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Case:
CE, Sect., 20 octobre 2000, n° 180122 Case Société Habib Bank Ltd
Date:
20 October 2000
Translated by:
Professor John Bell FBA
Copyright:
Professor B. S. Markesinis

CE, Sect., 20 octobre 2000, n° 180122
Case Société Habib Bank Ltd

20 October 2000

In the light of the summary request and the supplementary memorandum presented by the Société Habib Bank Ltd that the Conseil d’Etat:

1. annuls the decision of 8 March 1996 by which the Banking Commission (Commission bancaire) imposed on it a censure and a fine of 300,000 Francs;

2. condemns the State to pay it the sum of 25,000 Francs under art. 75-I of the Law of 10 July 1991;Without it being necessary to examine the other grounds of the request

Considering that, under the terms of art. 6 of the European Convention on Human Rights:

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.”

Considering that it is not contrary to the requirements of fairness that the possibility to investigate of its own motion matters which fall within its competence is conferred on a court or on an administrative body, which given its nature, composition and functions may be classified as a “court or tribunal” within the meaning of art. 6 (1) of the European Convention on Human Rights;

But considering that such a tribunal must be impartial; as this requirement has to be assessed objectively; as it follows that, if, in order that the person or persons investigated can make representations effectively, the decision by which a disciplinary tribunal decides to investigate certain facts must contain a precise statement of the facts and, in an appropriate case, the legal classification which may be placed on them according to the laws and decrees which the tribunal has to apply, the decision should not on its face give the impression that the cited facts are already determined and that their wrongful character in the light of laws and decrees is already settled;

Considering that art. 37 of the Law of 24 January 1984 on the activity and regulation of credit businesses provides:

“A Banking Commission shall be established responsible for supervision of compliance by credit businesses of the applicable provisions of laws and decrees and for sanctioning breaches.

It shall examine the manner of their operation and monitor their financial situation.

It shall monitor compliance with the rules of professional good conduct.”

as art. 45 of the same Law (as worded on the date at which the challenged decision was taken) provides:

“if a credit business has infringed a provision of a law or decree relating to its activity and does not comply with an order or has not heeded a warning, the Commission may impose one of the following sanctions: (1) a warning, (2) a censure; (3) a ban on conducting certain operations or any other limitation on the exercise of its activity; (4) the temporary suspension of one or more persons mentioned in art. 17 of this Law with or without the appointment of a provisional administrator; (5) the removal from office of one or more of those same persons with or without the appointment of a provisional administrator; (6) the withdrawal of the licence of the business.

Furthermore, in place of or in addition to these sanctions, the Banking Commission may impose a monetary penalty up to the amount of the minimum capital which the business is required to possess. Such sums shall be recovered by the Public Treasury and paid into the State budget.”

as under art. 48 of the same Law “when the Banking Commission decides under arts 44, 45 and 46, it is an administrative court…”

Considering further that art. 17 of the Law of 12 July 1990 on the participation of financial bodies in the fight against money laundering of the profits from the traffic in drugs provides that “when, as the result of a lack of vigilance, or a failure in the organisation’s internal control procedures, a financial body breaches the obligations which are imposed on it by this Chapter, the authority exercising disciplinary power may act of its own motion under the conditions set out by professional or administrative regulations”;

Considering that the letter of 12 July 1995 by which the President of the Banking Commission informed the Société Habib Bank that the Commission had decided on 30 June 1995 to begin disciplinary proceedings against it mentions the report drawn up following an inquiry conducted within the business which “has brought to light several breaches of provisions of laws or decrees relating to the fight against money laundering, as well as those which govern the law on cheques”, as the business “has thus breached the provisions of art. 12 of Law n¿ 90-614 of 12 July 1990 on the participation of financial bodies in the fight against money laundering of the profits from the traffic in drugs”, as the terms under which certain accounts were opened “constitute furthermore a breach of art. 33 of the Decree of 22 May 1992 relating to the refusal of payment and the prohibition on issuing cheques”, as the company “has breached the provisions of art. 14 of the Law of 12 July 1990 which requires that a special investigation shall be made of any substantial transaction which occurs in unusually complex circumstances and does not appear to have an economic justification or a lawful purpose” and, finally, “that in paying in cash on 4 November 1991 to a person who did not have an account with it on a crossed cheque, the Bank committed a breach of the provisions of art. 38 of the Decree-Law of 30 October 1935 unifying the law in relation to cheques and payment cards”;

Considering thus even though art. 17 of the Law of 12 July 1990 permits the Banking Commission to investigate of its own motion and art. 9 of the Decree of 24 July 1984 provides that, when it considers that it should impose sanctions, it must inform the credit business in question “the facts which are alleged against it”, the Banking Commission has, in fact, breached the requirement of impartiality by presenting as findings the facts which it was setting out and taking a position on the classification of breaches of various provisions of laws and decrees; as its decision is, thus, unlawful and the applicant company is justified in requesting that it be annulled;

Considering that the unlawful circumstances under which the Banking Commission undertook an investigation of the alleged breaches by the Société Habib Bank Ltd prevent it taking a new decision on the matter; as therefore the case is not remitted to it;

On the arguments relating to the application of the provisions of art. 75-I of the Law of 10 July 1991

Considering that it is not appropriate in the circumstances of the case to apply the provisions of art. 75-I of the Law of 10 July 1991 and to require the State to pay to the Société Habib Bank Ltd the sum which it requests as expenses incurred by it and not included in the costs;

Decides:

1. The decision of the Banking Commission of 8 March 1996 is annulled.
2. The remaining arguments of the request by the Société Habib Bank Ltd are rejected.

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