On November 13, 2015, the Slovak Parliament adopted an act which has introduced the concept of criminal liability of legal persons. The act was published in the official collection of acts as Act No. 91/2016 Coll. on Criminal Liability of Legal Persons (the “Act”). The effective date of the Act is July 1, 2016.
Previous efforts to align Slovak national law with positions held by international organizations such as the EU, OECD and the Council of Europe failed over the past years. The legislation so far has held legal persons liable only indirectly under a narrow legislative framework allowing only confiscation of finances or assets of a legal person. The Act finally establishes a dedicated legislative instrument that enables for criminal conduct to be directly imputable to legal entities.
The principle of imputability of a crime to a legal person
Criminal liability introduced by the Act revolves around a principle according to which criminally punishable conduct as committed by natural persons acting in the name, in the capacity, for the benefit of or within the scope of the activities of a legal person will be directly imputable to that legal person.
Conditions to establish liability
According to the Act, two conditions have to be fulfilled in order for criminal liability of a legal person to be established. First, a crime has to be committed (the Act introduces an exhaustive list of crimes imputable to a legal person, see below) and, second, there must be a causal link between (i) the interest or activity of a legal person and (ii) the illegal conduct of a natural person whose conduct is imputable to that legal person.
Establishing criminal liability of a legal person under the Act is not conditional upon holding liable of a natural person whose conduct is imputable to that legal person. Similarly, nor is finding of criminal liability conditional upon identification of an actual natural person (e.g., an employee or member of the statutory body) who committed the crime.
Natural persons whose conduct is imputable to legal persons
The Act introduces three “categories” of natural persons whose illegal conduct is imputable to a legal person (if the above conditions have been satisfied):
- statutory body or a member of the statutory body of the legal person,
- persons vested with supervisory powers in the legal person or
- other person authorized to represent or decide on behalf of the legal person.
State bodies exempted from liability
According to the Act, states, state bodies, municipalities and certain legal persons established by law are exempt from criminal liability. However, it should be stressed that the fact that these entities may hold shares in other legal persons does not shield such legal persons from being equally criminally liable under the adopted framework.
The Act enables to assess the criminality of conduct which occurred outside of the national territory of the Slovak Republic but was committed by a legal person established under Slovak law. The framework may similarly apply to conduct which occurred outside of the national territory, was not committed by a legal person established under Slovak law, but was committed in the interest or for the benefit of a legal person established in Slovakia. Further, the framework applies also to a foreign legal person’s branch registered in the Slovak Republic.
Catalogue of crimes imputable to legal persons
The Act aims to punish crimes occurring predominantly in areas such as international drug trade, human trafficking, sexual abuse, money counterfeiting and money laundering, data security and system integrity, preservation of the environment, terrorism, corruption and extremism. In this regard, it should be noted that the scope of the catalogue is a clear indication that compliance with international obligations has been the priority of the legislator. It appears that the pressures of international organizations to achieve compliance served as main drivers for the introduction of the Act and to a great extent pre-determined the scope of the final catalogue.
Penalties available under the Act include dissolution of the legal person, confiscation of assets, financial penalties up to EUR 1.6 million, ban on trade or other activities requiring an authorization or license, temporal ban on participation in public procurement tenders, disqualification from the ability to receive grants, subsidies or other benefits such as contributions from EU structural funds or a novel type of punishment: publication of a sentencing judgment.
The Act closely follows the Czech example (almost ‘copy-paste’ legislation) which has been intertwined by similar if not identical motives. In Slovakia, however, making use of the framework may initially prove problematic in practice due to the inexperience of enforcement agencies with prosecution of legal persons. The fact that the Act aims to regulate substantive as well as procedural aspects of criminal prosecution may aggravate the concerns. In this regard, practical application of the Act is hard to ascertain at such an early stage. Furthermore, it remains to be seen whether more consideration could have been given towards inclusion of a wider range of crimes, especially crimes occurring in trade and commerce.