the salvation of the systeme meets the banking sector itself, to ensure that they are permanently "resolvable", so that the hypothesis of their resolution never arises. This is the challenge of this system: that it is always ready, for never be applying.

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In the European Banking Union, the Single Resolution Board (SRB) is in charge of "resolve" the difficulties of European systemic banks in difficulty. It is the public body of the second pillar of the Banking Union. The first pillar is the prevention of these difficulties and the third is the guarantee of deposits. The resolution is therefore more like an Ex Post mechanism.

But in this continuum through these three pillars between the Ex Ante and the Ex Post, the SRB does not wait passively - as would a traditional judge do - that the file of the troubled bank reaches it. Like a supervisor - which brings it closer to the first public in the system (Single Supervisory Board -SSB), which supervises all the banks, it is in direct contact with all the banks, and it approaches the hypothesis of a bank in trouble by a systemic perspective: it is therefore to the entire banking system that the SRB addresses itself.

As such, it organizes meetings, where he is located: in Brussels.

Thus, on June 18, 2019, all banks came to discuss with the Single Resolution Board to know what it wants from the banks and for the banks, in what is called a "dialogue meeting".

To resolve in Ex Post the difficulties of a bank, it has to present a quality (a little known concept in Bankruptcy Law): "resolvability". How build it? Who build it ? In its very design and in its application, bank by bank.

For the resolution body vis-à-vis all players in the banking and financial sector, it's clear: "Working together" is crucial in building resolvability ".

In the projection that is made, it is affirmed that there can be a successful resolution only if the operator in difficulty is not deprived of access to what makes to stay it alive, that is to say the banking and financial system itself, and more specifically the "Financial Market Infrastructures", for example payment services.

Does the Single Resolution Board expect spontaneous commitments from the FMIs for such a "right of access"? In this case, as the Single Resolution Board says, this right of access corresponds to "critical functions" for a bank, the resolution situation can not justify the closure of the service.

By nature, these crucial operators are entities that report to regulators who oversee them. Who enforces - and immediately - this right of access? When one can think that it is everyone, it risks being nobody .... That is why the resolution body, relaying in this a concern of the Financial Stability Board, underlines that it is necessary to articulate the supervisors, regulators and "resolvers" between them.

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To read this program, since it is a proposed program of work for the banking sector, four observations can be made:

1. We are moving more and more towards a general "intermaillage" (which will perhaps replace the absence of a global State, but it is an similar nature because it is always to public authorities that it refers and not to self-regulation);

2. But as there is no political authority to keep these guardians, the entities that articulate all these various public structures, with different functions, located in different countries, acting according to different temporalities, these are the companies themselves that internalize the concern that animates those who built the system: here the prevention of systemic risk. This is the definition of Compliance, which brings back to companies, here more clearly those those which manage the Market Infrastructures, the obligations of Compliance (here the management of systemic risk through the obligation of giving access).

3. Even without a  single systemic guard, there is always a recourse. That will be the judge. There are already many, there will probably be more in a system of this type, more and more complex, the articulation of disputes is sometimes called "dialogue". And it is undoubtedly "decisions of principle" that will set the principles common to all of these particular organisms.

4. We then see the emergence of Ex Ante mechanisms for the solidity of the systems, and the solidity of the players in the systems, and then the Ex Post resolution of the difficulties of the actors according to access to the solidity of the infrastructures of these systems, which ultimately depend on judges (throughout the West) facing areas where all of this depends much less on the judge: the rest of the world.

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On 2 March 2018, Koen Lenaerts came to an amphitheater at the University Panthéon-Assas (Paris 2) to inaugurate the series of conferences organized by the Journal of Regulation & Compliance (JoRC), a cycle that has the general title: Pour une Europe de la Compliance (For the Europe of Compliance). The School of Public Affairs of Sciences Po, the Department of Economics of Sciences Po, the Ecole doctorale de droit privé  (Doctoral School of Private Law) at the Université Panthéon-Assas- Paris 2 (Panthéon-Assas University - Paris 2) and the School of Law of the University Panthéon-Sorbonne (Paris I), are associated with this cycle. Many personalities will take the floor. They will give contributions for the book that will be published in the Régulations & Compliance Series edited by Marie-Anne Frison-Roche at Éditions Dalloz.

After an admirable lecture offered by Koen Lenaerts, Antoine Garaponfootnote-94, secrétaire générale de l'Institut des Hautes Études pour la Justice (Secretary General of the Institute of Higher Studies for Justice), reacted perfectly in "premier discutant", stressing as everyone his great interest in listening to the demonstration made by the President of the Court of Justice.

He felt that it was hardly possible to speak of "Compliance Law"!footnote-91, because it is above all a Law that ceases to be "prescriptive" to become "relational" ", companies organizing themselves to put goals that are reached in relation with the public authorities. Companies thus develop a "systemic Law" that develops on its own, with alert mechanisms put in place directly by companies that care before the continuity of their economic activities. The notion of third parties disappears, a sort of "direct government" takes the place of the "indirect government" represented by the "third party", the companies having integrated this third party into their own organization, which upsets their relation to time and puts in place a "metajuridic" system.

Antoine Garapon then asks the question of how such a "conversion" could take place, that is to say, this transition of control systeme from the Ex Post mode to the Ex Ante, resulting in companies internalize the task of effective rules!footnote-92. He believes that on the one hand, the system that advocates it has the "market power to impose it and, on the other hand, those who demand it in this system make a" vision of the world "explicit. Antoine Garapon adds the need for a "moral ambition".

However, Antoine Garapon pointed out the United States have met these three conditions.

In his discussion, Antoine Garapon, on the other hand, felt that Europe did not bring them together and that Europe "starts with a handicap", because it does not consider worlwide, because it has no vision of the world, because it has not operated on moral integration.

He insisted that the Court of Justice can carry these three conditions, especially with regard to personal data. Because this is about the digital that Europe has a market power. It is about personal data that the Court of Justice is the place where Europe is both a market and values!footnote-93.

This is why the Court of Justice of the European Union does have a central role for this construction.

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These very constructed, very instructive remarks of Antoine Garapon, thanks to him, perfectly showed, in mirror of the conference of the President of the Court of Justice, the stake: the future.

Beyond the disputatio around the definitions, it is indeed the question of whether or not Europe will build its own compliance mechanisms.

By finding a vocabulary of its own. Not only in French, because the Law is made of words, but also with new words, which leave us "translated-glued" and which will carry European ambitions, as it was the case for the "right to be forgotten" ", very often quoted in the discussion.

Of course, this presupposes "power". But we must already pretend. And the Law has always claimed to pretend. It is in this that it is an Order. This is probably why President Koen Lenaerts insisted on the "juridicization" of compliance, as does the hand of Law that arises on an object.