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Firms unaware of criminal liability

Not many companies invest into measures to protect themselves from being prosecuted.

(Source: SME)

Though Slovak companies can be punished for committing crimes as of this July, not many of them are aware of it. Moreover, a recently conducted survey showed that many firms do not even consider the new rules beneficial.

“This is a paradox as the law forces companies to protect themselves from criminal activities that can be committed by their own employees or business partners,” said Ivan Moroz, partner at Screening Solutions which carried out the poll. 

Slovakia was the last EU country to adopt the law on criminal liability of companies, and was inspired mostly by the law used in the Czech Republic. 

“One of the main reasons to have this law is to cultivate the business environment,” said Leopold Černý of Screening Solutions, adding that the entrepreneurs should be motivated to adopt measures that will protect them from fraudulent practices. 

Main principles

One of the main changes introduced by the law is that it enables prosecution of an entire company.

Back in 2010, Slovakia introduced the so-called indirect criminal liability of legal people, which was part of the Criminal Code. It worked in a way that the whole company could be prosecuted only if it was proven that it is linked to a specific person who committed a crime. 

The new rules do not include such a requirement. Yet there are specific conditions which need to be fulfilled. 

The crime needs to be committed to the financial benefit of the company, in its name or via its activities. Those who can commit such a crime could be its statutory representatives, members of the controlling and supervision bodies, or people authorised to represent it. But this is not the case of state bodies and authorities.

The law also defines altogether 53 crimes for which a company can be prosecuted, including harming the environment, tax evasion and money laundering, or keeping child pornography on a work computer.

The courts can then sanction the companies in various ways, with the strictest being its termination. Other punishments include the publication of a verdict, a ban from attending public competitions, a ban from drawing subsidies and money from EU funds, prohibition of business activities, financial punishment, and seizure of property.

Practice in the Czech Republic has shown that the companies are terminated only if it is proven that they were deliberately established to commit some kind of crimes. The sentenced companies are usually punished via other sanctions.

Measures may help

Though the law became effective in July, many companies still do not know about their new duties. Only 38 percent of respondents, who attended the survey carried out by Screening Solutions in July and August, claimed they have implemented or plan to implement measures concerning the new legislation.

Why is verifying the information about employees and business partners important? What crimes will be soon added to the Slovak list?

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