On 13 November 2015 the Slovak Parliament adopted an Act on the Criminal Liability of Legal Persons. Slovakia thus becomes the last country of the EU to have introduced legislation imposing direct criminal liability on corporations. The Act enters into force on 1 July 2016.
Although the possibility to penalize or seize the assets of a legal person in criminal proceedings was introduced in the Slovak Criminal Code already in 2010, this measure proved to be inefficient and has not been applied in practice until today.
The proposal imposes criminal liability on legal persons for crimes expressly listed in the Act, insofar as the crime is committed by, on behalf of, through the activities or to the benefit of a legal person. Unfortunately, the Act only follows the minimum requirements arising from the EU legislation and international agreements binding on Slovakia. Consequently, the new legislation fails to hold legal persons liable for a range of crimes which are likely to be committed by corporations, such as fraud, embezzlement, or defrauding of a creditor.
As a means of protection of the legal person against deliberate or negligent misconduct of its employees, the legislative proposal allows for exculpation from the criminal liability by proving that the directors, supervisors or other competent bodies of the company did not neglect their supervisory obligations and other competences to prevent such misconduct.
The internal supervisory mechanisms can therefore play a critical role in protecting the corporation from sanctions applicable under the new Act ranging from financial penalties, through seizure of the company’s assets, prohibition to participate in public tenders, to a forced liquidation of the company.