The concept of the criminal responsibility of legal entities is recognised by many countries throughout the world, including the USA, Austria, Japan, Italy, and Switzerland among others.
The idea of legal entities’ criminal responsibility is not new in the Ukraine, either. The first attempts to introduce the respective provisions to the Criminal Code were made in 1993. Some lawyers argued that criminal responsibility of legal entities in Ukraine in the broadest sense already existed, but was hidden behind different names (such as administrative, tax and economic responsibility).
Ukrainian parliament, known as the Verkhovna Rada, decreed on 23 May 2013 that the law which determines legal criminal measures can be applied to legal entities – in other words, the criminal responsibility merits for legal entities. The law has been already signed by the President of Ukraine and will be effective from September 1 2014.
It is important to highlight that not every legal entity can be liable under this law. For example, criminal responsibility cannot be applied to state and local authorities, the authorities of the Autonomous Republic of Crimea, organisations established by the latter, social security funds, and so on.
According to the law, the legal entity can be criminally responsible for but not limited to the following:
- Money laundering operations
- Bribery of the private legal entity’s official in any form of business
- Bribery of the person that renders public services
- Offering or giving an illegal benefit (bribe) to the official
- Abuse of influence
- Committing an act of terrorism
- Involvement in committing an act of terrorism
- Public appeals to commit an act of terrorism
- Creation of a terrorist group or terrorist organisation
- Abetment (compelling) to perpetrate an act of terrorism
- Financing terrorism
The law distinguishes between two types of crimes: on behalf of and in interests of the legal entity; and on behalf of the legal entity. This means that for some of the crimes above it is important that the person acts not in his own interests, but in interests of the legal entity.
According to the provisions of Ukrainian law, the body or person who acts on behalf of the legal entity must always act in its interests. Therefore, in practice the court decides at its own discretion which interest was persecuted in the particular situation – the personal interests of the company official or the company itself’s interests.
“In our opinion, the legislator didn’t include the criteria of defining the interest of the accused person in the crimes mentioned in clauses 6-11 above due to the high social danger of such crimes – that is, the sole fact of acting in the interests of the legal entity is enough to qualify for the mentioned crimes,” says Olena Chorna or TMF Group Ukraine.
According to the provisions of the law there are three types of legal criminal measures which can be applied to legal entities: a fine, confiscation of property, or liquidation.
Of course, the introduction of the investigated responsibility’s type is a continuous process. It will necessitate changes to different legislative acts, and to the legal consciousness of judges, public prosecutors and militia.
The expediency of criminal responsibility is very debatable. At the same time, there is no doubt that it has certain advantages, such as special procedural guarantees in comparison with other types of responsibility and a more effective struggle against corporate criminality.