Corporate Liability for committing corruption
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Corporate Liability for committing corruption Kiev, 8 February 2013 Workshop on the implementation of the anticorruption legislation TAIEX – JHA 49058. Context.

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Context

  • By undermining democratic institutions, curbing economic growth and multiplying the spread of criminal activities, corruption threatens international security and stability.

  • Awareness of the international community and “season” of international conventions against corruption


Main international instruments against corruption

  • UNCAC (United Nations Convention against corruption) – 2003 (UNTOC 2000)

  • Council of Europe Criminal Law Convention and Civil Law Convention on corruption – 1999

  • (monitoring mechanism GRECO)

  • OECD Anti- Bribery Convention 1997 (international business transactions)

  • EU PFI Convention and protocols


Provisions on corporate liability

Article 26 UNCAC “Liability of legal persons

1. Each State Party shall adopt such measures as may be necessary, consistent with its legal principles, to establish the liability of legal persons for participation in the offences established in accordance with this Convention.

2. Subject to the legal principles of the State Party, the liability of legal persons may be criminal, civil or administrative.

3. Such liability shall be without prejudice to the criminal liability of the natural persons who have committed the offences.

“4. Each State Party shall, in particular, ensure that legal persons held liable in accordance with this article are subject to effective, proportionate and dissuasive criminal or non-criminal sanctions, including monetary sanctions.


Provisions on corporate liability

Article 18 – Corporate liability COE CETS 173 (Ceriminal Law Convention on Corruption)

1. Each Party shall adopt such legislative and other measures as may be necessary to ensure that legal persons can be held liable for the criminal offences of active bribery, trading in influence and money laundering established in accordance with this Convention, committed for their benefit by any natural person, acting either individually or as part of an organ of the legal person, who has a leading position within the legal person, based on:– a power of representation of the legal person; or– an authority to take decisions on behalf of the legal person; or – an authority to exercise control within the legal person; as well as for involvement of such a natural person as accessory or instigator in the above-mentioned offences.

 2 Apart from the cases already provided for in paragraph 1, each Party shall take the necessary measures to ensure that a legal person can be held liable where the lack of supervision or control by a natural person referred to in paragraph 1 has made possible the commission of the criminal offences mentioned in paragraph 1 for the benefit of that legal person by a natural person under its authority.

3 Liability of a legal person under paragraphs 1 and 2 shall not exclude criminal proceedings against natural persons who are perpetrators, instigators of, or accessories to, the criminal offences mentioned in paragraph 1.


Background

  • Traditional interpretation of the principle societas delinquere non potest

  • Constitutional problems – principle of personality of criminal liability

  • BUT

  • Juridical personality implies juridical liability

  • General recognition at international level of corporate liability, which may also be criminal in accordance with principles of criminal law, apart from the need of adaptation of sanctions


Issues at stake

  • Serious and sophisticated crime committed by, through or under the cover of legal entities, such as companies, corporations or charitable organizations.

  • Complex corporate structures can effectively hide the true ownership, clients or specific transactions related to serious crimes and corruption

  • Complexity of decision-making processes leading to corruption


Different approaches

  • Criminal, civil, or administrative responsibility

  • Different approaches related to

  • the attribution of intent and guilt

  • the determination of the degree of collective culpability

  • the type of proof required for the imposition of penalties on corporate entities;

  • the appropriate sanctions


International standards

Establishment of corporate liability

Parallel but independent from liability of natural persons

Sanctions must be effective, proportionate and dissuasive


International standards - sanctions

  • Most frequently used sanction – fine(criminal or non-criminal)

  • Other sanctions:

  • exclusion from contracting with the Government (for example public procurement, aid procurement and export credit financing);

  • forfeiture, confiscation, restitution, closing down of legal entities.


International standards - sanctions

  • Non-monetary sanctions available in some jurisdictions:

  • withdrawal of certain advantages

  • suspension of certain rights

  • prohibition of certain activities

  • publication of the judgment

  • appointment of a trustee,

  • direct regulation of corporate structures


Judicial cooperation

MLA (mutual legal assistance)I to be afforded to

the fullest extent possible under relevant laws, treaties, agreements and arrangements of the requested State party, in cases where a legal entity is subject to a

criminal, civil or administrative liability

Cooperation for purposes of confiscation (freezing, seizure, asset recovery)


EU relevant policies

  • Monitoring implementation of EU instruments by MS and promoting ratification of international instruments

  • Dialogue on Rule of Law and track record of implementation and irreversibility of anti-corruption reforms (candidate countries, ENP)

  • Support for strengthening good governance and democratisation granted by the EU as part of cooperation and development policy including anti-corruption policies


Evidence:

Council Framework Decision 2008/978/JHA of 18 December 2008 on the European Evidence Warrant for the purpose of obtaining objects, documents and data for use

in proceedings in criminal matters

Council Framework Decision 2003/577/JHA of 22 July 2003 on the execution in the European Union of orders freezing property or evidence, OJ L 196 of 2 August 2003, p. 45

In absentia judgments:

Council Framework Decision 2009/299/JHA of 26 February 2009 amending Framework Decisions 2002/584/JHA, 2005/214/JHA, 2006/783/JHA, 2008/909/JHA and 2008/947/JHA, thereby enhancing the procedural rights of persons and fostering the application of the principle of mutual recognition to decisions rendered in the absence of the person concerned at the trial

Confiscation:

Council Framework Decision 2006/783/JHA of 6 October 2006 on the application of the principle of mutual recognition to confiscation orders

Convictions:

Council Framework Decision 2008/675/JHA of 14 July 2008 on taking account of convictions in the Member States of the European Union in the course of new criminal proceedings

THANK YOU FOR YOUR ATTENTION!

Questions?

Gualtiero MICHELINI

Corte d’Appello di Roma

[email protected]


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