Lexology GTDT Market Intelligence provides a unique perspective on evolving legal and regulatory landscapes. This interview is taken from the Anti-Corruption volume featuring discussion and analysis of legal developments, compliance risk and the role of enforcement authorities within key jurisdictions worldwide.
1 What are the key developments related to anti-corruption regulation and investigations in the past year in your jurisdiction, and what lessons can compliance professionals learn from them?
During 2019, Greece underwent significant reform in penal and penal procedure law, which resulted in the adoption of a new Penal Code and Penal Procedure Code (Greek Penal Code (GPC)). Consequently, the basic legal provisions of Greek anti-corruption legislation have been significantly changed. As far as ‘corruption’ as a legal term and not as a social phenomenon is concerned, it covers all improper or unlawful transactions or trading relations, characterised by lack of transparency and aiming at improper economic interest. The anti-corruption legislation covers an extensive scope of passive and active bribery in the public and private sector, such as:
- passive and active bribery of public servants (articles 235, 236 GPC) and judges (article 237 GPC);
- trading in influence (article 237A GPC);
- active and passive bribery in the private sector (article 396 GPC);
- several aspects of active and passive bribery of voters and political officials in national and communal elections (articles 159, 159A, 165 GPC);
- active and passive bribery of foreign officials according to the Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention;
- active and passive bribery in sport (article 132 Law No. 2725/1999); and
- active and passive bribery of national or EU officials against the financial interest of the European Union (Law No. 2803/2000).
Concerning bribery in the public sector, article 235 GPC defines passive bribery and article 236 GPC defines active bribery. Both corruption-related crimes have become more lenient since the reform of the GPC and are thus applicable, as lex mitior, in all pending cases.
Pursuant to article 235 GPC, a public servant who requests or receives for him or herself or another person any kind of undue advantage, or a promise of such an advantage, in exchange for an action or omission in the future or in the past, within the exercise of his or her duties, is punished with imprisonment of between 10 days and five years and pecuniary punishment. If the act is committed by the public servant professionally (ie, as a profession), the foreseen sentence is imprisonment of between three and five years, and pecuniary punishment. If the public servant’s actions are contrary to his or her duties, he or she shall be punished with incarceration of five to 10 years and pecuniary punishment, and if the act is committed by him or her professionally, the penalty is incarceration of five to 15 years and pecuniary punishment. Article 235 GPC has been slightly modified and is more lenient as far as the penalty range and the pecuniary punishment are concerned.
The aforementioned punishments refer to public servants. Bribers who are not necessarily public servants are punished according to article 236 GPC (active bribery) with imprisonment of between 10 days and three years or with pecuniary punishment of between €1 and €18,000, when the public servant’s action or omission lies within the exercise of his or her duties. If the public servant’s actions are contrary to his or her duties, the briber shall be punished with imprisonment of between three and five years and pecuniary punishment of between €1 and €36,000. Article 236 GPC is more lenient than the previous law.
Active bribery was changed from a felony to a misdemeanour. This resulted in a shorter time limitation for active bribery (maximum eight years) than for passive bribery (maximum 20 years). This reform is applicable, as lex mitiori, in all pending cases. However, very recently, article 236 GPC was once again changed (Law No. 4637/2019) and active bribery, in its severe form, is once again a felony, but the penalty range is up to eight years’ incarceration instead of 10 years according to the legal provisions before the general reform of the new Penal Code in July 2019.
A further important reform was the abolishment of Law No. 1608/1950, which foresaw lifetime incarceration for the perpetrator of various committed against the financial interests of the Greek state and causing damage in excess of €150,000. In Greek legal practice, defendants charged with passive or active bribery could face allegations in terms of this severe regulation.
Concerning bribery in the private sector, article 396 GPC defines passive bribery as an act taking place in the private sector during the employee’s exercise of a business activity in breach of his or her duties as defined by law, employment contract or internal regulation. The foreseen punishment is imprisonment of one to five years and pecuniary punishment of between €1 and €36,000 where the employee requests or receives the undue advantage for him or herself, or a third person, in exchange for an action or omission against his or her duties. The same punishment applies to whoever, during the exercise of a business activity, provides or promises an undue advantage to an employee in the private sector in exchange for an action or omission in breach of the employee’s duties as defined by law, contract or internal regulation (active bribery).
In Greek legal theory, bribery in the private sector has been mainly considered a competition law crime. This is clearly stated in the new GPC by placing this criminal provision (article 396 GPC) in the chapter dealing with offences against assets. In the previous law, bribery in the private sector was classified among service-related criminal offences (article 237B in the former GPC). The scope of article 396 GPC underlines the importance of internal business regulation of an enterprise in identifying and prosecuting an employee’s breach of trust. Contrary to the aforementioned bribery crimes in the public sector, article 396 GPC is stricter compared to article 237B of the former GPC, since it foresees pecuniary punishment as well as imprisonment.
Another development related to anti-corruption regulation in the public sector regards the definition of public employees. In bribery crimes, the public sector was previously defined through the legal term ‘employee’, which was broader than the one for public servant and was described in article 263A of the former GPC. An employee for the purposes of articles 235 and 236 GPC (among others) was, as well as public servants, any person who served in a legal person of private law owned by the Greek state, in organs or organisations of the European Union or in legal entities of private law that were subsidised by the Greek state or by legal persons of public law. Article 263A GPC was changed during the recent reform of the GPC. The definition of ‘public employee’ for the purposes of articles 235 and 236 GPC is now described only in article 13 GPC, according to which, ‘an employee is a person who has been legally entrusted, even temporarily, with the exercise of public, municipal or community service, or service within another legal person of public law’. This change has significantly narrowed the scope of articles 235 and 236, which previously included, among others, bribery in the banking system and in private enterprises subsidised by the Greek state. Pending cases of bribery in the public sector may, under conditions, be handled the same as bribery in the private sector.
For the compliance professionals, article 235, paragraph 4 and article 236, paragraph 3 GPC are of paramount importance. Pursuant to article 236, paragraph 3, persons with decision-making or supervision powers within an enterprise, who fail through negligence and by breaching a specific service duty to prevent a person under their command offering bribes to a public servant in favour of the enterprise, are punished with imprisonment of between 10 days and two years, or with pecuniary punishment. This can be challenging for an enterprise’s compliance and legal department and may trigger further civil liability of the enterprise. Stricter punishments (imprisonment of between 10 days and three years or pecuniary punishment) are imposed – pursuant to article 235, paragraph 4 – on persons with decision-making or supervision powers within a public enterprise or in the public sector, when they fail through negligence to prevent the bribery in their enterprise or sector department. There is no relevant legal provision regarding bribery in the private sector. It must be noted here, that, pursuant to article 26 GPC, offences committed through negligence shall be punished only in exceptional cases specified by law. This exceptional character particularly applies in criminal offences against important legal interests, such as life or health; for example, negligent homicide. The fact that the Greek legislator attributes this exceptional character to both article 236, paragraph 3 and article 235, paragraph 4, through service-related criminal offences, demonstrates their great importance for the Greek jurisdiction and legal practice.
Furthermore, compliance professionals should focus on the legal provisions against money laundering Law No. 4557/2018, which repeats all legal provisions stipulated by the EU Anti-Money Laundering Directive 2015/849. Bribery crimes are, as predicate offences, by definition basic to money laundering, which triggers further liability for legal entities that gain an illicit advantage due to the bribery. Law No. 4557/2018 describes all preventive and repressive measures, the directions and the details on the application of anti-money laundering (AML) policies for all agencies and competent authorities and provisions for asset freezing, investigation, confiscation and seizures.
To conclude, it should be pointed out for the compliance professionals in Greece that anti-corruption regulation in the public sector has in general been more lenient, whereas in the private sector slightly stricter, which means that both sectors are now characterised by a uniformity concerning the penalty range. One should not draw the conclusion of a relaxation in anti-corruption matters. On the contrary, both the coordination of all anti-corruption and AML-related functions and competent authorities and the legal practice to date, result in a stricter and more sophisticated pattern of monitoring, investigating and exposing possible corruption acts.
2 What are the key areas of anti-corruption compliance risk on which companies operating in your jurisdiction should focus?
As explained in question 1, a key area in which compliance professionals should put the burden of anti-corruption strategies is article 236, paragraph 3 GPC, pursuant to which persons with decision-making or supervision powers within an enterprise, who fail through negligence and by breaching a specific service duty to prevent a person under their command offering bribes to a public servant in favour of the enterprise, are punished with imprisonment or with pecuniary punishment. Furthermore, as far as passive and active bribery acts in the private sector are concerned (pursuant to article 396 GPC, analysed in question 1), companies operating in Greece should focus on internal business regulation of an enterprise regarding both preventive and repressive measures, such as the investigation, identification and prosecution of an employee’s breach of trust. To conclude, another key area is Law No. 4557/2018 (ie, the legal provisions of money laundering), especially in cases when the crime of money laundering is established through bribery actions as predicate offences. Apart from the sanctions against the perpetrator (natural person) for breach of AML laws, sanctions can also be imposed against legal persons or entities if the money laundering or the predicate offence have been committed in favour or on behalf of the legal person or entity. These are mainly administrative fines, temporary or permanent suspension of activities, prohibition of certain activities to be performed by the legal person or entity and a ban from public tenders or subsidies. Competent authorities may impose – in addition to the mentioned fines – administrative fines for non-compliance with the legal framework for corporate governance. Administrative fines or the mentioned measures are imposed if individuals that have the power or authorisation to manage or make decisions on behalf of the legal person or entity fail to supervise or effectively control lower-ranking employees, thus enabling them to engage in AML controversies, which result in profit for the legal person or entity.
3 Do you expect the enforcement policies or priorities of anti-corruption authorities in your jurisdiction to change in the near future? If so, how do you think that might affect compliance efforts by companies or impact their business?
A radical change regarding the anti-corruption legal framework in Greece for the year ahead is not expected. A slight change concerning the investigating body of corruption crimes would not come as a surprise. In Greece, there is no special agency for combating corruption crimes like the UK Serious Fraud Office (SFO). Pursuant to articles 35 and 36 GPPC, there are, however, special departments in the Public Prosecution Offices seated in the second and first instance courts in Athens and Thessaloniki with the competence to investigate and prosecute corruption crimes. The anti-corruption prosecutors are prosecutors of the second instance. They are further assisted by at least two prosecutors of the first instance. The anti-corruption prosecutors are competent to investigate and prosecute felonies, perpetrated by public servants or political persons, aiming at improper economic interest against the Greek state. Therefore, this procedural definition of ‘corruption’ mainly refers to bribery in the public sector; it is narrow and serves mainly investigation and prosecution purposes. The anti-corruption prosecutors may conduct a preliminary inquiry or, in most cases, supervise the inquiry conducted by special prosecution authorities. They are further assisted by suitable qualified staff, such as accountants, economists or legal experts, who may compose their own conclusions.
Corruption-related crimes in the private sector are not investigated by anti-corruption prosecutors, but they may be investigated and prosecuted by the prosecutors of financial crimes (articles 33, 34 GPPC). The anticipated competence expansion of the anti-corruption prosecutors would contribute to a more effective anti-corruption system. Such a reimbursement of the anti-corruption policy would not directly affect the compliance efforts by companies or impact their business. Compliance professionals should still focus on the current legal provisions against bribery crimes and money laundering.
4 Have you seen evidence of continuing or increasing cooperation by the enforcement authorities in your jurisdiction with authorities in other countries? If so, how has that affected the implementation or outcomes of their investigations?
In general, the Greek authorities offer assistance to requests of mutual legal assistance. As far as the receiving of evidence is concerned, Greek authorities underwent a transitional phase. In recent years, the Greek justice system has dealt with some serious cross-border bribery cases in, among others, the pharmaceutical and arms industries. As Greek prosecution and investigating officials have had to cooperate with other prosecution officials in the European Union and the United States, several cross-border issues arose within the procedure of mutual assistance in criminal matters.
Greek prosecution and investigating officials are not familiar with the principle of specialty in mutual assistance in criminal matters. They, therefore, have tended to use the material received by the foreign prosecution office as they wish and sometimes against the volition of the foreign prosecution office. This judicial malpractice (due to the lack of understanding of the Greek authorities) has been confirmed both in cases of direct interstate mutual assistance between Greek prosecution and investigating offices and foreign prosecution officials (specifically between the Greek investigating judge and the Prosecution Office of Bremen in a bribery case in the arms industry), as well as in Eurojust-governed mutual assistance between several prosecution officials (specifically in a bribery case in the pharmaceutical sector). In both cases, the Greek authorities used the mutual assistance material in order to prosecute several persons, without prior consent of the foreign authorities. In one case, this resulted in the prosecution of a British citizen in Greece for fraud and money laundering, who already had been convicted of bribery in the United Kingdom after having pled guilty and provided crucial material to the SFO, which was then sent to the Greek prosecution authorities for further investigation. The Greek prosecutor and investigating judge used this very material to prosecute the British citizen in Greece – against the expressed volition of the SFO!
However, the Greek authorities seem to have adjusted to the new environment of mutual legal assistance. The aforementioned malpractice was recently spotted by the Chief Prosecutor of the Supreme Court, who recently circulated a note to all investigating judges and prosecutors, instructing them to respect the principle of specialty (Circular Note 6/2019). Furthermore, regarding the field of money laundering, both the Financial and Economic Crime Unit and the other enforcement agencies not only handle such requests of mutual legal assistance by virtue of international instruments, but also enter into administrative agreements of cooperation to exchange material quickly and efficiently. Requests concerning freezing and seizing of assets are executed on time, provided that they meet the criteria and the standards set in the aforementioned administrative agreements.
5 Have you seen any recent changes in how the enforcement authorities handle the potential culpability of individuals versus the treatment of corporate entities? How has this affected your advice to compliance professionals managing corruption risks?
There are no such recent changes because criminal liability lies, in principle, with natural persons. Of course, civil claims may be brought against both the perpetrators of bribery crimes and the legal person or entity employing the perpetrators of bribery crimes, following the general provisions of civil law. Furthermore, there are the AML sanctions, mentioned in question 2, against legal persons or entities, which vary depending on the seriousness of the violation against the AML provisions or the bribery crimes as predicate offences. Our advice to compliance professionals managing corruption crises is, among other things, to persuade the legal person or entity to conduct an audit or an internal investigation in order to investigate and expose possible violations against the anti-bribery or AML provisions perpetrated by their employees. The reason is that, pursuant to article 45, paragraph 4(e) of Law No. 4557/2018, this practice could lead to more lenient sanctions against the legal person or entity.
6 Has there been any new guidance from enforcement authorities in your jurisdiction regarding how they assess the effectiveness of corporate anti-corruption compliance programmes?
Apart from the key developments related to anti-corruption regulation in the past year, outlined in question 1, the OECD, together with the European Commission and Greece, has developed a series of guidelines with the intention to contribute to the fight against corruption in the private sector in Greece. This project was launched in 2016 and was completed in 2018. The aforementioned guidelines provide certain measures and strategies to prevent companies from engaging in corrupt behaviour and promote business integrity and trust, among others, through technical empowerment of the Greek authorities. This project led to four different collections of guidelines.
Anti-Corruption Guidelines on Compliance, Internal Controls and Ethics for Companies in Greece
These guidelines have been developed to help companies in Greece implement effective compliance measures to tackle corruption and bribery. They also contain recommendations on how the public and private sector can work together to ensure the fight against corruption is sustainable.
Corruption Risk Review and Risk Assessment Guidelines for Companies in Greece
This document analyses corruption risks in Greece. It also provides guidance to companies in Greece to help them successfully conduct a risk assessment and implement effective anti-corruption measures based on the results of the risk assessment.
Guidelines on Whistleblower Protection for Companies in Greece
These guidelines are designed to assist companies in Greece in developing and implementing effective internal reporting mechanisms. The guidelines reflect current international standards and good practices in whistle-blower protection and should also be relevant and adaptable for companies operating in numerous jurisdictions.
Whistleblower Protection in the Private Sector: Developing of the Legal Framework
This document provides a comprehensive review and gap analysis of the existing legal framework in Greece with regard to whistle-blower protection in the private sector. It also provides legislative proposals that take into account international standards on whistle-blower protection as well as insights and approaches from other parties to the OECD Anti-Bribery Convention, with a focus on countries that have enacted stand-alone, comprehensive whistle-blower protection legislation.
7 How have developments in laws governing data privacy in your jurisdiction affected companies’ abilities to investigate and deter potential corrupt activities or cooperate with government inquiries?
As far as data privacy is concerned, the legal framework consists mainly of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016. Regarding criminal matters in the field of data protection, the prosecutor is empowered to initiate criminal investigations in all cases. Furthermore, the Supervisory Authority of Data Protection may also impose administrative fines and sanctions for non-compliance with the legal framework for data protection. Concerning ‘data processing at work’ there is a series of interesting decisions of the Supervisory Authority of Data Protection, according to which the entity is allowed to access data from the employee’s computer, telephone and email, and from the company’s server, among others, when it comes to contributing to investigating criminal matters and under the general proviso that the whole process complies with articles 5 and 6 of the above-mentioned regulation. Regarding money laundering, law enforcement agencies (for example, the Financial and Economic Crime Unit) are not bound by laws governing data privacy in relation to material falling into their powers. They may receive material relating to a person’s or entity’s banking and tax records. Certain material such as telecommunications and correspondence need special authorisation to be obtained and reviewed. To conclude, there is no data privacy related to an agency’s request for the purposes of reporting and information sharing by covered institutions (ie, legal persons that must carry out AML measures pursuant to article 5 of Law No. 4557/2018, such as banking and finance organisations, venture capital companies, venture capital funds, auditing companies and others). As an example, a bank is not bound by rules of banking privacy when reporting and reviewing suspicious transactions.
The Inside Track
What are the critical abilities or experience for an adviser in the anti-corruption area in your jurisdiction?
Critical abilities for anti-corruption in Greece includes, on the one hand, having a full view of Greek and EU legal provisions against corruption and following the latest international trends concerning preventive and repressive anti-corruption measures, such as audits and internal investigations. On the other hand, an adviser in the anti-corruption area needs to adjust their legal knowledge to the ways in which the markets, the bank and finance sector and generally the real economy work.
What issues in your jurisdiction make advising on anti-corruption compliance challenging or unique?
A number of major corruption scandals have led to repeated amendments and adjustments to the anti-corruption and anti-money laundering lesiglation. Those adjustments have resulted in a stricter and more sophisticated strategy of monitoring, reporting and investigating corruption offences. The compliance officer has to confront this with rapid anti-corruption policy change and this most probably without having a team to help, because in the majority of Greek companies the relevant department consists of one person or only a small team of people.
What have been the most interesting or challenging anti-corruption matters you have handled recently?
The most interesting anti-corruption matter recently has been the above-mentioned cross-border bribery case in the pharmaceutical industry against a British citizen in Greece. The most challenging parts of the defence line had to do with the violation of nemo tenetur and ne bis in idem doctrines by the Greek prosecution and investigating authorities. Moreover, due to further violation of the principle of specialty in mutual assistance in criminal matters, defence lawyers had to provide a detailed analysis of this principle before the Criminal Court (Court of Appeal) of Athens, about the extent of usage of the material with the view to specific defendants. It has to be noted here that a representative of the UK Serious Fraud Office has testified before the Criminal Court of Athens concerning this point.