Czech Republic: Broader exposure of legal entities to criminal prosecution
The Czech Republic is among the countries in which legal entities may be held liable for criminal offences. For almost five years already, Czech law has recognized and enforced the criminal liability of legal entities. Indeed, over this period the number of convicted entities has been slowly rising: in 2015, 98 court rulings were handed down in which corporations were found guilty of criminal conduct. Yet more convictions may be expected in connection with the amendment to the Corporate Criminal Liability Act which is scheduled to come into force on 1 December 2016.
A fundamental change is the new way in which the amendment delineates the reach of corporate criminal liability: previously, the law contained an explicit list of all those criminal offences of which a legal entity can be found guilty; after the amendment, the law will to the contrary define those criminal offences which cannot be committed by a legal entity. The consequence is a jump in the number of criminal offences of which legal entities may be a perpetrator, by more than 100 additional criminal offences.
Additionally, dozens of offences have been added to the roster of cases in which culpability will be determined according to Czech law even if the relevant crime was committed abroad, and by a legal entity that is not incorporated in the Czech Republic.
Yet another change concerns promotion of what is known as compliance programmes – i.e., a set of ethical rules and rules of lawful conduct designed to prevent situations in which the unlawful acts of individuals are attributed to a legal entity. In this way, a legal entity may absolve itself from criminal liability if it can show that it has made every reasonable effort to prevent unlawful acts by individuals whose conduct may be attributed to the legal entity – in other words, if it can show that it has successfully implemented a compliance system. However, the amendment is vague on the details regarding this requirement, and it remains to be seen how the courts will deal with ambiguities.
In this manner, the amendment to the Criminal Corporate Liability Act is broadening the options for holding legal entities criminally liable, whereas the potential of this concept has not yet been fully tapped in the Czech Republic.
Source: Act No. 183/2016 Coll., amending Act No. 418/2011 Coll., on the criminal liability of legal entities and proceedings against them, as amended