Nord Pool Consulting AS document of 15 August 2017 “REMIT Best Practice, A sector review on how to comply with REMIT related to inside information and market abuse“ (p. 49, 50) contains the following instructions in case of the “dawn raid” involved with REMIT investigations:

1. instructions for reception desk:

  • ask for identification papers from all representatives from the authorities, make copies of the identification papers or note down name and authority they represent,
  • immediately notify the person they request to meet and the primary responsible person,
  • ask the authorities to wait in the reception until the responsible person arrives (if they disapprove of waiting, do not hinder them from commencing with the inspection),
  • if the inspectors disapprove of informing the responsible manager, inform that the company’s routines oblige you to contact the responsible legal counsel or compliance officer, immediately contact this person;

2. instructions for primary responsible person:

  • check ID and decision/authorisation (legal basis) issued by the relevant authority,
  • check whether you are under inspection or approached as witness,
  • request that the inspectors wait to commence the inspection until the attorneys have arrived, if they disapprove of waiting, do not hinder them from commencing with the inspection,
  • inform all concerned managers,
  • make sure secretarial assistance, meeting rooms and copying facilities are made available for the inspectors,
  • instruct everyone concerned by the investigation neither to delete nor destroy any documents, nor to communicate with anyone outside the company regarding the ongoing inspection and to fully cooperate with the inspectors,
  • do not let the inspectors walk around unattended,
  • ask for a copy of the inspectors’ list of documents, if necessary, make your own list, with the assistance of the owner of the office and a secretary,
  • the duty to explain only applies to specific and concrete information, if you are uncertain or do not remember certain facts, it is important to make this clear to the inspectors (avoid speculations, assessments and assumptions, negligently providing incorrect information may be a criminal offence),
  • do not sign the protocol of the deposition before it has been carefully reviewed with your legal advisor (if points are missing or it does not give a correct and accurate picture, request amendments or corrections). 

         
          
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It is noteworthy that the correspondence with external legal advisors represents legally privileged documentation that should be kept away from the inspectors (until a legal advisor is present and can make an assessment).

Special consideration should be given to the cases where an answer would reveal an illegal action.

Given that no-one is obliged to contribute to his/her own incrimination, the above Nord Pool Consulting AS document of 15 August 2017 suggests in such a case to invoke (after consulting the legal advisor) the principle of self-incrimination and state that:

  • the question is self-incriminating, and
  • there is no duty to answer.

If the inspectors do not relinquish the question and insist on it, the aforementioned Nord Pool Consulting AS document of 15 August 2017 recommends to made a request that it is noted in the protocol that the answer was submitted under the threat of criminal prosecution (which may influence on the value of such an evidence). 

The above Nord Pool Consulting recommendations can be assessed as very useful. Nevertheless multiple further best practice instructions may be considered. Among them the special importance should be given to the need to copy every document - no matter its form - transmitted to the inspectors on their request. Such copies should be retained and evidenced. Such copying may sometimes appear burdensome and require the participation of, for example, IT departments (hard disks etc.), but occurs extremely useful in further procedures.

It needs to be reserved, finally, that different rules may apply in different jurisdictions that may affect the above instructions.

 

REMIT 2

 

It is noteworthy that on 17 April 2024 Regulation (EU) 2024/1106 of the European Parliament and of the Council of 11 April 2024 amending Regulations (EU) No 1227/2011 and (EU) 2019/942 as regards improving the Union’s protection against market manipulation on the wholesale energy market (REMIT 2) has been published in the EU Official Journal.

  

quote

 

Regulation (EU) 2024/1106 of the European Parliament and of the Council of 11 April 2024 amending Regulations (EU) No 1227/2011 and (EU) 2019/942 as regards improving the Union’s protection against market manipulation on the wholesale energy market (REMIT 2) 

 
Recital 35

 

Any decisions adopted by the Agency under this Regulation should be subject to review by the Court of Justice of the European Union, including decisions whereby the Agency has imposed a periodic penalty payment. This Regulation is without prejudice to the competence of national courts or tribunals to review decisions adopted by the competent national authorities pursuant to this Regulation, such as authorisations by national judicial authorities in the context of on-site inspections carried out by the Agency or claims of irregularities under national rules on the enforcement of periodic penalty payments.

 

Article 1(16) - (17)

 

(16) Article 13 is amended as follows:

(a) paragraph 1 is replaced by the following:

‘1. National regulatory authorities shall ensure that the prohibitions laid down in Articles 3 and 5 and the obligations laid down in Articles 4, 7c, 8, 9 and 15 are complied with and enforced.

National regulatory authorities shall be competent to investigate all the acts carried out on their national wholesale energy markets and enforce this Regulation, irrespective of where the market participant carrying out those acts is registered or under an obligation to register pursuant to Article 9(1).

Each Member State shall ensure that its national regulatory authority has the investigatory and enforcement powers necessary for the exercise of the functions referred to in the first and second subparagraphs. Those powers shall be exercised in a proportionate manner.

Those powers may be exercised:

(a) directly;

(b) in collaboration with other authorities;

(c) by application to the competent national judicial authorities; or

(d) following a recommendation by the Agency.

Where appropriate, the national regulatory authorities may exercise their investigatory powers in collaboration with OMPs, trade-matching systems or other persons professionally arranging or executing transactions as referred to in Article 8(4), point (d).’;

(b) the following paragraphs are added:

‘3. In order to combat breaches of this Regulation, to support and complement the enforcement activities of the national regulatory authorities, and to contribute to a uniform application of this Regulation throughout the Union, the Agency may, in close and active cooperation with the relevant national regulatory authorities, carry out investigations by exercising the powers conferred on it by and in accordance with Articles 13a, 13b and 13c.

4. In sufficient time before exercising the powers referred to in paragraph 3 within the jurisdiction of a Member State where the acts that the Agency reasonably suspects to be in breach of this Regulation are carried out, the Agency shall inform the national regulatory authority and other authorities concerned of that Member State. The Agency may exercise its powers in that jurisdiction, unless the national regulatory authority objects on the grounds that it:

(a) has formally opened or is conducting an investigation on the same facts; or

(b) has conducted an investigation on the same facts and determined the existence or the absence of a breach.

The Agency may continue to exercise its powers in the remaining jurisdictions of those national regulatory authorities that have not raised an objection pursuant to the first subparagraph, point (a). The Agency shall not exercise its powers if an investigation has already been conducted on the same facts and has concluded on the existence or the absence of a breach.

The national regulatory authority shall inform the Agency of its objection within three months of being informed pursuant to the first subparagraph. In such cases, the national regulatory authority shall cooperate with the Agency, including by:

(a) sharing information and findings relevant for the Agency to exercise its powers under paragraph 3 in other relevant jurisdictions concerned; and

(b) participating, upon the request of the Agency, in an investigatory group established pursuant to Article 16(4), point (c).

The Agency shall inform the Commission of the establishment of the investigatory group and, upon the request of one of the national regulatory authorities concerned, the Agency may invite the Commission to participate, as an observer, in that investigatory group.

5. The Agency may exercise its powers to ensure that the prohibitions set out in Articles 3 and 5 are enforced where:

(a) acts are being or have been carried out on wholesale energy products for delivery in at least two Member States;

(b) the competent national regulatory authority, without prejudice to the derogations referred to in Article 16(5), does not take the necessary measures as soon as possible to comply with the request of the Agency pursuant to Article 16(4), point (b), where there is a cross-border impact;

c) without prejudice to paragraph 4, the national regulatory authority requests the Agency to exercise its powers with regard to acts that, even if not falling within the scope of point (a) or (b) of this paragraph, have a cross-border impact.

6. The Agency may exercise its powers to ensure that the obligations laid down in Article 4 are fulfilled where the relevant inside information is likely to significantly affect the prices of wholesale energy products for delivery in at least two Member States.

7. The Agency may exercise its powers to ensure that the obligations laid down in Article 8 are fulfilled where:

(a) a suspected breach affects the monitoring referred to in Article 7 by the Agency, of trading activity in wholesale energy products in at least two Member States; or

(b) a suspected breach affects the quality of information sharing referred to in Article 10 in at least two Member States.

8. The Agency may exercise its powers to ensure that the obligations laid down in Article 15 are fulfilled where the persons referred to in that Article are professionally arranging or executing transactions in wholesale energy products for delivery in at least two Member States.

9. In exercising its powers pursuant to paragraphs 5 to 8, the Agency may give priority to the cases with the most significant cross-border impact. For that purpose, the Agency shall establish criteria for identifying the cases with the most significant cross-border impact, after consulting and in cooperation with the national regulatory authorities.

10. For the purpose of establishing whether the conditions for the exercise of the Agency’s powers set out in paragraphs 5, points (a) and (b), 6, 7 and 8 are met, the delivery of wholesale energy products within a bidding or balancing zone that encompasses the territory of at least two Member States shall be considered to be delivery in a single Member State.

This paragraph shall be without prejudice to the possibility of a national regulatory authority concerned to submit a request pursuant to paragraph 5, point (c) or to object pursuant to paragraph 4.

11. Upon completion of its actions taken to exercise its powers pursuant to paragraphs 5 to 8, the Agency shall draw up an investigation report setting out the Agency’s findings. The investigation report shall also include all evidence on which the findings were based. If the Agency considers in the investigation report that a breach of this Regulation took place, it shall inform the national regulatory authorities of the Member States concerned accordingly and require that they take the necessary measures including, as appropriate, in accordance with Article 18. In the investigation report, the Agency may also recommend certain follow-up measures to the relevant national regulatory authorities, and, where necessary, inform the Commission. Within three months of the receipt of the investigation report, the relevant national regulatory authorities shall communicate to the Agency and, where necessary, to the Commission, the measures that they consider to be necessary.

12. The Agency shall, on a regular basis and in any event at least once a year, submit summaries of the reports that it has drawn up, in an aggregated and anonymised form, to the European Parliament and to the Council. Such summaries and their content shall be treated as confidential.’;

(17) the following articles are inserted:

‘Article 13a

On-site inspections by the Agency

1. The Agency shall prepare and conduct on-site inspections in close cooperation and in coordination with the relevant authorities of the Member State concerned.

2. In order to fulfil its obligations as laid down in Article 13(5) to (8), the Agency may conduct all necessary on-site inspections at the premises of the persons subject to the investigation where business records could be kept. Where the proper conduct and efficiency of the on-site inspection so require, the Agency may carry out that inspection without prior announcement to the persons subject to the investigation.

3. To the extent necessary for the on-site inspection, the officials of, and persons authorised or appointed by, the Agency to conduct that inspection shall be empowered, with respect to the persons subject to a decision adopted by the Agency pursuant to paragraph 6, to:

(a) enter the relevant premises of those persons;

(b) examine the books and other records related to their business, irrespective of the medium on which they are stored;

(c) take or obtain in any form copies of or extracts from such books or records;

(d) seal any business premises and books or records for the period and to the extent necessary for the inspection;

(e) ask any representative or member of staff of those persons for explanations on facts or documents relating to the subject matter and purpose of the on-site inspection and to record the answers.

Except in duly substantiated cases, seals referred to in the first subparagraph, point (d) shall not be affixed for more than 72 hours.

4. If a reasonable suspicion exists that business records related to the subject matter of an on-site inspection, which may be relevant to prove a breach of this Regulation, are being kept in private premises of directors, managers or other members of staff of businesses concerned by an investigation, the Agency may by decision carry out an on-site inspection in such private premises. In such cases, the decision referred to in paragraph 6 shall also state the reasons that have led the Agency to conclude that a reasonable suspicion exists.

5. The officials of, and persons authorised or appointed by, the Agency to conduct an on-site inspection shall exercise their powers upon production of a written authorisation specifying the subject matter and purpose of the on-site inspection.

6. The persons subject to investigation shall submit to on-site inspections ordered by a decision that shall be adopted by the Agency. The decision shall specify the subject matter and purpose of the on-site inspection, indicate the date on which it is to begin, the periodic penalty payments provided for in Article 13g where the person concerned does not submit to the on-site inspection in accordance with paragraph 3 of this Article, as well as the right to have the decision reviewed by the Court of Justice of the European Union (the “Court of Justice”). The Agency shall consult the national regulatory authority of the Member State where the on-site inspection is to be conducted prior to adopting such decision.

7. Officials of, and persons authorised or appointed by, the national regulatory authority of the Member State where the on-site inspection is to be conducted shall, upon the request of the Agency, actively assist the officials of, and persons authorised or appointed by, the Agency. To that end they shall have the powers set out in this Article.

Officials of the national regulatory authority may also attend the on-site inspection upon request.

8. Where the officials of, and persons authorised or appointed by, the Agency find that a person opposes an on-site inspection ordered pursuant to this Article, the national regulatory authority of the Member State concerned shall provide them, or other relevant national regulatory authorities, with the necessary assistance, requesting, where appropriate, the assistance of the police or of an equivalent enforcement authority, to enable them to conduct their on-site inspection.

9. If the on-site inspection provided for in paragraph 1 or the assistance provided for in paragraphs 7 and 8 requires authorisation by a national judicial authority in accordance with the applicable national law, the Agency shall apply for such authorisation. The Agency may also apply for such authorisation as a precautionary measure. In the cases referred to in paragraph 4, an on-site inspection shall not be carried out without the prior authorisation of a national judicial authority.

10. Where the Agency applies for an authorisation as referred to in paragraph 9, the national judicial authority shall verify:

(a) that the decision of the Agency is authentic; and

(b) that any measures to be taken are proportionate and not arbitrary or excessive having regard to the subject matter of the on-site inspection.

For the purposes of the first subparagraph, point (b), of this paragraph, the national judicial authority may ask the Agency for detailed explanations, in particular relating to the grounds the Agency has for suspecting that a breach referred to in Article 13(3) has taken place, the seriousness of the suspected breach and the nature of the involvement of the person subject to the investigation. By way of derogation from Articles 28 and 29 of Regulation (EU) 2019/942, the Agency’s decision shall be subject to review only by the Court of Justice.

Article 13b

Request for information

1. At the Agency’s request any person shall provide to it the information necessary for the purpose of fulfilling the Agency’s obligations laid down in Article 13(5) to (8). In its request the Agency shall:

(a) refer to this Article as the legal basis for the request;

(b) state the purpose of the request;

(c) specify what information is required, and following which data format;

(d) set a time-limit, proportionate to the request, within which the information is to be provided;

(e) inform the person that the reply to the request for information is not to be incorrect or misleading.

2. For the purpose of information requests as referred to in paragraph 1 of this Article, the Agency shall also have the power to adopt decisions. In such a decision the Agency shall, in addition to the elements listed in paragraph 1 of this Article, indicate the person’s obligation to respond to the request, the periodic penalty payments provided for in Article 13g where the person concerned does not comply with the request, and the right to have the decision reviewed by the Court of Justice.

By way of derogation from Articles 28 and 29 of Regulation (EU) 2019/942, the Agency’s decision shall be subject to review only by the Court of Justice.

3. The persons in receipt of a request for information pursuant to paragraph 1 or 2, or their representatives, shall supply the information requested. Those persons shall be fully responsible for ensuring that the supplied information is complete, correct and not misleading.

4. Where the officials of, and persons authorised or appointed by, the Agency find that a person does not comply with a request for information, the national regulatory authority of the Member State concerned shall, at the Agency’s request, provide the Agency with the necessary assistance in ensuring the fulfilment of the obligation laid down in paragraph 3, including through the imposition of fines in accordance with the applicable national law.

5. Where the officials of, and persons authorised or appointed by, the Agency find that a person refuses to supply the information requested, the Agency may draw conclusions on the basis of available information.

6. The Agency shall, without delay, send a copy of the request referred to in paragraph 1 or the decision referred to in paragraph 2 to the national regulatory authorities of the Member States concerned.

Article 13c

Power to take statements

1. In order to fulfil its obligations under Article 13(5) to (8), the Agency may interview and take statements from any person who consents to being interviewed for the purpose of collecting information relating to the subject matter of an investigation. The Agency may record the answers.

2. Where an interview pursuant to paragraph 1 is conducted at the premises of the person concerned, the Agency shall inform the national regulatory authority of the Member State on whose territory the interview takes place. The officials of the national regulatory authority of that Member State may assist the officials of, and persons authorised or appointed by, the Agency to conduct the interview.

Article 13d

Procedural safeguards

1. The Agency shall carry out on-site inspections, request information and take statements in full respect of the

procedural safeguards of persons subject to an investigation, including:

(a) the right not to make self-incriminating statements;

(b) the right to be assisted by a person of choice;

(c) the right to use any of the official languages of the Member State where the on-site inspection takes place;

(d) the right to comment on facts concerning them before the adoption of the investigation report pursuant to Article 13(11);

(e) the right to receive a copy of the record of interview and either approve it or add observations to it.

The invitation to comment on facts pursuant to the right referred to in point (d) shall include a summary of the facts concerning the person in question and shall indicate an adequate time limit for submitting comments. In duly substantiated cases where necessary to preserve the confidentiality of the on-site inspection or of an on-going or future administrative or criminal investigation by a national authority, the Agency may decide to defer the invitation to comment.

2. The Agency shall seek evidence for and against the persons subject to an investigation, and carry out on-site inspections, request information and take statements objectively and impartially and in accordance with the principle of the presumption of innocence.

3. The Agency shall carry out on-site inspections, request information and take statements in full respect of applicable confidentiality and Union data protection rules.

4. Article 14(6) of Regulation (EU) 2019/942 shall not apply to the Agency’s decisions adopted pursuant to Article 13a(6) or Article 13b(2).

Article 13e

Mutual assistance

In order to ensure compliance with the relevant requirements set out in Articles 13 to 13c national regulatory authorities and the Agency shall assist each other in the course of an investigation.

Article 13f

Investigating officer

1. In order to fulfil its obligations under Article 13(5) to (8), the Agency may, where it considers to be appropriate to ensure the effectiveness and efficiency of the investigation and taking into account its available internal resources, appoint a dedicated investigating officer within the Agency to lead the investigation.

2. In order to carry out his or her tasks, the investigating officer may exercise the powers available to the Agency, including the powers set out in Articles 13a, 13b and 13c, while respecting the procedural safeguards set out in Article 13d. When carrying out his or her tasks, the investigating officer shall have access to all documents and information collected by the Agency in its supervisory activities that are relevant for carrying out the investigation.

Article 13g

Periodic penalty payments

1. The Agency shall, by means of a decision, impose a periodic penalty payment in respect of a person subject to an investigation in order to compel that person:

(a) to submit to an on-site inspection ordered by a decision adopted pursuant to Article 13a(6);

(b) to supply the information requested by a decision adopted pursuant to Article 13b(2).

2. The periodic penalty payment shall be imposed on a daily basis until the person concerned complies with the relevant decisions referred to in Article 13a(6) or Article 13b(2).

3. Periodic penalty payments shall be effective and proportionate. To that effect, the amount of a periodic penalty payment shall be, in the case of legal persons, 3 % of the average daily turnover in the preceding business year or, in the case of natural persons, 2 % of the average daily income in the preceding calendar year. A periodic penalty payment shall be calculated from the date stipulated in the decision imposing the periodic penalty payment.

4. A periodic penalty payment may be imposed for a period of no more than six months from the notification of the Agency’s decision.

5. By way of derogation from Articles 28 and 29 of Regulation (EU) 2019/942, the Agency’s decision shall be subject to review only by the Court of Justice.

Article 13h

Procedural safeguards with regard to periodic penalty payment decisions

1. Notwithstanding Article 14(6) of Regulation (EU) 2019/942, before taking any decision imposing a periodic penalty payment under Article 13g of this Regulation, the Agency shall give the persons to whom it intends to address such decision the opportunity to be heard on the Agency’s findings. The Agency shall base its decisions only on findings on which the persons concerned have had the opportunity to comment.

2. The rights of defence of the persons concerned shall be fully respected throughout the investigation. They shall be entitled to have access to those documents in the Agency’s file that are relevant for the Agency’s decision to impose the periodic penalty payment, subject to the legitimate interest of other persons in the protection of their business secrets. The right of access to the file shall not extend to confidential information or internal preparatory documents of the Agency.

Article 13i

Nature, enforcement and allocation of periodic penalty payments

1. Periodic penalty payments imposed pursuant to Article 13g shall be of an administrative nature.

2. Periodic penalty payments imposed pursuant to Article 13g shall be enforceable.

Enforcement shall be governed by the applicable national procedural rules of the Member States concerned.

The order for its enforcement shall be appended to the Agency’s decision without any other formality than verification of the authenticity of the decision by the national authority which the government of each Member State shall designate for that purpose and which it shall make known to the Agency and to the Court of Justice.

When the designated national authority has completed the formalities referred to in the third subparagraph, upon application by the Agency, the Agency may proceed to enforcement in accordance with the applicable national law, by bringing the matter directly before the designated national authority.

Enforcement may be suspended only by a decision of the Court of Justice. However, the courts of the Member States concerned shall have jurisdiction over complaints that enforcement is being carried out in an irregular manner.

3. The amounts of the periodic penalty payments shall be allocated to the general budget of the European Union.

Article 13j

Review by the Court of Justice

The Court of Justice shall have unlimited jurisdiction to review decisions of the Agency imposing periodic penalty payments. It may annul, reduce or increase the periodic penalty payment imposed.’

 

 

   Regulatory chronicle

 
 
 

17 April 2024

 

REMIT 2 published in the EU Official Journal 

 


IMG 0744      Documentation

 

 

REMIT Regulation (Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency)

 

REMIT Best Practice, A sector review on how to comply with REMIT related to inside information and market abuse, Nord Pool Consulting AS, 15 August 2017 

 

 

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