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The International Comparative Legal Guide to:
Business Crime 2011

A practical cross-border insight into business crime
Published by Global Legal Group with contributions from: BCL Burton Copeland Charlton Chambers Clifford Chance Fischer, Tandeau de Marsac, Sur & Associs Homburger Ivanyan & Partners Lee & Ko Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. Nishimura & Asahi Oliva-Ayala Abogados Rajah & Tann LLP Schoenherr Simmons & Simmons Sjcrona Van Stigt Skadden, Arps, Slate, Meagher & Flom LLP Stockwoods LLP Studio Legale Pisano Tilleke & Gibbins Vilardi & Advogados Associados WESSING Rechtsanwlte Zeenat Al Mansoori & Associates
The International Comparative Legal Guide to: Business Crime 2011

General Chapters:
1 Navigating Rough Waters: Managing Multi-Jurisdictional Investigations Gary DiBianco & Matthew Cowie, Skadden, Arps, Slate, Meagher & Flom LLP
Contributing Editors Gary DiBianco & Gary Rubin, Skadden, Arps, Slate, Meagher & Flom LLP Brand Manager Oliver Smith Account Managers George Archer, Florjan Osmani, Rory Smith, Toni Wyatt Sub Editor Jodie Mablin Editor Caroline Blad Senior Editor Penny Smale Managing Editor Alan Falach Publisher Richard Firth Published by
Global Legal Group Ltd. 59 Tanner Street London SE1 3PL, UK Tel: +44 20 7367 0720 Fax: +44 20 7407 5255 Email: info@glgroup.co.uk URL: www.glgroup.co.uk
2 Whistleblower Laws: Protections for Employees, Risks to Corporations - Jonathan Sack & Barbara Trencher, Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. 3 The UK Bribery Act: Is There a New International Standard? - Louise Delahunty & Claire McLeod, Simmons & Simmons 13 6
Country Question and Answer Chapters:

4 Austria 5 Bahrain 6 Barbados Schoenherr: Heidemarie Paulitsch Zeenat Al Mansoori & Associates: Amel Al Aseeri & Reem Al Rayes Charlton Chambers: Sir Richard L. Cheltenham, K.A., Q.C. & Rene Butcher 7 Brazil 8 Canada Vilardi & Advogados Associados: Celso Vilardi & Davi Tangerino Stockwoods LLP: Scott Hutchison & Brian Gover 35 42 49 57 20 28
9 England & Wales BCL Burton Copeland: Richard Sallybanks & Guy Bastable 10 France Fischer, Tandeau de Marsac, Sur & Associs: Pierre-Olivier Sur & Silvestre Tandeau de Marsac 11 Germany WESSING Rechtsanwlte: Prof. Dr. Juergen Wessing & Dr. Heiko Ahlbrecht 12 Italy 13 Japan 14 Korea 15 Netherlands 16 Poland Studio Legale Pisano: Roberto Pisano Nishimura & Asahi: Yoshinori Ono & Norimitsu Yamamoto Lee & Ko: Changhee Suh & Tae Yop Lee Sjcrona Van Stigt: Jan Sjcrona & Enide Perez Clifford Chance, Janicka, Kruewski, Namiotkiewicz i Wsplnicy sp.k.: Bartosz Kruewski & Marcin Ciemiski 17 Russia 18 Singapore 19 Spain 20 Switzerland 21 Thailand 22 USA Ivanyan & Partners: Vasily Torkanovskiy Rajah & Tann LLP: Andre Yeap, S.C. & Hamidul Haq Oliva-Ayala Abogados: Laura Martnez-Sanz & Pablo Molina Homburger: Flavio Romerio & Roman Richers Tilleke & Gibbins: Michael Ramirez & Poomjai Kudidthalert Skadden, Arps, Slate, Meagher & Flom LLP: Gary DiBianco & Gary A. Rubin
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Cover Design F&F Studio Design GLG Cover Image Source Istockphoto Printed by Ashford Colour Press Ltd October 2010 Copyright 2010 Global Legal Group Ltd. All rights reserved No photocopying ISBN 978-1-904654-87-2 ISSN 2043-9199
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Further copies of this book and others in the series can be ordered from the publisher at a price of 200. Please call +44 20 7367 0720
Disclaimer
This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.
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EDITORIAL
Welcome to the first edition of The International Comparative Legal Guide to: Business Crime. This guide provides corporate counsel and international practitioners with a comprehensive worldwide legal analysis of the laws and regulations of business crime. It is divided into two main sections: Three general chapters. These are designed to provide readers with a comprehensive overview of key issues affecting business crime, particularly from the perspective of a multi-jurisdictional transaction. Country question and answer chapters. These provide a broad overview of common issues in business crime laws and regulations in 19 jurisdictions. All chapters are written by leading business crime lawyers and we are extremely grateful for their excellent contributions. Special thanks are reserved for the contributing editors, Gary DiBianco & Gary Rubin of Skadden, Arps, Slate, Meagher & Flom LLP, for their invaluable assistance. Global Legal Group hopes that you find this guide practical and interesting. The International Comparative Legal Guide series is also available online at www.iclg.co.uk
Alan Falach LL.M Managing Editor Global Legal Group Alan.Falach@glgroup.co.uk
Chapter 1
Navigating Rough Waters: Managing MultiJurisdictional Investigations

Skadden, Arps, Slate, Meagher & Flom LLP
Gary DiBianco
Matthew Cowie
I. Introduction
The number of and scope of truly multi-jurisdictional investigations has drastically increased in recent years, with the increasing cooperation of European and U.S. prosecutors in some of the most serious and complex fraud and corruption cases. Numerous regulators cooperated on investigations of transactions through UN Oil-for-Food Programme, U.S. and German prosecutors have cooperated on high-profile corruption investigations, and several investigations of US and UK companies have involved cooperation by the US Department of Justice and UK Serious Fraud Office. When advising a corporation in a multi-jurisdictional regulatory/criminal investigationor an investigation that has the potential to expand to multiple jurisdictionsa standard, singlejurisdiction investigation plan will not suffice. While the standard investigational issues to be addressed throughout the course of an investigationdata preservation and collection, employee interviews, fact analysis and reporting, disclosure obligation, employee discipline, and settlement negotiationsare part of any single-jurisdiction investigation, multi-jurisdictional investigations present additional issues and risks that must be considered and evaluated at each step of the investigation. Multi-jurisdictional issues complicate how an investigation is conducted. Decisions made and directions taken in one investigation will affect investigations in other jurisdictions. The investigation team must have the vision to prepare and respond to the multi-jurisdictional dynamic in advising and planning a multi-jurisdictional investigation, and carefully consider how to minimise liability across jurisdictions in reaching a settlement or other resolution. Indeed, the concept of a global settlement has taken on increased significance in an enforcement environment that may prompt several jurisdictions to seek to exact penalties for the same conduct.
to maintain potentially relevant categories and types of data and to abstain from altering or deleting the data. Following efforts to preserve data, collection is accomplished either through notices to employees to collect and provide data, active collection process by a forensic specialist or lawyers, or a combination of procedures. A document preservation directive and document collection notice should require that the recipient acknowledge receipt of and consent to the terms of the directive and notice. In multi-national preservation and collection exercises, careful efforts should be made to ensure compliance with governing data protection and data privacy restrictions, including bank secrecy laws and blocking statutes. (See endnote 1.) Where a companys servers and other data storage facilities are located will determine whether data protection restrictions will impact movement of the data from one jurisdiction to another. Specific company policies regarding data collection and protection as well as employee contracts may also affect the ability to transport the data from one jurisdiction to another. Additionally, access to data in certain jurisdictions may require a different level of notice to or consent from employees than is needed to preserve or transfer the data. For example, in jurisdictions following the EUs data protection directive (see endnote 2) (or similar directives), an employee must freely give unambiguous consent to the transfer of his or her data to a jurisdiction that the EU has determined does not have adequate data privacy and protection laws, such as the U.S. The consent must specifically list the categories of data to be transferred and the purpose for transferring the data to another jurisdiction. Moreover, certain jurisdictions may require that data protection authorities be notified of data collection efforts. If such notice is required, it will raise strategic issues about maintaining the confidentiality of the investigation when facing potential involvement by regulatory authorities. Giving public notice of data collection efforts presents real problems early in an investigation. Where the notice of data collection efforts is not publicly available, providing notice of data collection efforts still presents a certain level of risk even if the regulators that must be notified are not the same regulators who would enforce the issues under investigation. Information sharing and increased cooperation by regulators both within their own jurisdictions and internationally is an enforcement reality. Before moving to the next step of the investigationtransferring data from one jurisdiction to anotherthe investigation team must consider the relevant laws and regulations of the jurisdiction to which the data will be transferred. For example, even where transfer is contemplated between EU jurisdictions that provide similar levels of protection and security, some notice (and possibly consent) may be required before data may be transferred. If transfer
II. Data Preservation and Collection

Single jurisdiction investigations generally follow a familiar practice to ensure preservation and collection of relevant documents and electronic information. Often, preliminary interviews are conducted with a companys relevant information technology personnel in order to understand how and where the company maintains its data (for example, whether data is stored in a different location than where it was created); how that data is stored; what backup data processes are in place; what types of data storage devices are used by the company and employees (home desktop computers, laptops, PDAs, portable thumb drives); and who is likely to have relevant data. It is generally considered best practice to confirm the importance of preservation by a document preservation directive to the appropriate employees directing them
ICLG TO: BUSINESS CRIME 2011
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is contemplated to a jurisdiction without adequate data protection laws, transfer of the data may not be permitted without the specific consent of the individuals whose data is to be transferred and of the local data protection authority. For instance, jurisdictions following the EUs data protection directive are likely to require that there be a careful analysis of the status of the investigation or inquiry, the nature of the data to be transferred out of the jurisdiction, the proportionality of the volume of data at issue in connection with the specified purposes for the data, and the confidentiality restrictions on the data after it is transferred. There is no one size fits all approach, but there are several practical considerations that the investigative team should take into account. First, consideration should be given to collecting and conducting the initial review of the data within the original jurisdiction. This may allow for narrowing of the volume of data that needs to be transferred. It may also help satisfy any proportionality requirements that govern data collection and transfer. Second, there should be an assessment of the nature of the proceeding for which the data will be used. The EU directive allows transfer of data in connection with legal claims and defences. Particular jurisdictions may interpret legal claims and defences, as requiring court proceedings, or a response to official process (e.g., a subpoena). An internal investigation may not be sufficient to allow a company to utilise this data transfer exception. Finally, if the transfer of a proportionate amount of data is permissible, the recipient may be required to maintain the confidentiality of the data. This requirement necessitates careful and thoughtful treatment. Existing U.S. grand jury secrecy rules (see endnote 3) and Freedom of Information Act exceptions (see endnote 4) may provide sufficient protection when data is produced to U.S. government agencies. Data confidentiality needs to be carefully and thoroughly researched and documented in connection with a particular production of data to a regulator or prosecutor. These data preservation, collection, and transfer issues present in multi-jurisdictional investigations demonstrate that the investigative team should consult with experienced local lawyers early in the data preservation and collection stage for assistance in navigating data protection laws of the multiple jurisdictions involved. Taking this early step will help ensure that the investigative team secures access to the relevant data and preserves the privacy of the employees involved in compliance with local laws and regulations. Moreover, some data collection and transfer issues may be resolved in advance if a company is careful to establish inter-company data sharing agreements that would allow transfer among entities for purposes of internal reviews or investigations, or for purposes of responding to regulatory inquiries.
Navigating Rough Waters

Second, the interviewer should determine whether local law requires, or at least prefers, that labour unions or works councils be notified of an employee interview, and whether the presence of a union or works council representative during an employee interview is preferred or required. Notification if required will undoubtedly raise concerns in a situation whether it is important to preserve confidentiality of the existence of the investigation. If a union or works council representative is required to be present during an interview, privileges governing the process of the investigation will also come into question, as external regulators may take the position that an otherwise privileged discussion is no longer protected from disclosure as a result of the presence of additional participants. Third, the interviewer must consider how it will handle an individuals refusal to consent to an interview. In certain jurisdictions, the employer may not be able to compel the employee to agree to an interview, and the employees refusal to do so may not be actionable as a disciplinary violation unless a specific contractual provision or employment policy requires the employee to cooperate with the investigation. The refusal to sit for an interview by an employee who is central to the investigation can limit a corporations ability to gather information, so the investigation plan should account for the practical realities and limits of non-compelled interviews. Fourth, the interviewer may need to make preparations for the interviewee to have legal representation available for the interview. Some jurisdictions require, or prefer, that an employee be allowed to be represented by a lawyer during an interview. This can also be advantageous to the company, if for example, there is no privilege in the interview product or the company has determined to waive privilege over the interview content. Issues of admissibility, which might follow in a contested criminal trial, will be reduced if the interviewee was permitted access to representation throughout the process. Fifth, the interviewer must be cognizant of any local restrictions on the use of facts developed during an employee interview. Certain jurisdictions may prohibit the use of facts developed during an interview in connection with employment or disciplinary actions. For instance, if a works council, union or human resources representative is not present during the employees interview, the employee may take the position that the employer cannot take any personnel action against him or her, even if the employee acknowledged wrongdoing during the interview. Finally, the interviewer should consider, in advance of any employee interview, whether local law or practice requires that the interviewee be provided with access to interview notes taken during the interview or memoranda prepared from the interview notes. One option for addressing this issue in jurisdictions that have such requirements to maintain a privileged record of the interview for purposes of providing legal advice to the client and create a shorter summary of the interview, which would contain key facts and statements from the interview, for the employee to review and acknowledge.
III. Employee Interviews

U.S. practice has evolved to include employee interviews as a standard step in internal reviews and investigations, but the legal issues surrounding such issues outside of the U.S. must be carefully considered, in advance, to avoid running afoul of employee rights and laws prohibiting private investigations. These protections govern not only how the information from an interview may be used, but also whether certain interview practices are permissible at all. First, a company and its lawyers should confirm the basic threshold issues: that it is legal and permissible under local law to conduct an employee interview. In some jurisdictions it is illegal to conduct a private investigation. In other jurisdictions, official approval may be needed to conduct an investigation, audit, or to engage in compliance monitoring activities.
IV. Fact Analysis and Reporting

As with each stage of a multi-jurisdictional investigation, the investigative team needs to consider applicable local privilege law when reporting to an entitys management and in-house lawyers. Many jurisdictions do not recognise a privilege between in-house lawyers and company executives. (See endnote 5.) Moreover, some jurisdictions will not recognise a privilege between external legal advisors and the companys executives. Thus, it is critical that
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the investigative team understand all applicable laws governing privilege issues and to plan reporting to the clientboth written and oralaccordingly. Similarly, the investigative team must assess local requirements and practices with respect to auditors, including statutory audits and audits by independent public accountants. Some jurisdictions may require reporting regarding audits, which can raise additional privilege concerns.

obligations. Public disclosure requirements may require disclosure of potential regulatory risks and liabilities if they rise to the level of being market sensitive. The threshold for likelihood of loss may vary by jurisdiction and therefore needs to be understood and carefully monitored in the jurisdiction in which an entitys shares are traded.
VI. Employee Discipline

Governing labour and employment law is likely to strictly limit the manner and nature of sanctions that can be taken following internal fact-finding. The range of permissible disciplinary action will depend on the nature of the misconduct identified, the degree of evidence of the misconduct, the process by which the evidence was identified, and the speed by which the misconduct is resolved. The investigative team should understand the relevant legal framework and what will be required both substantively and procedurally in order to take adverse employment action. In considering disciplinary action against certain employees, the investigative team also must be mindful of any restrictions that limit the time frame during which action may be taken to dismiss an employee for cause. Often, this window is shorter than the amount of time needed to complete a thorough internal investigation of a complex issue. In such circumstances, standard investigation times may narrow the choice of potential remedial or disciplinary action or may make employment action significantly more expensive in terms of severance packages or litigating employment disputes.
V. Multi-Jurisdictional Disclosure Obligations

In multi-jurisdictional investigations, whether and how a company discloses information to a regulator or private litigants can affect its position with other regulators and private litigants, which ultimately can affect the companys ability to resolve multiple proceedings in a favourable manner. The investigative team needs to assess the companys disclosure obligations in the various jurisdictions involved and create a comprehensive disclosure strategy so that a disclosure taken in one jurisdiction does not negatively impact the company in another jurisdiction. To develop a credible and disclosure strategy, the investigative team must carefully consider whether the company is required to disclose the facts developed during the course of the investigation to the authorities in the jurisdictions where a company is based, where the conduct occurred, or where employees are located. Certain jurisdictions have positive disclosure requirements of certain improper conduct, although most do not. If the investigation involves a jurisdiction with a disclosure requirement, the nature and timing of the disclosure must be carefully analysed at the outset of the investigation and reconsidered throughout the investigation as new facts are developed. In addition to considering disclosure requirements, the investigation team must also be cognizant during the course of the investigation of disclosure obligations imposed by anti-money laundering laws. While there might not be a positive duty to disclose substantive offences to the authorities, the outworking, and national implementation, of the European Directives on Money Laundering (see endnote 6) imposes a wide range of obligations upon companies and professionals typically where there is knowledge or suspicion of a transaction involving the proceeds of illegal activity. Thus, in the event of a partially formed contract or ongoing business dealings, suspicion of fraud, tax offences, corruption, or embezzlement may trigger anti-money laundering disclosure obligations. Additionally, the facts developed during the investigation may identify other collateral disclosure obligations, such as the identification of tax deficiencies or environmental offences. Even if there is no legally required disclosure obligation, the investigative team should carefully evaluate the benefits of a voluntary disclosure in potentially relevant jurisdictions. The team should also analyse the potential risks of making a voluntary disclosure in one relevant jurisdiction but not in another and how that strategic decision might impact the companys overall investigation goals and strategies. For instance, in jurisdictions where amnesty is provided for first in the door reporting of anticompetitive behaviour, there may be a sense of urgency to make a multi-jurisdictional disclosure to the appropriate authorities before such a disclosure is made by a competitor. Depending on the specific facts of a situation, however, such an early disclosure could lead to investigations and adverse regulatory outcomes in other jurisdictions where there are no similar amnesty provisions. Finally, if the company is publicly traded, the investigative team must understand and consider the companys public disclosure
VII. Settlements
The fact that an investigation has been conducted in a number of jurisdictions raises issues that need to be considered before settling the investigation in any single jurisdiction. The nature of the charges and settlements in multiple jurisdictions are likely to vary, and are difficult to achieve in a coordinated fashion. Additionally, settlement in one jurisdiction will have consequences in another jurisdiction. Ideally, the company will seek to resolve all matters under investigation simultaneously to the extent possible. Coordinated settlements militate against a series of satellite prosecutions, and minimise the risk of multiple fines, disgorgement, and other sanctions for the same course of conduct. Achieving a simultaneous resolution will minimise the likelihood of generating follow-on investigations with regulators supplementing their charges to include additional conduct identified during the followon investigation. Moreover, it is important to coordinate a simultaneous resolution to all matters under investigation because certain jurisdictions may not recognise another sovereigns judgments for purposes of double jeopardy. Although certain jurisdictions, notably within Europe, recognise double jeopardy concerns, many jurisdictions do not bar prosecution solely because a company has paid a fine or penalty to a separate sovereign. U.S. federal and state governments, for instance, do not consider penalties imposed by each other or nonU.S. jurisdictions from a double jeopardy perspective. Thus, careful monitoring of parallel proceedings and creative negotiation of potential settlements is critical. If a U.S. settlement is likely to occur first, for example, an entity may consider negotiating for a deferred payment schedule or hold back for money that may be paid to another regulator. (See endnote 7.) In other instances, because the UK and EU jurisdictions do recognise parallel judgments, it may be appropriate to ensure negotiation with the

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regulator with primacy (see endnote 8) to a resolution so that other jurisdictions are bound by the appropriate resolution. Finally, the investigative team must consider that the structure of a settlement in one jurisdiction will have collateral consequences in other related jurisdictions. As a result, it is imperative that there be an assessment of the relevant debarment risks across jurisdictions if the company is going to admit to a substantive corruption (see endnote 9) or government contracting fraud offence. (See endnote 10.) Additionally, the investigative team should assess whether the factual findings or admissions that are a part of a settlement with a regulator will be binding in parallel litigation commenced by shareholders or competitors or could be relied upon by other regulators.
2. 3. 4. 5.

Directive 95/46/EC of the European Parliament and of the Council, 24 October 1995, O.J. L. 281, Nov. 23, 1995, p. 31. Fed. R. Crim. P. 6(e). 5 U.S.C. 552(b). The European Court of Justice recently reiterated this principle of EU law in Akzo v. Commission, holding that in-house lawyers are not protected by legal privilege in antitrust investigations conducted by the European Commission even if the in-house lawyer is admitted to the Bar of England and Wales or the Law Society and thus subject to its ethical rules. Case C-550/07 P (Sept. 14, 2010). See e.g., the UK Money Laundering Regulations 2007, No. 2157, entered into force on December 15, 2007; and the Luxembourg law of 17 July 2008, Memorial A n 106 of July 23, 2008, which implements both EU Directive 2005/60/CE and 2006/70/CE by amending the law of 12 November 2004. In 2006, Norwegian oil and gas company Statoil settled with the U.S. Department of Justice (DOJ) and other U.S. regulators for alleged violations of the Foreign Corrupt Practices Act regarding improper payments to an Iranian official. In its deferred prosecution agreement with the DOJ, Statoil agreed to pay a criminal penalty of USD $10.5 million, which was to be reduced by the $3 million fine Statoil paid to the Norwegian government to settle an inquiry regarding the same conduct. EU Council Framework Decision 2009/948/JHA on Prevention and Settlement of Conflicts of Exercise of Jurisdiction in Criminal Proceedings, adopted on 30 November 2009, available at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:328:0042:0047 :EN:PDF. Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004, O.J. L. 134, April 30, 2004, 45, available at http://eurlex.europa.eu/LexUriServ/ LexUriServ.do?uri=CELEX:32004L0018:EN: HTML. 48 C.F.R. 2.101, 9.402, 9.403, 9.406.
6.
VIII. Conclusion
Multi-jurisdictional investigations raise a complex array of issues for the investigative team throughout the course of the investigation. It is imperative that the investigative team be cognizant of these issues from the outset and thoroughly understand how local requirements in one jurisdiction may impact the investigation in another. With such knowledge and understanding, coupled with the assistance of experienced local lawyers, an investigative team can develop a comprehensive strategy for handling the issues that arise in multi-jurisdictional investigations.
7.
8.
9.
Endnotes
1. For example, France maintains a blocking statute. See Law No. 80-538, Journal Officiel de la Republique Franaise, July 17, 1980, p. 1799. Blocking statutes criminalise exporting certain types of data. Other countries, such as Malaysia, maintain bank secrecy statutes. See the Malaysian Banking and Financial Institutions Act 1989 (BAFIA), 97(1). 10.
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Gary DiBianco
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
Matthew Cowie
40 Bank Street, Canary Warf London, E14 5DS United Kingdom
40 Bank Street, Canary Warf London, E14 5DS United Kingdom
Tel: Fax: Email: URL:
+44 20 7519 7000 +44 20 7519 7070 Gary.DiBianco@skadden.com www.Skadden.com
+44 20 7519 7139 +44 20 7072 7139 Matthew.Cowie@skadden.com www.Skadden.com
Gary DiBianco is a partner in the firms London office and heads the London-based Corporate Investigations practice. Mr. DiBianco has extensive experience defending criminal and civil investigations; conducting internal investigations; and defending civil litigation in anti-corruption, fraud, securities and related matters. He has been involved in a number of significant matters representing U.S. and non-U.S. entities in a variety of industries and business sectors, including manufacturing, pharmaceuticals and life sciences, financial services and professional services. His experience under the U.S. Foreign Corrupt Practices Act and related laws includes global internal investigations, response to Department of Justice and Securities and Exchange Commission inquiries, defence of parallel international enforcement actions and shareholder litigation, and due diligence in connection with corporate transactions. He has performed investigations relating to anti-corruption issues in dozens of countries, including in Europe, Asia, the Middle East and Latin America.
Matthew Cowie is a counsel in the Corporate Investigations practice in the London office of Skadden. He focuses on internal investigations and defense of government enforcement matters, with an emphasis on overseas corruption and Foreign Corrupt Practices Act (FCPA) investigations. Mr. Cowie also advises on compliance best practices for U.K. and multinational corporates, particularly with regard to anticorruption policies and procedures and compliance with the Bribery Act 2010. Prior to joining Skadden, Mr. Cowie spent 11 years with the Serious Fraud Office (SFO). During this time he led the first significant investigations and prosecutions of overseas corruption and other corporate offending. Since 2004, Mr. Cowie has worked exclusively on corruption investigations and prosecutions. He has served as the prosecutor in the SFOs prosecution of Mabey & Johnson Ltd; Innospec Ltd; Johnson & Johnson/De Puy International Ltd. and BAE Systems plc. Mr. Cowie successfully brought the first two overseas corruption prosecutions of U.K. corporates. He also brought the first significant prosecution of a senior corporate executive on corruption charges within the medical devices industry. Additionally, Mr. Cowie supervised the conduct of casework encompassing both sanctions and overseas corruption offences.
The Government Enforcement and White Collar Crime Practice of Skadden, Arps, Slate, Meagher & Flom LLP and affiliates is an internationally recognised leader in the representation of corporations, boards of directors, management and other individuals in connection with a broad range of government investigations, enforcement actions, internal investigations, and white collar criminal investigations and litigation. The close coordination between criminal and civil regulatory authorities when investigating allegations of wrongdoing has increasingly blurred the line separating criminal, civil and administrative offences, resulting in heightened risks when conducting business, both domestically and internationally. Skadden is well-positioned to help clients navigate the legal landscape when business conduct results in concurrent criminal, civil and/or administrative proceedings that require a strategically coordinated response.

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Chapter 2
Whistleblower Laws: Protections for Employees, Risks to Corporations

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.
I. Introduction
The United States has a long history, dating to the Civil War era, of encouraging whistleblowers. As early as the 1860s, statutes allowed whistleblowers to share in the recovery from legal actions prosecuting frauds against the government. (See endnote 1.) New laws, such as Sarbanes-Oxley, have broadened the application of whistleblower protections to include virtually all United States corporations. Even more recent developments, including the DoddFrank Wall Street Reform and Consumer Protection Act, provide whistleblowers with enormous incentives and further strengthen existing whistleblower protections. Increasingly, the law has provided protections to employees who suffer retaliation as a result of their whistleblowing activities. These developments present challenges for corporations, as whistleblowers may lead to civil and criminal investigations and liability, regardless of whether the accusations raised by the whistleblowers are well-founded. Under these circumstances, corporations cannot afford to view whistleblowers merely as troublesome employees. Although whistleblowers may have mixedmotives and the concerns they raise are not always legitimate, a hostile approach towards whistleblowers is inconsistent with trends in the law and may expose corporations to liability for retaliation, even if the whistleblowers allegations prove to be without merit. The best practice for corporations is to be receptive to whistleblowers as part of a vibrant and effective compliance programme, and to protect them from retaliation. Such a programme is increasingly expected, if not required, by law, and may help shield a corporation and its directors from liability in the event that a whistleblower does expose wrongdoing.
Jonathan S. Sack
Barbara L. Trencher
apply to public companies and companies that contract with the government, under the False Claims Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act. These whistleblower laws overlap (for instance, many public company also contract with the government), and collectively apply to most companies doing business in the United States. (See endnote 2.)
A. False Claims Act
1. Qui Tam Actions and Related Criminal Actions Corporations that contract with the government must be sensitive to the provisions in the federal False Claims Act, which, among other things, incentivises disclosure of information concerning fraud against the government and protects whistleblowers from retaliation. The False Claims Act authorises whistleblowers to sue, on behalf of the government, an individual or entity that has defrauded the government, and share in any recovery. (See endnote 3.) Such actions are referred to as qui tam actions, and the private citizen suing on behalf of the government is known as the relator. These actions may alert the government to criminal activity, and serve as the trigger for a criminal investigation and prosecution. The federal False Claims Acts coverage is broad and has been steadily expanded to include not just fraud in defence procurement, which was the target of the original Act, (see endnote 4) but all federal administration of funds, including under TARP. (See endnote 5.) The False Claims Act provides that any person who knowingly submits, or causes another person to submit, false claims for payment of government funds is liable for treble damages and civil penalties of between $5,500 and $11,00 per false claim. (See endnote 6.) The Act applies to, inter alia, entities that submit invoices or vouchers for payment to the federal government, as well as entities that receive direct federal funding. Many states, and a few municipalities, have false claims statutes that contain qui tam provisions to encourage whistleblowers. Some of these statutes are modelled on the federal False Claims Act, and therefore track the False Claims Act in terms of procedure and the availability of large relator awards. (See endnote 7.) Procedurally, civil False Claims Act cases can proceed in one of two ways. First, the government can bring a direct civil action against an individual or entity that it believes has defrauded the government. In such cases, whistleblowers play no role. Second, and more relevant here, a whistleblower-relator can initiate a qui tam suit against an individual or entity on behalf of the government. When a relator initiates the suit, the complaint is filed under seal, and the government is given an opportunity to investigate the allegations. Based on the investigation, the government decides whether to join the case. (See endnote 8.) If the government
II. The Law Provides Many Incentives and Protections for Whistleblowers
Whistleblowers and informers are often celebrated by the government and the media for their courage, but the reality is that while some might be performing a valuable public service, many others are disgruntled employees who have ulterior motives. Although whistleblowers can be a mixed bag, the government actively seeks to solicit their information because whistleblowers can have inside knowledge about corporate practices that are difficult for an outsider, such as an auditor or regulator, to expose. To encourage whistleblowers, Congress has provided monetary incentives and protections from retaliation for corporate insiders who act as whistleblowers. Although there are many incentive and anti-retaliation laws, this article will focus on whistleblower protections and incentives that
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intervenes, the relator is entitled to share in the reward, receiving between 15 and 25 percent of the recovery. If the government does not intervene, and the case proceeds with only the whistleblowerrelator pursuing the action on behalf of the government, the relator is entitled to receive between 25 and 30 percent of any recovery. (See endnote 9.) Recent cases, predominantly involving health care and defence contractor fraud, demonstrate that the filing of the qui tam action and the ensuing government investigation into the allegations creates a serious risk of criminal as well as civil liability: A qui tam action for widespread health care fraud against WellCare Health Plans, one of the largest Medicaid HMO contractors, prompted a federal and state investigation of WellCare. After the first relator, a financial analyst at WellCare, brought suit, and while the qui tam complaint remained under seal, he cooperated with the government as an FBI informer, and provided more than 1,000 hours of surveillance audio and video. This led to a massive raid of WellCares Tampa offices, a significant decline in the value of WellCare stock, and charges against an executive, who ultimately pled guilty. (See endnote 10.) The company entered into a deferred prosecution agreement that required it to, among other things, retain an outside monitor. The resolution of a False Claims Act lawsuit against Pfizer arising from its off-label sales and marketing of the pain drug Bextra led to a $1 billion settlement and more than $102 million in payments to six whistleblowers, including one individual who was awarded $51.1 million. Pfizer also paid $1.3 billion as a criminal fine, and one company manager entered a guilty plea and was sentenced to 24 months probation and a fine. AstraZeneca Plcs $250 million settlement of False Claims Act litigation arose from the marketing of Seroquel led to two whistleblowers sharing a $45 million reward. AstraZeneca pled guilty to fraud, and paid $90 million in criminal fines, in connection with its drug pricing and marketing practices for Zoladex. The Zoladex fraud led to a $266 million recover under the False Claims Act. A military-procurement fraud qui tam case arising from allegations that TRW (now owned by Northrop) made defective parts for spy satellites that resulted in serious malfunctions and expensive fixes, led to fines of $325 million and payments to the qui tam whistleblower amounting to $48.7 million. Thus, the risks from a qui tam action should not be underestimated. Indeed, even if widespread fraud leading to criminal liability is not revealed, the cost of a government investigation brought on by a qui tam action can be enormous and can significantly impact the financial condition of a company, and even a purely civil action can be extraordinarily costly to a corporation. Notably, since the 1986 amendments to the False Claims Act, which significantly strengthened the False Claims Act and the qui tam provisions, the number of False Claims Act filings has increased, and the government has recovered over $15.7 billion through qui tam actions alone. (See endnote 11.) Of this amount, more than $15.1 billion was recovered in qui tam actions that were joined and pursued by the government. (See endnote 12.) Whistleblowers share of the awards was approximately $2.5 billion, (see endnote 13) and in some cases, the whistleblower awards have topped tens of millions of dollars. 2. FCA Whistleblower Protections The 1986 Amendments to the False Claims Act created a federal cause of action for any employee who suffers retaliation for participating in a False Claims Act prosecution. (See endnote 14.) This cause of action is not limited to qui tam relators, but also protects any person who does any lawful act in furtherance of a
Whistleblower Laws
False Claims action, including investigating, initiating, testifying in furtherance of, or assisting in a False Claims Act prosecution. (See endnote 15.) The scope of protected activity in furtherance of an action is not clearly delineated by the courts and is beyond the scope of this overview of the law. It is important to note, however, that courts have generally taken an expansive view of protected activity. For instance, some courts have held that the whistleblower provision protects an employee when the employee did not have a specific awareness of the FCA as long as the employee was engaged in action that was calculated or could reasonably have led to a viable FCA claim. (See endnote 16.) Courts addressing the scope of the False Claims Acts antiretaliation provisions have held that the law broadly protects employees against discharge, demotion, threats and harassment, or any other discrimination against an employee in the terms and conditions of employment. The Supreme Courts decision in Burlington Northern & Santa Fe Railway Co. v. White, (see endnote 17) which analysed the scope of Title VIIs anti-retaliation provision, governs the analysis of what constitutes retaliatory conduct under the False Claims Act, as well as under other federal anti-retaliation statutes. (See endnote 18.) Recently, the Fraud Enforcement and Recovery Act of 2009 strengthened the False Claims Acts anti-retaliation provisions by providing for individual liability against retaliators, and broadening the scope of coverage to protect not just employees, but also contractors and agents.
B. Sarbanes-Oxley Act of 2002
Historically, U.S. law did not broadly protect whistleblowers in corporate America. This changed with the Sarbanes-Oxley Act of 2002 (SOX), which enacted an expansive federal whistleblower protection statute for employees of public companies, and amended the obstruction of justice statute to provide criminal penalties for any person or entity that retaliates against an individual for certain whistleblower activity. This year, the civil protections under SOX were further strengthened by the Dodd-Frank Act. 1. Civil Liability Under SOX for Anti-Whistleblower Retaliation Sarbanes-Oxley broadly protects employees against retaliation for reporting alleged violations occurring within public companies. Under Section 806 of SOX, publicly traded companies, or any officer, employee, contractor, subcontractor, or agent of a publicly traded company, may not discharge, demote, suspend threaten, harass or in any other manner discriminate against an employee in the terms and conditions of employment because of any protected whistleblowing activity. (See endnote 19.) Publicly traded companies are defined as companies that have a class of securities registered under section 12 of the Securities Exchange Act of 1934, or are required to file reports under section 15(d) of the Exchange Act. The Act covers all companies that have securities publicly traded in the United States, including American Depositary Receipts (ADRs), or are required to file reports with the Securities and Exchange Commission (SEC), and does not distinguish between United States and foreign corporations. (See endnote 20.) Although there had been some dispute whether an employee of a non-publicly traded subsidiary of a publicly traded company was covered under SOX, the Dodd-Frank Act amended SOX to clarify that whistleblower protections apply to employees of subsidiaries of publicly traded companies whose financial information is included in the consolidated financial statements of [a publicly] traded company. (See endnote 21.) In addition, the Dodd-Frank Act expanded SOX coverage to include employees of nationally recognized statistical rating organization[s]. (See endnote 22.)

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A broad range of activities are protected under Section 806, including (i) providing information to federal agencies, Congress, or internally within the company to a person with supervisory authority over the employee or a person working for the employer who has the authority to investigate, discover, or terminate misconduct, and (ii) participating in a proceeding by filing, causing to be filed, testifying, or otherwise assisting in proceedings. (See endnote 23.) In order for the activity to be protected, the employee must reasonably believe that the information provided relates to a violation of federal mail, wire, bank or securities fraud statutes, or a violation of any SEC rule or other provision of federal law relating to fraud against shareholders. (See endnote 24.) If an employee believes he or she suffered retaliation, the employee may file an administrative complaint with the Department of Labor, which will investigate the claim and can order reinstatement, back pay and damages. (See endnote 25.) If the Department of Labor does not timely resolve the case, the employee may pursue the claim in federal court. (See endnote 26.) The Dodd-Frank Act made several procedural and substantive changes to enhance the protections of SOX by extending the statute of limitations for bringing a claim, voiding any agreement that purports to waive rights and remedies afforded to SOX whistleblowers, and increasing the scope of employers who are subject to the anti-retaliation provisions. (See endnote 27.) These provisions of the Dodd-Frank Act are discussed more fully below. 2. Criminal Liability Under SOX for Anti-Whistleblower Retaliation SOX also provides for criminal liability for retaliation against whistleblowers. Section 1107 of SOX amended the existing obstruction of justice statute,18 U.S.C. 1513, by adding a new subsection that imposes criminal sanctions for knowing and wilful retaliation against an individual who provides truthful information to law enforcement officers relating to the commission of any federal offence. (See endnote 28.) Section 1107 differs from the civil protections for employees under section 806 in several key respects. First, unlike SOXs civil retaliation remedies, which may be pursued only against publicly traded companies and nationally recognised statistical rating agencies, the criminal sanctions in section 1107 extend to any person, including all companies, employers, supervisors and other retaliating employees. Second, section 1107 punishes retaliation only against those who provide information to law enforcement, whereas section 806 provides that civil liability extends to retaliation against individuals who report potential violations internally. Third, section 1107 applies to retaliation against whistleblowers who report the commission or potential commission of any federal offence, not just the six classes of offence or violations relating to fraud or securities violations listed in section 806. Fourth, section 1107 contains an express provision for extraterritorial application. (See endnote 29.) Criminal sanctions under section 1107 are stiff, including fines for individuals of up to $250,000 and/or imprisonment up to 10 years, and fines for organisations of up to $500,000. To date, only a handful of criminal prosecutions have been brought under this section, and they have not involved corporate whistleblowers.
C. Dodd-Frank Wall Street Reform and Consumer Protection Act
Whistleblower Laws
encouraging and protecting whistleblowers who assist the government in enforcing the securities laws. Though generally focused on a new regulatory plan for the financial system, the Dodd Frank Act also provides new and significant incentives for prospective whistleblowers who provide information to the SEC concerning alleged violations of the securities laws, including violations of the Foreign Corrupt Practice Act. Pursuant to the whistleblower provision of the Dodd-Frank Act, which will be codified as Section 21F of the Securities and Exchange Act of 1934, the SEC must compensate individuals who voluntarily provide original information to the SEC, if that information leads to a successful enforcement action with a recovery of more than $1 million (including penalties, disgorgement and interest). Original information is defined as information derived from the independent knowledge or analysis of the whistleblower, not known to the Commission from any other source, and not derived from an allegation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media. (See endnote 31.) Even if a whistleblower provides original information, the award is not available if the whistleblower is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower otherwise could receive an award. (See endnote 32.) Whistleblowers who qualify for an award under Section 21F are entitled to 10 to 30 percent of the total recovery (including recovery from any SEC action, action by the Department of Justice, or any action taken by state regulators or self-regulatory bodies), and the SEC has discretion to determine the amount of the award within that range. (See endnote 33.) If the SEC declines to reward a whistleblower, or awards less than 10 percent of the total recovery, the whistleblower may appeal the decision to a Federal Appeals court. (See endnote 34.) Section 748 of the Dodd-Frank Act amended the Commodity Exchange Act to create a similar whistleblower incentive programme for the Commodity Futures Trading Commission (CFTC). Section 21F repealed and replaced an older, more limited and less generous SEC whistleblower reward programme that had been in place since 1989. (See endnote 35.) That programme, which applied only to insider trading cases and capped rewards at ten percent of any monetary sanctions recovered by the government, had paid out less than $160,000 to only five whistleblowers at the time the Senate issued its Report accompanying the Dodd-Frank Act. In enacting the Dodd-Frank Act whistleblower provisions, Congress explained that its purpose was to motivate those with inside knowledge to come forward and assist the Government to identify and prosecute persons who have violated securities laws and recover money for victims of financial fraud. (See endnote 36.) According to the Senate Report, despite the apparently limited use of the earlier SEC whistleblower reward programme, whistleblower tips are more effective in uncovering fraud at public companies than external auditors and the SEC. Specifically, the Report expresses the view that whistleblower tips are 13 times more effective at detecting fraud than external audits by auditing firms and the SEC. (See endnote 37.) The new Dodd-Frank Act whistleblower reward programme likely will encourage more whistleblowers to disclose information to the SEC and CFTC. Interestingly, after the Senate Report accompanying the Dodd-Frank Act was released, the SEC granted the largest insider trading tip award ever under the earlier SEC whistleblower reward programme. On July 23, 2010, the SEC announced the award of $1 million to two informants who provided information that led to the reopening of an insider trading investigation against Pequot Capital Management Inc. and the filing
1. New SEC Reward Programme for Whistleblowers Most recently, The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which was signed into law on July 21, 2010, (see endnote 30) places a strong emphasis on
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of an enforcement action against Pequot and its CEO. The settlement of that action required the payment of civil penalties totalling $10 million and over $17 million in disgorgement and prejudgment interest. (See endnote 38.) The Pequot whistleblower announcement suggests that the SEC has a renewed interest in pursuing tips offered by whistleblowers and compensating whistleblowers with much higher awards than it historically had offered. The SECs action, together with the new provisions of the Dodd-Frank Act, sends a clear message: corporations should expect an expansion of government investigations of civiland potentially criminalviolations undertaken in response to whistle-blowing. 2. Dodd-Frank Act Whistleblower Anti-Retaliation Right of Action The Dodd-Frank Act also protects employees who suffer retaliation as a result of their whistleblowing activities. The Act strengthened existing anti-retaliation protections under SOX and created a new federal private right of action for employees who have suffered retaliation as a result of their provision of information to the SEC (and CFTC) in accordance with the whistleblower reward section. Under section 922 of the Dodd-Frank Act, a plaintiff may pursue a claim directly in federal court against an employer for retaliation resulting from an act by the whistleblower (i) in providing information to the Commission in accordance with this section; (ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or (iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act, the Securities Exchange Act of 1934 and any other law, rule, or regulation subject to the jurisdiction of the [SEC]. (See endnote 39.) Though this private right of action overlaps with SOXs anti-retaliation provision, it is significantly broader in scope because it applies to any employer, not just to employers that are governed by SOX. Moreover, in contrast to the anti-retaliation provision of SOX, a plaintiff proceeding pursuant to section 922 need not first file a complaint with the Department of Labor before bringing a retaliation action in federal court. (See endnote 40.) Additionally, a claim under section 922 provides a significantly longer statute of limitations, and increased damages. (See endnote 41.)
Whistleblower Laws
programmes that support whistleblowers. Corporations that seek to avoid criminal prosecution often enter into non-prosecution agreements (NPAs) and deferred prosecution agreements (DPAs). These agreements commonly require companies to implement new compliance programmes or enhance existing compliance programmes to create a culture that is receptive to whistleblowers. (See endnote 44.) The increase in NPAs and DPAs is a byproduct of a shift in DOJ policy towards reforming corrupt corporate cultures rather than indicting, prosecuting and punishing. (See endnote 45.) To that end, some recent examples serve to underscore the importance that the Department of Justice places on encouraging whistleblowers: Baker Hughes entered into a DPA for Foreign Corrupt Practices Act violations which required, inter alia, that the company enact a code of compliance, inform the employees of it, and create [a] reporting system, including a Helpline for directors, officers, employees, agents and business partners to report suspected violations of the Compliance Code or suspected criminal conduct. (See endnote 46.) Bristol-Myers Squibb entered into a DPA, in connection with securities fraud and activities relating to wholesaler inventory and certain accounting issues, which required remedial measures including, inter alia, that the company provid[e] an effective mechanism in the form of a confidential hotline and e-mail address, of which BMS employees are informed and can notify BMS of any concerns about wholesaler inventory levels or the integrity of the financial disclosure, books and records of BMS. (See endnote 47.)
B. DOJ Prosecution Standards Take Compliance Programmes Into Account
III. The Best Practice is to Encourage Whistleblowers as Part of a Vibrant and Effective Compliance Programme
Corporations have strong incentives to implement effective compliance programmes and have a proper information and reporting system, including mechanisms for whistleblower allegations. (See endnote 42.) Reporting within the organisation provides an employer with an opportunity to address possible violations before they become public, protect a corporations reputation, and resolve issues without significant expenditures required by litigation and government investigation. Additionally, the effective management of internal and external complaints can reduce a corporations exposure to criminal and civil liability, and serve as an important mitigating factor in sentencing. (See endnote 43.)
A. Compliance Programmes Can Protect Against Criminal Liability and Government Prosecution
The implementation of effective compliance programmes can be a factor in determining whether the Department of Justice brings criminal charges, or the SEC files an enforcement action, against a corporation for the acts of its directors, employees and agents. The Department of Justice Prosecution Standards specifically require that prosecutors consider, inter alia, the existence and adequacy of the corporations pre-existing compliance programme, including whether the company had a compliance programme that had an adequate reporting system and whether, after the alleged misconduct, the corporation implemented, or took measures to improve, a compliance programme. (See endnote 48.) Although the SEC has not promulgated rules identifying specific factors it will consider in determining whether and how to charge a company that it is investigating, the Commission has explained that in making charging decisions, it considers existing compliance procedures, and efforts the company has undertaken to bolster its compliance procedures after the discovery of misconduct. (See endnote 49.) Thus, a compliance programme that is appropriately responsive to whistleblowers can be an important factor that helps a corporation avoid criminal and SEC liability.
C. The Sentencing Guidelines Allow Courts to Consider a Corporations Compliance Programmes
1. Non-Prosecution and Deferred-Prosecution Agreements In the law enforcement arena, the government increasingly has signalled to corporations the importance of internal compliance
If a corporation is ultimately charged with wrongdoing, a compliance programme and whistleblower programme can minimise the corporations sentence. The Federal Sentencing Guidelines for Organizations create broad incentives for organisations to implement effective compliance and ethics programmes. (See endnote 50.) Under the Guidelines, first promulgated in 1991 and since amended, if an organisation has implemented an effective compliance and ethics programme to

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prevent, detect and report violations of the law, it is eligible for a significant reduction in any fine to which it may be subject in connection with a conviction. (See endnote 51.) The Guidelines identify seven steps that the organisation must take in order to qualify for the reduced sentence, one of which is the establishment of a system for employees and agents to report potential or actual criminal conduct without fear of retaliation. (See endnote 52.)
D. Federal Statutes and Rules Require Whistleblower Programmes
Whistleblower Laws
Acknowledgment
Eli J. Mark, an associate with Morvillo Abramowitz, Grand, Iason, Anello & Bohrer, P.C., contributed substantially to the preparation of this article. Mr. Mark received his B.A., cum laude, from the University of Pennsylvania, and his J.D., summa cum laude, from the University of California Hastings College of the Law.
Endnotes
1. 2. John T. Boese, Civil False Claims and Qui Tam Actions 1.01[A] (3d ed. 2006, Supp. 2010). Numerous statutes, both new and old, contain whistleblower protection provisions. For example, employees who blow the whistle on fraud related to economic stimulus funds have been given strong protections under Section 1553 of the American Recovery and Reinvestment Act of 2009, commonly referred to as the Stimulus Act. All told, close to twenty federal whistleblower provisions arise under various statutes, including, inter alia, protections for employees reporting potential safety and security violations in the transportation sector (i.e. motor vehicles, aviation, railroad), environmental sector (i.e. clean water, clean air, waste disposal), and consumer products sector. 31 U.S.C. 3730. The original False Claims Act, which was sometimes referred to as the Lincoln Law or the Informers Act, was enacted in 1863 in response allegations of fraud and the provision of substandard or worthless goods to the Union Army during the American Civil War. Indeed, as recently as last year, Congress passed the Fraud Enforcement and Recovery Act of 2009, which expanded the False Claims Act to include, inter alia, fraud through the retention of overpayments made by the government, as well as fraud with respect to funds that are used on the Governments behalf or to advance a Government program or interest. Fraud Enforcement and Recovery Act of 2009, Pub. L. 111-21, 123 Stat. 1617, S. 386 4 (2009). 31 U.S.C. 3729; Civil Monetary Penalties Inflation Adjustment, 64 Fed. Reg. 47099 (Aug. 30, 1999), 28 C.F.R. 85.3(9) (2000). James F. Barger, Jr., et al., States, Statutes, and Fraud: an Empirical Study of Emerging State False Claims Acts, 80 Tulane L. Rev. 465, 469, App. A (2005). Moreover, Congress has encouraged states to enact or expand state level false claims laws. Thus, the Federal Deficit Reduction Act of 2005 included several provisions intended to stamp out Medicaid fraud by expanding qui tam litigation at the state level. The Act provided that states enacting liability penalties and qui tam provisions for Medicaid fraud modeled on the federal FCA would receive a 10% reduction in the amount owed by the state to the federal government for the federal portion of any Medicaid recovery. States, of course, could enact broader false claims laws not limited to Medicaid fraud and indeed many did. 31 U.S.C. 3730(b)(2). Id. 3730(d). Carol Gentry, Mike Wells, Associated Press (June 28, 2010), available at http://www.msnbc.msn.com/id/37977579/ns/business. http://www.taf.org/FCAstats2009.pdf (as of Sept. 30, 2009). Id. Id. 31 U.S.C. 3730(h). Id. See, e.g., Moore v. Cal. Inst. of Tech. Jet Propulsion Lab., 275 F.3d 838, 845 (9th Cir. 2002) (specific awareness of the FCA is not required, but the plaintiff must be investigating matters which are calculated, or reasonably could lead, to a viable FCA action) (internal quotation omitted). 548 U.S. 53 (2006). See, e.g., Michael Delikat, Corporate Whistleblowing in the SarbanesOxley Era 5.4 (1st ed., Supp. 2010). 18 U.S.C. 1514A(a).
Recently, Congress has mandated that companies engaged in certain businesses enact codes of ethics, compliance programmes and internal policies to address internal whistleblower complaints. For instance, the anti-money laundering provisions of the USA Patriot Act require that financial institutions (defined broadly under the Act to include banks, broker-dealers, casinos, insurance companies and automobile dealers) develop compliance programmes with internal policies, procedures, and controls to prevent money laundering. (See endnote 53.) SOX, the most important and sweeping federal legislation on this front, requires issuers of securities to adopt a code of ethics that is reasonably designed to deter wrongdoing and to promote honest, ethical conduct and compliance with applicable laws, rules and regulations. (See endnote 54.) Additionally, SOX requires that any company that lists its securities on the national securities exchanges and associations have an audit committee with procedures for the receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters, and have procedures for the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters. (See endnote 55.) Industries outside the financial sector are also affected by rules requiring codes of ethics and compliance programmes. For instance, federal regulations require that all government contractors implement a business ethics awareness and compliance programme, as well as internal control programmes. (See endnote 56.) Additionally, government contractors are required to disclose to the relevant agencys Office of Inspector General whenever they have credible evidence of: (1) certain criminal violations; and (2) civil False Claims Act violations. (See endnote 57.) The failure to disclose these violations will constitute grounds for suspension and/or debarment. Thus, government contractors who become aware of a whistleblowers allegations must be vigilant about investigating and reporting the conduct.
3. 4.
5.
6. 7.
8. 9. 10.
IV.
Conclusion
11. 12. 13. 14. 15. 16.
U.S. law has increasingly sought to protect and encourage whistleblowers. As a result, corporations must be ever mindful of protections afforded to whistleblowers and the potential liability if the corporation and its executives do not adequately and effectively address whistleblower concerns. It is important for employers to instruct employees properly with respect to compliance and reporting, and create a culture of compliance that solicits employee input and ensures that whistleblowers will not suffer retaliation. This is necessary not only for the effective management of labour relations, but also to preserve shareholder value and prevent criminal and civil liability. If a corporation, its executives and employees are not attuned to these concerns, they run a significant risk of corporate and individual criminal and civil liability.
17. 18. 19.
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20. Foreign issuers that are exempt from SEC filing requirements pursuant to Rule 12g3-2(b) of the Exchange Act or that have a Level I ADR program (ADRs that are traded between dealers in the over-the-counter market) are not subject to coverage under SOX. Peter M. Panken, SOX Whistleblower Protections, American Law Institute American Bar Association Continuing Legal Education (October 30 November 1, 2008) (unpublished paper). Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173, 11th Cong. 929A. See also Sen. Rep. 111-176, at 114 (explaining that amendment to clarify that employees of subsidiaries and affiliates of publicly traded companies were covered under SOX was made to eliminate a defence raised in a substantial number of actions). Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173, 11th Cong. 922(b). There is lingering debate concerning the application of Section 806 to employees that work abroad. Section 806 does not reflect any intent by Congress that it would apply outside the United States, and it is generally presumed that federal statutes do not apply extraterritorially absent clear language by Congress that the statute should have extraterritorial effect. Thus, federal courts and the Department of Labor have generally been reluctant to apply whistleblower protections to employees working outside the United States. However, where the employment relationship has a substantial nexus with the United States, because the protected conduct occurred within the United States or the retaliatory decision was made in the United States, several decisions have acknowledged that Section 806 could apply to overseas employees. See Penesso v. LCC International, Inc, 2005-SOX-16 (ALJ Mar. 4, 2005). 18 U.S.C. 1514A(a)(1)-(a)(2). An interesting question that has arisen is whether the refusal to participate in potentially illegal work is protected activity that may give rise to a retaliation claim. In analyzing this issue, one federal appellate court has concluded that the mere refusal to work does not constitute providing information to a supervisor relating to potential fraud, and thus does not trigger SOXs retaliation protections. See Getman v. Admin. Rev. Bd., No. 07-60509, 265 Fed. Appx. 317, 2008 WL 400232 (5th Cir. Feb. 13, 2008) (unpublished). However, if the employee communicated, with some level of specificity, that his or her refusal to take part in an activity was based on a belief that the activity constituted fraud or some other securities law violation, then the courts decision suggests that the refusal might constitute protected conduct under SOX. 18 U.S.C. 1514A(a)(1)-(a)(2). Id. at 1514A(b) & (c). Id. at 1514A(b)(1)(B). Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173, 11th Cong. 922 (c). 18 U.S.C. 1513(e). See 18 U.S.C. 1513(d) (There is extraterritorial Federal jurisdiction over an offense under this section). Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173, 11th Cong. 922 (2010). Id. 922(a)(3). Id. 922(c)(2). Id. 922(a)(5) and (c)(1). Id. 922(f). Id. 923(b)(2). Sen. Rep. No. 111-176, at 110 (2010). Id. at 110-111. U.S. Securities and Exchange Commission, Lit. Release No. 21601, SEC Awards $1 Million for Information Provided in Insider Trading Case (July 23, 2010), available at http://www.sec.gov/litigation/litreleases/ 2010/lr21601.htm. 52. 53. 54. 55. 56. 57. 51. 39. 40. 41. 42.
Whistleblower Laws
Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173, 11th Cong. 922(a)(h)(1)(A). Id. 922(a)(h)(1)(B)(i). Id. 922(a)(h)(1)(B)(iii) & (C). See e.g., Stone ex rel. AmSouth Bancorporation v. Ritter, 911 A.2d 362 (Del. Sup. Ct. 2006); In re Caremark Intl Inc. Deriv. Litig., 698 A.2d 959 (Del. Ch. Ct. 1996). Jed S. Rakoff & Jonathan S. Sack, Federal Corporate Sentencing: Compliance and Mitigation, 4.02 (ed. 2007). Peter Spivak and Sujit Raman, Regulating the New Regulators: Current Trends in Deferred Prosecution Agreements, 45 Am. Crim. L. Rev. 159, 159 (Spring 2008) (The marked increase in [the use of NPAs and DPAs] is arguably the most profound development in corporate white collar criminal practice over the past five years.); id. at 184 (virtually every agreement that was entered into in 2007 required the company to redouble its compliance efforts). From fiscal years 2004 to 2009, for the DOJs Criminal Division, the number of DPAs was comparable to the number of corporate prosecutions. Whereas, for the U.S. Attorneys Offices the number of DPAs and NPAs was less than the number of corporate prosecutions. http://www.gao.gov/highlights/d10110high.pdf. Id. at 160. A copy of the DPA is available at http://www.law.virginia.edu/ pdf/faculty/garrett/bakerhughes.pdf. A copy of the DPA is available at http://www.justice.gov/usao/nj/press/ files/pdffiles/deferredpros.pdf. United States Attorneys Manual, Principles of Federal Prosecution of Business Organizations, 9-28.800 (2008). 8 SEC Report of Investigation, Exchange Act Release No. 34-44969, 2001 WL 1301408, at n.3 (Oct. 21, 2001). The Guidelines have been extremely effective in prompting companies to implement formal compliance programs (indeed, that was one of their goals), and have served as a model for mandatory compliance programmes (including for government contractors). Since the guidelines were enacted, thousands of corporations have developed formal compliance programmes. According to surveys of these organisations, the Sentencing Guidelines heavily influenced decisions to adopt compliance programmes. A study by the Ethics Officer Association reported that 47 percent of responding corporate ethics officers indicated that the guidelines had a lot of influence on the organisations decision to adopt a compliance programme. See John R. Steer, Changing Organizational BehaviorThe Federal Sentencing Guidelines Experiment Begins to Bear Fruit (unpublished paper presented at the Twenty-Ninth Annual Conference on Value Inquiry, Tulsa, Oklahoma (Apr. 26, 2001)) (citing Ethics Officer Association, 1997 Member Survey 9 (2000)). Similarly, studies funded by the Sentencing Commission reported that 20% of corporate survey respondents had implemented a compliance programme because of an awareness of the guidelines and another 44% enhanced their existing compliance programmes because of the guidelines. See generally United States Sentencing Commission, Corporate Crime in America: Strengthening the Good Citizen Corporation 123-91 (1995). U.S.S.G. 8C2.5(f) (2009); Jed S. Rakoff & Jonathan S. Sack, Federal Corporate Sentencing: Compliance and Mitigation 4.02[2] (ed. 2007). U.S.S.G. 8B2.1 (2009). 31 U.S.C. 5318(h)(1). 15 U.S.C. 7264; 17 C.F.R. 229.406(a). 15 U.S.C. 78j-1(m)(4). Federal Acquisition Regulation 52.203-13. Id. 52.203-13(b)(3)(i).
21.
43. 44.
22.
45. 46. 47. 48. 49. 50.
23.
24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38.

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11
Whistleblower Laws
Jonathan Sack
Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. 565 Fifth Avenue New York, NY 10017 USA
Barbara Trencher
Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. 565 Fifth Avenue New York, NY 10017 USA
+1 212 880 9410 +1 212 856 9494 jsack@maglaw.com www.maglaw.com
+1 212 880 9505 +1 212 856 9494 btrencher@maglaw.com www.maglaw.com
Jonathan S. Sack is a Principal with Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. in New York City. His practice focuses on the representation of companies and individuals in criminal and civil matters and internal investigations. Before joining Morvillo, Abramowitz, he served as an Assistant U.S. Attorney for the Eastern District of New York, where he held a number of supervisory positions, including Chief of the Criminal Division. Mr. Sack graduated from Harvard University and Yale Law School. After law school, he was law clerk for the Honorable W. Arthur Garrity, Jr., Senior U.S. District Judge. Mr. Sack regularly speaks and writes on business crime issues. He is a co-author of Rakoff & Sack, Federal Corporate Sentencing: Compliance and Mitigation, and an Adjunct Professor of Law at St. Johns University School of Law, where he teaches a white-collar crime course. He is admitted to practice in New York and Connecticut.
Barbara L. Trencher is a Principal with Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. in New York City. She has represented individuals and organisations in a variety of civil, criminal, administrative, and regulatory matters, including investigations and cases involving securities, tax, Medicaid, and mail fraud, SEC enforcement actions, as well as investigations by regulatory agencies and self-regulatory organisations. She has litigated in numerous state and federal courts. Ms. Trencher graduated from Stanford University and received her Juris Doctorate degree, with honours, from the University of Chicago Law School. She joined Morvillo Abramowitz in 2002, later clerked for the Honorable Shira A. Scheindlin, U.S. District Judge, and then returned to Morvillo Abramowitz, where she became a principal in 2008. Ms. Trencher, an author of a number of articles on issues related to business crime, is admitted to practice in New York and Illinois.
Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. is regarded as the go-to firm for sophisticated, criminal, regulatory and commercial litigation matters. Formed in 1973 as a small practice specialising in white collar criminal representation, it has grown into a powerhouse litigation boutique that litigates at all levels of federal and state court, in arbitration, and before government agencies, regulatory organizations and other tribunals, on behalf of companies and individuals. The firm is commonly involved in the major white-collar criminal cases of the day, and its forceful approach on behalf of clients has resulted in numerous high-profile successes. Partners of the firm have served as prosecutors and advisors and in leadership positions in state and national government. The firm has been Top Ranked by Chambers USA, Top Listed in Best Lawyers, and described by The National Law Journal as a Small Firm with a Big Reputation.
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Chapter 3
The UK Bribery Act: Is There a New International Standard?

Simmons & Simmons
Louise Delahunty
Claire McLeod
1. Introduction
When it comes into force (see endnote 1), the Bribery Act 2010 (the Act) will arguably be the toughest anti-bribery law in the world. Unlike the US Foreign Corrupt Practices Act 1977 (FCPA), it will apply both to public and private sector corruption; there will be no exemption for facilitation payments and there will be no defence for marketing and promotional expenditure. The main change (and it is a fundamental one) is the introduction of a new corporate offence. This new offence imposes a vicarious liability offence on corporations which are subject to the jurisdiction of the Act. There will only be one statutory defence: for the corporation to show it has adequate procedures in place to prevent bribery. The Bribery Act has focused the minds of international companies and financial institutions on the issue of bribery and how they address the risk of bribery. Historically the FCPA has been the standard against which companies have measured their anti-bribery policies. Now organisations are having to review their existing policies and procedures to ensure they are adequate for the purposes of the Bribery Act.
3. Principal offences under the Bribery Act

The Act provides two general offences: offering, promising or giving a bribe (see endnote 7); and requesting, agreeing to receive or accepting a bribe. (See endnote 8.) A person is guilty of the first offence if he (directly or indirectly) offers, promises, gives or requests a financial or other advantage intending it to induce a person improperly to perform a relevant function or activity, or reward a person for doing so. The second offence is committed by anyone (directly or indirectly) agreeing to receive or accept a bribe, knowing that the bribe itself constitutes improper performance of a relevant function or activity. A relevant function or activity covers any function of a public nature, any business activity and any activity performed in the course of employment. (See endnote 9.) Improper performance is performance (or non performance) that breaches the expectations of good faith or impartiality, or breaches a position of trust. (See endnote 10.)
Bribing another person
2. Reforming English bribery law

The reform of bribery laws in the UK has taken many years. In 1997, the Law Commission published their first consultation paper and report on corruption. (See endnote 2.) However, following Parliamentary criticism of the Governments draft Corruption Bill it failed to achieve new law and in March 2007, the Government asked the Law Commission to look again at the law of bribery. The law of bribery prior to the Act comprised the common law and several statutory offences. (See endnote 3.) The law was criticised for being incohesive and fragmented. There was an imperfect distinction between public and private sector bribery with the 1889 Act confining bribery to public officials only and the 1906 Act applying it to agents regardless of whether they were in the public or private sector. Important terms such as corruptly (see endnote 4) and bribe (see endnote 5) lacked clarity. The Anti-terrorism, Crime and Security Act 2001, which extended the domestic courts jurisdiction to acts of bribery committed abroad by UK nationals and UK incorporated bodies, did not apply to foreign nationals committing bribery offences abroad, even if those nationals were resident or domiciled in the UK. Above all, the law was heavily criticised for failing to meet the standards of other jurisdictions and those required by the Organisation for Economic Cooperation and Development (OECD). (See endnote 6.)
An offence is committed under section 1 of the Act if the briber offers, promises or gives a financial or other advantage to another person, either: (1) (2) (3) intending the advantage to induce a person to perform improperly a function or activity; intending the advantage to reward a person for the improper performance of such a function or reward; or knowing or believing that the acceptance of the advantage would itself constitute the improper performance of a function or activity.
Requesting or receiving a bribe
Under section 2 of the Act, a person (R) will be guilty of being bribed in the following cases: (1) where R requests, agrees to receive, or accepts a financial or other advantage intending that in consequence a function or activity will be performed improperly; where R requests, agrees to receive, or accepts a financial or other advantage and this itself constitutes the improper performance of a function or activity by R; where R requests, agrees to receive, or accepts a financial or other advantage as a reward for the improper performance (by R or someone else) of function or activity; or where, in anticipation of, or in consequence of, R requesting, agreeing to receive, or accepting a financial or other advantage, a function or activity is performed improperly by
(2)
(3)
(4)

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R or by someone else, at Rs direction or with Rs acquiescence. In the last three scenarios, R commits a criminal offence even if he has no intention of doing so or is unaware that the performance of the function or activity is improper. (See endnote 11.) Despite objections, the Government rejected requests that a defence of honest mistake should be introduced. (See endnote 12.)
Bribing a Foreign Public Official
The UK Bribery Act

without an amendment legitimate promotional expenditure would be caught by the offence. However, an amendment was not agreed and legitimate expenditure promoting goods or services to a foreign official may now be capable of constituting bribery under the Act. In the Ministry of Justices draft adequate procedures guidance issued on 14 September 2010, (see endnote 20) (considered further below), useful commentary was provided on the issue of corporate hospitality and promotional expenditure. The Ministry of Justice accepted that ...reasonable and proportionate hospitality or promotional expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an established and important part of doing business....In some circumstances it may be that hospitality or promotional expenditure in the form of travel and accommodation costs does not even amount to a financial or other advantage to the relevant official as required by clause 6.....Generally, the higher the expenditure and the more lavish the hospitality of expenditure provided to a public official the greater the inference that it is intended to influence the official to grant business or a business advantage in return..Where the prosecution is able to establish a financial or other advantage has been offered, promised or given but there is not sufficient connection between the advantage and the intention to influence and secure business or a business advantage then clause 6 is unlikely to be engaged. While this guidance gives some comfort to those doing business with foreign public officials, the line is still hard to draw due to the breadth of the drafting. The position is not helped by section 328 of the Proceeds of Crime Act 2002 (POCA). Under section 328, a person commits an offence if he enters into an arrangement which he knows or suspects facilitates the acquisition of criminal property by another. Since a bribe will constitute criminal property in the hands of the recipient, section 328 will be engaged in the event that a company incurs promotional expenditure that is technically a breach of the Act. In order to avoid committing an offence under POCA, a company intending to make promotional expense payments will need to consider making a report to the Serious Organised Crime Agency.
There is a separate offence of bribing a foreign public official in the Act. (See endnote 13.) Questions were raised about the need for a separate offence and whether it should depart from the test for the general bribery offences. The offence was included in order to meet international obligations to deter and punish corrupt transactions in an international business context. (See endnote 14.) In fact, the section 6 offence goes further than the OECD Convention in not requiring prosecutors to demonstrate any criminal intent or impropriety. To commit an offence, the briber must give an advantage simply intending to: (a) influence the recipient in their capacity as a foreign public official; and (b) obtain or retain business or a business advantage. If an advantage is given to the official in such circumstances, an offence is committed. It is not an offence if the official is permitted or required by the written law of the relevant country to be influenced in his capacity as a public official by the bribe. (See endnote 15.) However, in reality it is difficult to see when this will apply. Indeed, it is a much narrower defence than the equivalent defence under the FCPA which provides that the payment of the bribe itself is permitted by local written law. (See endnote 16.) A foreign public official is widely defined as: (1) an individual who holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the UK (or any subdivision of such a country or territory); (2) an individual who exercises a public function for or on behalf of a country or territory outside of the UK or for any public agency or enterprise of that country or territory; or (3) an individual who is an official or agent of a public international organisation. (See endnote 17.) A public international organisation is defined as an organisation whose members are any of (1) countries or territories, (2) governments of countries or territories, (3) other public international organisations or (4) a mixture of (1), (2) and (3). (See endnote 18.) Given the wide definition of a foreign public official in section 6, it is likely to be interpreted broadly by the English Courts. For example, it could extend to officials and employees of entities such as national banks and also to quangos and other non-governmental bodies to whom public powers are commonly devolved. Arguably, private companies carrying out public services which have been contractually outsourced to them may also be caught. Employees or directors of a private entity (whether in the UK or overseas) which is partially or wholly government owned could also fall within the scope of the Act.
Hospitality and Promotional Expenditure
4. Jurisdiction
The principal offences under sections 1, 2 and 6 cover acts of bribery committed in the UK, irrespective of whether the function or activity under the offence takes place in the UK or abroad, and irrespective of the nationality of the person committing the bribery. The Act also extends to an act of bribery occurring overseas if it would have been a bribery offence in the UK and the person/entity committing the bribery is a British citizen, an individual ordinarily resident in the UK, or a UK incorporated company. (See endnote 21.) This means that any employee of an international organisation who is a British citizen or ordinarily resident in the UK who commits an act of bribery anywhere in the world, is subject to the jurisdiction of the Act and could be prosecuted. This is irrespective of where the bribe was paid and where the employee is located.
5. The corporate offence

The Act will impose criminal liability on organisations in the event that employees, subsidiaries, agents or consultants pay bribes in relation to the organisations business anywhere in the world. (See endnote 22.) A company or partnership will commit an offence if an associated person bribes another person in order to obtain or retain business or a business advantage for the company. A person is associated
The Confederation of British Industry (CBI) and others lobbied for an amendment to section 6 before the Bribery Bill was enacted to include a test for corruption, impropriety or dishonesty. Amendments to the offence were tabled both in the House of Lords and House of Commons when the Bribery Bill was being debated by Parliament. (See endnote 19.) Concern was expressed that
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with an organisation if he performs services for or on behalf of the organisation. There is a presumption that this will cover employees, but it could also include agents, subsidiaries, joint ventures, intermediaries, distributors and introducers. (See endnote 23.) The Act specifically states that the capacity in which the associated person performs services for or on behalf of the organisation does not matter. (See endnote 24.) Concerns were raised by business organisations as to the scope of the offence, particularly in relation to joint ventures and consortia. During Parliamentary debates on the draft Bill, the Government indicated that the definition has been drawn deliberately wide and could include joint ventures. (See endnote 25.)
Jurisdiction of corporate offence
The UK Bribery Act

Under the previous Directives (see endnote 30) exclusion for any criminal convictions was at the discretion of the contracting authority. In March 2010, the Office of Government Commerce (OGC) published guidance on mandatory debarment. (See endnote 31.) Significantly, it noted that, unlike convictions of individuals, corporate convictions do not currently become spent, with the result that a corporate conviction for an offence that requires mandatory exclusion could therefore currently result in permanent exclusion of that company from public procurement contract opportunities. The Regulations do make provision for an exception if the contracting authority is satisfied that there are overriding requirements in the general interest which would justify such an exception. (See endnote 32.) However, the OGC Guidance provides that these exceptions should only be used in the most serious of circumstances, for example in the case of a national emergency. It is likely that the new corporate offence of failing to prevent bribery will be an offence for the purposes of the debarment provisions in the Public Contracts and the Utilities Contracts Regulations. However, during the Acts passage in Parliament, a justice minister stated that active consideration was being given to this point. (See endnote 33.) Clarification on whether the corporate offence will be an offence for the purposes of the debarment provisions is still awaited. If it is an offence for the purposes of the debarment provisions, a company which is convicted of the corporate offence of failing to prevent bribery will be permanently debarred from bidding for public procurement contracts.
A remarkable aspect of the new corporate offence is its all encompassing long arm jurisdiction. The offence applies not only to companies incorporated in the UK, but to any organisation which carries on a business or part of a business in any part of the UK. Although carries on a business or part of a business in any part of the UK is not defined in the Act, it is potentially very broad. To take two examples - if an overseas bank or industrial conglomerate operates a small branch in London, the bank or conglomerate will be criminally liable in the UK if an employee, agent or subsidiary were to pay a bribe, whether in the public or private sector, anywhere in the world. The same will apply, if either the bank or conglomerate operates a UK subsidiary and that subsidiary is in reality carrying out the business of the overseas parent. Significantly, there is no requirement that the bribe be approved by or paid through the overseas companys branch in the UK - the mere existence of a UK branch will give the UK prosecutors and courts jurisdiction over the overseas company. The Act makes provision for only one defence to this offence, (see endnote 26) requiring the organisation to prove that it has adequate anti-bribery procedures in place designed to prevent bribery from being committed by those performing services for it. Once the prosecution has proved to the criminal standard that a bribe was paid (under sections 1, 2 or 6 of the Act), for the benefit of the company, the burden of proof will shift to the company to demonstrate that it had in place adequate procedures. This will be according to the civil standard of proof the balance of probabilities.
7. Adequate procedures
Given the vicarious liability nature of the corporate offence, the crucial question is what systems and controls will be considered adequate for the purposes of the Act? Following a report by a Joint Parliamentary Committee on the Bribery Bill (see endnote 34) and pressure from interested business groups, a commitment to provide guidance on this issue was placed on a statutory footing through the insertion of a section to this effect in the Act. (See endnote 35.)
Draft Guidance issued by the UK Government
6. Penalties
Offences under the Act are punishable by an unlimited fine for corporates, and up to ten years imprisonment for individuals. (See endnote 27.) In addition to the obvious reputational damage, companies convicted of corruption offences under the Act will also be debarred from tendering for public sector contracts in the UK.
Risk of Debarment from Public Contracts
On 20 July 2010, the Ministry of Justice announced that the implementation of the Bribery Act would be delayed until April 2011 to allow time for businesses to ensure compliance with the new regime and building in a period of consultation on the adequate procedures guidance. On 14 September 2010, the Ministry of Justice published its Consultation Paper on the adequate procedures guidance, for the purposes of the section 7 offence. (See endnote 36.) As anticipated, the draft guidance issued is principles based, providing some illustrative scenarios. It is based on six principles: risk assessment; top level commitment; due diligence; clear, practical and accessible policies and procedures; effective implementation and monitoring and review. The Guidance states that these general principles are outcome-focussed and flexible. This is to allow each commercial organisation to tailor its policies and procedures so that they are proportionate to the nature, scale and complexity of its activities. It will be for each organisation to implement their own tailored policies and procedures. The key to this will be assessing the risk
The Public Sector and Utilities Procurement Directives (see endnote 28) as implemented by the Public Contracts and the Utilities Contracts Regulations 2006 (see endnote 29), include a mandatory requirement for contracting authorities to exclude economic operators (suppliers, contractors and services providers) from public contracts where they have been convicted of certain offences, including participation in criminal organisations, corruption, money laundering and fraud. This is a recent provision.

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of bribery to the organisations business. The risk of bribery will depend on a number of factors, including the nature of the organisations activities, the business sectors and countries it operates in, who is performing services for the organisation (distributors, suppliers, agents, joint venture partners), relationships with public officials and dependence on licences. Discussions with business managers and local employees will be key to assessing where the risks lie. It will be important to look at what relationships the organisation has with public officials and which entities and individuals are performing services for the organisation. What is clear is that the draft guidance imposes a high bar for companies and with the Act due to come into force in April 2011, there is not much time to implement new or revised policies. Crucially, companies need to ensure that they do not just have a written policy, but that they have a culture of compliance from the top of the organisation downwards. Training and monitoring will be a key component of any compliance programme. Employees should be trained applying a risk based approach, with high risk employees receiving detailed and instructor led training. Employees need to be educated on what is permissible and the types of red flags which should alert them to a suspicion of bribery.
The UK Bribery Act

official. (See endnote 40.) Although some assurances have been given by the Serious Fraud Office (SFO) and the Ministry of Justice that it is not envisaged that the making of small facilitating payments in countries where that is normal practice would lead to prosecution, there is no such exception in the Bribery Act. (See endnote 41.) The FCPA has an affirmative defence for reasonable and bona fide business expenditures directly related to certain promotional activities. (See endnote 42.) The Bribery Act has no such defence and, as noted above, the section 6 offence catches perfectly legitimate promotional expenditures. Under the FCPA it is a defence to show that a payment or other advantage was lawful under the written laws and regulations of the foreign officials country. (See endnote 43.) The equivalent defence in section 6 of the Bribery Act is to show that the official is permitted or required by the written law of the relevant country to be influenced in his capacity as a public official by the bribe. (See endnote 44.) This is a much narrower defence.
9. Enforcement
In recent years the UK has affirmed its objective to pursue and prosecute bribery cases. The SFO, the UK authority responsible for the investigation and prosecution of bribery offences, has adopted a more aggressive policy on corruption and bribery; and it has taken steps to encourage corporates to self report overseas corruption. In July 2009, the SFO published guidance setting out its approach to dealing with overseas corruption. (See endnote 45.) That guidance was principally aimed at encouraging corporates to self report overseas corruption. It tied in with the overall approach the SFO appeared to be taking in dealing with corporate crime, starting with the plea deal struck with Balfour Beatty in 2008. Against this backdrop, the judgment handed down by Lord Justice Thomas in Southwark Crown Court on 26 March 2010 in relation to the Innospec (see endnote 46) case came as something of a setback to the SFO and its strategy for dealing with overseas corruption. Lengthy plea negotiations had taken place between Innospec, the SFO and the US authorities, including the Department of Justice (DOJ) and the SEC, regarding corrupt payments to public officials of Pertamina, an Indonesian state owned refinery, in order to secure contracts for the supply of a fuel additive. This resulted in a plea agreement being struck with the SFO, pursuant to which Innospec would pay US $12.7m - $6.7m to be allocated to a fine or confiscation to be imposed in the Crown Court with the balance being the subject of a civil settlement. At the same time, in the US, a plea deal was agreed by which Innospec would pay a fine of US $14.1m to the DOJ, US $11.2m to the SEC and $2.2m to the Office of Foreign Assets Control. As part of both plea agreements, Innospec agreed to enter into a compliance monitoring agreement and it was proposed that a joint US and UK monitor be appointed. It was also agreed between the US authorities and the SFO that the courts in both jurisdictions would be asked to sentence on the same day so that a joint announcement could be made. When the matter came before the courts in England for sentencing on 18 March 2010, it quickly became apparent that the Court had some concerns regarding the process which had been adopted. Ultimately, Lord Justice Thomas sentenced Innospec to the previously agreed US $12.7m fine. However, he made it clear that this was only because it would be unjust and unfair to impose a penalty greater than the amount agreed over a period of extensive
8. A comparison between the Bribery Act and the FCPA

For many years, the FCPA has set the standard in corruption law. However, the introduction of the new Bribery Act sets the bar higher and will cause organisations to rethink which global anticorruption standard they should adopt. There are a number of key differences between the two pieces of legislation:
Offences
The FCPA is concerned only with the bribery of foreign officials, political party officials and/or candidates. The Bribery Act, however, creates a number of general offences applicable to domestic bribery, i.e. where elements of the offences took place in the UK. (See endnote 37.) The FCPA only applies to the bribery of public officials. By contrast, the Bribery Act also applies, in the context of the general bribery offences, to the bribery of persons exercising a private function, such as in the course of a trade or business. (See endnote 38.) The FCPA has no vicarious liability corporate offence as in the Bribery Act. Unlike the Bribery Act, the FCPA has books and records and internal controls provisions which require US and nonUS entities which have their securities registered for trading on a US exchange or are otherwise required to file reports with the Securities and Exchanges Commission (SEC) to maintain financial records which accurately and fairly reflect their transactions and dispositions of their assets. (See endnote 39.) It is often for failing to comply with these provisions that companies face FCPA proceedings and enter deferred prosecution agreements. There are, however, books and records offences under the UK Companies Act and corporates are being prosecuted for these offences. For example, BAE Systems recently agreed to plead guilty to failing to keep accurate accounting records under section 221 of the Companies Act.
Defences
The FCPA allows for small facilitating payments made in order to expedite actions routinely performed by a foreign
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negotiations between the SFO, the US authorities and Innospec and that he considered the fine was wholly inadequate according to the law. In his concluding remarks Lord Justice Thomas said, I have concluded that the Director of the SFO had no power to enter into the arrangements made and no such arrangements should be made again...it is essential for the future that, unless any change is made to the rules of procedure or to the practice direction, it is appreciated this court must and will sentence in the way set out in the law... The case will also have a significant impact on two other lynchpins of the SFOs approach to plea deals, the use of civil recovery orders and the negotiated press release. The incentive held out by the SFO to companies considering whether to self report was the prospect that, if they did so, they stood a chance of avoiding criminal sanctions and being subjected instead to a civil recovery order. This had the key advantage of avoiding the mandatory debarment of the company from government contracts, discussed above. Lord Justice Thomas has, however, now made clear that corruption should, at least primarily, be a matter for criminal sanction, indicating that it will...rarely be appropriate for criminal conduct by a company to be dealt with by means of a civil recovery order. In addition, the ability to negotiate a press statement has gone - it would be inconceivable for a prosecutor to approve a press statement to be made by a person convicted of burglary or rape; companies who are guilty of corruption should be treated no differently to others who commit serious crimes. The case of R v Dougall, (see endnote 47) involving a senior marketing executive for a medical products firm, who pleaded guilty to conspiring to channel bribes to Greek surgeons, was also heard in April 2010 by the Court of Appeal. At first instance the Judge had sentenced Dougall to a years imprisonment, having taken account of his guilty plea and co-operation with the prosecuting authorities, but not suspended as the prosecutor had agreed with Dougall. The Court of Appeal suspended this sentence, but emphasised that sentencing for bribery was a matter for the Court and could not be pre-agreed between prosecutors and defendants, noting that guilty parties were common criminals like any other. Innospec and Dougall have left the status of plea agreements for individuals and companies that co-operate with prosecutors somewhat uncertain and the SFO will have to consider carefully how they present future cases to the courts.
New Economic Crime Agency
The UK Bribery Act

The crucial question is what powers and procedural tools will be given to the new agency to ensure that it proves more effective than those it replaces. In particular, powers currently used by the Department of Justice in the US in white collar criminal cases, such as deferred prosecution agreements, may also need to be put on a statutory footing in the UK.
10.
Conclusion
In demonstrating that the UK is serious about combating corruption, the Bribery Act will have a beneficial effect for the reputation of UK PLC on the global stage. However, it is clear that the new law will place a heavy burden on corporates with UK operations to have in place adequate anti-bribery policies and procedures for the purposes of the corporate offence defence. If corporates do not look at their own risks under the Act and how they need to update their policies to make them Bribery Act compliant they run the risk of corporate (as well as individual) liability. The key to getting this right will be the risk assessment and ensuring there is a culture of compliance from the top of the organisation. With not much time until the Act comes into force, businesses should start the process of reviewing their current policies and analysing their risk now.
Endnotes
1. 2. The Bribery Act received royal assent in April 2010 and is expected to come into force in April 2011. Legislating the Criminal Code: Corruption (1997) Law Commission Consultation Paper No 145; Legislating the Criminal Code: Corruption (1998) Law Com No 248. Public Bodies Corrupt Practices Act 1889 (1889 Act), Prevention of Corruption Act 1906 (1906 Act) and Prevention of Corruption Act 1916. Both the 1889 and 1906 Acts required the defendant to act corruptly but neither provided a definition for it. Different requirements for the bribe existed: undue reward under common law, gift, loan, fee, reward or advantage under the Public Bodies Corrupt Practices Act 1889, and gift or consideration under the Prevention of Corruption Act 1906. The UK Government has an obligation under Article 1 of the OECD Bribery Convention to make it a criminal offence for any person intentionally to offer any advantage, whether directly or indirectly, to a foreign public official to obtain or retain business. Section 1 of the Bribery Act. Section 2 of the Bribery Act. Section 3 of the Bribery Act. Section 4 of the Bribery Act. Section 2(7) of the Bribery Act. Lord Lyell of Markyate, a former Attorney General made the point: I am not happy to put on the statute book criminal law that makes someone a criminal without a guilty mind.This is not an area where there should be an absolute offence. Hansard, House of Lords, Report Stage of the Bribery Bill, 2 February 2010. Section 6 of the Bribery Act. See Article 1.1. of the Organisation for Economic Co-operation and Development, Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (November 1997). Section 6(3)(b) of the Bribery Act. 15 USC 78dd-1(a). Section 6(5) of the Bribery Act. Section 6(6) of the Bribery Act. Hansard, House of Lords Committee Stage, 7 January 2010, col GC39; House of Lords Report Stage, 2 February 2010, col 123; Hansard, House
3. 4. 5.
6.
7. 8. 9. 10. 11. 12.
One opportunity for greater clarity as to prosecutors powers in this area is the possibility of new legislation as part of the UK Governments planned shake-up of the agencies that investigate and prosecute economic crime. The new government has decided to create a body tasked with the investigation and prosecution of white collar crime: for now being referred to as the new economic crime agency, although its name is yet to be decided, as are its remit and powers. The proposed new single agency will take on the work of tackling serious economic crime, responsibility for which currently lies with different agencies, among them the Serious Fraud Office, the Financial Services Authority and the Office of Fair Trading. Separately the Home Secretary has announced the abolition of the Serious Organised Crime Agency, which will be replaced by a National Crime Agency, thus completing the reorganisation of the bodies dealing with white collar crime in the UK.
13. 14.
15. 16. 17. 18. 19.

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of Commons Committee Stage, 23 March 2010, col 182. 20. 21. 22. 23. 24. 25. Consultation on guidance about commercial organisations preventing bribery (as required by section 9 of the Bribery Act 2010). Section 12 of the Bribery Act. Section 7(1) of the Bribery Act. Section 8 of the Bribery Act. Section 8(2) of the Bribery Act. Lord Tunnicliffe said at Committee Stage in the House of Lords: Our purpose is clear, we want to encourage organisations involved in joint ventures to ensure that they are satisfied that adequate procedures are built into arrangements for the joint venture. The same can be said of any other business model. Hansard, House of Lords, Committee State, 7 January 2010, col GC58. Section 7(2) of the Bribery Act. Section 11 of the Bribery Act. Directive 2004/18/EC of the European Parliament and of the Council of 31st March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts; and Directive 2004/17/EC of the European Parliament and of the Council of 31st March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. The Public Contracts Regulations 2006 (SI 2006 No.5): and the Utilities Contracts Regulations 2006 (SI 2006 No.6). The Consolidated Works Directive (93/37/EEC), the Consolidated Supplies Directive (93/36/EEC), the Utilities Directive (93/38/EEC), and the Services Directive (92/50/EEC). OGC Guidance on the mandatory exclusion of economic operators, March 2009. 36. 35. 32. 33. 34. Regulation 23(2).
The UK Bribery Act
Hansard, House of Commons, 3 March 2010, col. 982. Joint Committee on the Draft Bribery Bill First Report dated 16 July 2009. Section 9 of the Bribery Act imposes a duty on the Secretary of State to provide guidance on the adequate procedures defence. Consultation on guidance about commercial organisations preventing bribery dated 14 September 2010. The consultation period runs until 8 November 2010 and a response with the final guidance will be published in early 2011. Under US law, there is provision for similar general domestic offences, but these are not part of the FCPA. There are, however, cases in which the FCPA books and records provisions have been used to prosecute the bribery of private individuals as well as public officials. In addition, a number of recent cases have demonstrated the Department of Justices ability and willingness to use the Travel Act to prosecute overseas commercial bribery, see United States v Control Components Inc. 15 USC 78m(b)(2)(A-B). 15 USC 78dd-1(b). Page 23 of Consultation on guidance about commercial organisations preventing bribery. 15 USC 78dd-1(c). 15 USC 78dd-1(a). Section 6(3)(b) of the Bribery Act. Approach of the SFO to Dealing with Overseas Corruption, 21 July 2009. R v Innospec Limited [2010] EW Misc 7 (EWCC). R. v. Dougall [2010] EWCA Crim 1048.
37. 38.
26. 27. 28.
39. 40. 41. 42. 43. 44. 45. 46. 47.
29. 30.
31.
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Simmons & Simmons
The UK Bribery Act
Louise Delahunty
Simmons & Simmons CityPoint, One Ropemaker Street London, EC2Y 9SS United Kingdom
Claire McLeod
Simmons & Simmons CityPoint, One Ropemaker Street London, EC2Y 9SS United Kingdom
+44 207 825 4706 +44 207 628 2070

louise.delahunty@simmons-simmons.com
www.simmons-simmons.com
+44 207 825 4511 +44 207 628 2070

claire.mcleod@simmons-simmons.com
www.simmons-simmons.com
Louise is a leading lawyer in white collar crime, extradition and all types of regulatory investigations. Louise advises on all aspects of business crime, has been involved in many high profile SFO prosecutions, and has dealt with the long arm jurisdiction of the USA and agencies around the world, including India, South Africa, Japan, and many EU countries. She has also developed lobbying and risk management expertise, particularly in antimoney laundering (AML) work, where she is one of the UKs acknowledged experts advising financial institutions, professional firms and corporate clients on AML risk mitigation, interpretation and defence. She also advises energy, financial institutions and life sciences clients on crime, fraud and investigations. Louise is a member of the Attorney Generals Plea Negotiation Panel and on 3 June 2009 gave evidence to the Parliamentary Select Committee on the Bribery Bill (now the Bribery Act).
Claire is a managing associate with substantial experience of working on high profile investigations by the UK Serious Fraud Office, the US Department of Justice, and other government agencies. She has advised clients on a range of white collar criminal matters, including extradition and mutual legal assistance and advises a number of corporates on the implications of the new Bribery Act 2010. Claire has acted for a corporate in connection with the SFOs Oil For Food Investigation and successfully defended two individuals in extradition proceedings pursued by the US Government. She is currently acting for a defendant in connection with a multi billion dollar fraud claim in multiple jurisdictions and involving worldwide freezing orders. Claire has also been seconded to the Crown Prosecution Service (CPS). Claire was recently named one of The Lawyers New Faces recognising her as one of the most talented and promising legal practitioners at work today.
Simmons & Simmons is a leading international law firm with over 700 legal staff in 18 offices situated in key business and financial centres across Europe, the Middle East, and Asia. In building our international business, we have created a closely knit and cohesive network of lawyers who seek to balance local business needs with the delivery of a global service. We have organised ourselves in line with our clients requirements into key practice areas and sector groups. Simmons & Simmons is rare among international City law firms in having a well-established civil fraud and asset recovery practice with a full-service corporate criminal practice. We now have the largest crime, fraud and investigations group in Europe (over 40 lawyers in 7 jurisdictions) and a rapidly expanding team in the Middle East and Asia. Across these jurisdictions, we are able to offer specialised fraud advice to financial institutions and corporate clients.

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Chapter 4
Austria
Schoenherr
Heidemarie Paulitsch
1 General Criminal Law Enforcement

1.1 What authorities can prosecute business crimes, and are there different enforcement authorities at the national and regional levels?
The Austrian Public Prosecution Service (Public Prosecution) represented by a prosecutor - is responsible for investigating crimes and prosecuting criminal offences. The public prosecutor is responsible for initiating criminal proceedings for criminal offences prosecuted ex officio and for the direction and supervision of criminal investigations. Furthermore, the prosecutor is authorised to order the cessation of criminal proceedings when the facts of the case so warrant. While the prosecutor directs and supervises criminal investigations, the utilisation of certain investigative measures that affect/restrict basic human rights or liberties can only be authorised by the court. In 2009, Austria newly institutionalised the Anti-Corruption Public Prosecution Service as a special public prosecutors office responsible for the prosecution of criminal offences. Such offences relate to public and private sector corruption (including fraud offences related to bribery), money laundering and the abuse of public office. Within its competence, in cases of corruption the public prosecutor will also exercise competence in cases involving international and European judicial assistance.
1.2 If there are more than one set of enforcement agencies, please describe how decisions on which body will investigate and prosecute a matter are made.
basic human rights of the suspect or the defendant such as search warrants, confiscation of evidence, information regarding bank accounts and bank transactions, blocking of accounts and telephone surveillances must be authorised by the judge of the criminal court. The Criminal Investigation Department of the police is responsible for undertaking all investigative measures authorised by the public prosecutor or the court that are aimed at the collection of evidence and the determination of the facts of the case. It is expected that starting from January 2011, economic competence centres with specially trained prosecutors will be established in the departments of public prosecution. These competence centres shall in the future be responsible for conducting the preliminary investigation and preferring charges and acting for the prosecution in the trial process for economic criminal offences where the damage exceeds EUR 5 million (e.g. embezzlement, serious (accounting) fraud and/or fraud committed with the intention of establishing a regular income, breach of trust, impairment of creditors, fraudulent misuse of data, serious tax crimes and money laundering).
1.3 Is there any civil or administrative enforcement against business crimes? If so, what agencies enforce the laws civilly and which crimes do they combat?
Basically, the organisational levels of the Public Prosecution correspond to the levels of court organisation. An office of public prosecution is set up with every regional court in charge of penal cases. The prosecutors of these courts are in charge of filing and representing indictments, both before the regional court and the district courts of the respective regional district court. As a rule, district prosecutors will present the indictment before the district courts. The latter are officials with special expertise, but do not require university training. According to the Austrian Criminal Procedure Act the prosecutor is the head of investigations (i.e. pre-criminal proceedings) and decides on the measures of investigations. Usually, the prosecutor orders the Austrian criminal police to assist or conduct investigations on its behalf. The Austrian criminal and business police have a reporting hotline for money laundering and fight business-related crime. The investigating police are subject to directives of the prosecutor. Coercive sanctions by the prosecutor that impact the
The Austrian Code of Enforcement provides a tool for preliminarily securing assets (preliminary injunction) in order to avoid the situation where the enforcement of a future court decision is considerably more difficult or even impossible. Upon the partys request, the court may issue injunctive relieve for securing monetary claims, most importantly in cases of the subjective endangerment of the requesting party. The court may take the following measures when issuing injunctive relief in order to secure monetary claims: movable objects (including money): judicial custody or administration/management; order to refrain from giving away, selling, or pawning movable objects; immovable objects: judicial administration/management; order to refrain from giving away, selling, hypothecating, or registering any encumbrances in the land registry; and receivables: garnishment order. The prosecutor may order the temporary securing of objects and/or assets for the sole purpose of securing the civil claims of the persons injured by a criminal offence. Such securing of assets is accomplished by establishing direct custody or by ordering the suspect to refrain from giving away, selling or pawning objects and/or assets. The public prosecutor may (upon authorisation by the criminal court) order house searches and the securing or seizure of objects (including letters and other documents) that might serve as evidence or secure civil claims, the monitoring of a suspects
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communication, etc. Any person injured by a criminal offence is entitled to access to files and to make use of such evidence in subsequent civil proceedings.
Austria
financial performance. Inside information is defined as nonpublic specific information, which directly or indirectly relates to a financial instrument or its issuer and which, if it were known to the public, would be capable of substantially affecting the price of such financial instruments (or derivatives related thereto), because such information would be used by an informed investor as a basis for making investment decisions. Insiders include corporate officers, key employees, directors, and shareholders who are beneficial owners of at least 10% of the companys shares. Criminal liability under Austrian insider trading rules attaches to persons who take advantage of inside information. A person who takes advantage of inside information, with or even without the intention to gain a pecuniary benefit for him or herself or a third party, by buying financial instruments (which term includes the certificates) is liable under Austrian criminal law. o Embezzlement Embezzlement is the fraudulent conversion of property to a persons own use by a person who has been entrusted with it. It is different from theft in that the embezzler has a relationship of trust with the victim under which the embezzler was lawfully in possession of the property until he or she appropriated it. o Bribery of government officials It is a crime to provide, promise, or offer to any Austrian government official, or to a person who has been selected to become an official, directly or indirectly, anything of value in order to induce the official to act in any way. Benefit is any performance of a material or immaterial nature that puts the bribed party in a better position (useful for him or a third party) and to which he does not have a legal claim. (A) Corruptibility for conduct contrary to duty A government official who demands, accepts or allows himself to be promised an illegal benefit for himself or a third party for the conduct or omission of an official function incumbent upon him shall be punished. (B) Active bribery of government officials This offence refers to active corruption, i.e. offering, promising or granting an unlawful benefit in reference to the performance or omission of an official act. A person is liable to prosecution for bribery if he offers, promises or grants a government official a benefit for the performance or omission of an official function contrary to his duties. (C) Acceptance of benefit for official duties A government official who accepts or allows himself to be promised a benefit for himself or a third party for the performance of an official duty, or omission of an official duty contrary to a prohibition of public-sector employment or organisation law shall be punished. Austrian members of parliament are excluded from criminal prosecution. A government official who demands a benefit for himself or a third party for the performance, or omission to perform, of an official duty shall also be punished unless this is expressly permitted by a regulation of public-sector employment or organisation law or an approval under public-sector employment law. The public-sector employment law for civil servants permits only minor customary benefits. (D) Active granting of benefits This offence is directed at the granting of benefits to government officials with the exception of Austrian members of parliament. The granting of benefits requires a causal connection with the regular performance, or omission to perform, of a certain official function and the contravention of a prohibition of public-sector employment or organisation law that is binding on the recipient.
2 Organisation of the Courts

2.1 How are the criminal courts in Austria structured? Are there specialised criminal courts for particular crimes?
The composition of the criminal court depends on the type of criminal act being adjudicated. Criminal offences that are punishable by monetary fines or a maximum prison term of one year are within the jurisdiction of district courts and are adjudicated by a single judge. Criminal offences of a more serious nature are within the competence of regional courts, in varying compositions: criminal acts punishable by a minimum sentence of 5 years and a maximum sentence of more than 10 years, and criminal acts punishable by life-time imprisonment (e.g. murder) as well as other very serious crimes are heard by a panel of three (professional) judges and an 8-member jury (Geschworenengericht); criminal offences that are punishable by a minimum sentence exceeding five years and a maximum sentence of 10 years imprisonment, as well as other serious crimes, are heard by a panel of one (professional) judge and two lay judges (mixed jury; Schffengericht); and all other criminal offences of a less serious nature are decided upon by a single professional judge.
2.2 Is there a right to a jury in business-crime trials?
Business crimes that are punishable by a minimum sentence exceeding 5 years and a maximum sentence of 10 years imprisonment are heard by a panel of one (professional) judge and two lay judges (mixed jury).
3 Particular Statutes and Crimes

3.1 Please describe any statutes that are commonly used in Austria to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
Fraud and misrepresentation in connection with sales of securities
It is a criminal offence if someone causes another to commit an act, or omits or tolerates an act, that causes a loss of property by such person or by another, by deceit regarding facts with the intent to unlawfully enrich himself or a third party. There are no specific laws in the Austrian Penal Code related to the sale of securities. o Accounting fraud Members of the management or supervisory board who misstate, conceal or fail to disclose the situation of the company or affiliated companies, or other material circumstances, are criminally liable. Such offences must be committed intentionally. This provision refers to the personal liability to creditors. o Insider trading Insider trading is a form of securities fraud. It involves trading a companys securities by individuals who have access to non-public information about the company, such as an imminent litigation settlement, regulatory approval for a significant product or recent

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(E) Preparation of corruptibility or the acceptance of benefits o o Government-contracting fraud Money laundering
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There is no specific provision in the Austrian Penal Code for this. Money laundering is defined as concealing property derived from the crime (felony or misdemeanour) of another person or from such tax offences as smuggling or evasion of import or export taxes (insofar as these fall within the competence of the courts), or disguises the origin thereof, particular by giving in legal relations false information regarding the origin or true nature of such property, the ownership of or other rights to them, the right to dispose of them, or the transfer of their location. The law sanctions persons who knowingly acquire such property; holds it in custody; or invests, administers, converts or transfers it to a third party. In cases when the assets involved in the offence exceed EUR 50,000, or the act is committed by a person or entity involved in a criminal enterprise continuously engaged in money laundering, the punishment may increase to a prison term of six months to five years. o Breach of trust Whoever knowingly abuses the authority conferred on him by statute, official order or contract to dispose of property not belonging to him, or who obliges and causes damage to another person in this way, is liable to imprisonment.
3.2 Is there liability for inchoate crimes in Austria? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Austria
This offence sanctions the initiation of a future (i.e., not imminent) official function. According to this, the government official shall be punished if he demands, accepts, or allows himself to be promised a benefit for himself or a third party with the intent of initiating the performance or omission of a future official function contrary to his duties. A government official who demands a benefit for himself or a third party with the intent of performing, or omission to perform, a future official function shall also be punished, unless this is expressly permitted by a regulation of public-sector employment or organisation law or an approval under public-sector employment law. Austrian members of parliament are excluded from criminal prosecution. The performance (or omission) of the future official function must be reasonably foreseeable, but must not be directly imminent. Whether the official function actually comes about is irrelevant. (F) Preparation of bribery Whoever offers, promises, or grants a benefit to a government official for the government official or a third party for initiating the performance or omission of a future official function contrary to his duties shall be punished. The granting of the benefit (i.e. offering or promising) requires a causal connection with the initiation of the performance or omission of a future official function contrary to his duties. (G) Prohibited intervention This crime is a two-act offence and punishes the sale of any persons political or commercial influence. The offender (e.g. politician) demands a benefit for himself or third parties for an intervention. The offender exerts his influence so that government official performs or omits an act of representation or an official action contrary to his duties. The deed includes the direct or indirect exertion of influence on the basis of granting of benefits for a consideration by third parties and requires the knowledge of an official action contrary to the duties of the civil servant or executive. o Criminal anti-competition Illegal arrangements in submissions This offence generally refers to award procedures in public invitations to tender. The offence also includes protective and sham offers to cover the other offer. Generally, a person who makes an application for participation, submits an offer, or conducts negotiations during an invitation to tender that are based on an illegal agreement intended to cause the customer to accept a certain offer is liable to prosecution. The occurrence of damage to the customer is not necessary for the accomplishment of the offence. Agreements between bidders Collusion through or in connection with agreements between bidders in private invitations to tender (submission cartels) to eliminate competition constitute fraud. The customer is deceived that the prices offered were fairly calculated in free competition so that he suffers damage in the amount of the difference between the price that would have been established through a normal competition and the agreed (higher) cheapest bid to the benefit of the ostensible cheapest bidder (so-called submission fraud). o Tax crimes Tax evasion means willfully attempting in any manner to evade any tax. To be liable for tax evasion, a person must take at least one affirmative act constituting an evasion or attempted evasion of the tax. Other tax crimes include willfully failing to collect and pay over tax that is due (such as employment taxes) and willfully failing to file a tax return.
In general, the attempt to commit an offence intentionally (an intentional offence) is punishable. The preparation of the attempt is also punishable. An act is attempted, and thus punishable, as soon as the offender has confirmed his decision to commit the offence by an implementation act or at least an act that is related to the implementation. The offence need not have been accomplished.
4 Corporate Criminal Liability

4.1 Is there entity liability for criminal offences? If so, under what circumstances will an employees conduct be imputed to the entity?
The Austrian Code on Corporate Criminal Liability establishes liability on the part of entities for criminal acts committed by their employees or decision-makers. For an offence to be established it must also have involved neglecting a duty of the entity. If the perpetrator is a decision-maker the entity is liable for such offence if it is committed in the interest of the entity or occurred due to negligence. The commission of a criminal offence by any employee of the entity provided that a decision-maker has violated its duty to supervise or control in compliance with the law leads also to the corporate criminal liability. In principle, the Code only demands that the employee meets all the objective elements of the respective criminal offence. It is sufficient if such elements are collectively fulfilled by the acts of several employees. Unlawfulness or even culpability of the behaviour set by employees is not claimed.
4.2 Is there personal liability for managers, officers, and directors if the entity becomes liable for a crime?
Parallel to the criminal liability of the entity, the decision-maker and/or the employee who committed the offence are criminally liable. Pursuant to Austrian criminal law, individuals and legal entities can be convicted separately.
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5 Statutes of Limitations
5.1 How are enforcement-limitations periods calculated, and when does a limitations period begin running?
securing of objects and/or assets for the sole purpose of securing the civil claims of the persons damaged by a criminal offence. Criminal proceedings can be used to obtain documents in the opponents or third parties possession. These documents can then be used as evidence in subsequent civil proceedings. The prosecutor may order house searches and the securing or seizure of objects that might serve as evidence or secure civil claims, the monitoring of a suspects communication, and more.
Most civil claims (e.g. compensation for damages) are subject to a statue of limitations of three years after notice of the damage and knowledge of the tortfeasor (calculated from the point in time at which the causal link between the damage and the wrongful behaviour of the tortfeasor became obvious to the damaged party). Civil claims for compensation for damages which result from a criminal offence which is punishable by more than one years imprisonment is subject to a statute of limitations of thirty years after the offence was committed.
5.2 Can crimes occurring outside the limitations period be prosecuted if they are part of a pattern or practice, or ongoing conspiracy?
Document Gathering:
7.2 Under what circumstances can the government demand that a company under investigation produce documents to the government, and under what circumstances can the government raid a company under investigation and seize documents?
Basically no. In the case of ongoing offences (e.g. repeated bribery) in which several acts were committed, the period of limitations begins to run at the conclusion of the last offence.
5.3 Can the limitations period be tolled? If so, how?
Demands towards an enterprise by the department of public prosecution can only be made if preliminary investigations are pending against one or more persons charged who are suspected to have committed an offence. A house search is only permissible if it can be assumed on the basis of certain facts that: a certain person suspected of having committed an offence is hiding in there; or there are objects or traces that must be secured and evaluated as evidence in criminal proceedings. There must be certain facts from which a reasonable conclusion is possible that the object searched for is in the place concerned (on these premises). The prosecutor may seek authority to raid a company to seize documents via a search warrant. The warrant must be based on facts known to the prosecutor that provide probable cause to search for and seize property. Before carrying out the house search, the inspectors must first demand that the objects sought be voluntarily handed over (voluntary inspection).
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Austria recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Austrias labour laws protect personal documents of employees, even if located in company files?
The statute of limitations for civil claims can be interrupted by a claim and/or criminal complaint of the private party damaged by the defendant(s) or legal entity. This happens either by a submission of the claim or criminal complaint to the court or public prosecution or in a hearing.
6 Initiation of Investigations
6.1 How are investigations initiated? Are there any rules or guidelines governing the governments initiation of any investigation? If so, please describe them.
The initiation of criminal proceedings for certain less serious criminal acts remains within the discretion of the injured party. In these cases, the injured party may privately pursue a criminal action whereby, in its capacity as a private prosecutor, the injured party effectively replaces the public prosecutor. Some of these cases relate to the breach of industrial or business secrets, violations of intellectual property rights, violations of certain act of unfair competitions or acts of (minor) corruption in the private sector. Criminal proceedings against the recipient will be commenced ex officio only if the claim exceeds EUR 5,000 or the corrupt acts are committed with the intention of establishing a regular income. Criminal proceedings against the payer will be commenced ex officio only if the offered or given reward is not negligible. In all other cases, only the injured person, or certain interest groups, may prosecute the offenders.
Privileged information of attorneys (in connection with their clientrelationship) is excluded from any investigations and may not be used as evidence generally. Further, business and trade secrets must be respected by the criminal authorities. Denying a right guaranteed by the Austrian Criminal Procedure Code (e.g. access to the files), or the unlawful use of an investigative or coercive measure against the defendant or third parties (attorney or entity) is subject to objection by the violated party. In such cases the investigation and evidence are inadmissable. The Austrian employment law allows investigations and searches of private documents of employees who are suspected of committing a crime. If there is no suspicion, the employee must agree to the search.
7.4 Under what circumstances can the government demand that a company employee produce documents to the government, or raid the home or office of an employee and seize documents?
7 Procedures for Gathering Information from a Company

7.1 What powers does the government have generally to gather information when investigating business crimes?
Austrian criminal procedure does not feature strict rules of evidence. The court determines the probative value of evidence through free and diligent deliberation. The prosecutor may order the temporary
The government may seek documents from an employee to the

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same extent, and via the same procedures, that it may seek documents from the company. Prior to any seizure of documents the authorities must ask that they be submitted voluntarily.
7.5 Under what circumstances can the government demand that a third person produce documents to the government, or raid the home or office of a third person and seize documents?
Austria
prosecution authority becomes aware of facts that may give rise to criminal prosecution (e.g. by a criminal complaint or information provided by other authorities). Anyone may file a criminal complaint with the office of the public prosecutor, the police or the criminal investigations department of the police. After authorities become aware of a suspicion that a criminal offence was committed with respect to their area of competence, they are required by law to file a criminal complaint.
8.2 Are there any rules or guidelines governing the governments decision to charge an entity or individual with a crime? If so, please describe them.
Austria
See the answer under question 7.4 above.
Questioning of Individuals:
7.6 Under what circumstances can the government demand that an employee, officer, or director of a company under investigation submit to questioning? In what forum can the questioning take place?
Yes. See question 4.1.

8.3 Can a defendant and the government agree to resolve a criminal investigation through pretrial diversion or an agreement to defer prosecution? If so, please describe any rules or guidelines governing whether pretrial diversion or deferred prosecution are available to dispose of criminal investigations.
Here it is of importance that the questioned employee is informed whether he is incriminated or not. Any person that is subject to criminal proceedings must be informed as soon as possible of the ongoing criminal proceedings, as well as of the suspicion against him. If the employee is located in Austria they may be ordered to appear as a witness before an Austrian court. A witness may be heard upon the request of any party (defendant, private party, prosecutor), or by order of the court even if no party so requested. A witness is obliged to appear before the court, to testify and to tell the truth. Certain persons may be excused as a witnesses entirely (e.g. relatives of the defendant) or with respect to privileged information (attorneys). A witness is regarded as a source of evidence for the parties. In preliminary investigations and criminal proceedings in the course of the examination of witnesses, every person has the right to call in a person of trust. Witnesses and participants of the offence are excluded as persons of trust. Attorneys can also act as persons of trust. A person who is under criminal investigation or becomes linked to the commission of a crime is called a defendant. The defendant has a due process right to be heard during the pre-trial and trial stages. This testimony serves not only in his defence but also in the courts quest for truth. During the interrogation, the defendant has certain rights and privileges.
7.7 Under what circumstances can the government demand that a third person submit to questioning? In what forum can the questioning take place?
In specific situations, alternative responses to a criminal act are possible. The possibility of diversion (a non-penal settlement) exists if the facts are sufficiently clear and if the act is not subject to the jurisdiction of a mixed or jury court and has not led to the death of a person. In such cases, the public prosecutor (or in later stages of the trial, the court) may choose diversion measures provided that the defendants fault is not serious and punishment does not seem required for purposes of special or general prevention. Diversion measures must be accepted by the defendant and may include monetary penalties, community service, probation and/or an out of court settlement with the victim.
8.4 In addition to or instead of any criminal disposition to an investigation, can a defendant be subject to any civil penalties or remedies? If so, please describe the circumstances under which civil penalties or remedies are appropriate.
The commission of a criminal offence may give rise to damages. A defendant may be held liable for civil claims of the damaged party. Civil and criminal proceedings against an individual or legal entity may run in parallel.
The government (i.e. prosecution, court) may question third persons to the same extent, and via the same procedures, that it questions employees, officers or directors of a company.
7.8 What protections can a person being questioned by the government assert? Is there a right to refuse to answer the governments questions? Is there a right to be represented by an attorney during questioning?
9 Burden of Proof
9.1 For each element of the business crimes identified above, which party has the burden of proof? Which party has the burden of proof with respect to any affirmative defences?
The government (i.e. the prosecutor) has the burden to prove every element of the crime. The defendant has the burden to prove every element of an affirmative defence.
9.2 What is the standard of proof that the party with the burden must satisfy?
See question 7.6 above.
8 Initiation of Prosecutions / Deferred Prosecution / Civil Dispositions

8.1 How are criminal cases initiated?
Criminal proceedings are initiated ex officio if the public
The prosecutor must prove every element of the crime beyond a reasonable doubt. Defendants generally have the burden of proving affirmative defences by clear and convincing evidence or a preponderance of the evidence, which are lower standards of proof. The preponderance of the evidence standard means that all
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of the evidence, taken together, makes a particular fact more likely than not. The clear and convincing standard is between the preponderance and beyond reasonable doubt standards.
9.3 In a criminal trial, who is the arbiter of fact? Who determines whether the party has satisfied its burden of proof?
Austria
unlawfulness of his act, every type of guilt and thus every type of punishment is excluded.
11.3 Is it a defence to a criminal charge that the defendant was ignorant of the facts i.e. that he did not know that he had engaged in conduct that he knew was unlawful? If so, what are the elements of this defence, and who has the burden of proof with respect to the defendants knowledge of the facts?
In criminal trials for business crimes sanctionable with imprisonment of a maximum of five years, a single judge is the arbiter of fact and whether a party has satisfied its burden of proof. In mixed jury trials, the jury is the arbiter of fact and whether a party has satisfied its burden of proof.
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Conspiracy / Aiding and Abetting
If the offender does not appreciate that he is creating a situation that corresponds to the statutory definition of an offence, he is acting without intent (but rather mistake as to the type of offence). Punishment for intentional action is thus not applicable. Punishment for negligent action remains, however, if there is indeed a corresponding offence involving negligence. The person charged must prove the mistake as to the type of offence. The court must satisfy itself that a mistake as to the type of offence exists.
10.1 Can a person who conspires with or assists another to commit a crime be liable? If so, what is the nature of the liability and what are the elements of the offence?
Contributory and designating offenders are also liable to prosecution. A contributory offender is someone who intentionally or negligently contributes to the commission of an offence (e.g. enabling, facilitating, safeguarding or otherwise promoting the offence). A designating offender is someone who intentionally causes another person to commit an offence.
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Voluntary Disclosure Obligations
12.1 If a person becomes aware that a crime has been committed, must the person report the crime to the government? Can the person be liable for failing to report the crime to the government?
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Common Defences
11.1 Is it a defence to a criminal charge that the defendant did not have the requisite intent to commit the crime? If so, who has the burden of proof with respect to intent?
There is no legally standardised disclosure requirement for enterprises and their organs. In view of the risk of the liability of an organ under criminal law and the corporate criminal liability threatened, it is recommended that the entity reimburse the third parties financial damage if this was caused by an organisation fault on the part of the entity. Complete and timely indemnification for damages is to be considered active contrition.
A person is acting with intent and, thus, culpably if he wishes to realise a situation that corresponds to a statutory definition of an offence. Wilful misconduct refers to the conscious and wilful pursuit of a goal in full awareness of its unlawful nature. What matters most is that damages are being inflicted with full knowledge and intent, requiring the injuring party to know that its conduct is unlawful. Wilful negligence differs from dolus eventualis in that, while the wilfully acting injuring party regards the goal as a possible outcome, it trusts that it will not be realised. Most business crimes are only punishable if the act was committed intentionally. In the majority of the cases, dolus eventualis is sufficient. There is no formal burden of proof in criminal proceedings, as the court must ascertain the material truth. If the prosecutor cannot sufficiently prove the incriminating facts (e.g. that the person charged acted with intent) the factual situation more favourable for the person charged must be assumed (the principal of in dubio pro reo).
11.2 Is it a defence to a criminal charge that the defendant was ignorant of the law i.e. that he did not know that his conduct was unlawful? If so, what are the elements of this defence, and who has the burden of proof with respect to the defendants knowledge of the law?
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Cooperation Provisions / Leniency
13.1 If a person voluntarily discloses criminal conduct to the government or cooperates in a government criminal investigation of the person, can the person request leniency from the government? If so, what rules or guidelines govern the governments ability to offer leniency in exchange for voluntary disclosures or cooperation?
Starting in January 2011, a leniency programme for criminal proceedings will likely come into effect in Austria. The public prosecution will have the possibility to waive an indictment if the accused party has voluntarily supplied significant information. Certain requisite conditions exist for principal witnesses. Despite cooperating with the authority, the principal witness must reckon with a fine, but not with imprisonment. A handbook gives information about the guidelines for the leniency programme in criminal proceedings.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Austria, and describe the favourable treatment generally received.
There is an error as to the prohibited nature of an act if the offender does not recognise the unlawfulness of his offence. Either the offender does not recognise at all that his act is prohibited and thus unlawful, or he is mistaken in the existence and/or the limits of the grounds of justification and does not recognise the unlawfulness of his act for that reason. If the offender cannot be accused of the
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this was caused by an organisation fault on the part of the enterprise. Complete and timely indemnification for damages on the part of the enterprise is to be considered active contrition. This can also be done by self-incrimination before the authority. Selfincrimination is, however, not compulsory for the rescission of punishment.
Austria
profitability and its overall financial capacities, but cannot be less than EUR 50 or more than EUR 10,000. The total maximum unit is EUR 1.8 million. The Austrian Code on Corporate Criminal Liability is, however, geared strongly towards preventative measures by entities. If preventative measures have already been set by the company to avoid the committing of criminal acts, then the law will look at it as a mitigating circumstance or even as a ground for dismissal of the case. A compliance programme, if implemented properly by the entity, can help stop criminal acts from being committed in the first place, on the one hand, and lead to relief from group liability on the other.
Austria
If the act is no longer culpable because of active contrition, there is also no causal offence, so that the Austrian Code on Corporate Criminal Liability is completely inapplicable. This means that no application for imposition of a fine can be made against the enterprise. The mere reporting of the facts of the case to the customer without indemnification for damages or selfincrimination before the authorities is not a sufficient precondition for active contrition.
16
Appeals
14
Plea Bargaining
16.1 Is a guilty or a non-guilty verdict appealable by either the defendant or the government?
14.1 Can a defendant voluntarily decline to contest criminal charges in exchange for a conviction on reduced charges, or in exchange for an agreed upon sentence?
A guilty verdict may be appealed by the defendant or by the public prosecutor, while an acquittal may be appealed only by the prosecutor.
16.2 Is a criminal sentence following a guilty verdict appealable? If so, which party may appeal?
In theory, plea bargaining is prohibited in Austria. However, in practice, informal arrangements between the public prosecutor and the defence do occur occasionally.
14.2 Please describe any rules or guidelines governing the governments ability to plea bargain with a defendant. Must any aspects of the plea bargain be approved by the court?
There are no rules applicable to plea bargaining (see question 14.1).
A guilty verdict may be appealed by both the defendant and the public prosecutor. If both parties appeal, the verdict can be changed either in favour of or to the disadvantage of the defendant. If only the defendant has appealed, the court may not increase the punishment on appeal. Furthermore, the defendant may only appeal civil claims.
16.3 What is the appellate courts standard of review?
15
Elements of a Corporate Sentence
15.1 After the court determines that a defendant is guilty of a crime, are there any rules or guidelines governing the courts imposition of sentence on the defendant? Please describe the sentencing process.
The Austrian Penal Code provides the minimum and maximum sentences (i.e. the amount of fine, term of imprisonment or both) to which the defendant can be sentenced for a particular offence. Once the court determines that a defendant is guilty, the sentence is up to the courts discretion; there are no official sentencing guidelines. The court must consider certain extenuating (i.e. compensation of the victim, confession) and aggravation circumstances (i.e. amount of damage, defendants history). If a person charged is sentenced to a prison term not exceeding 2 years or a fine, the court shall suspend the punishment setting a period of probation. No sentence without probation is pronounced. Sentences of imprisonment up to 2 years can be converted to a fine.
15.2 Before imposing a sentence on a corporation, must the court determine whether the sentence satisfies any elements? If so, please describe those elements.
Only those procedural errors listed in the Austrian Criminal Procedure Act lead to a nullity with no discretion on the part of the appellate judge. Material error influencing the outcome of a judgment, either acquittal or another criminal offence with a lesser sentence, may be grounds of appeal which lead to nullity as well. Grave error in the evaluation of evidence (questions of fact) may be considered in favour of the defendant.
16.4 If the appellate court upholds the appeal, what powers does it have to remedy any injustice by the trial court?
Enumerated types of legal error may be redressed through a nullity appeal. These types of error include error in procedural and substantive law, such as: a judge, the defendant or his counsel was not present during the entire trial; other serious violations of procedural rules have occurred; the evaluation rendered by the court concerning key evidence is unclear, incomplete, contradictory, or insufficiently reasoned; etc. Other types of error include incorrect application of substantive criminal law, e.g. the imposition of punishment in excess of what the law permits. The appellate court may immediately grant the appeal and order a new trial in favour of the defendant.
A legal entity found guilty is punishable by a fine, which is calculated in units. A unit is measured by the organisations
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Schoenherr
Austria
Dr. Heidemarie Paulitsch

Schoenherr Tuchlauben 17 A-1014 Wien Austria
Heidemarie Paulitsch is a Junior Partner at Schoenherr, where she specialises in Criminal Compliance and White Collar Crime. She has worked in the area of criminal compliance and prevention advice since 2007. Her dissertation work was on Compliance and Corporate Criminal Law with an emphasis on anti-corruption. Heidemarie has also been active in the legal defence of corporate criminal matters.
Schoenherr is a leading full service law firm in Central Europe. More than 300 professionals service national and international clients from our offices in Belgrade*, Bratislava, Brussels, Bucharest, Budapest, Kyiv, Ljubljana*, Prague, Sofia*, Vienna, Warsaw and Zagreb* (*cooperation office). Operating in a rapidly evolving environment, Schoenherr is a dynamic and innovative firm with an effective blend of experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, Schoenherr has grown to be one of the largest firms in the region. With 12 offices and several country desks, Schoenherrs comprehensive coverage of the region means the firm can offer solutions that perfectly fit the given industry, jurisdiction and company. In all areas of business, companies are facing mounting levels of risk and criminal law is playing an increasing role. As businesses become larger, more complex and more international, new threats may appear, often in unfamiliar areas. Consequently, for companies, preventive measures, corporate criminal proceedings and investigations have markedly gained in importance. In response to this, and to better service the needs of our clients, Schoenherr has established a dedicated criminal compliance and white collar crime team. The white-collar crime team offers criminal prevention advice in the field of criminal law with a focus in anti-corruption. It provides risk analyses of corporate areas fraught with risk and creates individual, tailor-made compliance programmes. The team also advises companies that have been damaged by the criminal activities of their employees or third persons. Additionally, it represents companies facing criminal liability due to organisational culpability or erroneous management decisions.

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Austria
+43 1 534 37 4005 +43 1 534 37 6100 h.paulitsch@schoenherr.at www.schoenherr.eu
Chapter 5
Bahrain
Zeenat Al Mansoori & Associates
Amel Al Aseeri
Reem Al Rayes

The Public Prosecution is the sole authority which can initiate and conduct criminal court action in the Kingdom of Bahrain. In accordance with provisions of the Criminal Procedure Law No. 46 of 2002 (Criminal Procedure Law) and the Judicial Authority Law No. 42 of 2002 (Judicial Authority Law) crimes cannot be prosecuted by any other authority except where provided by law.
For example, Ministry of Justice and Islamic Affairs Order No. 46 of 2006 delegates to certain employees of the Directorate of Commercial Registry and the Directorate of Company Affairs at the Ministry of Industry and Commerce the authority of Judicial Arrest Officers with respect to violations of the Commercial Registry Law No. 1 of 1961 as amended (Commercial Registry Law) and the Commercial Companies Law No. 21 of 2001 (Company Law). This Order is pursuant to the provisions of the Commercial Registry Law and the Company Law.
Yes. Please see above.

While the Public Prosecution has the sole authority to prosecute crimes, the Criminal Procedure Law gives Judicial Arrest Officers the authority to investigate crimes and to carry out certain acts in accordance with the law. Judicial Arrest Officers include the public prosecutors, the officers of public security, the borders, ports and airport guards, and the customs inspectors. Judicial Arrest Officers and regulatory and supervisory agencies can initiate an investigation of crimes within their respective area of competence and duty and if appropriate refer the investigation file to the Public Prosecution which may then decide to prosecute the crime(s) in accordance with the Criminal Procedure Law. The Public Prosecution will be under an obligation to carry out its own independent investigation with respect to felonies (serious offences). Further, where a complaint is made to the police or other enforcement agency by a victim and the agency carries out the investigation, the agency will be under an obligation to refer the investigation file to the Public Prosecution and cannot decide on its own initiative to close or reserve the investigation file for lack of evidence or other reason unless the victim consents. The Minister of Justice may, in agreement with the competent Minister, issue an order to grant a number of public officers the authority of Judicial Arrest Officers for crimes falling within their respective area of competence and duty. Amongst them are employees in the Ministry of Industry and Commerce (MOIC), the Central Bank of Bahrain (CBB), Ministry of Labour, the Directorate of Industrial Property, and the Anti-Economic Crime Directorate of the Ministry of Interior General Directorate of Criminal Investigation and officers of other agencies which exercise a regulatory and supervisory role and have the power of investigation and administrative enforcement in accordance with the law.
2.1 How are the criminal courts in Bahrain structured? Are there specialised criminal courts for particular crimes?
The Judicial Authority Law and the orders of the Supreme Judicial Council structure the court system in Bahrain. In accordance therewith, only criminal courts (the criminal division of the civil courts) are competent to deal with criminal cases. The criminal courts are divided into the following: The Court of Cassation deals with appeals against a final conviction and/or sentence, and only considers if: 1. the conviction and/or sentence was imposed based on a breach of law, or error in the application or interpretation of the law; or the procedure by which the conviction and/or sentence was imposed is invalid.
2.
The High Court of Appeal has jurisdiction to deal with appeals against conviction and/or sentences imposed by the High Court. The High Court has jurisdiction to deal with felonies (serious form of criminal offence) or high profile cases and to deal with appeals against conviction and/or sentences imposed by the Lower Court. The Lower Court has jurisdiction to deal with misdemeanours (less serious form of criminal offence).
No jury system exists in Bahrain and all trials take place without a jury present. The competent court decides on matters of both fact and law.
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Bahrain

3.1 Please describe any statutes that are commonly used in Bahrain to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
3.2
Is there liability for inchoate crimes in Bahrain? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
This question will be answered in general because the same principles apply to most of the crimes listed below. The constituents of a crime are 2 elements: the material (the prohibited conduct); and the mental element (intent). Intent will not always be required. Bahrain legislation deals with the material element but not with the mental element as the test to determine intent is left to the decision of the court. The Penal Code No. 15 of 1976 (Penal Code) deals with offences against public and private property, stock, money, securities etc. and defines each offence, its constituents, and the maximum and minimum penalties. However, the legislature deals with certain business and modern crimes in separate statutes providing more detailed provisions in relation thereto. Where a crime is punishable under the Penal Code, any order or administrative and/or criminal penalty imposed by another statute will be imposed without prejudice to any punishment in the Penal Code which is severer. It is also worth noting that unless a special penalty is imposed by the Law, crimes committed against public property, or by public officers by reason of or in the course of their employment, will be considered an aggravating circumstance by the court. o Theft, fraud and misrepresentation The Penal Code Part IX, titled Offences against Property, the Law of Commerce No. 7 of 1987 (Law of Commerce), and the Company Law. o Accounting fraud The Penal Code, the Company Law, the Central Bank of Bahrain and Financial Institutions Law No. 64 of 2006 (CBB Law), and the Auditors Law No. 25 of 1996 (Auditors Law). o Insider trading and market manipulation The Bahrain Stock Exchange Law No. 4 of 1987 as amended (Bahrain Stock Exchange Law) and the CBB Law and Guidelines on Insiders. o Embezzlement The Penal Code, Part II, Chapter II titled Embezzlement and Damage to Funds and Part IX, Chapter III, titled Breach of Trust and Related Offences. o o Bribery of government officials The Penal Code, Part II, Chapter I, titled Bribery. Criminal anti-competition The Penal Code and the Law of Commerce, Section III, titled Unfair Competition. o Government-contracting fraud The Penal Code and the Government Tenders and Purchases Law No. 36 of 2002 (Government Tenders Law). o Money-Laundering The Penal Code and the Anti-Money Laundering Law No. 4 of 2001 as amended (Anti-Money Laundering Law).
A person can be liable for attempting to commit a crime whether or not the attempted crime is completed. However a person will not be liable for attempting to commit a misdemeanour (less serious form of offence) except where it is specifically provided for under the Penal Code. It is worth mentioning that there will be no liability on a person who elects of his own free will not to complete the crime attempted, except if such attempt constitutes another punishable crime. If there is liability, the penalty for the attempted offence will be a reduced sentence of the penalty prescribed for the completed offence in accordance with the Law.

The legislature recognises corporate entities as legal persons in their own right. However, the Penal Code does not contain any provisions for corporate criminal liability. More modern statutes such as the CBB Law, the Company Law, and the Anti-Money Laundering Law refer to such liability where appropriate. An employees criminal conduct may be imputed to the entity in accordance with the relevant law and where the employee acted as representative of the company or for the companys account. The entity will be liable under the Civil Code for damages caused by its employee where the employee performed the unlawful act in the course of his employment.
Company crimes in general cannot be committed without the involvement of natural persons to carry out the unlawful act. Therefore, managers, directors, and employees may be personally accountable even if the company is found liable for the crime(s). The nature and extent of liability of natural persons where the entity becomes liable will depend on their involvement. For example, the Anti-Money Laundering Law maintains personal liability of natural person(s) involved in the offence irrespective of their relation or position in the entity. The Law prescribes independent and separate penalties for each.
The enforcement-limitation period is 10 years for felonies, 3 years for misdemeanors and 1 year for less serious violations, and is calculated from the date on which the crime is committed. The limitation period for certain offences committed by public officials is calculated from the date their term in office is terminated. The limitations period will stop running on commencement of investigation, including formal investigation, or charges or criminal trial and a new limitations period is calculated from the start date thereof. Note that different limitations periods apply to civil claims arising from the criminal act in accordance with the Civil Code.

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Bahrain

Bahrain
regulatory and legal breaches. For example Part 9 of the CBB Law titled Investigations and Administrative Proceedings grants such powers of entry, search and seizure to its Judicial Arrest Officers for offences within their departments of expertise and the licensee cannot prevent access to the Officers.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Bahrain recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Bahrains labour laws protect personal documents of employees, even if located in company files?
Bahrain
Crimes occurring outside the limitations period can be prosecuted if they are part of an ongoing conspiracy or part of a pattern in accordance with the Criminal Procedure Law.
The limitations period cannot be discontinued or tolled for any reason.
Yes, the Penal Code prohibits production or seizure of communications or documents prepared by attorneys or expert consultants. Any evidence relied on by the Public Prosecution in relation thereto will be invalid and excluded by the court.
Parties may notify or submit a complaint to the Public Prosecution or to agencies other than the Public Prosecution (for example, the police, the MOIC, the CBB etc.) who may initiate a preliminary investigation. Where the victim or person having a right insists on prosecution, the agency which initiated the investigation is under an obligation to commit the case to the Public Prosecution and the Public Prosecution will decide whether to commit the case to trial or reserve the file. The Public Prosecution initiates investigations and prosecutes crimes in accordance with the Judicial Authority Law and the Criminal Procedure Law. Investigations may also be initiated by Judicial Arrest Officers within their area of competence or other agencies exercising a regulatory and supervisory role in accordance with the Law.
The Criminal Procedure Law grants the Public Prosecution and Judicial Arrest Officers (by warrant) the power to enter and to search houses, offices, places and persons in the case of felonies and misdemeanours punishable by imprisonment for a period exceeding 3 months. The search must only be for purposes of investigating crimes of which they have been accused and must conform to the requirements of the Law.

Under the Criminal Procedure Law, the general rule is that the Public Prosecution cannot demand documents from, or search the home or office of, a third person other than the accused. To do so, the Public Prosecution must apply to the Lower Court for a warrant in accordance with the Criminal Procedure Law. The Court will issue such a warrant if it is satisfied that the Public Prosecution has reasonable grounds to suspect that such third person is in possession of evidence that relates to the crime(s).
At the initial stage the Public Prosecution and Judicial Arrest Officers have the power to enter and search public places (to which people had ready access at the time of the search), to interview witnesses, to request the assistance of a doctor or other expert, and to interview the suspect about the suspects alleged involvement in the offence(s). The Criminal Procedure Law grants the Public Prosecution and Judicial Arrest Officers (by warrant) additional statutory powers of entry, search, seizure and retention powers in respect of certain specific offences during the investigation stage in accordance with the Law.
Document Gathering:
Judicial Arrest Officers have the power to inspect, enter, search and seize documents of companies for the purpose of investigating
The Public Prosecution has the sole authority to question an employee, officer or director as a suspect to gather information. The questioning takes place in the Public Prosecution or in any police station or arrest office and must comply with the requirements of the Criminal Procedure Law. If the employee, officer or director is questioned only for the purpose of gathering evidence, then such employee, officer or director may be questioned by the Public Prosecution or other Judicial Arrest Officers in any other forum including the companys office or the Judicial Arrest Officers office.
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Bahrain
The Public Prosecution has the authority to evaluate the evidence and to determine if the evidence is sufficient or insufficient to charge the defendant or reserve the case file. The Law requires the Public Prosecution to notify the victim (if any) and the accused if it makes the decision to reserve the case file and gives the person claiming a civil right the right to object to the decision in front of the competent court within 10 days from the date they are notified.
If the witness refuses to be interviewed, the Public Prosecution may proceed to the Lower Criminal Court and the judge will sentence the person to imprisonment of a maximum of 3 months or to pay a fine if he continues to refuse to be a prosecution witness. Any third persons related to the suspect by blood or marriage (up to the second degree) are competent but cannot be compelled to submit to questioning. The witness may refuse to sign the witness statement in the circumstances set out in the Criminal Procedure Law.
The Public Prosecution cannot agree with the defendant to resolve a criminal investigation through pre-trial diversion or defer prosecution and, in general, the Public Prosecution has no authority to make arrangements with the defendant except for specific types of offences and to the extent permitted by the law.
The Criminal Procedure Law provides guidance as to the procedure that needs to be followed by the Public Prosecution in interviews. In general, the Public Prosecution may not question the person under investigation without cautioning him and giving him the right to request the attendance of his legal attorney. Exceptions may be made under urgent circumstances and in accordance with the Law. In all circumstances, the Public Prosecutor may not use oppression to obtain answers or elicit a statement. The suspect is not compelled to answer all questions in the interview and has the right to refuse to answer any. It is worth mentioning here that the statutes do not deal with failure or refusal to answer questions during the investigation stage as do the laws of some other jurisdictions. The courts may draw adverse inference from that silence at trial if the suspect raises facts as part of his defence which he could have mentioned during the interview. However, the courts cannot use silence as any admission of guilt (see under Burden of Proof).
The Penal Code prescribes for additional civil penalties (such as removing the right to public office, the right to vote or to run for elected office, the right to be a manager or director of a company etc.) and civil remedies (such as return monies or profits gained from the criminal act). Further, pursuant to the Civil Code No. 19 of 2001 (Civil Code), there will be an obligation to pay compensation where an unlawful act causes damages. The victim and/or persons claiming civil rights will have the right to put forth the civil rights claim to the competent criminal court and take a part in the criminal action and/ or file separate civil action for compensation.
9 Burden of Proof

If the Public Prosecution considers that it has sufficient evidence to charge the suspect, it will decide on the appropriate charge(s) (the Public Prosecution must carry out an investigation for felonies but can choose not to do so for misdemeanours) and the Attorney General would file the case in front of the competent court in accordance with the law. The court would then issue a summons requiring the defendant to appear before the court on a particular date to answer the charge(s).
In accordance with Bahrains constitution and Penal Code there will be a presumption of innocence unless guilt is proven. Therefore, the Public Prosecution will have the burden of proof of the elements of any of the business crimes above. The burden of proof will be on the defendant where the defendant was caught in the act or with respect to any affirmative defences. If the Public Prosecution does not prove the elements of the charge(s) with which the defendant is charged, the court shall pass a judgment for acquittal of the accused from such charge(s).
Pursuant to the Judicial Authority Law, the Public Prosecution is a sect of the Judiciary and is effectively the custodian of the criminal case and its acts are monitored by the judiciary.
The Public Prosecution bears the legal burden of proving beyond a reasonable doubt that the defendant is guilty of the offence with which he is charged. A defendant who raises a specific defence must place some evidence of this before the court and will need to satisfy a lower standard of proof on a balance of probabilities. The prosecution must then disprove the defence and satisfy the court that the defence is not true.

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Bahrain
The Criminal Procedure Law gives the Judicial Arrest Officers and the Public Prosecution the right to demand a third party submit to questioning if they reasonably believe that the third person may assist the investigation.

Bahrain
accordance with the Law. There is an obligation to report certain types of crimes under specific statutes. For example, under MOIC orders and the Anti-Money Laundering Law, failure to report any suspicious information to the Enforcement Unit shall be deemed as an offence related to money laundering and shall be punishable in accordance with the Law.
The court alone will decide whether the standard of proof has been satisfied.
Bahrain
10
13
A person who conspires with another to commit a crime or who assists another will be liable unless the law provides otherwise. If the involvement or intent of one conspirer or aid/abettor offender differs from another person participating in the crime, then each will be penalised in accordance therewith. Whether a co-defendant is deemed to have participated in the offence will be determined in accordance with the law.
11
Common Defences
Leniency in exchange for voluntary disclosures or cooperation are not dealt with under Bahraini law. However, the Penal Code prescribes maximum and minimum (the starting point sentence) penalties which the courts will decide depending on the facts and circumstances surrounding each case. Where appropriate, the defence attorney will persuade the court to impose the most lenient sentence which the court could give for the offence by emphasising any mitigating factors that are present. Such factors include, but are not limited to, the following: a. b. c. d. e. f. g. h. disassociation with any aggravating factors; a clean record with no previous convictions; commitment to moral and/or religious values; circumstances having had an effect on the defendants judgment or actions; the defendants young age and health (mental illness or longterm illness); the defendants family circumstances; respected social or occupational position within the community; cooperation with the Judicial Arrest Officers (the police, the Public Prosecution), or any other authorities; and any other personal factors deemed to be relevant.
That the defendant did not have the requisite intent is a defence to felonies and certain misdemeanour charges, unless excluded by law. The Public Prosecution has the burden of proving the constituents of the criminal offence: the criminal conduct and the mental element (intention). Bahrains Penal Code provides that an offence ...shall be deliberate if it is committed by an offender being aware of its factual reality and legal elements. An offence shall also be deliberate if the offender expects a criminal result of his act and attempted the act taking the risk of bringing about the criminal result.
i.
The application and extent of leniency by the court will be determined at the discretion of the court within the range of penalties prescribed in the Penal Code.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Bahrain, and describe the favourable treatment generally received.
Pursuant to the Penal Code, ignorance of the law is not a defence to a criminal charge.
12
Please see above.
14
Plea Bargaining
The Criminal Procedure Law obligates every person who is aware that a crime is committed to report the crime to the Public Prosecution or to a Judicial Arrest Office unless the crime can only be prosecuted subject to an oral or written complaint is filed by the victim or other party having the right to file such complaint. In addition, every civil servant, or officer entrusted with a public service, who becomes aware, during or by reason of the performance of his duties, of the occurrence of a crime must report it to the Public Prosecution or the nearest Judicial Arrest Officer in
Plea bargaining is not dealt with under Bahraini law. However, the courts may give the defendant credit for entering an early guilty plea to the offence (as a mitigating factor) and the defence attorney should (if appropriate) ask for leniency taking into account the defendants cooperation at the first opportunity and his/her true remorse.
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Bahrain
16
Appeals
Please see above.
15
Either the defendant or the Public Prosecution may appeal a conviction of the court of first instance and the rules which govern appeals by either party are in the Criminal Procedure Law.
The rule is that there is no crime or punishment except by statute. Therefore if the court finds a defendant guilty of a crime, it will be limited to the sentencing fixed in the Penal Code. The sentencing for every offence is subject to statutory minimum and a maximum and the court determines the appropriate type of sentence (if more than one type may be imposed) and the severity of the sentence. The Penal Code gives the court the power to impose a suspended sentence if custodial sentence is less than 1 year and if particular circumstances exist which justify the suspension of the sentence. The courts of first instance and the courts of appeal must have also have regard to statutory aggravating and mitigating factors.
Either the defendant or the Public Prosecution may appeal a sentence imposed by the court of first instance and the rules which govern appeals by either party are in the Criminal Procedure Law.
As stated above, either the defendant or the Public Prosecution may appeal a conviction and/or sentence of the court of first instance on the basis that the court of first instance made errors of fact and/or law. The court of appeal should carry out a full rehearing of the issues and take an independent view based on the evidence rather than simply reviewing the conviction and/or sentence passed by the court of first instance. Generally, new witnesses may be called, and new or different points of law and/or evidence may be relied on in the appeal.
As discussed above, the existing Penal Code does not deal with sentencing corporations. The court tends to impose from the available types of sentence the type which is enforceable on a corporate person (such as imposition of a fine). The question of corporate liability is a complex and controversial area outside the scope of this guide.
The court of appeal has the power to reverse or vary the decision of the court of first instance as it thinks appropriate. If the appellant is the Public Prosecution, the court of appeal does not have the power to reverse the acquittal of a defendant or to impose a more severe sentence except by unanimous decision of the judges. If the defendant is the appellant, the court of appeal only has the power to uphold the decision of the court of first instance or vary it in favour of the appellant.

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Bahrain
Bahrain
Amel Al Aseeri
Zeenat Al Mansoori & Associates Office 62, Floor 05, Al Matrook Building Road 1705, Diplomatic Area, Manama Kingdom of Bahrain
Reem Al Rayes
Zeenat Al Mansoori & Associates Office 62, Floor 05, Al Matrook Building Road 1705, Diplomatic Area, Manama Kingdom of Bahrain
Bahrain
+973 17 532 012 +973 17 536 255 amel@zeenatalmansoori.com www.zeenatalmansoori.com
+973 17 532 012 +973 17 536 255 reem@zeenatalmansoori.com www.zeenatalmansoori.com
Amel qualified at Zeenat Al Mansoori & Associates in 2007 and is Senior Associate. Amel specialises in commercial law, banking and finance, intellectual property, and company law. She has advised financial institutions, companies and senior managers on various legal and regulatory issues, including criminal investigation and civil and/or criminal proceedings. Amel represents companies and financial institutions involved in various enforcement investigations. She has experience in litigation involving credit card fraud and is currently involved in navigating several clients through a high-profile investigation involving allegations of banking crimes. She obtained a Bachelor of Laws from the University of Newcastle Upon Tyne (UK) and obtained a Graduate Diploma in Legal Practice from the College of Law (UK).
Reem Al Rayes joined Zeenat Al Mansoori & Associates in 2009 and has quickly become recognised by clients as an asset to the firm. Reem worked in the firms different practice areas and is building her experience in litigation and in the employment, corporate, and insurance sectors. She assists the firm in carrying out legal research and has developed a particular interest in business crimes. Reem obtained her Bachelor of Laws from the London School of Economics (UK) and has recently been presented with an honorary award from Bahrains Minister of Justice and Islamic Affairs for her achievement in the course organised by the Judicial & Legal Studies Institute for new lawyers.
Zeenat Al Mansoori & Associates is a leading full-service law firm in the Kingdom of Bahrain and is one of only a few local firms with expertise on regulatory and white collar defences. The firms managing partner Zeenat Al Mansoori has established the practice in 1989 with a relentless focus on the quality and value of client service. The firms longstanding clients include multinational corporations, executives, and high net-worth individuals in the banking, corporate, and insurance sectors. The firm provides an effective response to its clients by thoroughly understanding the nature of and extent of the regulatory and legal issues involved and maintaining good relationships with the regulators, prosecutors and the key personalities in the Kingdom of Bahrain. The firm has considerable experience in counselling and representing companies and individuals against different areas of business crime. Amongst others, these involve civil and criminal fraud, government contracts, criminal investigation of senior company officers, and internal and regulatory investigations. The firm has a strong litigation team experienced in front of all the courts of law in the Kingdom of Bahrain. This is underpinned by the firms impressive track record of favourable verdicts in complex litigation of all kinds.
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Chapter 6
Barbados
Charlton Chambers
Sir Richard L. Cheltenham, K.A., Q.C.
Rene Butcher
Introduction
Barbados has in recent years emerged as a premier centre for international business. Barbados reputation for political and economic stability and financial integrity is supported by a strong legal system and a well-educated workforce. The regulatory fiscal and legislative frameworks are constantly being re-engineered to reflect the business realities, and the position of Barbados in the international business environment. Undoubtedly, the phenomenal growth of the offshore business sector in Barbados suggests that investors view the Island as a prime location. Among the factors that have played and continue to play an important role in the development of the sector are the large number of double taxation treaties and bi-lateral investment agreements. Together they have served to buttress the Islands low and competitive tax structure. Resulting from these treaties and agreements Barbados is obliged to assist other countries in providing mutual assistance in detecting, investigating and prosecuting financial crimes. The justice system in Barbados has, therefore, broadened its reach to include the widest range of criminal activity of a financial nature.
In matters specifically related to tax evasion the Commissioner of Inland Revenue may be involved in the prosecutorial process. When in the Commissioners opinion, there is sufficient evidence to justify prosecution he may, pursuant to section 80 of the Income Tax Act, Cap. 73, lay an information before a magistrate. However, the trend has been for the Commissioner to instruct the police to initiate the prosecution in his name.
In addition to his involvement in the early stages of criminal prosecution, the Commissioner of Inland Revenue is also vested with powers of civil enforcement. Section 72A of the Income Tax Act authorises him to enforce and execute any judgment relating to unpaid tax certificates and to utilise all remedies attached in satisfaction of an order whilst section 73 authorises the Commissioner to demand payment of sums owed to the Crown. The DPP is entitled under the Proceeds of Crime Act, Cap. 143 to apply the High Court for confiscation and/or seizure orders in relation to a person convicted of money laundering or possession of property derived from criminal activity. The orders once granted clothe the DPP with the authority to cause them to be enforced.

2 Organisation of The Courts

2.1 How are the criminal courts in Barbados structured? Are there specialised criminal courts for particular crimes?
Barbados is an island state and not part of a federation. There is, in consequence, no regional prosecuting authority. At the apex of the national prosecutorial system is the Director of Public Prosecutions (DPP), a constitutionally created office. Section 79 (2)(a) of the Constitution empowers him to institute and undertake criminal proceedings against any person before any court other than a court marshal, in respect of any offence against the law of Barbados. He also has the power to take over and continue any criminal proceedings that may have been instituted by any other person or authority. In addition, he can at any stage before judgment is delivered discontinue proceedings however instituted.
The Magistrates Courts are at the base of the judicial system in Barbados. These courts which are six (6) in number hear and determine summary criminal matters as well as deal with preliminary inquiries. All matters disposed of by a Magistrate are appealable directly to the Court of Appeal. The High Court is the next tier in the judicial system and is the lower branch of the Supreme Court. It has unlimited jurisdiction over criminal matters. In its criminal jurisdiction the High Court is comprised of both Judge and Jury who hear and determine all indictable matters. The Court of Appeal consists of five (5) Justices of Appeal who sit as a three (3) person panel to hear matters appealed either from the High Court or Magistrates Court. This Court is the higher branch of the Supreme Court and is presided over by Barbados highest judicial officer the Chief Justice. The Caribbean Court of Justice (CCJ) in its appellate jurisdiction
In relation to white-collar criminal activity the Anti-Money Laundering Authority may actively participate in early investigation and information-gathering that may lead to prosecution by the Commissioner of Police.

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is at the pinnacle of the judicial system. This Court is located in Port-of-Spain, the capital of Trinidad & Tobago, and has, for Barbados, replaced the Judicial Committee of the Privy Council. Like the Privy Council before it, the CCJ has jurisdiction to hear appeals arising from decisions of the Courts below.
Barbados
also requires proof that the reward or inducement served to influence the officials conduct in a matter concerning the public body with which he is involved. Section 7 of the Act creates a rebuttable presumption of corruption where it is shown that a government official received money, a gift or other consideration from an individual or his agent who holds or is seeking to obtain a contract with the Crown, a government department or public body. The Act also targets private citizens who give, offer or promise an inducement or reward to any government official in exchange for a benefit. o Money Laundering Where an offence under the Money Laundering and Financing of Terrorism (Prevention and Control) Act, Cap. 129 is charged it must be established that the Accused received, possessed, concealed, disposed of, or brought into or sent out of Barbados any money or other property that is proceeds of crime. The prosecution must also demonstrate that the Accused knew or ought reasonably to have known that the property in question was derived either directly or indirectly from the proceeds of criminal activity. It is open to the defence to establish on a balance of probabilities that the Accused took reasonable steps to ascertain that the property was not derived from unlawful activity.
3.2 Is there liability for inchoate crimes in Barbados? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Barbados
There is in Barbados no specialised criminal court for particular offences.

In all indictable criminal cases, business crimes included, trial is by judge and jury in the High Court, and accused persons have a constitutionally guaranteed right to such a trial. However, where the Accused is charged with fraud and the trial involves prolonged and detailed examination of documents or accounts or any scientific or local investigation the Accused may, before the commencement of the trial, apply for the matter to be heard without a jury. Further, there is no right to trial by jury in business crimes involving sums of less than BD $10,000. These are dealt with by a Magistrate who is arbiter of both fact and law.

3.1 Please describe any statutes that are commonly used in Barbados to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
Fraud and In Connection With the Sale of Securities
The Securities Act, Cap. 318A makes provision for the establishment of a Securities Commission for the better regulation of the securities and capital markets and for the protection of investors. The elements needed to satisfy charges of fraud and insider trading arising from the sale of securities are set out in the Act. Where an Accused is suspected of fraudulent behaviour in the sale of securities it must be proved that he knowingly or recklessly made a representation in breach of the Act or any regulations thereunder. o Insider Trading In matters of insider trading the prosecution is required to prove that the Accused is a member of a self-regulatory organisation, a dealer or a person who is involved in the sale of securities. It must also be established that the Accused acted in consideration or anticipation of a reward. Finally, the prosecution must demonstrate that the information disseminated related to the fluctuation in price of the security in question, and was based on the manipulation in price by any person. According to section 142(2) the prosecution must also establish that the Accused committed the offence knowingly. o Embezzlement The Theft Act, Cap. 155 creates, inter alia, the offences of fraud and embezzlement. Where an accused is charged with either offence it must be established that he acted dishonestly. Specifically, in relation to fraud it must be proven that an accused acted with intent to obtain gain for himself or another and that he acted with intent to cause loss to a third party. Where the charge is embezzlement the prosecution must not only prove that the Accused dishonestly appropriated the goods of another but that he did so with intent to permanently deprive another. o Bribery of Government Officials Under the Prevention of Corruption Act, Cap. 144 it must be proved that a government official corruptly solicited, received or agreed to receive a reward or advantage as an inducement. The Act
Persons who commit inchoate crimes in Barbados are susceptible to criminal liability. The common law normally applies to offences of this nature. The Money Laundering and Financing of Terrorism (Prevention and Control) Act, however, makes specific provision for inchoate offences.

A company may be found liable for a criminal offence where the unlawful act has been committed by its directors, officers, or any other person who in fact controls or manages the company. The Companies Act, Cap. 308 specifically imposes criminal liability on a corporate entity where it has acted in contravention of its regulations governing the issue of financial statements. Liability may also be imposed on the entity where its management fails to issue a proxy form when giving notice of a meeting in compliance with section 139 of the Act. In determining whether an employees conduct will be imputed to an entity the court will decide as a question of fact whether the employee acted as the directing mind and will of the company. In so doing the court will have regard to the manner in which the companys affairs were conducted.
When a body corporate is charged with a criminal offence its directors and/or other officers may be held liable for its actions. Where the offence involves fraudulent conduct on the part of the companys directors, officers or any other person purporting to act
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in a similar capacity they may be found criminally liable under the Theft Act where it is proved that the act was committed with their consent or through connivance on their part. Before the directors or officers are charged with the offence the prosecution must satisfy itself that they were acting in that capacity at the time the offence was committed. It is, however, a defence to such charges to show that the criminal act took place without the Accuseds consent or that he exercised due diligence to prevent its occurrence. It must be noted that criminal liability for the actions of a body corporate charged with money laundering may extend beyond its directors and officers to managers, secretaries or other persons acting in an official capacity.
Barbados
be done in accordance with the Judges Rules and the relevant provisions of the Evidence Act, Cap. 121 as well as the Constitution. However, a breach of the foregoing does not automatically render such evidence inadmissible. In the case of the Constitution, for example, it will depend on the severity of the breach. In any event, the court still retains its discretion on matters of admissibility, even in the face of flagrant breaches of the rules and of the law.
7 Procedures on Gathering Information from a Company

5 Statutory Limitation
In matters of a summary nature the prosecution is required to lay an information before a magistrate within six (6) months from the time the offence was committed. The period of limitation is calculated in accordance with the Interpretation Act, Cap. 1 which requires computation of time to begin the day after the offence was committed. The last day of the six (6) month period is also included. There is no period of limitation with respect to indictable offences.
Barbadian citizens are constitutionally protected from arbitrary searches of their premises. This protection, however, does not prevent the police (pursuant to an order of the court) or the Commissioner of Inland Revenue (in accordance with his statutory authority) from entering and searching premises. Although inroads have been made into financial confidentiality, disclosure in the face of unlawful activity is far from novel. Barbadian financial institutions have for many years been required to disclose information related to their clients where the individual(s) is suspected of engaging in criminal enterprise. Under the Money Laundering and Financing of Terrorism (Prevention and Control) Act, financial institutions are required to submit a report to the Anti-Money Laundering Authority where they suspect that funds deposited by any of their clients have been derived from criminal activity. Barbados has also entered into a number of agreements that have imposed obligations of disclosure on the Islands Government. There are on the statute book two pieces of legislation aimed at increased disclosure the Extradition Act, Cap. 189 and the Mutual Assistance in Criminal Matters Act, Cap. 140A. The Mutual Assistance in Criminal Matters Act, allows a requesting state to obtain from the Government of Barbados evidence or information relating to a criminal matter where the requesting state has reasonable grounds to believe that the evidence or information is relevant thereto. This Act applies, firstly, to all Commonwealth countries and, secondly, mutatis mutandis to all other countries having a bi-lateral mutual assistance treaty with Barbados. The Islands courts have vigorously sought to limit fishing expeditions by clearly defining what constitutes reasonable grounds. This has, in turn, served to limit the granting of disclosure requests. Any request for disclosure must be based on independent and credible evidence that the stated offence has been committed.
The six-month statutory period of limitation does not apply to continuing offences. Local courts have taken the view that offences of this nature are repeated from day to day as long as the circumstances from which liability arises continue to exist.
There is no common law, statutory provision or practice that allows for the period of limitation to be tolled with respect to criminal offences in Barbados.
6 Initiation of Criminal Investigation

The manner in which an investigation is initiated, as has already been indicated, varies according to the offence that is the subject of the complaint or indictment. Criminal investigations are usually conducted by members of the local constabulary. And whilst this power remains firmly within their purview, other statutory bodies may assist in the initiation of criminal investigations. For example, in matters involving money laundering the AntiMoney Laundering Authority may do initial investigative work and, where it reasonably suspects that an offence has been committed, forward a report to the Commissioner of Police. It matters little who initiates the investigation. Any evidence sought to be admitted in criminal proceedings must be gathered in a manner that does not impugn the right of the Accused person to a fair trial. Where the investigation is initiated by local police it must
Document Gathering:
The Anti-Money Laundering Authority in the course of an investigation has the power to request examination of any information related to a company suspected of money laundering found in the records of the Central Bank and the departments of Land Tax, Inland Revenue, Customs, Immigration, National Insurance, and the VAT office. Access to the information must be

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provided by the head of the institution or department. Where an investigation of company has been initiated by a debenture or shareholder or the Registrar of Companies the court must appoint an inspector who is empowered to enter the premises, examine anything and make copies of any documents or records found therein. The court may also make an order requiring any person to produce documents or records to the inspector. A warrant may be issued to the police by a magistrate or justice of the peace to search the premises of a company, its officers, or any of its employees once there are reasonable grounds to believe it has committed an offence. The warrant so issued allows the police officer charged with its execution to search the premises and remove any document, material or other thing. A warrant may be issued where the Magistrate is satisfied that the document sought to be seized affords evidence of the commission of an offence. (See also question 7.1.)
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Barbados recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Barbados labour laws protect personal documents of employees, even if located in company files?
Barbados
Barbados
The court is empowered by the Companies Act to grant orders requiring any person to attend a hearing and to give evidence upon oath. There is, however, no legal requirement that any person submit to police or other investigative questioning.
Despite the courts power to compel attendance by any person a witness is generally entitled to claim the right against selfincrimination.
There are certain safeguards in place designed to ensure that the rights of persons who lawfully invest in the offshore sector are not trampled upon. Any information obtained by the Anti-Money Laundering Authority must be garnered by strict adherence to the procedure outlined in the Money Laundering and Financing of Terrorism (Prevention and Control) Act. Failure to comply with these provisions may result in any subsequent proceedings being vitiated. The requirement of disclosure is also limited by the nature of the relationship between an attorney and his client. An attorney cannot, therefore, be compelled to divulge privileged information disclosed to him by his client. No protection is afforded, however, to documents relating to employees found in their personnel files. Additionally, in the absence of suspected criminal activity the integrity of the banker-client relationship remains to a large degree undisturbed by the moves towards disclosure. The Financial Institutions Act, Cap. 324A emphasises the general principle that it is unlawful for a financial institution to disclose clients information except pursuant to the consent of the client or an order of the Court. The disclosure provisions under the Money Laundering and Financing of Terrorism (Prevention and Control) Act, earlier discussed, constitutes an exception.
In proceedings under the Companies Act it is explicitly provided (section 424) a witness cannot claim the privilege against selfincrimination. Significantly however, testimony obtained in this manner cannot be used in subsequent proceedings against the witness. Any additional use of this information is restricted to a potential prosecution for perjury arising from the manner in which the evidence was given. Law enforcement agents do not have the authority to detain an individual charged with fraud or any other offence contrary to the Theft Act for questioning unless he, the agent, makes a lawful arrest. Even after arrest the suspect is under no obligation to answer questions put to him. Nonetheless, individuals who submit to questioning have a constitutional right to seek legal counsel and have counsel present whilst being questioned.
8 Initiation of Proceedings / Deferred Prosecutions / Civil Dispositions

See also question 7.2.

Criminal matters are initiated by the laying of an information or complaint before a magistrate. Where the matter is indictable a preliminary inquiry must be conducted. The purpose of the preliminary inquiry is to determine whether there is sufficient evidence for the matter against the Accused to proceed to trial in the High Court. Even if the magistrate determines that there is not sufficient evidence and does not prefer an indictment the DPP may, nevertheless, upon successful application to the High Court cause an indictment to be filed. Thereafter, the matter proceeds to be heard by Judge and Jury.
Third persons are subject to the same powers of search and seizure where it is shown, to the satisfaction of the Court, that they are in possession of relevant information.
There are no written rules or guidelines that govern the decision to
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charge an entity or individual with a crime. What is, however, required is a reasonable belief that a particular offence has been committed by a named individual or entity. This reasonable belief must be informed by credible information which may be in the form of documents, accounts or witness statements, among other things.
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Conspiracy/Aiding and Abetting
The expression pretrial diversion is not known to the laws of Barbados. Even though the prosecution and defence may enter into informal discussion in relation to the conduct and timetable of the trial there is no provision for diverting or deferring any prosecution.
The Money Laundering and Financing of Terrorism (Prevention and Control) Act specifically imposes criminal liability on a person who attempts, aids, abets, counsels or procures the commission of or who conspires to commit the offence of money laundering. Such persons are liable to be fined or imprisoned upon summary or indictable conviction. The principal offender may be similarly sentenced, however, the term of imprisonment or fine imposed is not as severe for a person who only assists or conspires. Generally, however it is an offence contrary to common law to aid, abet, counsel or procure the commission of any offence. A person guilty of such an act may be convicted as a secondary offender.
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Common Defences
It is always open to the victim of fraud to initiate civil proceedings against the perpetrator of the crime. Both in accordance with the provisions of the Companies Act (section 439) and generally, the initiation of criminal proceedings does not preclude civil action arising from the same facts. Under the Money Laundering and Financing of Terrorism (Prevention and Control) Act, the court has the option of making forfeiture and freezing orders in addition to any other penal measures already imposed.
Where the accused is charged with an offence the burden rests on the prosecution to show that he possessed the required mens rea like any other ingredient of the offence. This is done by way of inference relying on whatever the accused might have said or done before, at the time of or after the commission of the offence.
9 Burden of Proof
Ignorance of the law is generally no defence to charges of any kind.

The burden of proof in all criminal matters rests with the prosecution. However, where a matter is peculiarly within the knowledge of the Accused or where it is open to him to rebut a presumption he must discharge his evidentiary burden on a balance of probabilities.
The burden and standard of proof is the same in criminal matters of a summary or an indictable nature. The prosecution must prove the case against the accused beyond a reasonable doubt. (See also question 9.1.)
The defence that the accused was mistaken as to the facts surrounding the commission of an offence generally does not find favour with the court. An accused, however, may in some circumstances be mistaken as to the facts and, to that extent, he may not have known that his conduct was unlawful in those circumstances. It is open to him to lead evidence seeking to establish on a balance of probabilities that he did not possess the requisite intent to commit the offence.
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A criminal trial may either be summary or indictable. In a summary matter the magistrate is arbiter of fact. In an indictable trial the jury plays that role. In a summary trial the magistrate determines whether the prosecution has discharged its burden of proof by making out a prima facie case against the Accused. In an indictable trial it is the judge who makes that determination.
Failure to report or concealment of a serious offence can result in the old common law offence of misprision of a felony which occurs

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once the commission of a serious offence has been concealed. In Barbados the distinction between felonies and misdemeanours has been abolished and it is now doubtful whether the offence survives. Financial institutions, however, are not only required by the Money Laundering (Prevention and Control) Act to report any suspicious activity, but are required to allow the Authority access to their financial records and to any individual involved in keeping such records. Where a financial institution fails to make a report as required by the Act the directors of the defaulting institution may be guilty of an offence and liable on conviction to a fine.
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Co-Operation Provisions/Leniency
The Penal System Reform Act affords the convicted person the opportunity of a sentencing hearing. At the hearing counsel is permitted to lead evidence of the Accuseds good character and good works. The Court must also commission a social inquiry report and permit the Accused or his counsel to cross-examine the author of the report who is normally a probation officer on its accuracy. The Accused or his counsel is also allowed to address the court before it proceeds to sentence. At the conclusion of the hearing the court must consider all relevant mitigating and aggravating factors raised both at the trial and sentencing phase.
There are no provisions within the Money Laundering (Prevention and Control) Act explicitly allowing the court to be lenient where a corporate entity has voluntarily assisted in the investigation of a criminal offence. However, in imposing a sentence the court is bound to take into account the aggravating and mitigating factors in the case consistent with the Penal System Reform Act, Cap. 139. The extent of the Accused Companys cooperation in the investigation will qualify as a mitigating factor to which the Court must have regard.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Barbados, and describe the favourable treatment generally received.
Each offence is accompanied by a maximum sentence. The courts are also guided by Practice Directions issued by the Chief Justice and decisions of the Court of Appeal in comparable cases. Consideration must also be given to the provisions of the Penal System Reform Act. The Act requires the court to consider, among other things, the gravity of the offence; the need to rehabilitate the offender; the need to deter, where appropriate, the commission of similar offences; and the offenders means to pay any fine imposed.
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Appeal
Please see previous question.
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Plea Bargaining
Plea bargaining is not an explicit part of the common law of Barbados nor has it been provided for in statute. However, practice allows the prosecution to reduce the offence charged where appropriate and where the Accused is willing to plead guilty. A judge or magistrate cannot, however, specifically intimate in advance of the guilty plea the type of sentence likely to be imposed.
The DPP is not permitted to appeal a verdict of not guilty. The Criminal Appeal Act, Cap. 113A, however, allows convicted persons to appeal against conviction, sentence or both. Where the issue is one of fact or mixed fact and law or of sentence, the convicted person must seek the leave of the Court of Appeal to prosecute his appeal. No leave is required where the appeal is on a question of law alone. The right of appeal without leave may be exercised upon the granting of a certificate by the trial judge stating that the matter is fit for appeal.
All sentences are appealable either by the Accused or the Crown. The Accused may contend that the sentence was informed by improper considerations or that it is excessive in all the circumstances. The DPP, on the other hand, may refer a case to the Court of Appeal where he is of the opinion that the sentence imposed is unduly lenient.
Please see previous question.
The standard of the review may vary from case to case but includes fairness of the trial; correctness in formulating the applicable legal principles; whether the verdict has been informed by error on a question of law, and whether the verdict is one that a properly
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instructed jury acting judicially could reasonably have rendered. However, it is nonetheless open to the Court to apply the proviso, that is, dismiss the appeal on the basis that no substantial miscarriage of justice has occurred. In determining whether to apply the proviso the Court will consider whether the Appellant has lost a chance of acquittal which was fairly open to him.
Barbados
In considering referrals by the DPP the Court may quash the sentence imposed by the trial judge and impose any other sentence it thinks appropriate and which the trial court may have passed in first instance.
Sir Richard Cheltenham

Charlton Chambers Charlton House Whitepark Road, Bridgetown Barbados, West Indies
Rene Butcher
Charlton Chambers Charlton House Whitepark Road, Bridgetown Barbados, West Indies
Tel: +1 246 430 8953/54 Fax: +1 246 436 9070 Email: rlcheltenham@caribsurf.com
Tel: +1 246 430 8953/54 Fax: +1 246 436 9070 Email: rene.akobi.butcher@gmail.com
Dr. The Hon. Sir Richard L. Cheltenham, K.A., Q.C., Ph.D., has enjoyed a varied and successful civil and criminal litigation practice in Barbados since his call to the Bar in 1970. Over the past twenty (20) years he has broadened his base to include the wider Caribbean. Sir Richards areas of expertise include, inter alia, Commissions of Inquiry, criminal prosecution and defence, extradition, white collar crime, commercial litigation, personal injury and constitutional and administrative law. Sir Richard counts the case of Ophelia King v. The Attorney General of Barbados (Privy Council) as one of his most memorable. It involved a proposed 8% reduction in civil servants salaries and directly affected approximately 20,000 Barbadians. In his spare time Sir Richard enjoys travel, listening to music, reading and commenting on cricket. He is married to fellow attorney Colleen, Lady Cheltenham and is the proud father of five (5).
Rene Butcher is a final-year student at the Hugh Wooding Law School in Trinidad and Tobago. He successfully obtained his L.L.B. in June of 2009, having previously completed a Bachelors of Science in Economics. Renes has sought to cultivate competence in a many areas of legal practise. His passion is criminal litigation, but his background in economics has engendered an appreciation for the corporate aspects of law. He is currently attached to Charlton Chambers, and anticipates being called to the bar in the fall of 2011.
The doors to Charlton Chambers were opened in 1990 by two prominent Attorneys-at-Law and siblings Sir Richard Cheltenham, K.A., Q.C., Ph.D and P. K. H. Cheltenham, Q.C. It is one of the largest chambers in Barbados and prides itself in setting high standards of professionalism and excellence. Our Chambers practice in multiple areas of law including Revenue Law, Competition Law, Constitutional and Administrative Law, Banking, Personal Injury, Commercial Litigation, Commissions of Inquiry, Arbitration, Intellectual Property, Criminal Law generally and in particular high profile murder involving difficult forensic evidence, white collar crime and Extradition. Charlton Chambers is conveniently located in Bridgetown and directly opposite the new Supreme Court Complex.

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Where the appeal is allowed the court must quash the conviction. It may then direct an acquittal, order a retrial for the same offence or impose a conviction for an alternative offence which could have been left to the jury in first instance.
Chapter 7
Brazil
Vilardi & Advogados Associados
Celso Sanchez Vilardi
Davi de Paiva Costa Tangerino

it concerns the general elections (jurisdiction of the Electoral Court). Specialised courts are not relevant for business crimes.
Although Brazil has a federal system of government, it is only upon Congress to legislate on Criminal Law and Criminal Procedural Law. Thus, both the federal courts as well as the state courts apply federal laws in their respective jurisdictions. There are no municipal courts. Under the Brazilian Constitution, criminal proceedings are, in an overwhelming majority of cases, initiated by a prosecutor. Criminal proceedings are rarely of a private nature, worth mentioning, in the context of business crimes, the unfair competition. At the federal level, it is an exclusive institutional function of the Federal Public Prosecution to initiate Public Criminal Cases. At the state level, this function is a matter of the State Public Prosecution. There are also specialised courts for Labour, Military and Electoral matters. All of them have residual criminal jurisdiction.
Yes, within the context of business crimes it is very common for criminal offences to be administrative infractions as well. In these cases, they are investigated and penalised separately. Tax crimes demand a tax offence, which is prosecuted and judged by the IRS or the State Tax Commission, depending on the nature of the tax. The Central Bank administratively punishes infractions committed against the national financial system. The Securities Commission (CVM) punishes those concerning the stock market and the Council for Economic Defense (CADE) regulates the administrative practices of competition. There are also a large number of agencies responsible for licensing concerning environmental matters. All of them can impose sanctions, especially the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).

2.1 How are the criminal courts in Brazil structured? Are there specialised criminal courts for particular crimes?
The criterion to determine the level of jurisdiction to common federal jurisdiction is whose interests were potentially harmed by the offence. Thus, the investigation of corrupt practices by a federal public official is of federal jurisdiction, while the investigation of corrupt practices by a state public official or a municipal public official is of state jurisdiction. In the field of business crimes, most of them concern the Unions interests, i.e. crimes regarding the national financial system, the stock market, free competition, the environment etc. For this reason, they are usually of federal jurisdiction. In ordinary justice cases, jurisdiction is subsidiary: what is not of interest to the Union will become the responsibility of the state. Tax crimes perpetrated against states and municipalities, as well as environmental crimes whose impacts happen at a local level are examples of crimes that will be judged by the state courts. Whenever the jurisdiction to investigate and prosecute is controversial, it is up to the Judiciary to secure it, since an individual can only be prosecuted and tried for one offence once. Finally, specialised courts will be set whenever: a) the defendant holds a special condition (members of the armed forces are, usually, tried by the Military Court); b) both parties hold a particular legal relationship (labour relations are judged by the Labour Court); or c)
The system is divided primarily into ordinary courts and extraordinary courts. The first examines the arguments of fact and Law, whilst the second can only analyse legal matters. The first analysis of a case is made by a single first-instance judge, usually focused on criminal cases (except in smaller towns, with fewer judges). Appeals filed against decisions given by first-instance judges are judged by a court of appeals called second instance. At this instance groups of at least three judges will decide the cause. In this case, they will always be specialised Chambers as well. The access to extraordinary jurisdiction is not automatic, and it depends on the demonstration that the ruling of the court of appeals violated a Federal Law or diverges from the decision of another court of appeals in the same matter. Under these circumstances, appeals can be made to the Superior Court of Justice. But if it is proven that the ruling of the court of appeals violated the Federal Constitution, then the appeal can be made to the Supreme Court. In the Superior Court of Justice there are groups of judges (Chambers) specialised in criminal cases. In the Supreme Court there are two Chambers and both of them assess and evaluate all matters.
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is committed only when the IRS or the State Tax Commission defines whether there were back taxes and determine their amount. It is also a tax crime to unlawfully withhold payroll taxes. In this case, it is not necessary for the administrative procedure to come to a final result. o Government-contracting fraud There is not a specific crime in the case of Government-contracting frauds. However, both the forgery and use of false public or private documents constitute a crime. It is also a crime to commit any type of deception against the Public Administration. o Environmental crimes There are a wide range of crimes in Brazil regarding the protection of flora, fauna, urban environment and Environmental Management. o Money laundering Money laundering is a crime in Brazil. The practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money (from crimes such as drug trafficking, terrorism, smuggling, crimes against public administration and crimes against the national financial system, among others) constitutes the crime of money laundering.
3.2 Is there liability for inchoate crimes in Brazil? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
No. The jury procedure is adopted in Brazil only in cases of wilful crimes against life.

3.1 Please describe any statutes that are commonly used in Brazil to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
Such crimes happen whenever: a) there is the issuing, offer or negotiation of forged or false securities; b) the securities have no prior registration issued by the competent authority or are different from what was declared during registration or were improperly registered; c) the securities have no backing or assurance under the Law; or d) despite being legally required to do so, the securities have no prior authorisation by the competent authority. The same is true for fraud on securities or property values. o Accounting fraud Accounting fraud is criminalised in Brazil by several statutes. If the fraud implies tax evasion, this will constitute a tax crime. Despite that, accounting fraud is prosecuted both in the Statute that regulates financial crimes, as well as in the Penal Code, regarding stock companies. o Insider trading Insider trading is a crime in Brazil. Whenever an insider or a related party trades based on material non-public information obtained during the performance of the insiders duties at the corporation, or otherwise in breach of a fiduciary or other relationship of trust and confidence or where the non-public information was misappropriated from the company the crime of insider trading is characterised. o Embezzlement Embezzlement is a crime in Brazil. The act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted is subject to criminal liability. There is even a specific tax crime concerning the withholding of social security contributions deducted from the worker and not forwarded to the competent authorities. o Bribery of government officials It is a crime to offer or promise undue advantage to a national public official in order to prevent him from putting into practice, omitting or delaying any official act. The same is true for offers or promises of undue advantages to a foreign public official regarding international business transactions. The understanding of a public official is very broad, involving not only the administration but also public enterprises or joint stock companies, or anyone who, even temporarily, holds a position, or any public occupation. o Criminal anti-competition The abuse of economic power with domination of the market or elimination of competition as well as making arrangements for artificial price fixing and market control constitute anti-competition crimes. o Tax crimes It is considered a crime to evade or reduce taxes through fraud. Tax crimes are understood here as the insertion of inaccurate data into public documents or accounting statements, as well as the omission of mandatory information from them. In some rare cases, a crime
Yes, the attempt to commit a crime creates criminal liability in Brazil if the execution of the crime has actually begun. The mere thought and preparatory acts are not punishable though (unless a crime was committed, such as the illegal possession of a firearm as a preparatory act for theft). According to the Criminal Code, the punishment of attempted crime should be decreased from 1/3 to 2/3 in relation to the fully committed ones.

An employees conduct can be imputed only with regards to environmental crimes. In the Brazilian model, both the individual and the legal entity are criminally responsible whenever the offence is a result of a decision undertaken by the legal entity, as long as the perpetrator of the crime is bound to the legal entity and the crime was committed on behalf of or benefits the legal entity.
There is no strict liability in Brazilian Criminal Law. Managers, officers and directors are liable for a crime when they have personally engaged in criminal activities. It is common, however, that the partners of an enterprise be criminally sued because they have benefited from a crime committed within its scope.
The limitations period begins running on the date an offence is

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committed. It is calculated according to the gravity of the crime: petty offences, the maximum penalty for which do not exceed one year, have a two-year limitation period; and very serious crimes have a limitations period of 20 years.
Brazil
Document Gathering:
Brazil
No. If the crime is still ongoing, the limitations period begins to run at the moment the last criminal act occurred, so that an ongoing crime, while it is ongoing, will not have a set limitations period. It must be pointed out, however, that, according to Brazilian Legislation, the crime of money laundering will only take place whenever the money laundered is a result of certain crimes specified by Law. In such cases, the limitations period of the previous crime does not lead to the extinction of the crime of money laundering.
No subject shall be compelled to furnish evidence against himself. However, companies may be required to provide certain documents for a legal duty (like tax books) even if it results in selfincrimination. If there is, however, well-founded suspicion of the commitment of a crime, the evidence of which is in the possession of the company, the judge may order the search and seizure of such documents. There is no legal provision of the obligation to disclosure information.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Brazil recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Brazils labour laws protect personal documents of employees, even if located in company files?
Yes, in three cases: a) when the existence of a crime depends on the judicial decision of another case; b) during the time the defendant is serving a sentence abroad; and c) once the defendant is convicted, the limitations period is suspended during the time that the defendant is arrested for a different reason. It is also important to draw attention to the causes that make the statute of limitations to be adjourned and re-run from zero. They happen: a) at the beginning of the prosecution; b) at the sentencing; c) when the defendant begins to serve the sentence; and d) in case of recidivism.
Documents are normally protected by attorney-client confidentiality and are not considered evidence except in the case of an understanding where the lawyer has acted as co-author of the crime. There is no legal provision concerning the protection of employees data.
In general, the same rules that are applied to the companies are applied to the employees.
According to the Procedural Law, police, prosecutors and judges may determine the beginning of an investigation - except in cases of private lawsuits, when the initiation of investigations will depend on a motion by any person with the power to do so. There are no strict rules for the initiation of investigations, except for those concerning jurisdiction.

A judge can grant (or renew) a seizure whenever there is sufficient evidence that a required document is under the responsibility of a third party. However, whenever the third party is not directly involved in the crime, the list of requirements to grant the seizure will be longer and the scope of the search, reduced.
The power of the police authority to gather information is very discretionary. It ranges from obtaining non-confidential information directly with public agencies, to leading the investigations and also hearing the defendant and others (witnesses) testify. But when the gathering of a particular proof restrains a constitutional guarantee, then a court order is needed. It is common when dealing with business crimes, the breach of banking and tax secrecies, and for wiretapping, searches and seizures and placing individuals under protective custody.
If an employee, officer or director of a company is a suspect of a crime, they can be summoned either by the police, during the course of the investigations, or by the judge during the trial period. In such a case, they have no obligation to speak and, if they choose to testify, they can lie without any charges.
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reduction, if not its complete extinction (e.g. the crime of cartel conducts).
7.8
What protections can a person being questioned by the government assert? Is there a right to refuse to answer the governments questions? Is there a right to be represented by an attorney during questioning?
The criminal, administrative and civil instances are independent, so that the subject can, at the same time, be sued civilly (for liability ex delicto), administratively (before the agencies listed in question 1.3), and criminally.
Only those investigated for, or accused of, a crime may refuse to answer a question. The witnesses have the obligation to speak and tell the truth. There are some exceptions where the oath is not required: a) for ascendants or lineal descendants; b) for the spouse, even if divorced; and c) for brothers, sisters, fathers, and mothers, unless there is no other way to obtain proof of the fact. The presence of a lawyer is guaranteed both during investigations and in court, and if that does not occur, the procedural act can be considered null and void.
9 Burden of Proof

The burden of proof in criminal proceedings in Brazil lies with the accuser, i.e., the public prosecutor. Thus, if there is no evidence to support an indictment, the defendant should be acquitted (in dubio pro reo). The defence team has the burden of proving that their own allegations are true, but in a mitigated manner.
Criminal cases are usually initiated by the prosecutors request to the judge, based on the police investigations or information received from other tax entities such as the IRS, the State Tax Commission, the Central Bank, etc. In rare cases, the victim may start a so-called private prosecution.
Evidence must be sound enough to prove that the defendant is guilty, beyond the reasonable doubt. According to the principle of in dubio pro reo, whenever doubt sets in, the defendant should be acquitted.
The Brazilian Code of Criminal Procedure provides that, for the initiation of a criminal action, there must be proof of the commitment of an offence and sufficient evidence of authorship. Furthermore, it is necessary that the prosecution thoroughly describes the conduct deemed criminal. In the case of legal entities, besides the abovementioned requirements, the occurrence of the elements described in question 4.1 must be demonstrated.
The arbiter of fact is usually a judge. The only exception concerns wilful crimes against life, which are trialled by a jury.
10
Diversions are an exception in the Brazilian system. For those offences, whose maximum penalty do not exceed 2 (two) years, a civil composition with the victim may be established. There can also be a deal with prosecutors, in which the defendant receives a different type of punishment (e.g. provision of community services or cash benefit to the victim) in order not to be sued. For nonviolent offences, whose minimum penalty do not exceed 1 (one) year, the prosecutor may offer to suspend proceedings under certain conditions. It is possible for a limited amount of offences, that after an agreement between the prosecutor and the defendant, in which the defendant agrees to be a whistleblower, he receives a penalty
Yes, Brazilian Criminal Law holds any person who contributed to the extent of their culpability, including the co-authors and other participants, liable. Exceptionally, when the participation is minor, the penalty may be reduced by 1/6 or up to 1/3. The expression to the extent of their culpability, emphasises the wilful participation of the defendants.
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Common Defences
Yes, whenever the crimes require a specific intent. The burden of

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Witnesses may also be subpoenaed and have the duty to show up, as well as to speak the truth. They can be heard by the police or by the judge.

proof with respect to intent lies with the prosecution. However, the defence team will always be in a better position to prove the absence of specific intent.
Brazil
to clarify the facts and the commitment to cease the anticompetition practices. After the terms of the agreement were fulfilled by the defendant, the judge redeems the defendant from any criminal penalty. For some other offences (e.g. money laundering), there is also the possibility of whistle blowing, which reduces the penalty of the informer, as described in question 8.3. In such cases, the agreement will be under the care of the prosecution without further legal criteria to guide it.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Brazil, and describe the favourable treatment generally received.
Brazil
The Brazilian criminal law exempts from punishment the inevitable mistake of law, that is to say the fact that the conduct is forbidden. In such cases the defence team has the burden of proof, since the general rule is the knowledge of what is lawful.
Yes, the mistake of fact focuses on the elements of the corpus delicti, which normally ends up excluding the crime itself. Also the burden of proving the mistake of fact lies with the defence. It should prove, in short, if the facts were as the agent believed them to be, and if under those circumstances the agent formed a misperception of them, there would be no crime.
In general, both the agreements for whistle blowing or leniency demand a confession by the informer, and they must result in the identification of co-authors, as well as the obtaining of evidence to the crime. For the purposes of the leniency agreement, the rule is of the first in and the informer cannot be the leader of the cartel. Also, the law provides that the Secretariat of Economic Law of Ministry of Justice will celebrate a direct agreement with the informer, which shall contain the conditions necessary to ensure the effectiveness of the collaboration and the outcome of the proceedings.
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No, not unless he is responsible for preventing the commitment of the crime. Thus, the ordinary citizen who discovers a crime in a company as long as he does not benefit from it has no obligation to report it, unless he holds a higher position than the offender, or holds a position responsible for preventing business crimes within the company. If he has the duty to inform, he could commit a different crime. If, on the other hand, by any other means, it is understood that he had to report it, he may be considered co-author or participant, when his omission is seen as the cause of the crime.
Not exactly. In the deal mentioned in question 8.3, the subject ceases to be prosecuted and receives a restrictive punishment, but there is no assumption of guilt. Therefore, he abstains from contesting the charge but in exchange for a measure, not a penalty (the difference lies precisely in the status of guilty). It is worth mentioning the deal that, in the cases of whistle blowing, the defendant does not cease to dispute the charge, but will have his sentence reduced for producing evidence against other defendants and for cooperating with their prosecution.
13
The requirements were described in question 8.3. The judge must approve the deal, and that happens in the overwhelming majority of cases.
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The leniency agreements exist only for competition crimes. The procedure starts before the Secretariat of Economic Law of the Ministry of Justice (SDE), consulting secretly with them what is in the governments interest in a particular cartel. If there is interest, the terms of the leniency agreement are drafted. The leniency agreement always contains rules for continued and comprehensive cooperation during the administrative and judicial phases, in order
Yes. The sentencing is divided into three phases. For the penalty of imprisonment, the judge must first adopt the minimum amount of time according to the criminal statute. At this moment, he shall take into account, so says the Penal Code, the defendants culpability, his criminal records, social behaviour, personality, motives, crimes circumstances and victims behaviour. He shall weigh the negative
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and positives elements and, according to the final result, will increase the penalty or maintain it at its legal minimum. At the second phase, he shall verify if there are mitigating circumstances (e.g.: the defendant is younger than 21 or older than 70 years-old, having a moral or social reason for the commitment of the crime, ignorance of the Law, whether or not there was a confession, etc.) or aggravating circumstances (recidivism; moral turpitude; having committed the crime either to facilitate or to ensure the execution, occultation or impunity of another crime; use of means that annul the victims possibility of defence, or that increased common danger; against relatives; with abuse of power or violation of duty inherent to the position, employment or ministry; etc.). At the third phase, he shall analyse if there are special causes that either increase (e.g.: continued crime) or decrease (the attempt to commit a crime, for instance) the penalty. Finally, he must decide if the imprisonment penalty can be substituted for lesser severe ones or, yet, if its execution can be suspended under determined and legally established circumstances. For the fines, the judge must also obey three steps: first, taking into account the gravity of the crime, the judge will determine an amount of so-called day-fines, ranging from 10 to 360; the second step concerns the economic capacity of the defendant. It will be the basis to determine the amount of each day-fine, ranging from 1/30 to 5 times the minimum wage; and at the third step, if the judges consider the fine insufficient, the fine can be tripled. There are some specific rules that alter a little the abovementioned rules. It is worth mentioning those related to the crimes against the environment. For legal entities whose criminal liability exists in the realm of those crimes there are no specific rules for sentencing, and it is possible to make the penalties: (i) a partial or total interruption of the activities; (ii) a temporary interdiction of the business, construction site or activities; (iii) a prohibition of celebrating contracts with the public power, as well as receiving public subsidies, subventions or donations; or (iv) community service.
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Appeals
Yes, both the defendant and the plaintiff (for a higher penalty, for example) may appeal against a guilty verdict.
The appellate court can, once again, decide the case, i.e., reassess the facts and come to a different conclusion than the one made by the judge. They can also reassess the justification used by the judge at his decision. Finally, they can also agree with the conviction, but disagree with the intensity or the quality of the penalty, and therefore, change it.
As mentioned in the previous answer, the appellate court upholds extensive powers, both regarding the facts and the rights, and it is only at this level of appeal (see question 2.1) that the case will be thoroughly and deeply revisited. It is possible, however, at the Superior Courts to obtain a decision whose effects are equal to those arising from an ordinary appeal. However the justification must rely only upon the rights, not the facts.
Yes, as explained in the previous answer.

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Yes, always. In Brazil, there is the right to appeal the judgment to a higher court (Pact of San Jos, Costa Rica, Article 8, 2, h).
Brazil
Celso Sanchez Vilardi

Vilardi Advogados Associados Av. Paulista, 949 17 andar So Paulo, SP CEP 01311-917 Brazil
Davi de Paiva Costa Tangerino

Vilardi Advogados Associados Av. Paulista, 949 17 andar So Paulo, SP CEP 01311-917 Brazil
Brazil
+55 11 3262 0101 +55 11 3262 0605 celso@vilardi.com.br www.vilardi.com.br
+55 11 3262 0101 +55 11 3262 0605 davi@vilardi.com.br www.vilardi.com.br
Celso Vilardi founded Vilardi&Advogados Associados in 1991, a sound law firm specialised in Business Crimes. He obtained his Masters Degree at the Pontifical Catholic University of Sao Paulo. He is a Coordinator and Professor at GVLaw (Specialisation in Economic Criminal Law) and at the Paulista University (currently licensed). He is an expert at General Theory of Procedure and author of several articles in the realm of Economic Criminal Law, as well as co-author of the book Aspectos Atuais do Direito do Mercado Financeiro de Capitais, published by Dialtica in 1999.
Davi Tangerino is an associate at Vilardi & Advogados and has been a lawyer for a decade in the field of corporate crimes, especially tax crimes, crimes against the national financial system, money laundering and environmental crimes. He worked as a clerk at the Brazilian Supreme Court. He obtained his Masters Degree and PhD at the University of So Paulo (USP), and had a one-year sandwich doctorate experience at the Humboldt Universitt zu Berlin (Germany). He teaches Criminal Procedural Law at the Federal University of Rio de Janeiro (UFRJ). He speaks Portuguese, English, French, Italian and German.
VILARDI E ADVOGADOS ASSOCIADOS provides legal advice and other legal services in all areas of Criminal Law, in particular with respect to crimes relating to economic and corporate activities, such as crimes against the Brazilian financial system, the tax legal order, consumer, money-laundering, unfair competition and other criminal conducts encompassed by the area of law known as Corporate Criminal Law. Our firm offers consulting services, legal advice and defence work in connection with criminal matters, as well as services involving the monitoring of police investigations and criminal proceedings. Founded in 1991 by senior partner Celso Sanchez Vilardi, our law firm has since then been providing services in the area of Criminal Law. We offer to our clients a wide network of correspondent law firms, and can provide services throughout Brazilian territory, in particular in Brasilia, where we monitor cases under review by the higher courts.
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Chapter 8
Canada
Stockwoods LLP
Scott C. Hutchison
Brian Gover

by different prosecuting authorities. As a practical matter, one prosecution authority may defer to allow the jurisdiction with the more obvious connection to the underlying transaction to take precedence, but there is no legal requirement for them to do so. Decisions as to who will carry an investigation or prosecution forward are generally made informally.
Canada is a federal state with 10 provincial governments in addition to the federal (national) government. Under the Constitution, lawmaking authority is divided by subject matter between the federal government and the provincial governments. The federal government is principally responsible for making criminal law. The authority to prosecute crimes generally and business crimes in particular, is vested principally with the provinces, though certain prosecution areas (tax fraud and anti-competition in particular) remain areas for federal prosecution. Provincial governments have the power to make laws related to business matters that have penal consequences. Most significantly, the provincial governments remain principally responsible for the regulation of the capital markets in Canada through provincial securities commissions. (The federal government has announced its intention to create a national securities regulator, but that project is in relatively early days.) Within each province and at the federal level, there is an Attorney General who is a member of the cabinet. Within each province, there is a prosecution service responsible for prosecuting crimes arising within their territorial jurisdiction. The federal government has a counsel in the Department of Justice and the Public Prosecution Service of Canada who share responsibility for prosecuting matters within federal jurisdiction. Such matters would include anti-competition (anti-trust) charges, federal tax fraud and a number of other less significant federal jurisdictions.
The provincial securities commissions are principally responsible for the enforcement of civil and administrative laws related to the capital markets of Canada. The federal government has recently moved to create a national securities regulator but this process is only just beginning. For the immediate and medium term, provincial securities commissions remain the authority responsible for investigating and prosecuting civil or administrative breaches of legislation governing capital markets. The federal Competition Bureau is responsible for administrative and penal enforcement in respect of criminal anti-competitive (anti-trust) activity. In addition, the Canada Revenue Agency is responsible for the investigation of possible breaches of income tax or importation laws. Those provisions are subject to either civil or criminal enforcement.

2.1 How are the criminal courts in Canada structured? Are there specialised criminal courts for particular crimes?
The provincial prosecution services are generally responsible for the prosecution of most criminal acts including business crimes. The federal prosecution service is, in general, limited to prosecuting specific areas reserved to the federal government. For present purposes, the most significant of these is the prosecution of anticompetitive activity and fraud in relation to federal income tax provisions. Where misconduct overlaps between areas of jurisdiction (for example, a fraud with anti-competitive elements), both prosecution authorities may proceed. While there is some protection in Canada against double jeopardy, this does not prevent multiple prosecutions
In general, within each province there are two levels of trial court, a Provincial Court and a Superior Court or Court of Queens Bench. The Provincial Court deals with the vast majority of criminal cases either by way of a preliminary hearing or as the trial court. All Provincial Court matters are judge alone. The Superior Court (Queens Bench) will deal with more serious criminal trials and will deal with all jury trials. There is no formal specialisation in either court with respect to criminal law although, as a practical matter, many judges in the Provincial Court hear only criminal cases. There are no courts specialising in business or commercial crime. From both trial courts there is an appeal as of right to the provincial Court of Appeal. The provincial Court of Appeal hears appeals from all areas of law (criminal, civil and family) and is made up of judges from a variety of backgrounds.

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In addition, there is a federal court system dealing with a limited number of matters arising in the context of federal enforcement areas. However, the overwhelming majority of business crime cases will be dealt with in the provincial system. At the federal level there is a trial division, and an appeal division. From the appeal division there is a further appeal to the Supreme Court of Canada. Criminal prosecutions related to federal tax fraud and anticompetition allegations are dealt with in the provincial system.
Canada
make it an offence for a person or company in a special relationship with an issuer to purchase or sell securities of the issuer with the knowledge of a material fact or change with respect to the reporting issuer that has not been generally disclosed. There is a related offence of tipping which similarly prohibits an issuer and or person or company in a special relationship with an issuer from informing any person (other than in the necessary course of business) of a material fact or material change before the material fact or material change has been generally disclosed. o Embezzlement The previously mentioned general fraud provision, as well as the prohibition against theft, are generally invoked to deal with circumstances sometimes called embezzlement (a taking by someone from or within an organisation). o Bribery of government officials Bribery of government officials is a serious offence in Canada. There are a number of provisions prohibiting bribery of judicial officers, individuals involved in the administration of justice, and anyone responsible for government contracting or other dealings with the government. These provisions are complicated and drafted with a view of capture almost any form of dealing between a person or company dealing with the government and any employee of the government. It is an offence to provide any benefit (monetary or otherwise) to an individual working for the government in any way in connection with the dealings between the government and the individual providing the benefit. It is an offence for any person so employed to take any benefit, whether or not it influences them in any way in their dealings with the party providing the benefit. o Criminal anti-competition The principal criminal provisions in the Competition Act are as follows: Conspiracies between Competitors to Lessen Competition: It is an offence for anyone to conspire, agree or arrange with a competitor: (a) to fix, maintain, increase or control the price for the supply of the product; (b) to allocate sales, territories, customers or markets for the production or supply of the product; or (c) to fix, maintain, control, prevent, lessen or eliminate the production or supply of the product. Bid Rigging: It is an offence for anyone be a party to and an agreement or arrangement between two or more persons whereby one or more of those persons agrees or undertakes not to submit (or to withdraw) a bid or tender in response to a call or request for bids or tenders, or agrees or undertakes to withdraw a bid or tender submitted in response to such a call or request. As well it is an offence to be a party to an agreement or arrangement whereby responses to a call for tenders or bids are arrived at by agreement between the tendering parties. It is a defence to such a charge if the fact of the agreement was made known to the party seeking the tenders. o Tax crimes There are a number of freestanding tax statutes in Canada at both the federal and provincial level. Most significantly, the federal Income Tax Act makes it an offence to fail to report income or remit taxes thereon, in addition to the general offence of fraud. o Government-contracting fraud The Criminal Code includes several provisions preventing frauds on the government. In general, it will be a fraud for any person to provide any benefit to a decision maker within government in connection with dealings between that person and a portion of the government over which the receiver has any authority or influence. In addition, any person receiving such a benefit is liable to prosecution. These provisions have been broadly interpreted by the courts.
Canada
Where the penalty for the charged offence could lead to imprisonment for five years or more, there is a constitutional right to a trial by jury. This right applies even where the accused is a corporation.

3.1 Please describe any statutes that are commonly used in Canada to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
The federal Criminal Code creates a general offence of fraud which may be applicable to frauds or misrepresentations related to the sale of securities. It is an offence for anyone, by deceit, falsehood or other fraudulent means, to defraud any person or the public of any property, money or valuable security. It is sufficient if the pecuniary interests of the victim have been placed at risk to make out a fraud. The expression other fraudulent means has been given a broad interpretation by the courts and includes the non-disclosure of important information that a court finds should have been disclosed. In addition, provincial securities law makes it an offence to make a statement in any offering related document under securities law that is misleading in a material respect at the time and in the light of the circumstances under which it is made. This includes a statement that is misleading or untrue or a document that does not include a fact that is required to be stated or that is necessary to make the statement not misleading. The penalty for provincially created securities will be less than five years, plus a monetary penalty of up to five million dollars (CDN). These statutes generally have no special intent requirement: it is sufficient if the prosecution proves that the accused did the prohibited acts with knowledge of the relevant facts. o Accounting fraud There is no specific accounting fraud crime in Canada. The sort of misconduct normally captured by accounting fraud statutes would be captured by the broad definition of fraud (or the related offences of forgery and uttering forged documents) in the general provisions of the Criminal Code. o Insider trading There is a relatively new specific criminal prohibition against insider trading making it an offence for anyone to buy or sell a security while knowingly using inside information that they obtained as a result of being an insider. Insiders include shareholders, professionals providing services to the issuer, entities involved in proposed takeovers, individuals employed by the issuer and anyone knowingly receiving information from any of the previously mentioned individuals. The main recourse for transactions of alleged insider training is found in the provincial securities Acts. These provincial statutes
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o Any other crime of particular interest in Canada
Canada
misconduct by an entity the individual works for or controls. However, individuals can, and often are, held liable for their own actions taken in the course of their employment or direction of a company.
Canadian courts have taken an expansive view of the offence of obstruction of justice. While there is generally no affirmative duty to assist the police, it is an offence to mislead the police (or regulatory investigators).
3.2 Is there liability for inchoate crimes in Canada? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
5.1
How are enforcement-limitations periods calculated, and when does a limitations period begin running?
There are three theories of liability by which a person can be found guilty of a crime that has not been completed. First, it is an offence for any person to counsel the commission of a criminal offence. Counselling is the act of encouraging or advising someone to commit an offence in the hope that they will in fact carry out the offence counselled, and is a crime whether any offence is actually committed. Second, it is an offence to conspire with another person to commit an offence. A conspiracy is an agreement between two or more individuals to work together to commit an offence. Third, it is an offence to attempt to commit an offence. An attempt is complete upon an individual having the necessary intent to commit the offence and taking some step beyond mere preparation.
There are very few limitation periods in Canadian criminal law. Depending on the statute, the limitation may run from the last act involved in the commission of the offence, or may run from the time when the enforcement agency first had the opportunity to have knowledge of the offence.

In some cases, ongoing criminal activity a continuing offence can provide a basis for the extension of a limitation period to acts or omissions taking place outside the limitation period. In general, the limitation period does not begin to run until the last act or omission that is the part of an ongoing transaction or conspiracy.
The circumstances under which a corporation will become criminally liable are set out in the Criminal Code. Where the offence in question is a negligence offence (for example, some forms of manslaughter), a corporation will be liable if while acting within the scope of their authority: (a) one of its representatives is a party to the offence; or (b) two or more of its representatives engage in conduct which, if it had been the conduct of only one representative, that representative would have been a party to the offence; and (c) the senior officer(s) responsible for that aspect of the organisations activities departs markedly from the standard of care that, in the circumstances, could reasonably be expected to prevent a representative of the organisation from being a party to the offence. In essence if the representatives engage in negligent acts, and the responsible senior officers have departed markedly from the standard of care needed to control that sort of conduct, the corporation will be liable Where the offence require proof of fault (a traditional mens rea offence) an organisation is a party to the offence if, with the intent at least in part to benefit the organisation, one of its senior officers: (a) acting within the scope of their authority, is a party to the offence; (b) having the mental state required to be a party to the offence and acting within the scope of their authority, directs the work of other representatives of the organisation so that they do the act or make the omission specified in the offence; or (c) knowing that a representative of the organisation is or is about to be a party to the offence, does not take all reasonable measures to stop them from being a party to the offence.
With limited exceptions, there are no provisions for the tolling of limitation periods. However, some statutes permit a defendant to waive an objection based on a limitation period normally to enable the government to lay a charge under a less serious provision.
Criminal investigations are normally initiated after a complaint is received by the police or other enforcement agency from the public. Every entity will have some sort of internal control with respect to when resources are devoted to an investigation. Generally, however, these internal policies do not have the force of law and will not provide the basis for an objection by a party being investigated.

Individual criminal liability will normally not derive from
Under the Canadian Constitution, the government is limited in its ability to intrude into matters where an individual or organisation has a reasonable expectation of privacy. In the context of true criminal investigations, the government is allowed to interview witnesses, but there is no general duty on the part of individuals or entities to cooperate with the government. Subject to the points raised below with respect to specific powers, there is no authority to intrude upon an individual or entitys privacy.

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Document Gathering:
Canada
enforcement agency have reasonable grounds to believe that the home or office of an employee has electronic or paper documents located in it, they can obtain a search warrant to enter the home or office and seize and/or copy the documents relevant to their investigation.
Canada
In the context of provincial securities act enforcement, the various securities commissions generally have the power to require the subject company and any individual performing a function requiring registration to provide the commission with any document it requires in order to conduct a complete investigation. As well, under both the Criminal Code and the various securities acts, the police or enforcement agencies have the authority to apply to a judicial officer for a search warrant or production order. A warrant authorises the officers to enter the companys place of business and search for and seize documents or anything relevant to the investigation. Anything found can be seized or copied and used by the government to further its investigation and admit it in evidence in any later prosecution. A production order requires the company to provide any evidence in its possession to the police.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Canada recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Canadas labour laws protect personal documents of employees, even if located in company files?
In the context of true criminal investigations, there is no obligation on the part of any individual to cooperate with the police. In Canada, there is no grand jury system. However, common in the context of securities act investigations, any individual performing a registered function or officer of any company dealing in securities can be required to provide a statement under oath to the Commission to assist it in its investigation. The questioning takes place before a court stenographer, but does not take place in a court setting.
In the context of true criminal investigations, there is no obligation on the part of any individual to cooperate with the police. In Canada, there is no grand jury system. However, common in the context of securities act investigations, any individual performing a registered function or officer of any company dealing in securities can be required to provide a statement under oath to the Commission to assist it in its investigation. The questioning takes place before a court stenographer, but does not take place in a court setting.
In general, in the context of criminal investigations, the only privilege recognised is in respect of lawyer/client communications. While other privileges exist in law, they are generally not recognised in the context of criminal investigations. While a variety of statutes create privacy rights, a search warrant will, almost always, trump such legislation and allow the government to seize and use the otherwise private material. Claims of lawyer/client privilege must be made in a timely way and will be subject to adjudication by a Court hearing submissions from both the claimant and the government.
The answer depends on whether the interview is compelled by statute. Where an interview is compelled by statute there is normally a right to have counsel present. Under the Canada Evidence Act and most provincial Evidence Acts, there is no right to refuse to answer a question but the party being interrogated is given a form of use immunity which prevents the statement from being used against them (personally) in any subsequent prosecution. There is a limited derivative use immunity where it can be shown that the government has discovered evidence that it would not otherwise have found but for the compelled testimony. A person arrested has the right to remain silent and no adverse inference can be drawn from the exercise of the right. Where someone is interviewed after being arrested the right to counsel is narrower. In general, Canadian law recognises the right of an arrested individual to consult with a lawyer prior to being questioned to being interrogated. There is no right to have counsel present during an interview/interrogation.
In general, a company employee cannot be required to produce documents any more than the company itself. However, if the police or other enforcement agency have reasonable grounds to believe that the home or office of an employee has electronic or paper documents located in it, they can obtain a search warrant to enter the home or office and seize and/or copy the documents relevant to their investigation. In an investigation under a provincial securities act an employee may be required to give a compelled statement and produce documents under the control.
In general, a third party cannot be required to produce documents any more than the company itself. However, if the police or other
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9 Burden of Proof
Criminal cases are initiated when a police officer or representative of an enforcement agency comes to the conclusion that they have reasonable grounds to believe that an offence has been committed. They attend before a judicial officer (called a justice of the peace) and swear to their reasonable grounds. The justice of the peace will then make one of a number of possible orders (warrant for arrest, summons) intended to require the individual or entity to attend before the Court to answer the charge.
The Canadian Constitution guarantees every individual or entity the benefit of the presumption of innocence. This requires the state to prove all elements of all offences and, in the context of a criminal case sets the standard of proof as proof beyond a reasonable doubt.
A defendant may be required to introduce or point to evidence raising a doubt. In general, the accused does not carry a burden of proof with respect to any affirmative defence. The prosecution must disprove any defence which arises on the evidence and which could give rise to a reasonable doubt. The Crown must prove all elements of the offence (and all aggravating facts on sentence) to the standard of proof beyond a reasonable doubt. Where the accused is required to raise an issue, the accused must point to or introduce evidence which has the potential to raise a reasonable doubt.
Each provincial prosecution service has its own policy manual guiding the initiation or continuation of prosecutions. In general, a prosecution will only be initiated or continued where the prosecutor is satisfied that there is a reasonable prospect (or, in some provinces, a reasonable likelihood) of conviction. The prosecutor must also be satisfied that the initiation or continuation of the prosecution is in the public interest. Whether a prosecution is in the public interest is dependent on a number of factors. In general, factors relevant to whether initiating or continuing a prosecution is in the public interest will include the seriousness of the offence, the role of the particular individual or corporate defendant in the offence, whether any other enforcement agency has already taken action, whether the individual or entity has been cooperating with the state and, in particular, whether the individual or entity has agreed to provide evidence against other more culpable individuals or entities. As well, any special circumstances related to the individual can be considered.
In a criminal trial with a jury, the jury is responsible for deciding all ultimate questions of fact (that is, any question related to guilt or innocence). The trial judge may determine certain factual questions relevant to dealing with legal issues in anticipation of the question of verdict being submitted to the jury. The trial judge may determine whether there is a sufficient case to be submitted to the jury, but the jury determines whether the prosecution has satisfied its burden of proof. With respect to issues requiring factual determination during the course of the trial, or the ultimate issue in the context of a judge alone trial, the trial judge will determine any relevant questions of fact.
A defendant and the prosecuting authority may agree to resolve a criminal investigation through pre-trial diversion. Again, there are different policies and procedures in place in every province. In general, the factors relevant to whether to allow a defendant to have the benefit of some sort of pre-trial diversion will be a function of the same factors as would be considered by the government in relation to whether a charge should be initiated or continued at all.
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A person will be guilty of conspiring to commit a criminal offence where that person has entered into an agreement with another person to work together to commit a criminal offence. Similarly, a person will be guilty of a criminal offence where they aid or abet (that is to say, encourage) another person to commit a criminal offence. In the context of a conspiracy, the crime being prosecuted is the agreement (not the ultimate criminal objective). It is the act of agreeing which the law seeks to prevent and so the mere fact of an agreement to commit a further offence is sufficient to make out the crime.
The imposition of civil penalties or civil remedies in place of a criminal disposition may be a factor relevant to the exercise of the prosecutors discretion to initiate or continue a prosecution. In general, the decision whether to proceed by way of some sort of civil remedy will be a function of the seriousness of the offence.

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Common Defences
police or other enforcement agency. In some circumstances, an individual or entity may become liable to a civil action for damages where they have failed to make a report and individuals have subsequently suffered a loss.
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Every criminal offence has a minimal intent that requires that the accused acted voluntarily and with knowledge of all the relevant facts. Some offences require the accused to act with a specific intent. In both situations the onus of proof is on the prosecution to prove the required mental element beyond reasonable doubt.
In general ignorance or misunderstanding about the law is not a defence in a criminal matter in Canada. There may be a limited exception where knowledge of a legal fact is an element of the offence. As well, in some limited circumstances a defendant may be able to rely upon a defence of officially induced error. The defence of officially induced error may arise where the defendant can show that they: turned their mind to the legal issue which gave rise to their mistake; sought advice from an official involved in the administration of the law in question; the official gave erroneous advice that was reasonable on its face; and the defendants mistake arises innocently and because of the erroneous advice. Where the defendant relies upon a defence of officially induced error, the burden of proof remains on the Crown and the accused will be acquitted where there is a reasonable doubt with respect to each of the elements of the alleged defence or of the defence being asserted.
In general, there are no formal policies dealing with the granting of lenient treatment to individuals or entities that voluntarily come forward with information about criminal activity where they have been personally involved. Normally, a prosecutor or court will carefully consider such voluntary cooperation in the context of any subsequent penalty hearing. One significant exception to this general rule relates to the Competitor Collaboration Guidelines of the Competition Bureau of Canada and the Bureaus immunity programme under the Competition Act. Under the immunity programme, the first party to an anticompetitive agreement that comes forward may be granted immunity from prosecution if certain criteria are satisfied. Immunity is only available to the first in. Other parties may come forward later and seek forms of lenient treatment for their cooperation in cartel cases.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Canada, and describe the favourable treatment generally received.
There is no general formal regime governing leniency in criminal matters. The degree of cooperation and measure of leniency available will be in the discretion of the particular prosecution service. One important exception arises in the context of anti-competitive activity where Competition Bureaus Immunity Program Under the Competition Act which sets out the policy of the Bureau with respect to such matters. Under the programme immunity or leniency may be available where: the Bureau is unaware of an offence and the party seeking immunity is the first to disclose it; or the Bureau is aware of the offence and the party is the first to come forward before there is sufficient evidence to warrant a prosecution In order to be eligible the party coming forward must terminate its participation in the illegal activity and cannot have coerced others to participate in the offence. The cooperation to be provided to investigators and prosecutors must be complete, timely and ongoing. The party must reveal any and all conduct of which it is aware, or becomes aware, that may constitute an offence under the Act and in which it may have been involved. The party must provide full, complete, frank and truthful disclosure of all non-privileged information, evidence and records in its possession, under its control or available to it, wherever located, that in any manner relate to the anti-competitive conduct for which immunity is sought. There must be no misrepresentation of any material facts;
A mistake of fact is a defence to a criminal charge. The defendants state of knowledge is part of the mental element of the offence and so it must be proven by the prosecution to the normal standard of proof beyond a reasonable doubt. The accused is not obliged in law to prove that they were mistaken with respect to a question of fact but, as a practical matter, will almost always have to lead or point to evidence to support their claim that they were ignorant or mistaken with respect to key facts.
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There is no affirmative obligation on anyone to report a crime to the
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companies must take all lawful measures to secure the co-operation of current directors, officers and employees for the duration of the investigation and any ensuing prosecutions. Companies must also take all lawful measures to secure the co-operation of former directors, officers and employees as well as current and former agents, where doing so will not jeopardise the investigation. The application for immunity is to be kept confidential by the applicant. If the first party to apply for immunity fails to meet the requirements above, a subsequent party that does meet the requirements may be recommended for immunity. 3. 4.
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whether the offence involved a large number of victims; and whether the offender took advantage of the high regard in which the offender was held in the community.
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Plea Bargaining
The sentencing process is a formal hearing in Court in which the parties present evidence and argument to the judge as to what the appropriate sentence should be. In some cases, a pre-sentence report may be prepared by a correctional official but it can be rejected by the defendant, in which case, the prosecution is required to prove (beyond a reasonable doubt) any facts relied upon in aggravation. The defendant is required to prove on a balance of probabilities any facts relied upon in mitigation.
It is common for the prosecution and the defendant to enter into negotiations with respect to resolving a criminal charge. Such plea bargaining discussions are common. Prosecutors will negotiate such arrangements and can normally agree to modify the charges to which a plea will be entered, the facts provided to the court to support the charge, and the sentence to be recommended to the court.
When sentencing a corporation (or other organisation), the Court is required to take into account the following factors: 1. 2. 3. 4. Any advantage realised by the organisation as a result of the offence. The degree of planning involved. Attempts to conceal or convert assets to avoid paying a fine. The impact of a sentence on the economic viability of the organisation and the continued employment of its employees. The costs associated with the investigation and prosecution. Any regulatory penalty imposed outside the criminal process and whether representatives of the organisation have already been convicted of and punished for similar offences by a regulatory body. Any penalty imposed on the representatives of the organisation in other criminal proceedings. Any restitution that has been paid or ordered. Any step taken by the organisation to reduce the likelihood of the commission of a similar offence in the future.
5. Every provincial prosecution service has a Crown Policy Manual guiding how decisions are made with respect to plea bargaining. While the prosecutor has an absolute right to terminate any prosecution, the Court is not bound by the prosecutors submission or a joint recommendation with respect to sentence. The Court may hear a defendant plead guilty, hear the joint recommendation as to sentence, and yet impose a sentence that is more or less than the one jointly recommended. It is, however, unusual for a court to reject any sort of joint submission and, if a court is going to do that, it must first advise the parties and given them an opportunity to make further sentencing submissions. 6.
7. 8. 9.
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Appeals
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The Criminal Code provides little guidance with respect to the sentences to be imposed in respect of true crimes. In general, maximum penalties are provided (for example, for fraud, the maximum penalty is 14 years) but it is rare for the maximum sentence to actually be imposed. In sentencing, in respect of fraud and other business crime matters, the Court is to consider as aggravating factors the following matters: 1. 2. whether the value of the fraud exceeded CDN$1 million; whether the offence adversely affected or had the potential to adversely affect the stability of the Canadian economy or financial system or any financial market or investor confidence;
A defendant can appeal from a finding of guilty. The first level of appeal is automatic. Subsequent levels of appeal may be subject to the appeal court granting leave to appeal. The prosecutor may appeal an acquittal on a similar basis. The prosecution can appeal in the same way but on a narrower basis.
Both the prosecutor and the defendant may appeal a sentence.

In general, where the defendant appeals, the appeal may raise any question of law, question of mixed fact and law or, in some cases, certain questions of fact. The prosecution can only appeal on

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The Court cannot consider as a mitigating factor any aspect of the offenders education, employment or social status that may have permitted them to commit the offence.
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questions of law alone. The standard of review with respect to questions of law is one of correctness. However, some discretionary decisions, such as the admissibility of evidence, may be subject to a deferential standard of review.
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Where the Court allows an appeal, it can order a new trial or enter any verdict that the trial court could have entered. In the case of a prosecution appeal it cannot enter a conviction if the original acquittal was the result of a jury trial. The appellate court can also vary the sentence to any legal sentence that it thinks should have been imposed.
Scott C. Hutchison
Stockwoods LLP Royal Trust Tower 77 King Street West, Suite 4130 P.O. Box 140, Toronto-Dominion Centre Toronto, Ontario M5K 1H1 Canada
Brian J. Gover
Stockwoods LLP Royal Trust Tower 77 King Street West, Suite 4130 P.O. Box 140, Toronto-Dominion Centre Toronto, Ontario M5K 1H1 Canada
+1 416 593 2485 +1 416 593 9345 scotth@stockwoods.ca www.stockwoods.ca
+1 416 593 7200 +1 416 593 9345 briang@stockwoods.ca www.stockwoods.ca
Scott Hutchisons practice includes criminal litigation and advisory services, with a particular interest in white collar crime and appellate advocacy. His recent practice has included a number of high profile criminal prosecutions, selected class actions and injunction proceedings, and Ontario Securities Commission proceedings. From 1989 to 2005, he was Crown Counsel at the Crown Law Office (Ontario) where he represented the Crown all levels of court, including hundreds of appearances in the Court of Appeal and numerous appeals in the Supreme Court of Canada. He is the author of a number of regularly cited legal texts, including Search and Seizure Law in Canada (Carswell); Hutchisons Search Warrant Manual, 2007; Computer Crime in Canada (with Robert Davis) and is one of the authors of McWilliams Canadian Criminal Evidence. He is one of the Co-Chairs of the annual National Symposium on Crime and the Corporation.Scott writes and teaches extensively and is a member of the adjunct faculty of Queens Law School where he teaches Trial Practice and Appellate Advocacy.
Brian Gover was admitted to the Ontario Bar in 1983 and has practised at Stockwoods since 1994. He is a respected senior litigator and a fellow of the American College of Trial Lawyers. Before joining Stockwoods, he was counsel in the Crown Law Office Criminal where he argued appeals before the Ontario Court of Appeal and Supreme Court of Canada. His practice includes competition law, criminal law, discipline proceedings, general civil litigation and administrative law. He acts for private clients, as well numerous regulators and administrative agencies. In addition, Brian has frequently acted as counsel on federal and provincial Commissions of Inquiry. In that role, he has served as Commission counsel on the Walkerton Inquiry, Arar Inquiry and the Air India Inquiry. Brian speaks and writes on a broad variety of topics and is a frequent speaker at continuing legal education programs. He is the Editor-in-Chief of the Corporate Liability Journal, has served as adjunct faculty at the University of Western Ontario law school and is currently an Adjunct Professor at Osgoode Hall Law School.
Stockwoods LLP is a leading litigation boutique law firm based in Toronto, Canada. Members of the firm are regularly retained by major companies, corporate executives and senior government officials to act on their behalf in the most complex and challenging investigations and prosecutions. Led by two former senior prosecutors, our Regulatory Enforcement/White Collar Crime Group provides representation and advisory services in a wide range of criminal law and regulatory matters. The firms broad experience and expertise allows it to seamlessly provide advice and representation in relation to class action and other civil implications arising from the criminal law/enforcement issues presented by the immediate brief, or to coordinate with other counsel retained on the clients behalf.
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Chapter 9
England & Wales

BCL Burton Copeland
Richard Sallybanks
Guy Bastable


2.1 How are the criminal courts in England and Wales structured? Are there specialised criminal courts for particular crimes?
The Crown Prosecution Service (CPS), incorporating the former Revenue and Customs Prosecution Office, prosecutes most forms of business crime, including tax frauds and corporate manslaughter. However, the majority of high value corporate fraud and corruption cases are prosecuted by the Serious Fraud Office (SFO). Numerous other specialist agencies also prosecute business crime. For example, the Financial Services Authority (FSA) prosecutes market manipulation and insider dealing; the Office of Fair Trading (OFT) prosecutes cartel arrangements; and the Department for Business, Innovation and Skills, the Health and Safety Executive, and the Environment Agency prosecute insolvency, health and safety, and environmental offences respectively.
Criminal courts are divided into Magistrates Courts and Crown Courts. There are no juries in Magistrates Courts, which hear minor criminal cases. Crown Courts generally hear only indictable offences, which are offences of a requisite seriousness. Appeals from decisions of the Crown Court may be made to the Court of Appeal. Exceptionally, a further appeal may be made to the Supreme Court. There are no specialised courts for particular crimes.
Certain types of business crime are commonly prosecuted by specialist agencies (see question 1.1 above). However, where an offence might otherwise be investigated by a specialist agency, e.g., boiler room fraud (FSA) or price-fixing (OFT), but also involves serious or complex fraud, it may be referred to the SFO. The decision to refer a case to the SFO is based on statutory provisions or guidelines agreed between the agencies. The SFO then applies certain criteria in deciding whether to accept the case for investigation (see question 6.1 below).
There is a general right to a jury in all cases tried on indictment. However, since 2006, prosecutors have been able to apply for cases to be tried without a jury where there is evidence that jury tampering would take place. Further, since 2003, there have been provisions on the statute book (not yet brought into force) to enable applications to be made for certain fraud cases to be tried without a jury.

3.1 Please describe any statutes that are commonly used in England and Wales to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
Fraud generally
Some agencies whose remit includes both a regulatory and enforcement function have powers to impose administrative penalties. The FSA, for example, can impose fines against companies and individuals and may withdraw or limit such persons authorisation. It can also take civil action to obtain injunctions, payment of restitution, or insolvency orders. In addition, certain prosecutors can institute civil recovery proceedings for the purpose of recovering money and other property obtained through unlawful conduct.
Many fraud-related business crimes are prosecuted either under the common law offence of conspiracy to defraud or under the Fraud Act 2006. Under the common law, it is an offence for two or more people to agree dishonestly to prejudice the rights of another. Under the Fraud Act, a person may commit fraud by false representation, by failing to disclose information or by abuse of position. The main elements of the offence are dishonesty with an intent to gain or cause loss or to expose another to a risk of loss. o Fraud and misrepresentation in connection with the sale of securities
Under the Financial Services and Markets Act 2000, it is an offence for a person to knowingly or recklessly make misleading statements in relation to investments or to dishonestly conceal information in

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connection with a statement. The offender must act for the purpose of inducing, or be reckless as to whether he may induce, another person to deal or refrain from dealing in securities. The offence also applies where a person intentionally carries out misleading practices, such as artificial trades, with the intention of creating a false or misleading impression and thereby to induce another person to deal or refrain from dealing in securities. o Accounting fraud Under the Theft Act 1968, a person is guilty of false accounting if he destroys, defaces, conceals or falsifies any account, record or document required for an accounting purpose, or where he produces or makes use of any such account etc., knowing it is or may be misleading, false, or deceptive in a material particular. The offender must have acted dishonestly with a view to gain for himself or another, or with intent to cause loss to another. o Insider dealing Under the Criminal Justice Act 1993, it is an offence for a person who has inside information to deal in securities, encourage another to deal, or disclose inside information to another (other than in the proper course of his employment). However, there are a number of defences which are set out in the Act, for example, where the person would have done what he did even if he did not have the information, or where the person did not realise that the information was price-sensitive. o Embezzlement There is no specific offence of embezzlement. Rather, such conduct is likely to be prosecuted as a fraud offence (see above) or as an offence of theft under the Theft Act 1968. A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it. o Bribery of government officials The Bribery Act 2010, which is likely to come into force in April 2011, creates offences of bribing another person, receiving a bribe and bribery of foreign public officials, as well as a new offence for commercial organisations of failing to prevent bribery (subject to a statutory adequate procedures defence). The Act describes various ways in which bribery can be committed, but, in general, it is committed where a person offers, promises or gives (or requests, agrees to receive or accepts) a financial or other advantage intending that, as a consequence, a relevant function or activity should be performed improperly. Until the Bribery Act comes into force, bribery of government officials may be prosecuted under the common law, under the Public Bodies Corrupt Practices Act 1889 (PBCPA) or under the Prevention of Corruption Act 1906 (PCA). The PBCPA is limited to local government bodies. Bribery of central government employees is therefore usually prosecuted under the PCA, under which it is an offence to corruptly give, agree to give or offer to an agent (or for an agent to accept, agree to accept or attempt to obtain) any gift or consideration as an inducement or reward for doing or forbearing to do any act in relation to his principals affairs. o Criminal anti-competition Under the Enterprise Act 2002, it is an offence for individuals dishonestly to agree with one or more others to make or implement, or cause to be made or implemented, certain types of anticompetitive conduct, namely price-fixing, market sharing, bidrigging and limitation of production or supply. Companies have only a civil liability, e.g., under the Competition Act 1998. o Tax crimes There are numerous revenue and customs related offences. For example, under the common law, any form of fraudulent conduct
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which results in diverting money from the Revenue is an offence of cheating the public Revenue. Under the Finance Act 2000, a person who is knowingly concerned in the fraudulent evasion of income tax will commit an offence. Under the Customs and Excise Management Act 1979, it is an offence to be in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable on any goods. Finally, under the Value Added Tax Act 1994, it is an offence for a person to be knowingly concerned in, or take steps with a view to, the fraudulent evasion of VAT. o Government-contracting fraud There is no specific offence relating to government-contracting fraud. Such conduct is likely to be prosecuted as a fraud or corruption offence (see above). o Any other crime of particular interest in England and Wales
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Money laundering Under the Proceeds of Crime Act 2002, it is, in general terms, an offence to deal with criminal property, i.e., property which constitutes or represents a persons benefit from criminal conduct and the alleged offender knows or suspects that this is the case. Corporate Manslaughter Under the Corporate Manslaughter and Corporate Homicide Act 2007, an organisation will be guilty of an offence if the way in which its activities were managed or organised caused a persons death and amounted to a gross breach of a relevant duty owed by the organisation to the deceased, where the way in which its activities were managed or organised by its senior management was a substantial element of that breach. Fatal accidents also expose companies to criminal liability under the Health and Safety at Work etc. Act 1974. Offences under the Companies Acts The various Companies Acts create numerous criminal offences, including failing to keep adequate accounting records, making false statements to an auditor, and fraudulent trading (where a person is knowingly party to the carrying on of a business for any fraudulent purpose).
3.2 Is there liability for inchoate crimes in England and Wales? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
A person is guilty of attempting to commit an offence if, with intent to commit an offence, he does an act which is more than merely preparatory to the commission of the offence, i.e., he tried to commit the offence. A person may be guilty of attempt even if it would be impossible to commit the substantive offence. If a person agrees with any other person or persons to pursue a course of conduct which, if carried out, would amount to the commission of an offence, or would do so but for the existence of facts which render the commission of the offence impossible, he is guilty of conspiracy to commit the offence in question. Finally, a person is guilty of an offence where he does an act capable of encouraging or assisting the commission of an offence and he intends to encourage or assist its commission or believes that it (or at least one of a number of possible offences) will be committed and that his act will encourage or assist its commission.
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A company may be guilty of strict liability offences where the act of an employee counts as the act of the company. In addition, in relation to offences involving a required mental element, a company is only liable where the act and state of mind of a company officer who is its directing mind can be attributed to the company; commonly, a director or senior manager. All elements of the offence must be proved against the directing mind with the companys liability following as a matter of course.
In addition to the powers to obtain search warrants, arrest suspects, search premises following arrest and interview under caution (via the police), agencies such as the FSA, the OFT and the SFO may issue a notice compelling a person to answer questions about matters relevant to an investigation, to otherwise provide information or to produce documents. Similar powers have been granted to the CPS in relation to certain crimes including: money laundering; false accounting; revenue and customs offences; bribery and corruption; and attempts and conspiracies in relation to the same.
Document Gathering:
The accessorial liability of company officers is often provided for in a statutory provision creating liability where it is proved that the predicate corporate offence was committed with the consent or connivance of or was attributable to the neglect of a company officer. Individuals may also be liable for crimes committed by companies if they aid, abet, counsel or procure the commission of the offence (see question 10.1 below).
There are no limitation periods for the prosecution of indictable offences. However, proceedings for offences which may only be tried in a Magistrates Court must, generally, be commenced within six months from the time when the offence was committed or discovered.
Certain agencies (e.g., those mentioned at question 7.1 above) may issue a notice compelling a company to produce documents. Generally, the criteria for issuing a notice are that there are reasonable grounds for suspecting that an offence has been committed and that the recipient of the notice has relevant information. The agencies may also apply to a court for a search warrant. To issue the warrant, the court must be satisfied that the company has failed to comply with an obligation to produce documents, or it is not practicable to serve a notice to produce documents, or to give a notice might seriously prejudice the investigation.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does England and Wales recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do England and Wales labour laws protect personal documents of employees, even if located in company files?
No (conspiracies are triable only on indictment).

No they cannot.
Notices or court orders may not compel the production of a document that is legally privileged, nor may legally privileged material be seized pursuant to a warrant. However, it is often impractical to identify privileged material at the time of seizure such that potentially privileged material may be seized, but is then subject to independent review and must be returned if it is later determined to be privileged. Certain confidential material such as journalistic material or personal records acquired or created in the course of business may be protected from seizure, but not, generally, from a production requirement. However, certain documents held in confidence may be protected. For example, in FSA investigations, a recipient of a notice who is not a person under investigation may refuse to provide documents held under an obligation of banking confidence.
Generally, investigations are commenced when a complaint is made or there are circumstances suggesting that a crime may have been committed. However, certain specialist enforcement agencies apply specific criteria. The SFO, for example, considers factors such as whether the value of the alleged fraud exceeds 1 million and whether the case is likely to be of widespread public concern.

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7.4
England & Wales
Under what circumstances can the government demand that a company employee produce documents to the government, or raid the home or office of an employee and seize documents?

In the same circumstances that apply in relation to companies (see question 7.2 above). In addition, suspects premises may be subject to search following arrest.
Criminal cases are generally commenced either by orally charging the defendant at a police station and producing or bailing him to a Magistrates Court; or by laying an information before the court as a result of which the defendant will be summoned to attend. Proceedings against companies are commenced by summons. There are however new provisions being brought into force which enable prosecutors to charge suspects in writing and require them to appear in court on a specified date.
In the same circumstances that apply in relation to companies (see question 7.2 above).
Individuals who are suspected of committing a criminal offence may, where necessary, be arrested by the police for the purpose of interview. The interview will normally take place at a police station. Alternatively, certain agencies (e.g., those mentioned at question 7.1 above) may, in the circumstances outlined at question 7.2 above, issue a notice compelling any person to answer questions or otherwise furnish information. Such questioning may take place at any location.
The Code for Crown Prosecutors sets out the general principles prosecutors should follow when deciding whether to charge an entity or individual. Prosecutors must first be satisfied that there is sufficient evidence to provide a realistic prospect of conviction. If so satisfied, prosecutors must then go on to consider whether a prosecution is required in the public interest. Prosecutors whose remit includes both a regulatory and enforcement function apply further criteria to the decision as to whether to bring criminal or administrative proceedings. The FSA, for example, takes into account factors including: the seriousness of the misconduct; the financial consequences; the persons compliance history; and level of co-operation with the FSA.
Third parties may not be arrested. However, the powers to issue notices outlined in question 7.6 above are generally used to compel witnesses to provide information.
Save for minor offences, it is generally not possible for a suspect to agree with the prosecution to divert or defer a prosecution. The law in England and Wales does not recognise so-called Deferred or Non Prosecution Agreements. However, in rare circumstances, suspects who self-report and/or co-operate with an investigation may be able to avoid prosecution (see question 13.1 below).
Suspects are interviewed under caution and can therefore refuse to answer questions for whatever reason. However, an adverse inference may be drawn against a defendant at trial if he relies on facts in his defence which he failed to mention when questioned under caution. All persons interviewed under caution have a right to be represented by a solicitor during questioning. Persons who receive a notice compelling them to answer questions may not without reasonable excuse refuse to answer questions. The privilege against self-incrimination is not a reasonable excuse as statements obtained from a person under compulsion may not, save in limited circumstances, be used in evidence against them. Nor is the recipient of a notice entitled to legal representation, although such persons are generally given a reasonable opportunity to arrange this.
In many instances, the penalties and remedies imposed against a convicted offender (e.g., a fine, company director disqualification order, confiscation of assets, or a compensation order) will negate the need for civil penalties or remedies. However, where the defendant is acquitted or where an appropriate remedy is not imposed by the criminal court, certain enforcement agencies may take civil or administrative action: e.g., civil recovery proceedings to recover the proceeds of the alleged crime, or proceedings to disqualify the person from professional practice. Further, certain prosecutors have powers to impose administrative penalties as an alternative to prosecution (see question 8.2 above).
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9 Burden of Proof
Ignorance of the criminal law is no defence. The prosecution generally has the burden of proving each element of the offences identified above. However, some statutes specifically provide for a reverse burden. For example, in relation to corruption of a public official, the public official is presumed to have acted corruptly unless he can show to the contrary. Further, some offences, such as insider dealing, prohibit the doing of an act save in specified circumstances (see question 3.1 above), in which case the burden of establishing the presence of the specified circumstances may lie with the defence.
9.2 What is the standard of proof that the party with the burden must satisfy? 11.3 Is it a defence to a criminal charge that the defendant was ignorant of the facts i.e. that he did not know that he had engaged in conduct that he knew was unlawful? If so, what are the elements of this defence, and who has the burden of proof with respect to the defendants knowledge of the facts?
Where the burden lies on the prosecution, the standard of proof is beyond all reasonable doubt. Where the burden lies on the defence, the standard of proof is a balance of probability.
A genuine mistake of fact may entitle a defendant to be acquitted where, for example, the mistake prevents him from possessing the relevant state of mind required for the offence. If the issue is raised by the defendant, the onus of proving that the defendant did not make a mistake generally lies on the prosecution (see question 11.1 above).
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In a Magistrates Court, the magistrates are judges of both fact and law. In the Crown Court, the arbiter of fact is nearly always the jury (see question 2.2 above). However, at any time after the close of the prosecution case, the judge may rule that the defendant has no case to answer and withdraw the case from the jury if the evidence, taken at its highest, is such that a reasonable jury, properly directed, could not convict.
Generally, a person is not obliged to report a crime. However, an offence may be committed where a person who receives information in the course of a business in the regulated sector (e.g., the financial sector) has reasonable grounds for knowing or suspecting that another person is engaged in money laundering or terrorist financing and fails to report the same to the authorities.
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A person can be guilty of conspiring to commit an offence (see question 3.2 above) and may be punished to the same extent as if guilty of the substantive offence. A person may also be guilty of an offence if he aids, abets, counsels or procures the commission of an offence and may be punished to the same extent as a principal offender.
In general, prosecutors can secure the co-operation of offenders in an informal manner, for instance by concluding that a prosecution of that person is not in the public interest (see question 8.2). A formal process also exists under the Serious Organised Crime and Police Act 2005 (SOCPA) which provides that the SFO, CPS and FSA may enter into agreements with offenders providing that in return for the offenders co-operation, the prosecutor will: not prosecute them; not use certain evidence against them; or set out in writing their co-operation with a view to obtaining a reduced sentence from the court (see question 15.1 below). Generally, to benefit from an agreement the offender must: fully admit their own criminality; provide the investigators with all information available to them; and agree to co-operate in any prosecution against others. Further, under the Enterprise Act 2002, the OFT may grant immunity (so-called no action letters) to individuals in cartel cases who come forward and give evidence in a criminal investigation. The conditions that must be satisfied in order for an individual to
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Common Defences
A defendant is entitled to be acquitted if the state of mind required by the offence has not been proved. In nearly all cases, the burden lies with the prosecution to prove the requisite state of mind. However, certain offences specifically provide for a reverse burden and some offences incorporate a specified qualification, which can mean that the defendant must prove that he had an innocent state of mind (see question 9.1 above).

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qualify for receipt of a no action letter are similar to those that apply in relation to SOCPA agreements.
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Finally, in relation to companies in cases of overseas corruption, the SFO has indicated that it will, wherever possible, look to deal with companies who self-report such offences by way of a civil sanction. Whilst this left open the prospect for companies to negotiate a civil outcome, in a recent case in which this route was adopted, the SFO was heavily criticised by the court, which commented that it will rarely be appropriate for criminal conduct by a company to be dealt with by means of a civil sanction.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in England and Wales, and describe the favourable treatment generally received.
Companies that wish to seek leniency in criminal cases will generally have to: self-report their misconduct (ideally before the prosecutor discovers the misconduct); commit to resolving the issue; co-operate fully and/or agree to conduct any further investigation (and share the results of the investigation with the prosecutor); and agree to provide appropriate restitution and implement a programme of training and culture change (this may include the appointment of an independent monitor). In return, the company may expect a reduced financial penalty and may be able to work with the prosecution in agreeing the basis of plea (see question 14.1 below).
The sentencing process should never represent a mathematical calculation: judges must reflect on all the circumstances to determine the appropriate sentence. Generally, however, the route to determining sentence is: first, the court determines whether there is a statutory minimum or mandatory sentence; secondly, the court follows or has regard to guidelines issued by the Sentencing Council or the Court of Appeal; and thirdly, the court determines the seriousness of the offence taking into account all aggravating and mitigating features. The court will then decide the appropriate sentence to which it may apply deductions or additions based on the defendants personal circumstances (e.g., financial circumstances or assistance given to the authorities: see question 13.1 above). Finally, the court may make a deduction for a plea of guilty (generally, between 10% and one-third).
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Plea Bargaining
Plea bargains, in the sense of an agreement as to sentence, are not recognised. However, it is open for a defendant to agree with the prosecution to plead guilty on the basis of particular facts (the basis of plea) and/or to agree to plead guilty to particular charges. Further, in cases of serious or complex fraud, defendants may enter into agreements with the prosecution which include a joint submission as to sentence, i.e., the agreed aggravating and mitigating features, the appropriate sentencing authorities and the applicable sentencing guideline.
Generally, the court must have regard to the purposes of sentencing: punishment; reduction of crime (including by deterrence); reform and rehabilitation; and reparation. In relation to companies, the court will have regard to factors such as turnover/profit, cooperation with the authorities, and actions taken to provide redress. Further, the Sentencing Council has published guidelines in relation to certain offences applicable to companies. For example, the guidelines in relation to Corporate Manslaughter set out the principles relevant to assessing the seriousness of the offence, the level of financial penalties and additional sentencing powers available to the court.
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Appeals
Defendants may appeal a verdict of guilty after a contested trial. The prosecution cannot appeal a not-guilty verdict but may apply for a retrial in relation to certain serious offences if there is new and compelling evidence of guilt and it is in the interests of justice for there to be a retrial.
The prosecution may agree a basis of plea and/or the selection of charges as long as they reflect the seriousness and extent of the offending and they give the court adequate powers to sentence. However, a basis of plea is always subject to the approval of the court, which will consider whether it is fair and in the interests of justice. It is open to the court to reject a basis of plea where it does not represent a proper plea on the basis of the facts set out in the papers. The same applies to agreements in cases of serious or complex fraud: the judge retains the absolute discretion to refuse to accept the plea agreement and to sentence otherwise than in accordance with the sentencing submissions.
Defendants may appeal any sentence not fixed by law. The Attorney General may refer sentences in relation to certain serious offences to the Court of Appeal for review (see question 16.3).
Appeals against conviction will be allowed if the conviction is unsafe, usually as a result of some error or irregularity at trial. Appeals by the defendant against sentence will be allowed when, for example, the sentence is wrong in law, wrong in principle or
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manifestly excessive. Referrals of sentence by the Attorney General will be allowed if the sentence is unduly lenient.
Where an appeal against conviction is allowed, the conviction is quashed and the appellant may be retried or acquitted. Where an appeal against sentence is allowed, the Court of Appeal may substitute a different sentence.
Richard Sallybanks
BCL Burton Copeland 51 Lincolns Inn Fields London WC2A 3LZ United Kingdom
Guy Bastable
BCL Burton Copeland 51 Lincolns Inn Fields London WC2A 3LZ United Kingdom
+44 (0)20 7430 2277 +44 (0)20 7430 1101 rsallybanks@bcl.com www.bcl.com
+44 (0)20 7430 2277 +44 (0)20 7430 1101 gbastable@bcl.com www.bcl.com
Richard Sallybanks is a partner specialising in complex business crime and regulatory defence work, often of an international nature. He is a recognised leading expert in the UK in relation to business crime. He has considerable experience in Serious Fraud Office, Financial Services Authority, HM Revenue & Customs and Office of Fair Trading investigations and prosecutions involving domestic and overseas corruption (including joint UK / US Foreign Corrupt Practices Act investigations), sanctions offences, fraud, false accounting, insider dealing, market manipulation and price-fixing (including Department of Justice investigations). The international nature of much of his work means that he is also experienced in the areas of extradition and the UKs mutual legal assistance regime with other jurisdictions. He is a member of the International Bar Association, and spoke at the 2010 IBA Trans-national Crime Conference, as well as the American Bar Association.
Guy Bastable is a partner specialising in business crime, regulatory enforcement, serious crime and anti-money laundering compliance. He is a recognised leading expert in the UK in relation to criminal fraud / business crime and corporate manslaughter / health and safety. He has acted in numerous large and complex business crime cases involving all types of fraud, financial regulation (insider dealing / market abuse), and money laundering. He also provides expert advice in relation to the recovery of the proceeds of crime (restraint, confiscation, cash seizure and civil recovery) and antimoney laundering compliance, and is a co-author of OUPs Money Laundering Law and Regulation: A Practical Guide. He also has particular expertise in fatal accidents, corporate manslaughter, Coroners inquests, health and safety and fire safety having acted for a number of substantial commercial and public organisations in relation to such matters.
BCL is a market leader in the UK in the areas of domestic and trans-national business crime and regulatory enforcement, providing discreet, effective and expert advice to governments, commercial organisations, directors, senior personnel and high profile / high net worth individuals. Its reputation has been established over many years through an unremitting drive to help its clients by providing a supportive service and guidance through the legal minefield, whilst focusing at all times on achieving a pragmatic solution rather than troubling them with dense legal problems and process. BCLs expertise covers all areas of criminal / regulatory law including commercial and tax fraud, corruption, sanctions offences, cartel activity, financial regulation and money laundering, extradition, corporate manslaughter, health and safety, fire safety, product safety, and environmental law. BCL also advises in the areas of anti-money laundering and anti-corruption compliance, and regularly acts in associated civil proceedings where there is a flavour of alleged fraud or misfeasance.

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Fischer, Tandeau de Marsac, Sur & Associs
Pierre-Olivier Sur
Silvestre Tandeau de Marsac

1.3
Is there any civil or administrative enforcement against business crimes? If so, what agencies enforce the laws civilly and which crimes do they combat?
France doesnt have a federal system of government. As a result, the prosecuting authority is one nationwide body, the ministre public or parquet, hierarchically organised, and headed by the Department of Justice. Therefore, the public prosecutor or procureur de la Rpublique (or procureur gnral in an appellate court or in the Supreme Court) is not an independent magistrate, and is entrusted with the defence of society. The procureur de la Rpublique generally initiates preliminary investigations. Consequently, he might: Supervise and control all police investigations before deciding whether or not to send a suspect to trial. Ask an investigating judge, or juge dinstruction, to be assigned to lead a formal judicial investigation. The investigating judge will decide himself whether or not to charge a person and send him or her to trial. Unlike the prosecutor, the investigating judge is an independent magistrate, whose mission is to seek out evidence of innocence as well as guilt. In the latter case, the public prosecutor defines the scope of the crimes being examined by the judge and law enforcement forces. Like the defence counsel, the prosecutor may petition or motion for further investigation.
In France there is the Autorits des Marchs Financiers (AMF or financial markets authority), which is an administrative authority combating market abuses. Indeed, following Directive 2003/6/EC of the European Parliament and of the Council on insider dealing and market manipulation (adopted on January 28th 2003 to create a legal framework to reinforce the protection of financial markets integrity), each Member State was meant to appoint a single administrative authority competent to ensure the application of the provisions adopted pursuant to that Directive. Respective of it, the AMF is able: to carry out investigation measures (access to any document, convocation, carry out on-site inspections, phone-tapping); to take injunction measures; and to take prohibition measures, request the freezing and/or sequestration of assets. AMF decisions can be appealed.

2.1 How are the criminal courts in France structured? Are there specialised criminal courts for particular crimes?
As a general matter, it is important to recall that criminal offences in France are broken down into three classes: contraventions (petty offences); dlits (misdemeanour); and crimes (felonies). Petty offences are only the matter of the prosecutor and therefore exclude the assignment of an investigating judge. On the contrary, felonies are necessarily investigated upon by the investigating judge, however assigned by either the prosecutor or following a civil party complaint. As far as misdemeanours are concerned, the prosecutor has all the discretion. Therefore, if it appears that the case is complex, or if the suspect is unknown, the prosecutor might decide to assign an investigating judge in order to lead a formal judicial investigation.
In France, three different criminal courts handle violations of the three types of offences listed in the French Criminal Code, and previously introduced in question 1.2: petty offences are handled by the tribunal de police, which sits with a single judge; misdemeanours are handled by the tribunal correctionnel, which usually sits with three judges unless the law specifically provides for a single one; and fellonies are handled by the Cour dAssises, consisting of a jury composed of three professional judges and nine citizens drawn at random from a panel which derives from the electoral register.
Business crimes are necessarily fitting in the category of misdemeanours. As a result, business crimes are only tried before the tribunal correctionnel, only consisting in professional judges.
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3.1 Please describe any statutes that are commonly used in France to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
acting as a representative, administrator or agent of the State or territorial bodies, to obtain or attempt to obtain for others an unjustified advantage by an act breaching the statutory or regulatory provisions designed to ensure freedom of access and equality for candidates in respect of tenders for public services and delegated public services. o Money Laundering Money laundering is facilitating by any means the false justification of the origin of the property or income of the perpetrator of a felony or misdemeanour which has brought him a direct or indirect benefit. o Abus de biens sociaux The offence of abus de biens sociaux consists in managers using the companys property or credit: in bad faith, in a way which they know is contrary to the interests of the company, for personal purposes or to encourage another company or undertaking in which they are directly or indirectly involved.
3.2 Is there liability for inchoate crimes in France? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
The French Monetary and Financial Code punishes the act of carrying out a manoeuvre intended to impede the normal operation of a regulated market by misleading others, or the act of publicly disseminating, via whatever channel or means, any false or deceptive information concerning the prospects or the situation of an issuer, or the likely performance of a financial instrument, which might affect the price thereof. o Accounting fraud The General Tax Code punishes by prison whoever knowingly omits to pass or makes pass from the writings, or passes or makes pass from the inaccurate or fictitious writings to the day book and the book of inventory. o Insider trading It is unlawful for insiders i.e. executives of a company, or persons who, through the practice of their profession or the performance of their functions, obtain privileged information concerning the prospects or the situation of a company or the performance of a financial instrument to carry out or facilitate transactions before the public has knowledge of that information, either directly or through an intermediary. o Embezzlement Embezzlement is the act of deceiving a natural or legal person by the use of a false name or a fictitious capacity, by the abuse of a genuine capacity, or by means of unlawful manoeuvres, thereby to lead such a person, to his prejudice or to the prejudice of a third party, to transfer funds, valuables or any property, to provide a service or to consent to an act incurring or discharging an obligation. o Bribery of government officials Active corruption is the act of unlawfully proffering, at any time, directly or indirectly, any offer, promise, donation, gift or reward, in order to induce a person holding public authority, discharging a public service mission, or vested with a public electoral mandate: to carry out or abstain from carrying out an act pertaining to his office, duty, or mandate, or facilitated by his office, duty or mandate; or to abuse his real or alleged influence with a view to obtaining distinctions, employments, contracts or any other favourable decision from a public authority or the government. o Criminal anti-competition Part of competition law in France is prescribed by the Commercial Code, which contains minor misdemeanours such as refusals to sell or absence of invoice. However, the main source of competition law in France is EU norms (trusts, mergers, monopolies). o Tax crimes Tax optimisation is allowed in France, except in the case where the tax operation could not have any other purpose but to evade or reduce the tax expenses. In addition, failure to declare the income to tax authorities will be seen as tax evasion in France. o Government-contracting fraud It is unlawful for any person holding public authority or discharging a public service mission or holding a public electoral mandate or
Yes. A person who has attempted to commit an offence will be held liable where, having started to commit the crime, it was suspended or failed to achieve the desired effect solely through circumstances independent of that persons will. Exceptionally, the Criminal Code will also punish at an even earlier stage a criminal association, i.e. any group formed or any conspiracy, established with a view to the preparation, marked by one or more material actions, of one or more felonies, or of one or more misdemeanours punished by at least five years imprisonment.

Yes. Entities, with the exception of the State, are criminally liable for the offences committed on their account by their organs or representatives. In most cases, the sentences incurred will be monetary penalties five times the rate set for individuals committing the same offence, with greater monetary penalties for recidivist conduct.
The criminal liability of an entity does not exclude that of its managers, officers and directors who are perpetrators or accomplices to the same act. However, their responsibility is not automatic.
As far as business crimes are concerned (i.e. necessarily misdemeanours), prosecution is time-barred by the passing of three years from the day of the commission of the misdemeanour if, during this period, no step in investigation or prosecution was

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taken. Where such steps were taken, it is time-barred only after the passing of three years starting from the last step taken. This applies even with respect to those persons who would not have been affected by this step in the investigation or prosecution. The limitations period generally begins running when the last act in furtherance of the offence is committed. However, for some specific crimes, such as the abus de biens sociaux (introduced in question 3.1), the limitations period will begin running on the date of discovery of the committed offence.
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In case of refusal, provided that: it is justified by the needs of the inquiry; and the offence investigated upon is punishable by a prison sentence of five years or more, ... the liberty and custody judge (juge des liberts et de la detention) may, at the request of the prosecutor, decide, in a written and reasoned decision, that these operations will be carried out without the consent of the person or company. It should be noted that, if the prosecutor can use these powers under specific circumstances, the investigating judge can request documents and information, raid a company and seize documents unconditionally by issuing a warrant, regardless of the approval of the person or company.
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Yes. Indivisible offences (when the crimes are committed in the same place, at the same time and are part of the same conspiracy) and connate offences (when the crimes can be linked to each other even though not committed in the same place or at the same time) can be prosecuted outside the limitations period. Indeed, in that case, a step of investigation or prosecution taken with relation to one crime will start a new limitations period of three years for all the crimes linked to it.
Document Gathering:
Yes, it can be tolled in a few circumstances, such as the death of the suspect or charge person, amnesty, the repeal of the statute, and when the law expressly provides it, the existence of a settlement between the defendant and administrations (such as customs or tax authorities etc.).
The government can demand that a company produces documents to the government, raid a company under investigation and seize documents following the procedure exposed in question 7.1, if these documents are relevant to the investigation in course.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does France recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Frances labour laws protect personal documents of employees, even if located in company files?
France indeed recognises a legal privilege. Following Article 2 of the Paris Bar Rules: The Attorneys professional privilege is of public order. It is general, absolute and unlimited in time. This means that any communication or correspondence between lawyer and client must be kept confidential at all times. That privilege is absolute and cannot be waived by the client or by the lawyer. The rationale behind this is the need in a democratic society for the public to be satisfied that any communication with their lawyer is private and confidential. However, there are three exceptions to this absolute rule on legal privilege: 1. a lawyer is suspected of being involved in the commission of an offence. In such a situation it would be possible for communication to be seized; 2. a lawyer is giving advice as a friend or outside his professional activity. In such a situation, the lawyer may not be bound by the rules on privilege; and 3. a lawyer is being accused by his client of wrongdoing or negligence. In such situations the lawyer may not be bound by the rules on privilege, as he must have a right to defend himself against such allegations. However, the lawyer would be confined to revealing only those matters that are necessary to defend himself. This being said, the prosecutor can however raid a lawyers office or premises provided that: he has issued a written and motivated document, exposing the reasons justifying the raid; and the President of the relevant bar (or its representative) is present.
As previously exposed in question 1.2, and as far as business crimes are concerned, the public prosecutor has all the discretion whether or not to investigate and prosecute facts brought to his attention, either by the police, a victim, or any other person or administration, when the prosecution believes these facts may amount to a crime.

The public prosecutor can use two procedural tools in order to gather information: 1. 2. A request to a person to voluntarily produce documents or provide information. The visit of a persons premises or a companys headquarters and offices when it appears that evidence may be collected by seizing papers, documents, electronic data or other articles.
In the latter case, the person or company which premises or headquarters are visited, or which documents are seized, can refuse such visit or seizure, unless the crime investigated upon is a flagrant.
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Only the latter can review the documents found in the lawyers office or premises before being seized. If he disagrees on such seizure, the liberty and custody judge will further make a decision upon it. As far as personal documents of employees are concerned, provided that the needs of the inquiry justify their communication, there is no special protection available.
7.4 Under what circumstances can the government demand that a company employee produce documents to the government, or raid the home or office of an employee and seize documents? 7.8
France
However, that person can refuse to answer the questions. Until today, there has been no right in France to be represented by an attorney during questioning in the police station. However, following a struggle led by lawyers all over France and the association Je ne parlerai quen presence de mon avocat (I will not speak unless I am assisted by a lawyer), the Conseil Constitutionnel has issued a decision on the 30th of July 2010, holding the police custody procedure contrary to the French Constitution because of the non-attendance of a lawyer during the questioning of a suspect. As a result, on the 6th September 2010, the French Department of Justice communicated a project of reformation of the law expressly providing for the attendance of a lawyer during the questioning of suspects. Therefore, French law might change on this issue.
The government can demand production of documents to an employee or seize documents at his office or home, following the procedure exposed in question 7.1, if these documents are relevant to the investigation in course.
The government can demand production of documents to a third party or seize documents at the third persons office or home, following the procedure exposed in question 7.1, if these documents are relevant to the investigation in course.

Criminal cases can be initiated following three different ways:
if the prosecutor has led the investigations himself (supervising the police) - considering it was not necessary to open a judicial inquiry -, he may decide to indict a person or a company, sending that person or company to trial; if an investigating judge has been assigned, he might, at the end of his inquiry indict, a person or a company, enquiring about the prosecutors insight beforehand; and for misdemeanours only, and provided that a victim is in possession of all the evidence allowing a person or a company to be tried, that victim can directly summon a defendant for trial, thus becoming a civil party to the case. The court will then determine with reference to the civil partys income a sum to be paid into court, which, unless he was granted legal aid, he must deposit with the court office within a time-limit, failing which the direct action is inadmissible.
In the course of investigations led by the government, any person likely to provide information concerning the facts of the case may be called to be questioned at the police station. If the person does not comply with the summoning, the prosecutor might give his permission to use a law enforcement agency to compel the person to respond to such summon. The employee, officer or director of the company under investigation may be heard either as a witness or as suspect (either as a legal representative of the company or personally), in which case he would be placed into police custody before being heard, and notified his rights of defence. Besides, it is to be recalled that an employee, officer or director can also be heard in the course of a formal judicial investigation let by the investigating judge. In that case, the person can also be summoned to be questioned, either by the judge himself, or by the police under the supervision of the judge.
The prosecutor has a total discretion whether or not to charge an individual or an entity with a crime. Indeed, where he considers that facts brought to his attention constitute an offence (provided there is no legal provision blocking the implementation of a public prosecution), the prosecutor with territorial jurisdiction decides if it is appropriate: 1. 2. 3. to initiate a prosecution; to implement alternative proceedings to a prosecution; and to close the case without taking any further action.
A third person can be submitted to questioning by the government in the same circumstances as described in question 7.6.

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There is no specific protection which a person being questioned can assert.

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evidence which was submitted in the course of the hearing and discussed in an adversarial way. Before the Cour dAssises retires for deliberation, the president of the court reads out the following instruction to the jury: The law does not request judges to account for the means by which they convinced themselves; it does not charge them with any rule from which they shall specifically derive the fullness and adequacy of evidence. It requires them to question themselves in silence and reflection and to seek in the sincerity of their conscience what impression has been made on their reason by the evidence brought against the accused and the arguments of his defence. The law asks them this single question, which encloses the full scope of their duties: are you inwardly convinced? (Article 353 of the Code of criminal procedure.)
France
Prior to any prosecution being instituted, the prosecutor may propose conditional suspension of the prosecution to an adult person who admits to having committed a misdemeanour punishable by less than five years in prison, providing that this person executes one or several obligations as set by the prosecutor. However, this procedure would normally not interest business crimes. First, it only refers to individuals, and therefore excludes companies. Second, it implies that the facts involved are not complex and do not justify much investigation, which is not the case for business crimes.
10
A defendant can be subject to civil remedies, but not to civil penalties or punitive damages in the course of a criminal case. In France, a victim can exercise the civil action, and thus, become a civil party to a criminal case if he or she proves to have personally suffered damage directly caused by the offence. In most cases, civil action is exercised together with the criminal action, before the criminal courts. Civil action enables the victim to be awarded a sum of money which is exclusively aimed at the reparation of the damage suffered and is never intended to punish the defendant, unlike a fine meant to be paid to the government as part of the sentence. In business crimes, civil parties can either be individuals, companies or administrations (such as tax authorities, etc.).
Yes, that person can be held liable as being an accomplice to a crime, i.e. a person who knowingly, by aiding and abetting, facilitates its preparation or commission. An accomplice would also be any person who, by means of a gift, promise, threat, order, or an abuse of authority or powers, provokes the commission of an offence or gives instructions to commit it. An accomplice can only be liable if the substantive crime has been proven.
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Common Defences
9 Burden of Proof
Yes, it is a defence to a criminal charge that the defendant did not have the requisite intent to commit the crime, as intention is one of the constitutive elements of a criminal offence. The prosecutor bears the burden of proving that the defendant has this intent. However, the Criminal Code provides for an exception regarding non-intentional crimes. Where the law so provides: the deliberate endangering of others is a misdemeanour; and a misdemeanour also exists, in cases of recklessness, negligence, or failure to observe an obligation of due care or precaution imposed by any statute or regulation, where it is established that the offender has failed to show normal diligence, taking into consideration where appropriate the nature of his role or functions, of his capacities and powers and of the means then available to him. In that specific case, the absence of intention will not be a defence to a criminal charge.
In France, the prosecution always bears the burden of proving a criminal case, thanks to the principle of the presumption of innocence. There is no concept of affirmative defences which would reverse the burden of proof.
The prosecutor must establish every constitutive element of a crime, by using any mode of evidence.
The judges decide whether or not to convict someone according to their innermost conviction and can only base their decision on
The ignorance of the law is never a defence to a criminal charge. Indeed, French law is governed by the adage Nemo censetur legem ignorare (Everyone is deemed to know the law).
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offences is exempted from a sentence if, having alerted the judicial or administrative authorities, he or she has prevented the crime from being committed, and, where relevant, has enabled the other perpetrators or accomplices to be identified. 2. The prison sentence incurred by the perpetrator or the accomplice to any of the relevant offences is reduced by half if, by alerting the legal or administrative authorities, he or she has made it possible for the criminal behaviour to be stopped or for loss of life or permanent injuries resulting from the offence to be avoided and, where relevant, has identified any other perpetrators or accomplices. Where the sentence incurred is criminal life imprisonment, this is reduced to twenty years criminal imprisonment.
A defendant who does not know he has engaged in a conduct he would otherwise know is unlawful does not have the requisite intent to commit the crime. As a result, ignorance of the facts, i.e. lack of the requisite intent, is a perfect defence to a crime (see question 11.1). Again, the prosecutor has the burden of proof with respect to the defendants knowledge of the facts.
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13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in France and describe the favourable treatment generally received.
There is no specific procedure enabling entities to cooperate with the government in order to seek leniency. However, in practice, cooperation of an entity would necessarily be taken into consideration by the court when imposing a sentence.
There is in France an obligation to report a crime to the government, leading to liability if not respected, regarding specific misdemeanours on vulnerable persons (maltreatment, deprivations, or sexual assaults inflicted upon a minor under fifteen years old or upon a person incapable of self-protection by reason of age, sickness, infirmity, physical or psychological disability or pregnancy). There is also an obligation to report a felony, the consequences of which it is still possible to prevent or limit, or the perpetrators of which are likely to commit new felonies that could be prevented. In the latter case, however, close family members are exempted from such obligation. In both cases exempted persons are also bound by an obligation of secrecy, either because of their position or profession, or because of a temporary function or mission unless the law provides otherwise. As far as business crimes are concerned, there is no general obligation to report that a crime has been committed to the government. However, specifically, auditors have the obligation to report to the government any offence they would discover in the course of their mission. Failure to report such offence could lead the auditor to be held liable as an accomplice to the crime and be prosecuted.
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Plea Bargaining
A defendant can voluntarily decline to contest criminal charges in exchange for an agreed upon sentence, but not for a conviction on reduced charges, and provided that the offence committed is a misdemeanour punishable by less than five years of prison. The procedure is called appearance on prior admission of guilt. However, this procedure would normally not interest business crimes. Firstly, it only refers to individuals, and therefore excludes companies. Secondly, it implies that the facts involved are not complex and do not justify much investigation, which is not the case for business crimes.
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After prosecuting an individual, the prosecutor may, of his own motion or at the request of the defendant or his attorney, use the procedure of appearance on prior admission of guilt. The prosecutor may suggest to the person that he or she undergoes one or more of the main or additional penalties incurred. Where the penalty suggested is a prison sentence, its duration may not exceed either a year or half the prison sentence incurred, possibly suspended in part or in whole. Where the penalty proposed is a fine, its amount may not exceed the maximum fine applicable to the offence and may be accompanied by a suspension. The statements in which the person admits the matters of which he is accused are received, and a penalty is suggested by the prosecutor, in the presence of the persons who cannot waive his right to be assisted by a lawyer. Where, in the presence of his lawyer and after having privately discussed with him, the person accepts the proposed penalty or
Yes. Two situations shall be described, only applicable to felonies and organised crimes (drugs trafficking, terrorism, offences against the nation, assassination, poisoning, etc.) when specified by the Criminal Code: 1. Any person who has attempted to commit any of the relevant

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penalties, he or she is immediately brought before the president of the court or the judge appointed by him, who must approve the sentence proposed by the prosecutor before it is enforced. For this purpose, the president of the court or the judge appointed hears the person and his or her lawyer. After checking the truth of the facts and their legal qualification, he may decide to approve the penalties proposed. That procedure takes place in a public hearing.
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Only when specifically set out by the law, a corporation can be punished by one or more of the following penalties: dissolution; prohibition to exercise, placement under judicial supervision for a maximum period of five years; permanent closure or closure of the establishment for up to five years; disqualification from public tenders; prohibition to make a public appeal for funds; prohibition to draw cheques or to use payment cards; confiscation of the thing which was used or intended for the commission of the offence; and posting a public notice of the decision.
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Elements of a Corporate Sentence 16 Appeals
In France, the court (or the jury for felonies) always determines the conviction and the according sentence at the same time. Therefore, there is no separate hearing for the imposition of sentence. The Criminal Code provides, for each offence, the maximum sentence which can be imposed by the court, both on individuals and on companies. For some offences, the Criminal Code also provides for higher sentences in case of aggravating factors. In principle, the court is not bound by any minimum sentence. However, the Criminal Code exceptionally specifies that a minimum sentence shall be imposed when the offence has been committed less than five years following a previous conviction for a similar offence. In that case, the court can only impose a lesser sentence if it expressly motivates it regarding the circumstances of the offence, the character of the convicted person and his or her guarantees of integration.
A guilty verdict is appealable by the defendant. A non-guilty verdict is appealable by the prosecutor. The civil party is only entitled to appeal the decision made on damages.
As the decision on conviction and sentence are necessarily part of the same verdict, the party who decides to appeal will appeal both the conviction and the sentence. Therefore, there is no possibility to appeal the sentence without appealing the conviction.
The appellate court judges a case afresh, and can therefore uphold a trial court on both factual findings and conclusions of law.
The court can only impose a sentence on a corporation if provided by the Criminal Code. The most common penalty incurred for felonies misdemeanours committed by a corporation is a fine. and
The appellate court has no power to remedy any injustice by the trial court.
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France
Pierre-Olivier Sur
Fischer, Tandeau de Marsac, Sur & Associs 67 Boulevard Malesherbes 75008 Paris France
Silvestre Tandeau de Marsac

Fischer, Tandeau de Marsac, Sur & Associs 67 Boulevard Malesherbes 75008 Paris France
Pierre-Olivier Sur is a partner in the firm and heads its criminal law department. He has extensive experience in criminal law, including business and political criminal law, defending both accused and civil parties. He started exercising law in 1985 when he took the oath. In 1989, he was appointed Scretaire de la Confrence (distinction of eloquence) and was elected member of the Paris Bar in 1997. Pierre-Olivier Sur exclusively deals with criminal law, in domestic as well as international proceedings. In France, he has been involved in a great number of significant cases, such as the Sang contamin case (the infected blood case), the Erika case, (pollution case), the Affaire ELF, or the Alstom case. Internationally, he has been involved in the case of French hostages detained by Bosnian Serbs in Sarajevo (1994), Abou ZAIDs defence in Cairo (1996), Alpha Conds defence in Guine (opponent to President Lansana Cont), and the President Compaors defence in Burkina Faso (in the Zongo case). Recently, he has been assisting civil parties in the UN Khmer Rouge trial in Cambodia. He is currently applying to become the President of the Paris Bar Association.
Silvestre Tandeau de Marsac is one of the founding partners of the firm and heads its banking and finance department. He has an extensive experience in international litigation, including finance criminal law. He was admitted to the bar in 1984. In 1987, he was elected Premier Scretaire de la Confrence (distinction of eloquence) and became member of the Paris Bar Council in 2000. In 2004 he was chosen to participate to the task force of the CCBE (Council of Bars and Law Societies in Europe) on money laundering. Silvestre Tandeau de Marsac is an expert for the French Institute of International Experts (IFEJI). He is the author of a book entitled Professional liability of Wealth and Investment management advisors (Lexis Nexis Litec 2006). He regularly appears as a lawyer to defend actors of banking and finance before the French financial regulatory authorities like AMF (the French equivalent of SEC) in market abuses cases (insider trading and market manipulation). He has been advising foreign government agencies in anti-money laundering cases.
The firm Fischer, Tandeau de Marsac, Sur & Associs is a Partnership of Lawyers at the Bar of Paris. In its present form, it was created in Paris in 1985. The firm gives advice, draws up deeds and assists and represents its clients, both natural persons and legal entities, in litigation and during negotiations. The firm acts, in particular, in all matters concerning the life of a business, its partners and its directors. Fischer, Tandeau de Marsac, Sur & Associs has also developed international activities that allow it to provide its clients with full international legal services, if necessary with the assistance of lawyers established abroad. The firm draws up the contracts necessary for international trade, helps to negotiate them and supervises their execution. It also gives advice to its foreign and French clients on their establishment activities (creation of branches or subsidiaries, acquisitions of businesses) and investment activities in France and other countries.

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+33 1 4723 4724 +33 1 4723 9053 posur@ftms-a.com www.ftms-a.com
+33 1 4723 4724 +33 1 4723 9053 smarsac@ftms-a.com www.ftms-a.com
Chapter 11
Germany
WESSING Rechtsanwlte
Prof. Dr. Juergen Wessing
Dr. Heiko Ahlbrecht

Business crimes are basically prosecuted by the Public Prosecutors Office like any other crime committed in Germany. If a tax crime is suspected, the tax authorities are competent to investigate the facts of the case (Section 386 of the German Fiscal Code, AO). The cartel authorities are exclusively competent in proceedings to assess a fine against a legal person or association of persons if the fine arises from a criminal offence regarding agreements between competing undertakings intended to distort competition (Section 82 of the Act Against Restrains of Competition, GWB).
Regional Courts are organised in different chambers for criminal matters. The small criminal chamber deals with appeals against judgments by a Local Court exclusively. The grand criminal chamber is a court of first instance. There are grand criminal chambers with special responsibilities, e.g. the business crimes chamber and the chamber for crimes against the state. The business crimes chamber is hereby also competent for appeals within its special responsibility. The Higher Regional Courts are courts of first instance only concerning state security offences. They are courts of second instance for appeals on points of law only against appellate judgments of Regional Courts. The Federal Court of Justice is competent for appeals on points of law only against judgments whose first and last instance determining the facts was at the Regional Court or Higher Regional Court.
There are no jury trials under German Law.
Generally, all criminal offences/crimes are prosecuted by the Public Prosecutors Office. But, the tax authorities are competent for prosecution in the investigative phase of the proceedings, if the offence exclusively is a tax crime. However, tax cases can be taken over by the prosecutor at any time. Usually, the prosecutor takes the lead if there is the suspicion of other criminal offences/crimes beside the tax crime. In these cases the tax authorities only act as an ancillary organ of the Public Prosecutors Office.

3.1 Please describe any statutes that are commonly used in Germany to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
Fraud and misrepresentation in connection with sales of securities Fraud is punishable under Section 263 of the German Criminal Code (StGB). It requires a deceit that leads the person under the so caused misapprehension to a disposition of assets which must result in a pecuniary damage. The person that disposes and the one that has the damage do not have to be identical. Section 263 StGB is also applicable if the disposition can be assigned to the sphere of the person who suffered the damage. The offence has to be committed intentionally regarding the aforementioned elements of the offence and with the additional intent of obtaining unlawful material benefit for the perpetrator himself or a third person. Section 264a StGB (capital investment fraud) expands the punishability beyond the bounds of Section 263 StGB. Hereafter, the making of incorrect favourable statements or the keeping of unfavourable secrets in connection with the sale of securities, subscription rights or shares intended to grant participation in the yield of an enterprise or an offer to increase the capital investment in such shares is punishable. The provision requires intentional conduct.
There is no civil or administrative enforcement against criminal offences under German Law. However, the European Anti-Fraud Office (OLAF) could by law investigate on administrative level in Germany as well. In fact, such investigations are always those of German prosecutors accompanied by OLAF-personnel.

2.1 How are the criminal courts in Germany structured? Are there specialised criminal courts for particular crimes?
Local Courts are courts of first instance that are competent for offences if a prison sentence not exceeding 4 years is expected. The
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o Accounting fraud
Germany
prescribed or if it is expressly provided by law (Section 23 StGB). The offender has to act with intent regarding all elements of the offence, he has to be unjustified and guilty. Section 24 StGB provides the possibility to obtain an exemption from punishment if the offender voluntarily abandons the criminal offence.

Insider trading
It is punishable to acquire or dispose an insider security intentionally pursuant to Section 38 (1) of the German Securities Trading Act (WpHG). o Embezzlement / Breach of Trust The term embezzlement / breach of trust is identified with two variations of commitment specified in Section 266 StGB. The first variation addresses a person who abuses the power accorded to him to dispose assets of another person. It also requires an essential duty to safeguard the property interests of the person whose assets are disposed. The second variation concerns the violation of the duty to safeguard property interests. The duty has to be an exceptional part of the relationship to the assets. Both variations require damage to the disfavour of the assets to be safeguarded and intentional conduct. o Bribery of government officials According to Section 334 StGB, the offering, promising or granting of a benefit to a public official, a person with special public service obligations, a soldier of the Federal Armed Forces, a judge or an arbitrator in return for a performance of an official act by violating official duties is punishable. The provision requires intentional conduct. o Criminal anti-competition Section 298 StGB addresses tender offers regarding goods or commercial services that are based on unlawful agreements which aim at causing the tenderer to accept a specific offer. The provision also requires intentional conduct. It is irrelevant whether the actor intends to induce the tenderer to accept a specific offer. It is already sufficient if the person making the offer had knowledge of the agreements aim. o Tax crimes It is punishable to understate taxes or derive unwarranted tax advantages whether to his own benefit or the benefit of a third person pursuant to Section 370 AO. This result has to be achieved by providing the revenue authorities with incorrect or incomplete particulars or by failing to inform them of facts concerning matters of substantial significance for taxation although ones obliged to do so. It is also prohibited to fail to use revenue stamps or revenue stamping machines when one is obliged to do so. The provision addresses intentional conduct. o Government-contracting fraud Section 264 StGB punishes an attempted fraud as a completed one within the scope of public procurement and the use of subsidies. The production of incorrect or incomplete favourable statements or the unlawful concealing of information that are designated as relevant by law or by the subsidy giver in accordance with the law in the subsidy procedure is already punishable. The provision requires intentional conduct.
3.2 Is there liability for inchoate crimes in Germany? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
There is no criminal liability of an entity under German Law. However, Section 30, 130 of the Administrative Offences Act (OWiG) allows a fine to be imposed on an entity providing that a representative or another person in a leading position has committed a criminal offence. The provision is applicable if the association has gained or was supposed to gain a profit obtained through the criminal activity or the committed offence violates duties which the entity is responsible for.
The liability of an entity is linked to the offence of a person in a leading position but not the other way round.
The limitations period begins when the unlawful act is completed. The period is determined by the punishment that is set out in the applicable penal provision.
There is no possibility to prosecute crimes that occur outside the limitations period.
The statute of limitations are tolled as long as the prosecution may not be commenced or continued except the act is not prosecuted because complaint, authorisation or request for prosecution are lacking solely.
An attempt to commit an unlawful act is punishable if it concerns an unlawful act for which a prison sentence of one year or more is
The Public Prosecutors Office has to initiate criminal investigation proceedings as soon as it obtains knowledge of a suspected criminal offence providing sufficient facts indicate that the offence was committed (initial suspicion).

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Misrepresentation or concealing the state of affairs of a company in the opening balance sheet, annual report, status report or interim balance sheet by member of an organ having power of representation or the board of supervisors are punishable pursuant to Section 331 of the German Commercial Code (HGB). The provision requires intentional conduct.
Germany

Germany
The power of the government to gather information extends to the examination of witnesses, experts and defendants, seizure of evidence, automated comparison and transmission of personal data, interception of telecommunications and undercover investigators.
Document Gathering:
Every witness that is summoned by the court or the Public Prosecutors Office is obliged to appear, to testify truthfully and to take an oath if he has no right to refuse the answers. There is no obligation to appear for an interview at the police. However, the questioning could take place anywhere, also during a search at the premises searched. Usually, interviews are conducted at the police station, the Public Prosecutors Office or at the court.
There is an obligation to hand over objects that may have importance as evidence for the investigation. An initial suspicion and a potential importance as evidence are sufficient for this measure. But the defendant as well as a company under investigation is not obliged to submit or produce any material. A judge or, in exigent circumstances, the public prosecutor can authorise the search of the premises of a person that is suspected of committing a criminal offence providing that the discovery of evidence can be assumed. They may also order seizures if a person does not want to hand an alleged evidence voluntarily over. The same can happen to a company not willing to cooperate as well. A search and seizure at a company is possible similarly to those of witnesses.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Germany recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Germanys labour laws protect personal documents of employees, even if located in company files?
The circumstances are the same as described under question 7.6.

The testimony may be refused on professional grounds or if the witness is a relative of the defendant. A witness may also refuse to answer questions if the answer would subject him to the risk of being prosecuted for a criminal or regulatory offence. In the latter case, the constitutional right to a fair trial also includes the right to consult an attorney. There is the right to be accompanied by an attorney during questioning.

Generally, there is no legal protection for any document at companies or individuals. The only accepted privilege derives from the client-attorney-privilege between the defence-counsel and the individual client. Any other privilege, especially for the companys external counsel in criminal proceedings is in discussion but not legally defined or judged by any court so far.
The prosecutor writes an indictment and applies for a court trial of the case at the court. The court decides on the opening of main proceedings.
Main proceedings have to be opened if there is sufficient suspicion that a criminal offence was committed in the light of the results of the investigation proceedings.

The Public Prosecutors Office may dispense the proceedings pursuant to Section 153 StPO if the culpability of the offender is considered to be of a minor nature and there is no public interest in the prosecution. The prosecutor may ask the accused if hes willing
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to pay a certain amount of money as a precondition to terminate the proceedings according to Section 153a StPO. The prosecutor has to ask a judge to accept the termination of proceedings. Once the requested amount of money has been paid, the proceedings will be terminated.
Germany
A reasonable doubt concerning the knowledge of the applicable law and the understanding of how it applies to the current case suspends the guilt of the offender pursuant to Section 17 StGB if he was unable to avoid the mistake. If the offender could have avoided the mistake, the punishment may be mitigated.
The aggrieved person can bring a property claim against the accused arising out of the criminal offence in criminal proceedings instead of a civil litigation claim pursuant to Section 403 StPO.
9 Burden of Proof
A reasonable doubt concerning the awareness of all circumstances that constitute the elements of the offence or a ground for justification leads to the assumption of unintentionally acting according to Section 16 StGB.
The court is obliged to take evidence propriu motu regarding all facts in order to establish the truth. According to the principle in dubio pro reo, all elements of the business crime regarding the facts have to be proofed.
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The court has to be convinced that all statutory elements of the criminal offence are fulfilled pursuant to Section 267 StPO.
A person can be liable for failing to report a crime to the government only when he is obliged to contribute to the prosecution by law, e.g. police officers on duty.
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The court decides based on the result of the evidence taken according to its free conviction pursuant to Section 261 StPO.
10
It is punishable to intentionally incite someone or render aid to someone regarding the intentional commitment of an unlawful act of another person pursuant to Section 26, 27 StGB. The intention of the participant has to concern their own participation and the actions of the perpetrator.
If a perpetrator helps to prosecute or even to prevent a crime that may be punished with a significant prison sentence by disclosing voluntarily his information, the court may mitigate or abandon the sentence according to Section 46b StGB. The provision does not apply to entities. An entity cannot become a perpetrator of a criminal offence. There is also a leniency programme of the Federal Cartel Office (FCO) for participants of so-called hardcore cartels pursuant to Article 81 (7) GWB. Individual person and entities can apply for this programme to achieve a mitigation or even a dispense from a fine under the OWiG.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Germany, and describe the favourable treatment generally received.
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Common Defences
A reasonable doubt concerning the required intention favours the defendant with regard to Section 15 StGB. The reasonable doubt can only concern the facts and not the legal situation.
An entity that applies for the leniency programme of the FCO has to provide the FCO with significant verbal and written information

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and evidence. The applicant has to cooperate fully and on a continuous basis. The FCO treats the applicant as confidential and protects all trade and business secrets during the proceedings up to the point at which a statement of objections is issued to a cartel participant.
Germany
Germany
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Plea Bargaining
The fine on a corporation according to Section 30, 130 OWiG basically correlates with the general assessment on sentences. But Section 20 OWiG as the applicable provision contains a difference with regard to Sections 53, 54 StGB. Any fine has to be imposed separately.
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Appeals
The defendant can make a confession in exchange for an agreement on the range of the sentence.
The verdict is appealable by the defendant as well as the Public Prosecutors Office.
Plea bargaining is subject to Section 257c StPO. The Court is not allowed to choose the option of plea bargaining prematurely. The Court has to extend the taking of evidence to all relevant facts and means of proof proprio motu pursuant to Section 244 (2) StPO to establish the truth. On this account, the Court has to examine the facts of the case and the legal situation first. The content of the bargaining must not comprise the verdict of guilty. Only a floor and a capping of a sentence may be part of an agreement, which have to remain related to the seriousness of the crime. The opportunity to allocute has to be granted to all participants. A waiver of the right to file an appellate remedy is barred in cases of plea bargaining.
The sentence is appealable in cases of an appeal on fact and law. The assessment of the penalty is subject to the discretionary power of the instance determining the facts and therefore cannot be reviewed comprehensively by the court hearing an appeal on law only. It may only assess if the sentencing process violates a legal norm. The defendant and the Public Prosecutors Office may appeal.
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The appellate body that hears an appeal on fact and law reviews the case comprehensively as the court of first instance. In cases of an appeal on law only, the court only examines whether a legal norm was violated or not.
The assessment of penalty sets out from the range of sentences according to the applicable penal provision. At the second step, a mitigation of the punishment is considered. The assessed action has to be classified with regard to the shifted range of sentencing. If a judgment concerns more than one committed crime, an aggregate punishment has to be formed by increasing the highest punishment incurred pursuant to Sections 53, 54 StGB. The aggregate punishment has to be less than the sum of the individual punishments.
In cases of an appeal on fact and law, the court files a decision on the merits and quashes the judgment of the trial court. In cases of an appeal on law only, the appellate body itself may only render a decision on the merits if the judgment is to take a specific form.
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Germany
Dr. Juergen Wessing

WESSING Rechtsanwlte Rathausufer 16-17 40213 Dsseldorf Germany
Dr. Heiko Ahlbrecht

WESSING Rechtsanwlte Rathausufer 16-17 40213 Dsseldorf Germany
+49 211 168 440 +49 211 168 44444 wessing@strafrecht.de www.strafrecht.de
+49 211 168 440 +49 211 168 44444 ahlbrecht@strafrecht.de www.strafrecht.de
Born December 3, 1950 in Dsseldorf. Legal training at the Universities of Bonn, Mnster, Cologne, and Washington. Admission to the Bar in 1982. Specialised in criminal law since then. Prof. Wessing holds the title Specialized Attorney in Criminal Law granted by the German Bar Association. He is an adjunct professor at the University of Dsseldorf and teaches criminal procedure and law regarding fiscal offences. He is also a judge at the court on standards of attorney conduct of the Dsseldorf Bar Association. Professor Wessing is the author of various articles in law journals and books mainly covering topics related to criminal procedure or substantial criminal law. He gives speeches with subjects like corporate crime and law regarding fiscal offences on a regular basis. He was and is regularly invited by the German Attorneys Institute, EUROFORUM, and other institutions. Professor Wessing works as a coordinator or defense attorney in extensive criminal proceedings, but he also counsels national and international (mainly Anglo-American) production companies, corporations, banks, or corporate groups that are in crisis or need advice on questions of compliance. Professor Wessing is chairman of a medical corporation. Languages: English, French.
Born in 1971. Law School of the University of Mnster until 1997. Dr. jur equivalent to Ph.D./S.J.D. 1999 granted from the University of Hagen. Rechtsreferendariat (mandatory legal internship/clerkship) Regional Court Dortmund, Higher Regional Court Hamm. Admitted to the German Bar in 2001. Admitted to the International Criminal Court for the former Yugoslavia, Den Haag, in 2002. Defense counsel with the Law Firm Haarmann, Hemmelrath & Partner, Dsseldorf from 2000 to 2001. Defence Counsel with Wessing II Verjans from 2001 to 2006, since 2006 with Wessing Rechtsanwlte. Partner at Wessing Rechtsanwlte since 2007. The main focus of his work is the advisory practice concerning risk assessment and crisis management in criminal proceedings for companies, their members of the board, and their staff. This includes both the representation of companies as entities and individuals. The scope of advice involves all aspects of so called white-collar-crime and ranges from bribery, corruption (FCPA, SOA), economic, and environmental crimes to money-laundering, fraud and all variations of corporate criminal law. Dr. Ahlbrecht is specialised in dealing with international cases involving every aspect of international criminal law. Frequently, and especially in company representation, he resolves allegations of corruption in business transactions pursuant to sec. 299 of the German Criminal Code. Languages: English.
Wessing Rechtsanwlte offer their services on both the national and international level. We are specialised in the following areas of practice: White-Collar-Crimes Corporate Criminal Law Tax Fraud and Evasion Extradition Risk Assessment Environmental Crimes Money Laundering Business Crimes, Fraud Corruption and Bribery International Criminal Law Compliance Crisis management Insider Trading Criminal Litigation and Procedure
Our experienced lawyers provide clients with professional services, whether it be legal counselling or litigation. Our law firm advises in all matters of corporate compliance, litigation and prevention. We assist corporations in meeting the fast-developing standards of national and international compliance regulations. When criminal disputes arise, our clients benefit from our in-depth strategic analysis and early litigation advice. It is our goal to support you in accomplishing your objectives before a conflict arises, in trial, and in appellate courts. In our law firm, experience gained over decades meets the dynamics of a young and highly qualified team of attorneys. Beyond their legal education, our lawyers served in business management positions, spent years abroad acquiring further qualifications in the common law system, are licensed tax consultants, or are qualified to practice medicine. All of the lawyers stay in close touch with academia through teaching at the university level, publishing in academic journals, and giving talks and presentations in selected areas of corporate criminal law. The team is supported by our well-trained staff and state-of-the-art equipment that enables us to meet the highest technological standards.

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Chapter 12
Italy
Studio Legale Pisano
Roberto Pisano

The authorities who can prosecute are the Public Prosecutors, who are assisted by the Police Forces, which include the State Police, the Carabinieri and the Financial Police. There are not autonomous authorities at the regional levels that can prosecute business crimes.
provided with extensive powers of investigations (very similar to the ones of Consob mentioned above) and, where it assesses serious violations, it has the power to apply significant fines (up to 10% of the companys previous year turnover). It should be noted that, in the Italian system, cartels and abuses of dominant positions do not amount to a criminal offence, and so the administrative enforcement is in principle the only one applicable; and (iii) the Tax authorities, whose task is to collect taxes and to prevent, assess and punish tax violations. Differently from the Consob and the Antitrust Authority, they are not an independent body. They are provided with extensive powers of investigations, and where they assess tax violations they apply related fines. It should be noted that the most serious tax violations can also amount to a criminal offence; in those cases, the tax proceeding (and litigation) and the criminal proceeding proceeds in parallel, but in the end criminal and administrative punishments cannot be applied jointly on the same individual (in practice, only the criminal punishment is applied).
As mentioned under question 1.1, the Public Prosecutors are the only authorities who can prosecute, with the assistance of the Police Forces.

2.1 How are the criminal courts in Italy structured? Are there specialised criminal courts for particular crimes?
Yes, there is administrative enforcement against unlawful conduct which can also amount to business crimes. In principle, such administrative enforcement runs in parallel (and in addition) to the criminal one, on the basis of an autonomous set of provisions attributing to specific regulators the power to assess the relevant violations and to apply the related administrative sanctions. The main regulators are the following: (i) the Consob (National Commission for the Companies and the Stock Exchange; the Italian SEC), whose task is to ensure the transparency and the correct functioning of the financial market, and that in order to achieve this goal it is provided with extensive powers of investigations (i.e. to compel companies officers to attend an interview and to provide documentation; to conduct inspections at companies premises; to seize assets, under specific conditions; etc.), and it can be assisted by the Financial Police. Where Consob assesses relevant violations it applies administrative sanctions, mainly consisting of significant fines (which, where the conduct does also amount to a criminal offence, such as in cases of insider trading and market manipulation, are applied in addition to the criminal sanctions); the so-called Antitrust Authority, whose task is to ensure free competition within the Italian market, especially by counteracting cartels and abuses of dominant positions. It is
The criminal jurisdiction is exercised by professional judges (magistrates), regardless of the kind of crime, with the exception of army crimes (art. 1 of the Italian Code of Criminal Procedure, hereinafter ICCP). The main judicial bodies are the following: (i) Court of First Instance (constituted of a solo judge, or three professional judges, depending on the seriousness of the crime/extension of imprisonment provided for by the law); Court of Appeal (second instance; ordinarily constituted of three professional judges); and Court of Cassation (third instance; ordinarily constituted of five professional judges).
(ii) (iii)
There are no specialised criminal courts for particular categories of crimes, but with respect to certain serious crimes (such as murder, genocide, etc.; see the list under art. 5 of the ICCP) also the socalled popular (non-professional) judges participate to the courts. These courts are called respectively Court of Assize of first instance and Court of Assize of Appeal (in both cases constituted of two professional judges and six popular judges). The jurisdiction over business crimes is determined on the basis of the mentioned criteria: in general terms, these crimes are decided by collective courts, but not by the Court of Assize (and so without the participation of popular judges).
(ii)
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a) purchases, sells or carries out other transactions, directly or indirectly, on behalf of himself or of a third party, on financial instruments by using the mentioned information; communicates the mentioned information to others, out of the normal relation of employment, profession, function or office; and

3.1 Please describe any statutes that are commonly used in Italy to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
The mental element required is intent. o Embezzlement The corresponding statute is the one of misappropriation (art. 646 ICC). It provides for the punishment of imprisonment up to 3 years for anyone who, in order to obtain an undue profit for himself or others, misappropriates the other money or movable thing which he possesses under any title. The mental element required is intent. A specific criminal complaint filed by the injured person is a pre-condition for the criminal action, unless aggravating circumstances are present. o Bribery of government officials The bribery offences relating to domestic public officials are provided for by articles 318-322 ICC, and their sanctions in principle equally apply to the public official and the private briber (art. 321 ICC). In particular, the ICC provides for three forms of domestic bribery, the essence of which is the unlawful agreement between the public official and the briber: (i) the so-called improper bribery, which occurs when the public official, in exchange for performing an act not conflicting with the duties of his office, receives as undue consideration money or other things of value, or accepts its promise. Punishment is imprisonment from 6 months to 3 years (art. 318 ICC); the so-called proper bribery, which occurs when the public official, in exchange for performing (or having performed) an act conflicting with the duties of his office, or in exchange for omitting or delaying (or having omitted or delayed) an act of his office, receives money or other things of value, or accepts its promise. Punishment is imprisonment from 2 to 5 years, and it can be increased due to aggravating circumstances (art. 319 ICC); and the so-called bribery in judicial acts, which occurs when the conduct mentioned under (i) or (ii) is taken for favouring or damaging a party in a civil, criminal or administrative proceeding. Punishment is imprisonment from 3 to 8 years, and it can be increased due to aggravating circumstances (art. 319-ter ICC).
The main statute used in this respect is the one related to the offence of market manipulation, which is contained in Legislative Decree no. 58/1998 (the so-called Finance Unified Text; art. 185). It provides for the punishments of imprisonment from 2 up to 12 years and a fine from 40,000 up to 10 million Euros for anybody who spreads false news or carries out sham transactions or others deceptions concretely able to cause a sensible alteration of the price of financial instruments. The amount of the fine can be additionally increased by the judge in the most serious cases. The mental element required is intent. The general statute of fraud can be used in residual cases (art. 640 of the Italian Criminal Code, hereinafter ICC). It provides for imprisonment up to 3 years (and up to 5 years in cases of aggravating circumstances) for anyone who, using devices and tricks, obtain an undue profit for himself or others causing damage to others. The mental element required is intent. o Accounting fraud The statute used is the one of false accounting (arts. 2621-2622 of the Civil Code). With respect to listed companies, it provides for imprisonment from 1 to 4 years for directors, chief executives, internal auditors and liquidators who, with the intent to mislead the shareholders or the public and with the aim to obtain an undue profit, by stating material facts not corresponding to the truth, in the balance-sheets, reports or other corporate communications, or by omitting information whose communication is imposed by the law, on the economic, patrimonial or financial situation of the company, in a way able to mislead the addressees on the aforesaid situation, cause an economic damage to the shareholders or creditors. The offence has to be excluded if the falsities or omissions do not alter in a notable way the representation of the economic, patrimonial or financial situation of the company and, in any case, if they do not exceed specific thresholds (5% of the turnover, and 1% of net equity value). The mental element required is intent. For non-listed companies punishments are reduced, and a specific criminal complaint filed by the injured persons is a pre-condition for the criminal action. o Insider trading The statute of the insider trading offence is contained in Legislative Decree no. 58/1998 (the so-called Finance Unified Text; art. 184). It provides for the punishments of imprisonment from 2 up to 12 years and a fine from 40,000 up to 6 million Euros for anybody who, being in possession of non-public information by virtue of his quality of member of administrative, managing or supervisory bodies of the issuer corporation, or of being shareholder of the issuer corporation, or of performing an employment activity, profession or function, also public, or an office:
(ii)
(iii)
It should be noted that where the private party is forced by the public official to give or promise bribe, then the more serious offence of extortion committed by a public official does occur, entailing the exclusive criminal liability of the public official, the private party being considered the victim of the crime (art. 317 ICC). With respect to bribery relating to public officials of foreign States, and of international organisations (such as UN, OECD, etc.), the mentioned domestic bribery offences do apply, but with the following two limitations: a) only active corruption is punished (namely, only the private briber, on the assumption that the foreign public officials will be punished according to the laws of the relevant jurisdiction); and on condition that the fact is committed for obtaining an undue advantage in international economic transactions or with the purpose of obtaining or maintaining an economic or financial activity (art. 322-bis ICC). Criminal anti-competition
(ii)
As explained under question 1.2, in the Italian system cartels and

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No: as mentioned under question 2.1, popular judges only participate to the Court of Assize, which does not have jurisdiction on business crimes. However, it should be noted that, in the Italian system, the role of popular judges is much less relevant than the one of a jury in Anglo-Saxon systems, because professional judges participate to and influence the formation of the verdict.
b)
c)
exhorts or induces others, on the basis of the mentioned information, to carry out some of the transactions indicated under letter a).
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abuses of dominant positions do not amount to a criminal offence, and so the administrative enforcement is in principle the only one applicable. o Tax crimes The regulation on tax crimes is contained in Legislative Decree no. 74/2010. The most relevant tax criminal offences are the following:

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fraudulent tax return by using false invoices (for non-existing transactions). Punishment is imprisonment from 1 year and 6 months up to 6 years (art. 2); fraudulent tax return by using other fraudulent means. Punishment is imprisonment from 1 year and 6 months up to 6 years (art. 3); false tax return. Punishment is imprisonment from 1 up to 3 years (art. 4); failure to file a tax return. Punishment is imprisonment from 1 up to 3 years (art. 5); issue of false invoices (for non-existing transactions). Punishment is imprisonment from 1 year and 6 months up to 6 years (art. 8); concealment or destruction of account books. Punishment is imprisonment from 6 months up to 5 years (art. 10); and fraudulent subtraction to the payment of tax. Punishment is imprisonment from 6 months up to 4 years (art. 11). In most of the mentioned offences, the achievement of a specific amount of tax evasion (higher than a certain threshold) is a precondition of the offence (i.e. more than 77,468.53 Euros for the failure to file the tax return, and the fraudulent tax return by using other fraudulent means; more than 103,291.38 Euros for the false tax return). The mental element required is always the intent to evade income tax or Vat (or to allow third persons to evade taxes). o Government-contracting fraud Italian law provides for a specific offence of fraud in public supplying (art. 356 ICC). It provides for the punishment of imprisonment from 1 up to 5 years for anyone who commits a fraud in the execution of supplying contracts signed with the government or in the performance of the related contractual duties. The mental element required is intent. Furthermore, as previously explained, the general statute of fraud can be used in residual cases, and it expressly provides as aggravating circumstance (increasing the punishment up to 5 years imprisonment) the perpetration of the fraud against the State (art. 640 ICC). The mental element required is intent.
3.2 Is there liability for inchoate crimes in Italy? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
As of 2001, prosecutions can be brought against entities in relation to a compulsory list of criminal offences committed by their managers or employees (Legislative Decree no. 231/2001). The list of offences has been constantly updated and broadened and it currently covers many business crimes (such as: corruption, fraud against the State, market manipulation, insider trading, false accounting, money laundering, handling stolen goods, health and safety crimes, intellectual property crimes, infringement of trademarks; in short environmental crimes will be added). The employees conduct can be imputed to the entity on condition that the offence was committed in the interest or for the benefit of the entity. The entitys responsibility is qualified by the law as an administrative offence, but the matter is dealt with by a criminal judge in accordance with the rules of criminal procedure, in proceedings which are usually joined with the criminal proceedings against the entitys employees. Where the offence is committed by an employee, an entity can avoid liability by proving to have implemented effective compliance programmes designed to prevent the commission of that type of offence (art. 7). Where the offence is committed by senior managers, the implementation of effective compliance programmes does not suffice, and the corporations responsibility is avoidable only by proving that the perpetrator acted in fraudulent breach of corporate compliance controls (art. 6).
Yes, as explained under question 4.1 the commission of a qualified criminal offence by the entitys employees or managers is a precondition for imputing the mentioned administrative responsibility to the entity. In that scenario, the entitys employees or managers are subject to personal criminal responsibility in compliance with the general rules, and punished accordingly.
Yes, the ICC provides for the autonomous crime of attempt, on condition that the conduct of the offender is: (i) (ii) able to complete the crime; and unequivocally directed to commit the crime (art. 56 ICC).
According to Italian law, the statute of limitations begins running at the moment of commission of a crime and, in the event of so-called continuing crimes, at the moment such continuation has stopped (art. 158 ICC). In relation to each crime (with a few exceptions for the most serious offences, to which the statute of limitations does not apply), Italian law provides for a first limitation period equal to the maximum period of imprisonment the law provides for the same crime, and that cannot be lower than 6 years (art. 157 ICC). In the event no qualified activity of investigation is carried out within that period (such as a request of interrogation of the suspect, a request of committal for trial, an order of pre-trial custody, the fixing of a preliminary hearing, etc.), the crime is considered extinguished. On the contrary, in the event a qualified activity of investigation is carried out, then the original limitation period is extended for an additional period of one fourth. If no final conviction is reached within that longer period, the crime is considered extinguished.
The ability to complete the crime has to be evaluated in the concrete terms, and at the moment of the action. In turn, the direction of the conduct should objectively reveal the intention to perpetrate the crime. The punishments for the crime of attempt are the same applicable to the completed crime, but substantially reduced (from one third to two thirds). If a person willingly interrupts the action, and the portion of action performed does not amount by itself to a different crime, criminal responsibility is excluded.
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determined things and documents (including documentation and correspondence possessed by banks); issue search warrants to search premises (where there are reasonable grounds to believe that in a certain place there are items related to the crime) and seize relevant items and documents (the items related to the crime, which are necessary for the assessment of the facts; art. 253 ICCP); and seize funds in bank accounts and related documentation (where there are reasonable grounds to believe that they are related to a crime; art. 255 ICCP). Public Prosecutors are not empowered to autonomously issue phone tapping orders, but can make applications to a competent judge, which in practice often authorises them (art. 267 ICCP).
As explained under question 5.1, in the event of so-called continuing crimes the statute of limitations begins running at the moment such continuation has stopped. However, once the limitation period has expired, prosecution is not anymore admitted. The same principle applies to the conspiracy, which is provided by Italian law as an autonomous crime, performed by three or more individuals who create an association aimed at committing several offences (art. 416 ICC). The limitation period for the conspiracy, which is in principle equal to 6 years (extendable by one fourth, up to 7 years and 6 months), starts running for each member from the moment he gave the last contribution to the criminal association.
Document Gathering:
Yes, the running of the statute of limitations is tolled in some particular cases, such as the following: (i) when the criminal proceeding is suspended, in view of a decision of another court (such as the Italian Constitutional Court, etc.); and when the criminal proceeding is temporarily suspended, due to a legitimate impediment to attend of the defendant or his defence lawyer.
(ii)
The time bar re-starts running from the day in which the cause of suspension has stopped.
As explained under question 7.1, Public Prosecutors are empowered to issue search warrants and to raid a company where there are reasonable grounds to believe that in a certain place there are items related to the crime (art. 247 ICCP). In that contest, they can seize items and documents related to the crime, which are necessary for the assessment of the crime (art. 253 ICCP). In practice, the threshold is very low and companies are raided frequently. Theoretically, Public Prosecutors could avoid a raid and request companies to produce documents every times such documents are necessary for the investigations. In practice, however, raids are more often used, in order to benefit from the surprise effect.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Italy recognize any privileges protecting documents prepared by attorneys or communications with attorneys? Do Italys labour laws protect personal documents of employees, even if located in company files?
First of all, it should be noted that Italian Public Prosecutors are not pertaining to the government, but they are professional magistrates. Their duties to bring criminal actions are compulsory and not discretional (art. 112 of the Constitution): such that where there is a notice of crime (a notice regarding specific facts potentially constituting a crime), the Public Prosecutor has a duty to open a formal criminal proceeding, to start investigations, and subsequently - if he assesses that the requirements of a crime are met - to bring a criminal prosecution, by requesting the committal for trial of the suspect. The time-limit for carrying out and concluding the so-called preliminary investigations is 6 months, extendable up to a maximum of 2 years (running from the date a notice of crime is formally registered in a special registrar).
Theoretically, Public Prosecutors do not have the power to seize, or request the production of, documents which are subject to legal professional privilege (i.e. correspondence between the suspect and his defence lawyer; documents regarding the suspects criminal defence) unless such documents represent the so-called elements of the crime (art. 103 ICCP). In practice, however, protection granted by legal professional privilege is more effective at trial - to prevent the use as evidence of documents covered by privilege than at the stage of the investigations (where documents covered by privilege are often seized). In the event of criminal investigation, Italys labour law does not protect personal documents of employees from search and seizure. Theoretically, lawyers, expert witnesses, etc., cannot be compelled to testify in relation to matters known only because of their profession, and to deliver documents possessed because of their profession. However, courts (and to some extent, Prosecutors), if they consider such an objection is ill-founded, can order the deposition and seizure of those items (arts. 200 and 256 ICCP).

The Public Prosecutors powers of investigation are extensive. In particular, they are empowered to: compel a person to attend an interview (both witnesses and suspects); compel the provision of information and the production of

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7.4 Under what circumstances can the government demand that a company employee produce documents to the government, or raid the home or office of an employee and seize documents? 8.2
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Are there any rules or guidelines governing the governments decision to charge an entity or individual with a crime? If so, please describe them.
See the answer to question 7.2.
7.5
Under what circumstances can the government demand that a third person produce documents to the government, or raid the home or office of a third person and seize documents?
As explained under question 8.1, according to the law the Public Prosecutor has a duty to request the committal for trial of a suspect if the notice of crime against him is grounded. In practice, that means that in the Public Prosecutors view the evidence gathered during the preliminary investigations can successfully support the charges in the trial. However, there are not precise guidelines or thresholds provided for by the law. As far as entities are concerned, see under question 4.1 the peculiar additional requirements for the entities liability. It should be noted that, further to a request of committal for trial, the decision to issue a decree of committal for trial (indictment) is taken by a judge (the so-called Judge for the Preliminary Hearing) at the end of an intermediary stage of the proceeding called Preliminary Hearing. An indictment is issued when in the judges view the evidence gathered by the Public Prosecutor during the investigations can successfully support the charges in the trial. In the negative, the judge issues a decision of dismissal.
Italy
Public Prosecutors can order that an employee, officer, or director of a company under investigations, or more in general a third person, submit to questioning if in their view he/she can provide useful information for the purposes of investigations. The interview takes place at the Prosecutions Office.

As explained under questions 6.1 and 8.2, criminal action is compulsory and not discretional, and it cannot be dropped by the Public Prosecutor (unless he assesses that no crime was ever committed by the relevant suspect, and then requests accordingly a dismissal to the competent judge). Under certain conditions, plea bargaining with prosecuting authorities is recognised by Italian law. It has to be approved by the competent judge, the punishment agreed upon cannot be more than 5 years imprisonment, and it is substantially considered as a conviction sentence (art. 444 ICCP). Furthermore, under certain conditions, a civil settlement with the person injured, aimed at compensating damage, can qualify as a mitigating circumstance to reduce the criminal sentence.
Suspects required to attend interviews with Public Prosecutors and Judicial Police, have a right of silence (privilege against selfincrimination), from which adverse inferences cannot legally be drawn, and they have a duty (not only the right) to have legal representation (art. 64 ICCP). On the contrary, witnesses have a duty to answer questions truthfully (otherwise, the offence of false deposition is perpetrated) and do not have the right to legal representation.

As explained under question 6.1, where there is a notice of crime the Public Prosecutor has a duty to open a formal criminal proceeding, to start investigations, and subsequently - if he assesses that such a notice of crime against a certain suspect is grounded to bring a criminal prosecution, by requesting the committal for trial of the suspect. In the event the Public Prosecutor assesses that the notice of crime against a certain suspect is ungrounded, he requests the dismissal to the competent judge (the so-called Judge for the Preliminary Investigations).
Yes, in the event the criminal offence has caused economic or noneconomic damage, the author bears a civil liability for the restitution and damages (art. 185 ICC). The person injured by the crime can obtain compensation for the damage suffered directly within the criminal proceeding, by enforcing a specific civil action in that context (the so-called standing as civil party).
9 Burden of Proof
Art. 27, paragraph 2, of the Italian Constitution provides that a
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9.2
What is the standard of proof that the party with the burden must satisfy?
The Public Prosecutor must prove guiltiness beyond any reasonable doubt (art. 533, par. 1, ICCP). It should be mentioned that the standard beyond any reasonable doubt was only recently expressly introduced in the Italian system (by Law no. 46 of 2006), and that in most of the cases is applied by professional judges and not by a jury (see question 2.1) so that the effectiveness of the principle is generally lower than in the Anglo-Saxon system.
Yes, absolutely. All business crimes (with a few exceptions) require intent as a mental element, whilst negligence and recklessness theoretically are not sufficient. The burden of proof in this respect is with the Prosecutions Office, as explained under questions 9.1 and 9.2. However, it should be noted that Prosecutors and courts tend to infer, and even to presume, knowledge and intent from objective circumstances, in such a way to significantly broaden the notion of intent.
The only arbiter of fact in a criminal trial is the judge/court, on the basis of the evidence produced by the parties or that he exceptionally ordered to be produced. The judges convincement is free; however, his decision must comply with the law provisions concerning the evaluation of evidence (art. 192 ff. ICCP) and the grounds for judgment (art. 546, par. 1, letter e, ICCP).
10
This defence can be raised successfully only in very limited and exceptional situations. In particular, ignorance (or the mistake) of criminal law does not exclude the criminal responsibility, except in case of inevitable ignorance (art. 5 ICC). The cases of inevitable ignorance were identified by a decision of the Constitutional Court (no. 364 of March 24, 1988), and they in essence refer to exceptional cases where the person was misled by wrong indications given by the public authority, or by seriously contradicting rulings issued by the courts. This is confirmed by the consolidated case law, according to which a person, and especially a professional or entrepreneur, has a duty to gather information on the lawful nature of his actions, and in case a doubt still remains after that he has a duty to abstain from taking the relevant conduct.
Yes. With respect to the elements and sanctions for the autonomous crime of conspiracy, which requires in any case the creation of a stable organisation aimed at committing several offences, see the answer under question 5.2. Where a person contributes to the commission of a criminal offence, without fulfilling the more stringent requirements provided for the conspiracy, he is criminal liable for that offence together with the other offenders, under the concept of participation to a crime (art. 110 ff. ICC). The general principle is that each individual taking part in the crime is considered an offender, and bears a criminal responsibility equal to the others. However, specific aggravating and mitigating circumstances do apply, in order to modulate the criminal responsibility in line with the contribution given by each participant (arts. 112-114 ICC). The case of participation to a crime should be distinguished from the autonomous crime of abetting, which applies in relation to the conduct of anyone who, after the commission of a crime, and out of cases of participation to a crime, helps someone to elude the investigations of the authority, or to escape its researches (art. 378 ICC). In essence, in the latter case there is no previous agreement to contribute in a common unlawful activity, and the conduct of the abetter takes place only after a crime has already been committed.
Yes, the mistake of fact, in the event it affects the essential elements of the unlawful conduct, excludes the criminal responsibility because it excludes the mental element (intent) of the crime (art. 47, par. 1, ICC). The burden of proof with respect to the existence of such excuse is with the defence. It should be mentioned, however, that the sphere of application of such defence is in practice rather limited
12
No: Italian law does not provide for a general duty of individuals to report crimes to the competent authorities (Prosecutions Offices and Police). However, specific provisions such as anti-money laundering, require individuals working in certain sectors to make disclosures to competent authorities (the Financial Intelligence Unit) about

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defendant cannot be considered guilty until the final conviction. In line with this presumption of innocence, the Italian rules on evidence provide that the burden of proof, for each element of the business crimes identified above, is in principle with the Prosecutions Office. Where the defendant raises an affirmative defence, then it lays on him the related burden of proof. In the event the trial court admits some elements of evidence for the Prosecution, the defendant has always the right to the admission of the so-called contrary evidence (art. 495, par. 2, ICCP).
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Common Defences

suspicious transactions. Such a duty of disclosure was originally imposed only on financial intermediaries (banks, etc.), but has recently been extended to tax accountants, notaries public and lawyers, on condition that they perform an activity of a financial nature. Failure to disclose a suspicious transaction does not amount to a criminal offence, but is penalised by the imposition of fines and other administrative sanctions.
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15 13 Cooperation Provisions / Leniency
Italian law, with the exception of mafia or terrorism crimes, does not provide express benefits in that respect. However, it can be stated that, on a case by case basis, a certain degree of cooperation can produce positive effects, especially if joined with the compensation of damage in favour of the injured party (this could qualify as one or more mitigating circumstances, able to reduce the future sentence).
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Italy, and describe the favourable treatment generally received.
The court determines the concrete punishment, mostly the extension of imprisonment, within the minimum and maximum limits that the law provides in relation to each crime (art. 132 ICC). The most relevant criteria that the court has to take into account are the following: (i) (ii) (iii) (iv) all modalities of the action; seriousness of the damage or danger caused to the person injured by the crime; intensity of intent or degree of negligence; and criminal capacity of the offender (art. 133 ICC).
The concrete punishment has to be increased or decreased (usually of one third) where aggravating or mitigating circumstances have to be applied. Furthermore, additional reductions (usually of one third) do apply in the event the defendant chose an alternative route to the ordinary trial (such as abbreviate trial, etc.).
Cooperation with the prosecuting authorities before trial (in terms of removal of the officers/body members allegedly responsible for the unlawful conduct, implementation of compliance programs aimed at preventing the same type of offences, compensation of damage, restitution of the profits gained, for the purposes of confiscation, etc.) can have a significant impact in reducing the pretrial and final sanctions to be applied to the corporation. In particular, in the event of criminal responsibility (see question 4.1) corporations are subject to sanctions constituted of fines, disqualifications and confiscation. Disqualifications can be particularly afflictive, because they can also be applied at a pre-trial stage, as interim coercive measures, and they can consist of the suspension or revocation of government concessions, debarment, exclusion from government financing, and even prohibition from carrying on business activity (arts. 9-13 of Legislative Decree no. 231/2001). Cooperation with the prosecuting authorities before trial, in the forms mentioned above, can prevent or reduce the pre-trial disqualifications, and the ones applicable with the final sentence (art. 17 of Legislative Decree n. 231/2001).
The court must verify the existence of the elements indicated under question 4.1, which are pre-conditions for the corporations liability. As a general principle, the corporations liability does require the positive assessment that a relevant criminal offence was committed by its managers or employees, in the interest or for the benefit of the corporation. However, the corporations liability can be affirmed also in some peculiar cases in which a conviction against the individuals (managers or employees) cannot be issued (such as when the crime is time-barred, or the offender is not chargeable or has not been identified, or is deceased).
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Appeals
14
Plea Bargaining
Yes, a guilty or a non-guilty verdict can be appealed by both the Public Prosecutor and the defendant before the Court of Appeal (art. 593, par. 1, ICCP).
As explained under question 8.3, under certain conditions, plea bargaining with prosecuting authorities is recognised by Italian law. It has to be approved by the competent judge, the punishment agreed upon cannot be more than 5 years imprisonment, and it is substantially considered as a conviction sentence (art. 444 ICCP).
As indicated under question 16.1, both the Public Prosecutor and the defendant can appeal a guilty verdict, by attacking the aspects of the decision of first instance that they want to be amended, in order to obtain a ruling more favourable to their respective positions.
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Roberto Pisano
Studio Legale Pisano Via Cino del Duca no. 5 Milan Italy
The Court of Appeal has competence on the case only to the extent of the grounds of appeal, and not on the decision of first instance as a whole (art. 597 ICCP). A renewal of the gathering of evidence (especially examination of witnesses), or the taking of new evidence, takes place before the Court of Appeal only in the event it considers it necessary to decide the case (art. 603 ICCP).
In case of appeal made by the Prosecutor: (i) against a decision of conviction: the Court of Appeal can qualify the crime as a more serious one and apply a more serious punishment (i.e. the Court can increase the period of imprisonment); or against a decision of acquittal: the Court of Appeal can change the verdict from non-guilty to guilty, or it can acquit the defendant for different grounds.
(ii)
In case of appeal made by the defendant, the Court of Appeal can change the verdict from guilty to non-guilty, or in any case issue a decision more favourable to the defendant. In case of appeal made only by the defendant, the Court of Appeal cannot apply a more serious punishment, and neither acquit the defendant on the basis of less favourable grounds (art. 597 ICCP). The decision of the Court of Appeal can be appealed by both the Public Prosecutor and the defendant before the Supreme Court (the so-called Court of Cassation), that cannot decide on factual issues, but only on violations of law.
Roberto Pisano obtained a law degree, cum laude, from the State University of Milan in 1992, and a PhD from the University of Genoa in 1999. Between 1993 and 1997 he was a research associate at Bocconi University of Milan where, since then, he has worked as a contract professor on business and tax crimes. Mr Pisano was co-chair of the business crime committee of the IBA in 2007 and 2008, vice-chair of the ECBA in 2008 and 2009, and is a member of the ABA and NACDL. He is the author of several publications on the subject of business crime and mutual legal assistance, including: Tax Crimes (Cedam, 2002, coauthor); Criminal Responsibility from Asbestos (Giuffr, 2003, contributor); The Relations Between Domestic Law, Treaty Law and EC Law (Egea, 1995); EU arrest warrant in action (in European Lawyer, 2005, co-author); and The Illegal Performance of Financial Intermediation (Cedam, 2007). Mr Pisano is the managing partner of Studio Legale Pisano, and in the course of his practice successfully represented prominent individuals and entities in high-profile Italian criminal proceedings, including: a case alleging international tax fraud involving the Italian prime minister, in which Mr Pisano represents a well-known US movie producer; a case involving a claim for restitution of antiquities by the Italian Ministry of Culture, in which Mr Pisano represented a prominent US museum; a case alleging a fraudulent bankruptcy of managers and contractual parties of Parmalat SpA, including foreign banks, in which Mr Pisano represents a prominent external counsel of a US bank; and a case alleging multiple homicide of several workers by the managers of a multinational company manufacturing hazardous products, in which Mr Pisano was a member of the defense team. Mr Pisano is a regular speaker at conferences and seminars in Italy and abroad on the subject of white-collar crime and mutual legal assistance and extradition, including: - IBA Buenos Aires, October 2008: Chair of the session Financial crime and regulation; - IBA Milan, June 2005: Chair of the session Criminal liability of companies; - ECBA Lisbon, April 2005: Chair of the session Taking liberties - Anti-terrorism laws post 9/11 and Madrid; - C5, Geneva, March 2009: Speaker at the session Mutual Assistance and Co-operation among European Nations on Cross-Border Fraud: New Developments; - IBA Buenos Aires, October 2008: Speaker at the session Criminalizing corporate conduct; - IBA Washington, June 2007: Speaker at the session MLAT Challenging mutual assistance and extradition; - IBA Chicago, October 2006: Speaker at the session Cooking the books: where are we 5 years after Enron?; and - IBA Prague, September 2005: Speaker at the session Offshore tax sheltering schemes: fair means or foul?.
Studio Legale Pisano is an Italian boutique firm which specialises in areas of white-collar crime including corporate criminal responsibility, corruption, market abuse and false accounting, tax crimes, fraud and recovery of assets, bankruptcy crimes, environmental and health-and-safety crimes and money laundering. The firm provides assistance as well in the course of regulatory investigations and specialises on transnational investigations and related aspects of mutual legal assistance and extradition. Studio Legale Pisano benefits from the expertise of specialists in criminal and international law and interacts daily with counsel of various jurisdictions. The firm has a history of representing prominent individuals and entities in high-profile Italian criminal proceedings, and in the frame of foreign proceedings for judicial review of search and seizure orders, assets confiscation, extradition and surrender according to the European Arrest Warrant regulations.

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Tel: +39 02 7600 2207 Fax: +39 02 7601 6423 Email: robertopisano@pisanolaw.com
Chapter 13
Japan
Nishimura & Asahi
Yoshinori Ono
Norimitsu Yamamoto

(b)
Administrative organs responsible for investigation of business crime cases
(1)
Power to initiate prosecution
Japan has a centralised system of government. Public prosecutors and public prosecutors assistants belong to the Public Prosecutors Office and they are national public officers. Public prosecutors have the sole power to initiate prosecution of crimes. Public prosecutors have discretion over whether to initiate prosecution, and may choose not to do so if they consider it unnecessary due to matters such as the gravity and circumstances of the offence, or situation after the offence. One exception is a decision to institute prosecution which is made by the Committee for Inquest of Prosecution twice when it determines that institution shall be appropriate in response to a petition by a person who filed a complaint or accusation, despite the prosecutors disposition not to institute prosecution. When the Committee makes a decision to initiate prosecution, a courtappointed lawyer is in charge of the prosecution. (2) (a) Investigative authorities and related bodies Investigative authorities under the Code of Criminal Procedure (CCP)
Specific administrative organs have powers to investigate certain business crimes (hansoku-chosa) and file an accusation with public prosecutors seeking prosecution of such business crimes. Those organs may also engage in compulsory investigations (e.g., visit, search, or seizure) with a warrant issued by a judge. Specific examples of such organs are: (i) (ii) (iii) tax collectors with the power to investigate criminal cases regarding national tax (excluding customs and tonnage taxes); customs officials with the power to investigate criminal cases regarding customs; personnel of the Special Investigation Section of the Securities and Exchange Surveillance Commission (SESC) with the power to investigate criminal cases regarding specific violations of the Financial Instruments and Exchange Act (FIEA); or staff members of the Criminal Investigation Department, Investigation Bureau of the Japan Fair Trade Commission (JFTC) with the power to investigate criminal cases regarding specific violations of the Antimonopoly Act (AMA).
If there are more than one set of enforcement agencies, please describe how decisions on which body will investigate and prosecute a matter are made.
(iv)
1.2
The CCP provides for public prosecutors, public prosecutors assistant officers and judicial police officials as the authorities responsible for investigation. Public prosecutors have the power to investigate in addition to instituting prosecution. Judicial police officials consist of general judicial police officials who have the power to investigate any criminal matters and special judicial police officials whose power to investigate is limited to special criminal matters. Public prosecutors and public prosecutors assistant officers belong to the Public Prosecutors Office and they are national public officers. Many special judicial police officials are also national public officers who belong to national organisations such as the Japan Coast Guard. In contrast, police officials who are general judicial police officials belong to the National Police Agency or prefectural police headquarters. Although some police officials are national public officers, most are local public officers. The investigative authorities described above may, with a warrant issued by a judge, also engage in compulsory investigation activities (e.g., search, seizure, inspection, arrest and detention).
As stated above, only public prosecutors are authorised to prosecute crimes in Japan.
(1)
Civil claim
A criminally liable act may also be subject to a victims claim for compensation of damages based on tort because such an act will also constitute an infringement of anothers right or legallyprotected interests under the Civil Code. However, there is no system available that enables an administrative organ to claim for compensation of damages for the victim. (2) Administrative sanctions Penalties for business crimes include the imposition of administrative sanctions in addition to criminal punishment. (i) Non-penal fine (karyo) A non-penal fine is an imposition of a sanction of pecuniary obligation on a violator in order to maintain administrative public order.
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(ii) Incidental tax
Japan
(iii)
Surcharge (kachokin)
(i)
Laws such as the AMA and the FIEA prescribe a surcharge as a sanction to ensure the effectiveness of administrative regulations. This differs as follows: (a) Surcharge under the AMA Under the AMA, surcharges shall be imposed on cartel and bid-rigging, private monopolisation and other unfair trade practices such as abuse of superior bargaining position. In cases of such offences, the JFTC will provide the relevant business entities in advance with an opportunity to express their opinions and to submit evidence before it issues any order to pay surcharges. A party that is dissatisfied with such payment order may request that the JFTC conduct a hearing. The decision that the JFTC reaches at the hearing is subject to appeal to the Tokyo High Court. (b) Surcharge under the FIEA Under the FIEA, surcharges shall be imposed by the Commissioner of the Financial Services Agency on offences such as disclosure of false information on important matters in primary markets or secondary markets by listed companies or insider trading. If the SESC conducts an examination and discovers facts satisfying the requirements for making a payment order, the SESC will recommend that the Commissioner of the Financial Services Agency proceed with making the payment order. The Commissioner will then issue a decision on the commencement of trial procedures pursuant to the recommendation. For more details, please refer to question 3.1. With respect to surcharge reduction system, please refer to question 13.2.
Litigation that relates to crimes punishable by the death penalty or life imprisonment with or without a labour requirement (e.g., homicide, arson of inhabited building, and robbery causing death). Litigation of cases that are statutorily subject to trial by a panel of judges and which relate to crimes in which the accused killed the victim by a wilful criminal act (e.g., injury causing death and dangerous driving causing death).
(ii)
It is unlikely that ordinary business crime would fit into the above categories.

3.1 Please describe any statutes that are commonly used in Japan to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
o (1) (i) (ii) (2) (i)
Fraud and misrepresentation in connection with sales of securities Crime in connection with sales of securities in general, not limited to listed securities Fraud (Penal Code). Use of false documents (Companies Act). Crime in connection with sales of the listed securities (FIEA) Violation of the disclosure regulation in the primary market. A B False information in securities registration statements. False information in prospectus. Market manipulation. Spreading rumour and use of illegal means.
(ii)
Prohibition of wrongful act in connection with securities. A B

2.1 How are the criminal courts in Japan structured? Are there specialised criminal courts for particular crimes?
Please note that with respect to the foregoing offences, surcharges calculated according to the formula provided in the FIEA may also be imposed. Criminal punishments are only imposed in cases of serious violations of the law. In addition to the above, certain types of wrongful, misleading or fraudulent acts in connection with dealings of securities are generally prohibited. o Accounting fraud The following accounting related actions are considered criminal offences: (1) Violation of the disclosure regulation in the secondary market (FIEA)
The criminal court system in Japan adopts a three-tiered judicial system, and either a District Court or Summary Court has first instance jurisdiction depending on the substance of the criminal penalty. In most cases of business crimes, District Courts have first instance jurisdiction. High Courts are the appellate courts, and the Supreme Court is the court of final appeal. A Summary Court conducts proceedings through a single judge. Depending on the case, a District Court conducts proceedings through a single judge or a panel of judges comprising three judges. An appellate court conducts proceedings through a panel of judges comprising three judges, and the court of final appeal conducts proceedings through a panel of judges comprising five judges (petty bench) or 15 judges (full bench). No criminal court exists that specialises in specific types of crimes. However, trials of juvenile criminal cases are handled by Family Courts. Summary Courts, District Courts, High Courts and the Supreme Court all handle both civil and criminal cases.
This relates to the submission of annual securities reports, quarterly securities reports, semi-annual securities reports, or extraordinary reports containing false information on important matters. (2) (3) Payment of Illegal dividends (Companies Act) Aggravated breach of trust (Companies Act)
This relates to situations in which directors or other officers commit acts in breach of that persons duties and causes financial damages to the company for the purpose of promoting that persons own interests or the interests of a third party or inflicting damage on the stock company.

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An incidental tax is imposed on a failure to collect or violation of collection of a national or local tax. In the procedures for incidental tax, directors of the Regional Taxation Bureaus, the chiefs of tax offices, or the superintendants of custom houses make orders to impose incidental tax; and if dissatisfied, a party may file an objection. Incidental taxes and criminal penalties may be imposed cumulatively.
In Japan, a jury system does not exist, but there is a saiban-in system (lay judge system). Under the saiban-in system, a saibanin (lay judge) who is appointed for each case from among the persons eligible for election, together with judges, finds criminal facts and determines the sentence. The following types of cases are subject to the saiban-in system:
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o (1) Insider trading Insider trading by corporate insider (FIEA)
Japan
wrongful gain (any gains which satisfy a persons demands or desires) as consideration for a certain duty of the public officer. o (1) Criminal anti-competition Criminal offences and surcharges under the AMA
Japan
Any person listed below who knows a material fact pertaining to the business or other matters of a listed company (Material Fact) and makes a sale, purchase or other transfer for value or acceptance of such transfer for value of shares of the listed company before the Material Fact is publicised has violated the insider trading laws, as set out in the FIEA: (i) an officer, agent, employee or other worker (Officer) of the listed company (including its parent company and subsidiaries) who has come to know a Material Fact in the course of his duty; a shareholder entitled to the right to inspect account books of the listed company who has come to know a Material Fact in the course of such an inspection; a person having statutory authority over the listed company who has come to know a Material Fact in the course of exercise of its authority (e.g., a public officer having the statutory authority of permission, investigation, or inspection); a person having concluded or been in negotiation to conclude a contract with the listed company who has come to know a Material Fact in the course of the conclusion of, negotiation for, or performance of the contract; an Officer of a juridical person listed in item (ii) or (iv) who has come to know a Material Fact in the course of his duty; a person within one year since he ceased to be a person listed in item (i) through (v);
Please note that criminal charges are rarely sought and most enforcement is made through Surcharges. Criminal charges are reserved for very serious offences. (i) Criminal offences: (a) (b) (c) Private monopolisation and cartel and bid-rigging. International agreement which provides for a cartel and bid-rigging. Restraint of acquiring or holding another corporations voting rights by bank (no more than 5%) or insurance corporation (no more than 10%).
(ii)
(iii)
(ii)
Surcharges
The AMA also imposes surcharges as follows:

Manufacturer, etc. (a) Cartel, bid-rigging or other anti-competitive activities (b) Monopoly by Control (c) Monopoly by Exclusion (d) Concerted refusal to trade, discriminatory pricing, unjustly low price sales; and resale price restrictions (e) Abuse of superior bargaining position 10% (4%) 10% 6% Retailer Wholesaler
(iv)
3% (1.2%) 3% 2%
2% (1%) 2% 1%
(v)
(vi)
3%
2%
1%
(vii) a person who has received from a person listed in item (i) through (vi) information on a Material Fact; or (viii) an Officer of a juridical person who has received from a person listed in item (vii) belonging to the same juridical person information on a Material Fact in the course of his duty. The Material Facts include among others: (a) a decision by the organ of the listed company which is responsible for making decisions on the execution of the operations of the listed company to carry out certain important matters; (b) an occurrence of certain important facts in the listed company; (c) the existence of a significant difference compared to the latest publicised forecasts of sales, current profits, net income, or other account title of the listed company; and (d) any other important matters which would cause significant influence on investors decisions. The decisions, occurrences, and difference in settlement of account information which are similar to the foregoing with respect to the subsidiaries of the listed company are also included in the Material Facts. (2) Insider trading by person in connection with tender offer (FIEA)
1%
*Percentages in parentheses are applicable to small and medium enterprises. *Surcharge with respect to (a) through (d), shall be calculated by multiplying the sales amount of goods or services concerned by indicated surcharge rate as indicated. Surcharge with respect to (e) shall be calculated by multiplying the amounts of transaction with trade partner(s) that suffered the abuse by the indicated surcharge rate (1%). The JFTC announces that it will proactively file an accusation with the Prosecutor General seeking criminal punishment against the cases which fall under any of the following items: (a) (b) a case with a vicious and serious offence which has a vast influence on peoples life; and a case where it is deemed to be impossible to achieve the goal of the AMA only by administrative sanctions as surcharges, such as repeated offences or violations of a cease and desist order.
The same punishment as item (1) shall be imposed against a person who has come to know a fact concerning the launch or suspension of (a) a tender offer or (b) a purchase of more than 5% of the shares of a listed company (collectively, a Tender Offer), who has the same relationship with the tender offeror or the purchaser as prescribed in (i) through (viii) of (1) above. However, in the case of a launch of a Tender Offer, only purchasers of shares will be considered to be in violation of the law, and in the case of a suspension of a Tender Offer, only sellers of shares shall be punished. Please note that with respect to the offence (1) and (2) above, surcharges calculated according to the formula provided in the FIEA may also be imposed. Criminal punishments are only imposed in cases of serious violations of the law. o Bribery of government officials The Japanese Penal Code prohibits anyone from providing any
(2)
Obstruction of auctions and collusion (Penal Code)
If an agreement on bidding price constitutes the crime of collusion, this may constitute the crime of a cartel under the AMA. In this case, this constitutes both the crimes of collusion and cartel. o (1) (i) Tax crimes Evading taxes Income tax evasion
A person who continues to reside in Japan for one year or more shall be liable to pay tax for all income, provided that a nonJapanese national who resides in Japan for no more than five years on aggregate in the last 10 years shall only be liable to pay tax for domestic source income and income paid within or remitted to
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Japan. A non-resident shall be liable to pay tax only for domestic source income. (ii) Corporate tax evasion A domestic corporation (with the head office or principal office within Japan) shall be liable to pay tax for all incomes; and a foreign corporation shall be liable to pay tax only for the domestic source income. (2) (3) (4) Failure to pay the withholding income tax Failure to submit the tax return form Obstruction of an inspection
Japan
A person may not lend money on a regular basis to receive annual interest exceeding 20%. (c) (4) Money laundering Fraudulent bankruptcy
A person may not conceal or conduct a fraudulent transfer of the debtors property for the purpose of harming its creditors. (5) (i) Unfair Competition Prevention Act (UCPA) Trade secret infringement
A person may not acquire trade secrets illegally or use such trade secrets in certain manners as specified in the UCPA. (ii) Other crimes regarding unfair competition: (a) A person may not commit acts of unfair competition (as specified in the UCPA) such as creating, for a wrongful purpose, confusion with another persons goods or business by using an indication of goods or business that is identical or similar to the persons indication of goods or business that is well-known among consumers. A person may not give, or offer or promise to give, any money or other benefits to a foreign public officer for the purpose of having the foreign public officer act or refrain from acting in a particular way in relation to his duty, or having the foreign public officer use his position to influence another foreign public officer to act or refrain from acting in a particular way in relation to that officers duties in order to obtain illicit gains in business with regard to international commercial transactions.
A person may not fail to answer or make a false answer to the questions given by tax collectors, or refuse, obstruct or avoid an inspection by tax collectors. o Government-contracting fraud If a public officer has executed a government contract to promote his own or another partys interest and caused financial loss of the government, such act is a crime of breach of trust under the Penal Code. Anyone who has conspired with or assisted the public officer to commit such a crime may also be liable. Please refer to question 10.1. If a person has defrauded a property of the government, such act may be a crime of fraud under the Penal Code. o (1) (a) Any other crime of particular interest in Japan Labour regulations Employment Security Act and Worker Dispatch Act
(b)
A person may not carry out employment placement business or general worker dispatching undertaking without obtaining a licence from the Minister of Health, Labour and Welfare. (b) Employment Insurance Act A business operator is obligated to notify the Minister of Health, Labour and Welfare when it has hired a new employee under the Employment Insurance Act. (c) Industrial Safety and Health Act A person may not manufacture, import, transfer, provide, or use substances which seriously impair workers health (e.g., yellow phosphorus matches and benzidine), except where he manufactures, imports or uses such substances for the sake of research or examination and complies with the requirement prescribed by cabinet order. In addition, manufacturing of certain hazardous materials requires permission from the Minister of Health, Labour and Welfare. (2) Trade regulations A person who intends to export specific kinds of goods to specified regions, which are specified by cabinet order as being considered to obstruct the maintenance of international peace and security, or intends to conduct a transaction designed to provide technology pertaining to the design, manufacture or use of specific kinds of goods in specified regions, shall obtain permission from the Minister of Economy, Trade and Industry. (3) (a) Finance regulations Exchange transactions
(6) (i)
Consumer protection Non-store retailing
A person may not misrepresent information (e.g., the type and performance or quality of the goods, or the type and details of the rights or services, and the selling price of the goods or rights) in soliciting a sales contract or a service contract pertaining to nonstore retailing (e.g., door-to-door sales or telemarketing sales) or preventing withdrawal of offer or rescission of such contract. (ii) Misleading representation A person may not use false or exaggerated labelling or advertising, which may cause harm to public health regarding food, additives, apparatus or containers and packaging. (7) (i) Environment protection Waste management
A person may not dispose of wastes or incinerated wastes without compliance with laws and regulations. (ii) Pollution A prefectural governor may issue an order to change or abolish the plan concerning smoke exhaustion of facilities if it does not match the criteria set forth by law and regulation. The same shall apply to water pollution. When a prefectural governor finds the existence of land falling under the criteria set forth by the cabinet order for the categories of land that involve a threat of harmful effects on human health due to soil contamination by a hazardous substance, the governor may order the owner, manager or occupier of the site to conduct an investigation of the site according to the cabinet order and to make a report on its results. (8) Building Lots and Buildings Transaction Business Act No person may sell, purchase or exchange real estate or broker or mediate a sale, purchase, exchange or lease of real estate on a regular basis without a licence.
In Japan, no person may conduct exchange transactions on a regular basis without a licence (e.g., banking business or credit association). However, a person who obtains the registration of a money transfer business may conduct exchange transactions in which the handling of money does not amount to more than the amount of money equivalent to 1 million yen. (b) Money lending business In Japan, no person may conduct money lending or intermediary of money lending on a regular basis without a licence of money lending business.

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3.2 Is there liability for inchoate crimes in Japan? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Japan
to all crimes begins at the time of the cause of the final outcome. Accordingly, until this limitations period has ended, all crimes resulting from the single act can be prosecuted. Where an act performed as the means of a crime (e.g., fraud) constitutes another crime (e.g., counterfeiting of official documents), the former crime can be prosecuted until the end of the limitations period of the latter crime, provided that the latter crime was committed before the end of the limitations period of the former crime. However, if the latter crime was committed after the end of the limitations period of the former crime, the former crime cannot be prosecuted.
Japan
A person who commences but does not complete a crime may receive a reduction in the punishment which he or she would have faced had the crime actually been committed. The offender may further be exculpated of all criminal liability if he or she voluntarily abandons the commission of the crime. Certain serious crimes, such as attempted murder and attempted counterfeiting of currency have provisions allowing for punishment of preparatory acts without commencing the offence itself.

The limitations period is tolled if: (i) (ii) (iii) (iv) prosecution is instituted in the case concerned; prosecution is instituted against one of the accomplices; the offender is outside Japan; or the offender conceals him/herself so that it is impossible to serve on him/her a transcript of the charging sheet or notification of the summary order.
Under Japanese law, only natural persons are subject to criminal punishment. However, juridical persons may also be criminally punished if a dual punishment provision (ryobatsu-kitei) exists which provides that juridical persons will also be punished together with the offender who actually committed the violation regarding the business of the juridical persons. In addition to such dual punishment provision, the AMA and the Labor Standards Act provide triple punishment provision (sanbatsu-kitei) which also imposes a fine on the representative of the corporation which the offender belongs to or the employer of the offender, who failed to take necessary measures to prevent the offence. As administrative sanctions are not considered to be criminal punishment, their application is not limited to natural persons.
In many cases, the investigative authority or the administrative organ discussed in question 1.1(2)(b) initiates investigations when it deems that an offence has been committed. Additionally, investigations are initiated in any of the following cases: (i) A complaint A complaint is where a victim of a crime reports the crime which injured him/her to an investigative authority and demands that the investigative authority punish the person who committed the crime. For some crimes (e.g., a trade secret infringement under the UCPA), the offender shall not be punished without a complaint. (ii) An accusation An accusation is where any person reports a crime to an investigative authority and demands that the investigative authority punish the offender. In order to urge the prosecutors to institute prosecution, a person who is a victim of crime can file a complaint, and a person who is not a victim can file an accusation. Any person can file an accusation of any crime. (iii) A surrender A surrender is where a person who committed a crime confesses his crime to an investigative authority before the offence is made known to investigative authorities and the offender is identified as a suspect. A complaint, an accusation, or a surrender shall be filed with a public prosecutor or a judicial police official in writing or orally.
Even if the corporation is liable for a criminal offence as explained in question 4.1, an officer and/or employee who has not committed the crime will not be considered to be in breach of a criminal statute. However, the representative of such corporation or the employer of the offender may also be punished by fine under triple punishment provision as explained in question 4.1.
The enforcement-limitations period begins at the time when the criminal act has ceased. Regarding a case of complicity, the limitations period with respect to all accomplices begins at the time when the final act has ceased. The limitations period depends on the statutory penalty. The limitations period is seven years for a crime in which the statutory penalty is punishment by long-term imprisonment with work for 10 years or more but less than 15 years.

Where two or more separate crimes are deemed a single criminal act from a social point of view, the limitations period with respect
There are two types of investigations which are conducted by investigative authorities (public prosecutors, public prosecutors assistant officers and judicial police officials); non-compulsory
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investigations and compulsory investigations. The method of the non-compulsory investigation is not limited. However, compulsory investigation shall not be conducted unless special provisions have been established in the CCP or other relevant law. In concrete terms, compulsory investigation includes search, seizure, inspection, arrest and detention upon a warrant issued by a judge. A suspect under arrest or detention is obliged to submit to questioning, but he has the right to remain silent and to appoint his counsel. In addition, if he refused to submit to questioning, no sanction shall be imposed on him for such refusal.
the suspect committed the crime and evidence exists in the target place and that a search, seizure, or inspection is necessary. However, the residence or any other place of a person other than the suspect (e.g., a residence used by a company employee who is not the suspect) may be searched only when it is reasonably supposed that articles which should be seized exist there. The administrative organs may conduct visits, searches, or seizures with a warrant issued by a judge.
Document Gathering:
A company may cooperate voluntarily with the investigation. The authority may request the company to submit documents and make a report on necessary matters relating to the investigation. However, if a company declines to cooperate with the investigation, the authority cannot compel the company to cooperate. However, the investigative authority may conduct search, seizure, or inspection with a warrant issued by a judge. The judge will issue a warrant if he judges that there is a probable cause that the suspect committed the crime and the articles of evidence exist in the company and that search, seizure, or inspection is necessary. The administrative organs may, if necessary to investigate a criminal case, with a warrant issued by a judge, visit, search, or seizure.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Japan recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Japanese labour laws protect personal documents of employees, even if located in company files?
A third person may cooperate voluntarily with the investigation of an investigative authority. Investigative authorities may request the third person to submit documents and make a report on necessary matters relating to the investigation. However, if a third person declines to cooperate with the investigation, investigative authorities cannot compel the third person to cooperate. However, investigative authorities may conduct searches, seizures, or inspections with a warrant issued by a judge. The judge shall issue the warrant if he judges that there is a probable cause that the suspect committed the crime and the articles of evidence exist in the target place and that a search, seizure, or inspection is necessary. The third persons residence may be searched only when it is reasonably supposed that articles which should be seized exist. The administrative organs may also conduct visits, searches, or seizures with a warrant issued by a judge.
Japanese law does not recognise privileges protecting documents prepared by attorneys or communications with attorneys. However, under the CCP, an attorney, patent attorney, physician, dentist, nurse, notary public or any other person who was formerly engaged in any of these professions, may refuse the seizure of items containing the confidential information of others that they have been entrusted to them. Please note that this right does not extend to the owners of such confidential information.
Where an employee, officer, or director of a company is under arrest or under detention, they are obliged to submit to questioning, but they have the right to remain silent and to appoint their counsel. In addition, if they refused to submit to questioning, no sanction shall be imposed on them for such refusal. On the other hand, where they are not under arrest or detention, they have no obligation to submit to questioning, or after they have appeared, they may withdraw from the questioning at any time; therefore, it is entirely up to the persons will whether he responds to questioning. The questioning by the investigative authority takes place in an office of the authority or any other location.
A company employee may cooperate voluntarily with an investigation. Investigative authorities may request that an employee submit documents and make a report on necessary matters relating to the investigation. However, if a company employee declines to cooperate with the investigation, investigative authorities cannot compel the employee to cooperate. However, investigative authorities may also conduct searches, seizures or inspections with a warrant issued by a judge. The judge shall issue a warrant if he judges that there is a probable cause that
Investigative authorities may ask any person for questioning if it is necessary for the investigation of a crime. However, it is entirely up to the persons will whether he/she responds to the questioning. Questioning by the authority takes place in an office of the authority or any other location. Additionally, if the person falls under any of the following, a public prosecutor may, only before the first trial date, request a judge to examine the person as a witness. When the summoned witness does not appear without any justifiable reason, the court may punish them by ruling on a non-penal fine of not more than 100,000 yen

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and subpoena him. The following are: (i) a person who apparently possesses information essential to the investigation of a crime and refuses to respond to questioning by the investigate authority; or a person who has made a voluntary statement to the investigative authority and who is likely to make a statement at trial that differs from the previous statement, provided that the persons statement is deemed essential to prove a fact constituting the crime.
9 Burden of Proof
(ii)
Japan
7.8
In criminal cases, the public prosecutor bears the burden of proof of all the charged facts. If a defendant alleges justifiable causes (e.g., its act was performed in the pursuit of lawful business) or causes of non-imputability (e.g., circumstances where any lawful act could not be expected), the public prosecutor bears the burden of proof that there is no such cause.
Under the Constitution of Japan, a suspect cannot be compelled to testify against himself and, under the CCP, cannot be required to make a statement against his will. A suspect may appoint a counsel at any time. However, they do not have the right to be represented by their counsel during questioning by the investigative authority.
The public prosecutor must prove the charged facts beyond reasonable doubt because the defendant is presumed to be innocent.

The arbiter of fact is the court. The court determines whether or not the public prosecutor has satisfied its burden of proof.
10
The prosecution of criminal case is initiated by a public prosecutor.

These rules and guidelines are not publicly available. A public prosecutor decides whether or not to initiate prosecution by considering the precedents as well as the gravity of the offence, the circumstances under which the offence was committed, and other various factors.
A person who conspires with or assists another to commit a crime may be liable if the other person actually committed the crime on the following grounds: (i) Co-conspirator If two or more persons conspired against a crime and any of them committed the crime based on the conspiracy, the person who joined the conspiracy but did not have a direct hand in the crime shall be a co-principal. (ii) Inducement A person who induces another to commit a crime shall be punished with the same sentence as the principal of the crime. (iii) Accessories A person who aids a crime committed by another is an accessory. The punishment of an accessory shall be reduced from the punishment of the principal.
Under Japanese law, there is no such system for criminal cases where a defendant and the government agree to resolve a criminal investigation through pre-trial diversion or agreement to defer prosecution.
11
Common Defences
Criminal offences generally correspond with torts under Japanese Civil Code. The victims may sue for damages in tort. However, these damages are compensatory damages. Punitive damages are not permitted.
In principle, an act performed without the intent to offend is not punishable. However, where the law provides for a crime caused by negligence, an act performed without intent but with negligence is punishable. A public prosecutor bears the burden of proof in relation to whether a defendant had the requisite intent at the time of the offence.
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the Prosecutor General against the first applicant who reported criminal activities to JFTC before JFTCs investigation has commenced.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Japan, and describe the favourable treatment generally received.
Ignorance of the law is not a defence. However, such ignorance may lead to a reduced sentence. Furthermore, there are lower court precedents that stipulate that when the defendant verified his act with the public organ which has the authority of operation and interpretation of the law and he was amenable to the public organs guidance, there is no possibility that he could know that his conduct was unlawful; therefore, he is not criminally charged.
(1)
Leniency system for surcharge under the AMA
In addition to leniency policy for criminal case under the AMA explained in question 13.1, the AMA provides for leniency system of surcharge as follows. The members of a cartel who voluntarily report on such a cartel to the JFTC may be granted an exemption from such surcharge. Up to five parties can receive leniency; provided that the 4th and 5th applicant must report facts and materials which are unknown to the JFTC. The percentage of the exemption is as set forth below according to the order of filing an application with the JFTC: 1st: 100% 2nd: 50% 3rd through 5th: 30% However, parties who file applications for leniency after the JFTC has initiated an investigation of the cartel shall be limited to an exemption of 30%. Also, once an investigation has been initiated, only three parties may receive leniency. So, for example, if the JFTC initiates an investigation after one participant has filed an application for leniency, only three additional participants would be permitted to receive exemptions of 30%. (2) The surcharge reduction system under the FIEA As to (a) the offence of disclosure of false information on important matters in the primary or secondary market and (b) the offence of insider trading of its own stock, a person who voluntarily reports on such an offence to the SESC before it initiates investigation on the offence may be granted an exemption of 50% from the amount of surcharge calculated according to the formula provided in the FIEA.
Where a crime has been committed in an organised manner within a company, if an employee did not know that his conduct amounted to the crime, he is not criminally charged for lacking the intent to offend or conspiracy. If the defendant alleges the above, a public prosecutor has the burden to prove that the defendant was not ignorant of the facts.
12
Any person who believes that a crime has been committed may file an accusation. A government official or local government official shall file an accusation if they believe a crime has been committed. Other persons have no legal obligations to file an accusation and are not liable for failing to file.
14
Plea Bargaining
13
Plea-bargaining is not allowed in Japan. However, a public prosecutor has discretionary power over whether or not to institute prosecution. After prosecution, the public prosecutor also has discretionary power to determine the level of punishment to be requested in the court. As such, the public prosecutor may consider it a favourable factor in exercising such discretion if a defendant voluntarily admits criminal charges after the fact.
(1)
Surrender (Penal Code)
With respect to all crimes, the punishment of a person who committed a crime and surrenders himself to an investigative authority before his offence is known to any investigative authority may be reduced. However, there are no specific rules or guidelines as to how much reduction of punishment may be given. It is decided by the court after considering all the circumstances of the case. (2) Leniency under the AMA With respect to crimes under the AMA as mentioned in question 3.1, the JFTC does not file an accusation of criminal liability with
Plea-bargaining is not allowed in Japan. There are no rules or guidelines, except where it is provided in the CCP that a public prosecutor may decide not to institute prosecution by considering the character, age, environment, gravity of the suspect, circumstances, or situation after the offence.

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15
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In Japan, the criminal sentencing procedure is not separated from the verdict procedure. A judgment includes a guilty or a not-guilty verdict and a criminal sentence. Please refer to the answer to question 16.1.
These rules and guidelines are not publicly available. When deciding a sentence, the court will consider not only the facts appearing in the trial but also the precedents. The court will also consider the sentence requested by the public prosecutor which is based on the internal precedents of the Public Prosecutors Office.
The appellate court does not review all issues of facts, but instead reviews the first instance judgment, considering whether there are any errors in the construction or application of law, excessive severity or leniency of the sentence, and any errors in fact-finding, especially focusing on the grounds for the appeal. The court of final appeal reviews the second instance judgment considering whether there are any violations of the Constitution or errors in its construction or application of law, especially focusing on the grounds for the appeal.
Under Japanese law, a corporation shall be punished by fines under a dual-punishment provision, if the court finds that a suspect violated a law with regard to the business of the corporation. Please refer to the answers in section 4. Any other elements are not required.
16
Appeals
When the first appellate courts or the court of final appeal quash the judgment of prior instance, in principle, they should remand the case to the court of prior instance. However, they may render a new judgment immediately where they consider it appropriate.
A public prosecutor can appeal against a non-guilty verdict, and a defendant can appeal against a guilty verdict. Both public prosecutor and defendant can appeal against a guilty verdict on the grounds of inappropriate sentencing.
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Yoshinori Ono
Nishimura & Asahi Ark Mori Building, 1-12-32 Akasaka Minato-ku, Tokyo 107-6029 Japan
Norimitsu Yamamoto
Nishimura & Asahi Ark Mori Building, 1-12-32 Akasaka Minato-ku, Tokyo 107-6029 Japan
Yoshinori Ono is a partner and a member of the cross border transaction group of Nishimura & Asahi. He has been advising foreign clients on various business crime and compliance matters under Japanese law since he started practicing in 1986. His practice also focuses on cross-border matters including cross-border investment/licensing, joint ventures, mergers and acquisitions, antitrust, corporate restructuring/insolvency, labour issues, real estate investment and cross-border dispute resolution. Mr. Ono is a graduate of Tokyo University (LL.B., 1981) and was admitted to practice law in Japan in 1986.
Counsel since 2009. Education: The University of Tokyo (LL.B., 1991). Legal Training and Research Institute of the Supreme Court of Japan. Professional Experience: Tokyo District Public Prosecutors Office and other public prosecutors offices, 1995-2002. Department of Justice, USA (dispatched for research), 2001. Civil Affairs Bureau, Ministry of Justice of Japan, 2002-2005. Areas of Practice: General Corporate, Corporate Litigation, Maritime Law, Corporate Compliance, Crisis Management and Criminal Cases, etc. Publications: Co-Author: Share Option Handbook (Shojihomu, 2009); and others. Languages: Japanese, English.
Nishimura & Asahi is one of Japans premier full-service law firms, covering all aspects of domestic and international business and corporate activity. Established through the integration of Nishimura & Partners and Kokusai Bumon (International Division) of Asahi Law Offices on July 1, 2007, Nishimura & Asahi is the largest law firm in Japan. The firm currently has 478 Japanese and foreign lawyers and employs over 550 support staff, including tax accountants, and one of the largest teams of paralegals in Japan. Through the enhancement of professional and organisational synergies, resulting from the firms expansion, an unprecedented level of client service is made possible in highly specialised and complex areas of commercial law. Nishimura & Asahi understands its clients growing needs and its fully integrated team of lawyers and professional staff are proud to share the same fundamental philosophy: an uncompromising commitment to excellence. In June 2010, we opened our Beijing Representative Office - our first office outside of Tokyo. The firm plans to invest a great deal of time and effort to ensure that our China practice, through this new Beijing office, carries on the traditions of Nishimura & Asahi, and develops deep roots in the local community. Key areas of practice: Acquisition Finance, Administrative Disputes, Antitrust, Asset Finance, Asset Management, Assistance to Administrative Organisations, Banking, Capital Markets, Civil & Commercial Disputes, Compliance, Corporate Crisis Management, Education and Professional Activities, General Corporate, Insurance, International Trade, International Transactions, IP Disputes, IP Licenses, Labour Law, M&A, PFI/Project Finance, Real Estate/Environmental, Restructuring/Insolvency, Specialised Disputes, Start-up Businesses, Structured Finance/Securitisation, Tax, Tax Disputes, Telecommunications/Media, Transnational Dispute Settlement, Trusts & Estates, Venture Capital/IP Finance. Managing Partner: Mr. Akira Kosugi. Languages Spoken: Japanese, English, Chinese (Mandarin) and French. Total number of lawyers: 478. Email: info@jurists.co.jp

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+81 3 5562 8500 +81 3 5561 9711~9714 y_ono@jurists.co.jp www.jurists.co.jp
+81 3 5562 8528 +81 3 5561 9711~9714 n_yamamoto@jurists.co.jp www.jurists.co.jp
Chapter 14
Korea
Lee & Ko
Changhee Suh
Tae Yop Lee
1 General Criminal Act Enforcement

violation of the Financial Investment Services and Capital Markets Act (Capital Markets Act) or any order or disposition thereof.

2.1 How are the criminal courts in Korea structured? Are there specialised criminal courts for particular crimes?
In Korea, only public prosecutors in the Public Prosecutors Office under the Ministry of Justice have the power and authority to investigate and prosecute crimes. The Public Prosecutors Office is divided into the Supreme Public Prosecutors Office, the High Public Prosecutors Office, the District Public Prosecutors Office, and the Branch Office of the District Public Prosecutors Office. Among those, the District Public Prosecutors Offices and their respective Branch Offices are in charge of investigations and indictments. The Central Investigation Division in the Supreme Public Prosecutors Office is also in charge of business crime cases including significant bribery cases.
There is no separate criminal court. However, all courts have a number of divisions, among which there is a criminal division which is devoted to criminal cases.
There was no system of jury in Korea up until January of 2008 when jury system was implemented for the first time. However, jury trials are limited to certain type of criminal cases, including, murder, special robbery, rape, and bribery cases involving bribes of KRW30,000,000 or more in value. Because the jury system is at its test stage, the decisions of the jury are not binding.

All public prosecutors compose a hierarchical pyramid structure whose top level is occupied by the Prosecutor General and act as an indivisible organic unit. A prosecutor, as an independent government office, has the authority to exercise prosecutorial powers as a whole not a single separate office. This purports to balance the exercise of prosecutorial powers nationwide and thereby promote fair exercise of prosecutorial powers.
1.3 Is there any civil or administrative enforcement against business crimes? If so, what agencies enforce the laws civilly and which crimes do they combat? 3.1 Please describe any statutes that are commonly used in Korea to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
The Capital Markets Act prohibits the sale of financial investment instruments and any of the followings in connection with the transaction: 1. 2. use of unfair means, scheme, or trick; attempting to earn money or any interest in property by using a document containing a false description or representation of a material fact necessary for preventing others from being misled or any other description or representation; or use of false market price with intent to attract another to trade or make any other transaction in financial investment instruments. Accounting fraud
Yes. Certain government agencies investigate and civilly or administratively enforce business crimes. The Fair Trade Commission (FTC) can impose corrective measures and civil monetary penalties against a person or entity that violates antitrust and competition laws. FTC may impose administrative fines against a person who fails to comply. The National Tax Service may conduct tax investigation when there is any error or omission in the taxpayers report. With delegated powers from the Financial Services Commission, the Financial Supervisory Service may investigate the cases of 3.
The Capital Markets Act provides that a person who made a false statement or representation of a material fact or omitted statement or representation of a material fact in the documents such as
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Insider trading
The Capital Markets Act provides that an insider shall not use nonpublic information for trade and anyone who is in violation of this is punishable by imprisonment or fine. Nonpublic information refers to any information that may produce a significant impact on investors investment judgment, and that has not been disclosed yet to a multiple number of unspecified people in a manner prescribed by the laws. o Embezzlement The Criminal Act provides that a person who has the custody of anothers property, embezzles or refuses to return it, is punishable by imprisonment or fine. o Bribery of government officials The Criminal Act provides that a person who promises, delivers or manifests a will to deliver a bribe to a public official is punishable by imprisonment or fine, and anyone who, for the purpose of delivery of a bribe to a public official, delivers money or goods to a third party, or receives such delivery with knowledge of its nature is punishable likewise. o Criminal anti-competition The Monopoly Regulation and Fair Trade Act provides that a business operator shall not agree with other business operators by contract, agreement, resolution or any other means to jointly engage in an act which unfairly restrict competition or allow any other business operator to perform such unfair act. o Tax crimes Tax crimes are regulated by the Punishment of Tax Evaders Act, which contains penal provisions for tax evasion, evasion of an order ordering payment of tax, violation of duty to issue tax invoices, and lending ones or borrowing anothers name. o Government-contracting fraud There is no penal provision in the government contract law for fraud in entering into a contract with the government. Instead, the person may be penalised for fraud under the Criminal Act. o Breach of trust In Korea, breach of trust may constitute a crime. The Criminal Act provides that a person who administers anothers business obtains pecuniary advantage or causes a third person to obtain pecuniary advantage from another in breach of his duty and, thereby causes loss to another is punishable by imprisonment or fine. Breach of trust is common in many business contexts including LBO and trade secret infringement cases.
3.2 Is there liability for inchoate crimes in Korea? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Yes. There are several joint penal provisions that prescribe for penalising legal entities jointly with the employee who committed a crime. Joint penal provisions are generally applicable where: (i) a representative, agent, employee or any other servant; (ii) commits a crime; and (iii) in connection with the business of the legal entity. A considerable number of laws exonerate legal entities from criminal liability if the legal entity makes every effort to prevent its employee from committing a crime.
Even if the legal entity is found liable for a crime, its representative, agent or employee, other than the person who actually committed the crime, is not liable.
The Enforcement-limitations period begins running from the date when the relevant crime is completed. Limitation periods vary from 1 to 25 years depending on the seriousness of the relevant crime, but generally are roughly 5 to 10 years for serious crimes. In cases of habitual violators (where a violator habitually commits the same or similar crimes), the subsequently violation would be deemed aggravated, in which case, the limitations period would also increase accordingly.
Yes. If a criminal act was committed as part of a continuing offence, the limitations period for that criminal act begins running when the continuing offence is completed. Likewise, the limitations period for all accomplices begins running when criminal act of the accomplice who commits the last criminal act is completed.
The limitations period tolls on the institution of the public prosecution, and continues to run again when a judgment becomes final and conclusive (not appealable). If the limitations period for one accomplice is tolled, the limitations period for other accomplices also tolls. If a person is overseas for purposes of avoiding enforcement, the limitations period tolls until he/she returns to Korea.
Yes. When an intended crime is not completed or if the intended result does not occur, it is punishable as an attempted crime. To constitute an attempt, there must be intent to commit a crime and an action in furtherance of the attempt. An attempts is punishable only when prescribed so by statute.

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registration statement or supplements, quarterly or half-yearly report etc., a person who wrote his/her signature in accordance with the laws with knowledge the fact that there is a false statement or representation of a material fact or an omission of a material fact, and a certified public accountant, appraiser, or an expert in credit rating who signed wrote his/her signature on such a document to certify that the document is true and correct with knowing that it is not, is punishable by imprisonment or fine.

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As for communications between an attorney and client, there is no provision in the Criminal Procedure Act which prescribes the client may resist seizure of opinions or documents held in his/her custody. However, a lower court had ruled that the client may resist seizure and search of such articles pursuant to the right to assistance of counsel guaranteed by the Constitution. Personal documents of employees are not protected from search and seizure.
Korea
The Criminal Procedure Act provides that a public prosecutor can start an investigation when there is a suspicion that a crime has been committed, and a law enforcement officer must investigate the crime under the instructions from the public prosecutor. In practice, law enforcement officers initiates investigations independently but receives instructions from public prosecutor when conducting compulsory investigations such as executing warrants. An investigation is initiated (i) when information of a crime has been obtained and (ii) when there is a report of a crime or confession.
The government may seek documents from an employee to the same extent, and using the same procedures, that it may seek documents from the company.

The government can conduct compulsory or discretionary investigation to gather information needed for criminal investigation. In a discretionary investigation, prosecutors or law enforcement officers may request the owner, possessor or custodian of certain article to submit the article, or request any public office or public organisations for reports on necessary particulars. In a compulsory investigation, prosecutors or law enforcement officers (through prosecutors) may obtain a search warrant from a court and execute the warrant.
The government may seek documents from a third party to the same extent, and using the same procedures, that it may seek documents from the company.
Document Gathering:
The government may request relevant employee, officer, or director to appear for questioning as a suspect or a witness. Although he/she can refuse, the government may seek an arrest warrant to arrest the person if the person is a suspect. When the government questions a suspect, the suspect has a right to refuse to make incriminating statements. Although this right to refuse to make statements is not guaranteed to a witness, the witness practically enjoys the same right by refusing to make statements. Questioning by the government can take place without any restriction in particular.
The government may demand that a company under investigation produce documents at any time. If there is a probable cause to believe that the company will conceal, destroy, or manipulate evidence, the government may search the company and seize documents and computer files (including emails).
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Korea recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Koreas labour laws protect personal documents of employees, even if located in company files?
The government can demand that a third person submit questioning as a witness if it is necessary for the investigation. There is no restriction in particular for question a witness. Witness questioning usually takes place in the government building, but sometimes takes place outside of the government building such as the witness office.
Under the Criminal Procedure Act, a person who is or was an attorney, doctor or a religious functionary may resist seizure of articles held in his/her custody or possession entrusted to him/her in the course of his/her profession and which relates to secrets of another person, unless that another person consents or there it is necessary for important public interests.
A suspect has a right to refuse to answer the governments questions and a right to assistance of counsel. Consequently, the suspect has a right to be represented by an attorney during questioning.
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If the employee, officer, or director of the company being investigated appears as a witness and not a suspect, the person has no right to refuse to answer questions or a right to be represented by an attorney. But under Korean law the government may not compel a witness to appear, and the witness has no duty to answer truthfully.
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In a criminal trial, who is the arbiter of fact? Who determines whether the party has satisfied its burden of proof?

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Only public prosecutors may initiate prosecutions. After indicting the suspect, the prosecutor files a petition for public trial before a court of jurisdiction.
Yes. A person who conspires with or aids or abets another person to commit a crime may be held liable as principal to the same extent as that person. Aiding and abetting is distinguished under Korean law. Aiding is defined as a mitigating circumstance to allow a person who aided to be imposed with less severe punishment than the principal. The elements of criminal conspiracy are satisfied when two or more persons agree to commit a crime and at least one of those persons takes at least one overt act toward committing the crime.
To ensure unified exercise of prosecutorial powers, the Supreme Prosecutors Office establishes and implements guidelines on determining dispositions of cases. For each crime, dispositions include indictment with confinement, indictment without confinement, and suspension of indictment. Main factors considered in determining dispositions include seriousness of the offence, amount of damage, criminal history, and settlement with the victim.
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Common Defences
Yes. Unless there is a special provision that penalises negligence, specific intent is a necessary element to all crimes. Lack of requisite intent is a valid defence. Prosecutors must prove that the defendant had the requisite state of mind to commit the offence beyond a reasonable doubt.
There is no procedure for negotiating with public prosecutors to avoid indictment.

Civil penalties or remedies cannot substitute criminal penalties.
Generally, ignorance of the law is not a valid defence to a crime. Courts view that the defendant has a duty to learn the law even if the act is unrelated to social order. However, the Criminal Act provides that if a person erroneously believes that his or her act does not constitute a crime, the person may not be punished if there is a justifiable reason for such belief. If a defendant raises such defence, the prosecutor has the burden of proving that there is no justifiable reason.
9 Burden of Proof
The government has the burden to prove every element of any crime charged.
The government must prove every element of the crime beyond a reasonable doubt.
Yes. If the defendant was unaware of all or part of the elements of the crime because of his mistake of fact, then no intent can be found. Therefore, the defendant cannot be penalised for lack of requisite intent.

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The judge is the arbiter of fact in a criminal trial, even in cases of the Civil Participation in Criminal Trial. Therefore, the judge determines whether each party has satisfied any burden of proof.
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Prosecutors have the burden to prove the defendants state of mind beyond a reasonable doubt.
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Government officials have duty to report a crime when they become aware of the crime while performing their duty. There is no provision penalising failure to report a crime. The general public has no duty to report crimes.
The Sentencing Commission under the Supreme Court established guidelines in sentencing for certain crimes including murder, bribery, robbery, embezzlement and perjury. The Commission is in the process of establishing guidelines for other crimes as well. Although these guidelines are not legal binding, courts must note reasons for the sentence if the sentence deviates from the guideline. For the crimes with sentencing guidelines, judges determine the type of act for each crime based on the overall information revealed during trial and determine appropriate sentence taking into account aggravating or mitigating circumstances. For the crimes without sentencing standard, a judge decides punishment based on the background.
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Generally, the Criminal Act provides for mitigation or exemption from penalty when the defendant confesses his or her wrongdoing. The defendant may also raise mitigation or exemption from penalty in his or her defence. In antitrust cases such as cartel, FTC do not report leniency applicants, in which case, the leniency applicant would not be subjected to criminal liability.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Korea, and describe the favourable treatment generally received.
Only fines will be imposed on corporations in accordance with joint penal provisions. For offenders, the procedure is identical to the procedure for criminal cases in general. In applying joint penal provisions, courts will consider whether the company has implemented any compliance organisation and internal controls or disciplined the employees who were responsible for the misconduct.
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FTC will consider leniency when the companys disclosures and cooperation materially assist it in uncovering and investigating criminal acts it could not have uncovered and investigated without the companys assistance, or could not have uncovered and investigated without expending significant resources.
If a defendant is found guilty at trial, the defendant may appeal the verdict on any available grounds. If the defendant is found not guilty, the government may appeal.
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Plea Bargaining
Yes. A defendant who has been convicted of a crime may appeal a sentence if the sentence is deemed excessive for the crime committed, and the government may appeal a sentence if the sentence is deemed light for the crime committed.
There is no plea bargaining in Korea. However, there are some cases that the public prosecutor lessens the sentence sought when a person actively cooperates with investigations, such as disclosing a third persons criminal conduct.
The first level appeal does not simply stop at reviewing whether the judgment of the trial court is appropriate. Instead, like the trial court, an appellate court reviews evidence, such as witness examination, and determine guilty or innocence and the sentence based on the facts found up until its decision.
There is no plea bargaining in Korea.
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When the appeal is found meritable, first level appellate courts, in principle, vacate trial court judgment and render its own decision.
Changhee Suh
Lee & Ko 18th Floor, Hanjin Main Building 118 Namdaemunro 2-ga, Jung-gu, Seoul Korea 100-700
Tae Yop Lee

Lee & Ko 18th Floor, Hanjin Main Building 118 Namdaemunro 2-ga, Jung-gu, Seoul Korea 100-700
+82 2 772 4427 +82 2 772 4001 suh@leeko.com www.leeko.com
+82 2 2191 3043 +82 2 772 4001 tyl@leeko.com www.leeko.com
Changhee SUH is a partner at Lee & Ko. He joined Lee & Ko in 2006 after serving as a prosecutor for almost 20 years. In Lee & Ko, he was involved in many high-profile cases and ultimately led many such cases to successful conclusion for clients. Being an ex-prosecutor, he understands the detailed mechanics of how the cases are handled by the prosecutors and judges in practice and has the capacity to formulate the most ideal strategies in light of the overall circumstances surrounding the cases at hand. Given his exposure to a myriad of criminal cases during his career as a prosecutor, he is familiar with, and specialises in, a wide range of criminal-related matters including white collar crimes, securities crime, violation of foreign exchange-related laws, customsrelated violations, and medical crimes.
Tae Yop Lee is a partner in the firms Corporate Crime and Investigations Team. He, as a former prosecutor, had the experience of prosecuting a wide variety of cases including those involving corporate crimes, intellectual property crimes, financial crimes, tax crimes and trade-related crimes. During his prosecutorial career, he also worked as a renowned expert in the area of digital forensics. With such unique background, he specialises in advising on corporate criminal liability, management of personal customer data and protection of intellectual property rights. He is a member of the Bar Exam Research Council and has frequently lectured before diverse audiences including prosecutors and the Korea Listed Companies Association on such topics as trade secrets and personal data protection.
Lee & Ko is a premier, full-service law firm in Korea, consisting of 250 lawyers and 60 patent attorneys. According to many surveys conducted by law firm research and evaluation companies including Chambers & Partners, Legal 500, and Asia Law, and the most widely read newspapers in Korea including Chosun Daily Newspaper and Seoul Economy Newspaper, Lee & Ko has continuously ranked in the top tiers in all of its practice areas. Lee & Kos Corporate Crime and Investigations Team is composed of elite lawyers, including former judge, former public prosecutors and former law enforcement officers with a wealth of experience and practice in criminal investigations and criminal prosecutions. The Team not only provides assistance in prosecutor or law enforcement officer investigations but offers fast, accurate and total solution from initial stages of investigations by National Tax Service, Fair Trade Commission, Financial Supervisory Service, and Korea Food & Drug Administration.

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Chapter 15
Netherlands
Sjcrona . Van Stigt
Jan Sjcrona
Enide Perez

Administrative law enforcement agencies such as the AFM and NMa (see below) can deny the suspected person to act in any capacity of function than he had when he (allegedly) committed the crime. E.g.: a banker might be denied to act as such if he is suspected of insider-trading. Such a measure may run parallel to criminal enforcement concerning the same matter. Examples of such agencies are: Authority for the Financial Markets (AFM). Central Bank of the Netherlands (DNB). Netherlands Competition Authority (NMa). Inspectorate for Transport, Public Works and Water Management (IVW). Food and Consumer Product Safety Authority (VWA). Evironment Inspectorate. Labour Inspectorate (AI).
The only authority with criminal prosecuting powers, i.e. the power to issue an indictment and commit a person or a corporation to a trial or a hearing in open court, is the Public Prosecutor. The Office of the Public Prosecutor has several divisions, within which prosecutors specialise in investigating and, if need be, prosecuting various (alleged) crimes. But since business crime is not a precisely defined area of (alleged) criminal conduct in the Netherlands, corporations and their management (and lower staff) could in principle be indicted by any Dutch Prosecutor. However, the more serious cases of corporate crime are dealt with by a highly specialised branch of the Office of the Public Prosecutor, located in Amsterdam. Its prosecutors have nationwide jurisdiction; they specialise in prosecuting particular types of crimes, including Tax, Antitrust, Insider Trading, Corruption, Bribery and Environmental violations. They also focus on more general crimes such as fraud or embezzlement.

2.1 How are the criminal courts in the Netherlands structured? Are there specialised criminal courts for particular crimes?
As said the Public Prosecutor is solely responsible for the decision to prosecute any case. But there are quite a few administrative enforcement agencies that investigate possible crime in the area of law that has been assigned to them. They liaise with specialised prosecutors. See question 1.3.
There are no specialised criminal courts as such. However, each of the 19 District Courts (of first instance) has a specialised criminal division, within which the court may create specialised panels of judges who deal with business crime cases. Defendants who have lost at the court of first instance may usually turn to an Appeal Court. If the Prosecutor lost the case, s/he may also appeal. There are 5 Courts of Appeal. The procedure in appeal is de novo, meaning that the defence and prosecution may introduce new evidence. Nevertheless the judgment by the District Court is the starting point for the appeal procedure and the appellate judges usually only scrutinise those parts of the first judgment that are subject to clear and precise objections filed by those appealing. The Defendant or Prosecutor who lost the appeal usually has the right to file a submission to the Supreme Court, on points of law only.
In cases of a serious suspicion that an Economic Crime as covered by the Economic Offences Act (WED) has been committed, and prior to the hearing in open court, the Prosecutor or the Investigating Judge may request the District Court to issue certain temporary orders. The suspects business operations thus might be closed down and he may be ordered to refrain from certain acts or actions. The suspect has the right to appeal. The life span of those orders is never longer than it takes for the final judgment in the case to become irrevocable.
No. Trial by jury does not exist in the Netherlands.
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3.1 Please describe any statutes that are commonly used in the Netherlands to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
dolus eventualis is required. o Bribery of non-government officials It is a crime to accept a gift or promise, and remain silent about that situation, vis--vis ones employer, if that gift or promise relates to something the receiver thereof has (not) done or will (not) do in the course of duty as an employee. Similarly it is a crime to make those promises or hand out such gifts (Article 328 ter CC). o Criminal anti-competition It is a crime to mislead or deceive the general public or a specific person in any way, in order to preserve or increase a certain market position, if that causes any disadvantage to that person or any competitor (of the defendant) (Article 328 bis CC). Criminal intent, at least dolus eventualis is required. o Tax crimes There are several forms of tax crimes, but the most commonly prosecuted is tax evasion (Article 69 General Act on State Taxes). Often the prosecution then also focuses on violation of the common provision of fraud (Article 225 CC, see supra) or deception (Article 326 CC, see supra), since filing an untrue tax return constitutes ordinary fraud. Criminal intent, at least dolus eventualis is required. o Government-contracting fraud Different than in the US, government-contracting fraud does not exist as such. However, falsifying, concealing, covering up any material fact, making false statements and/or using false documents in dealing with any government official, might easily constitute any form of the common fraud (Article 225 CC) or deception (Article 326 CC) crimes. Criminal intent, at least dolus eventualis is required. o Other crimes of particular interest in the Netherlands: Environmental crimes
Drafting a false document or falsifying documents and/or using such documents
Article 225 Criminal Code (CC) provides that it is a crime to draft false documents and to falsify original documents and to use false or falsified documents. This provision is commonly used in business crime prosecutions. Criminal intent, at least conditional intent (dolus eventualis), is required. Case law demonstrates that courts in general do not have many problems in finding that the Defendant willingly and knowingly took a certain risk, which entails that he must have known that he might violate the law, in which case his intent apparently was focussed on such violation. o Deception a.k.a. false representation Article 326 CC penalises conduct by which a person, with the object of obtaining unlawful gain for himself or somebody else, by assuming a false name or a false identity, or by applying artful tricks, or by a stream of lies, induces someone to hand over any property, to make available data having monetary value in commerce, or to incur a debt or renounce a claim. Criminal intent, at least dolus eventualis is required. o Fraud and misrepresentation in connection with sales of securities
According to Article 334 CC it is a crime to disseminate false information with a view to manipulate the price in any direction of any stock or other security or merchandise. Criminal intent, at least dolus eventualis, is required. Moreover, the Act on Financial Supervision (Article 5:58, par. 1 d) as sanctioned in the Economic Offences Act - provides for a more detailed provision, sanctioning the dissemination of information that proliferates or may proliferate an incorrect or misleading signal with regard to the supply of, demand for or the price of financial instruments, while he who disseminates said information knows or should reasonably suspect that that information is incorrect or misleading. Criminal intent, at least dolus eventualis, is required, but conviction is also possible in certain situations of culpable negligence. o Insider trading Insider trading is a crime according to the Act on Financial Supervision (Article 5:56) as sanctioned in the Economic Offences Act. Criminal intent (at least dolus eventualis) is a prerequisite for conviction. o Embezzlement Embezzlement is a crime according to Article 321 CC and entails the fraudulent conversion of property to a persons own use by someone who has been entrusted with it. It is similar to, though not the same as, theft: the embezzler has a relationship of trust with the victim under which the embezzler was lawfully in possession of the property until he or she appropriated it. Criminal intent, at least dolus eventualis is required. o Bribery of government officials It is a crime to provide or promise any Dutch government official (whether or not at local or national level) or anyone who will become such an official anything of value, or render any service to him, in order to induce that official to act in any way contrary to his duties (Article 177 CC). It is a lesser crime to engage in such conduct if the official would be convinced to act in a way, without violating his duties (Article 177a CC). Criminal intent, at least
The Economic Offences Act penalises an enormous amount of lesser or more serious (intentional or negligent) infringements of many environmental laws that focus on clean energy, air, soil and water. Operating a company that in any way might harm the environment requires permits, and the prosecution often focuses on permits not having been issued, or having been issued under false pretences, or having been violated in the course of the production process.
3.2 Is there liability for inchoate crimes in the Netherlands? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Yes. Liability requires evidence of intent (be it dolus eventualis), which needs to have been focussed on all elements of the crime. Also there needs to be proof of an action in furtherance of the attempt.

Yes, in principle a legal entity can commit any crime. The entity can then be given any sentence (apart from prison); additionally, those people who were actually in charge of the criminal conduct or on a higher level ordered it to take place, can be sentenced. For a legal entity to be sentenced for having committed a crime, case law shows that mainly two criteria have to be met: a) the conduct of an employee, officer or director has to be attributed to the company; and b) when a certain state of mind (intent, negligence) is an element of the offence, the knowledge of employees, officers and (board of)

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directors may be imputed to the entity. Imputation of criminal conduct to the entity is regarded to be reasonable if one or more of the following situations can be proven:
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In such situations the total length of the period of limitations for crimes is twice the length of the initial period as prescribed by law (see question 5.1).
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the employee was acting within the scope of his or her employment or if not employed- that person acted on behalf of the entity; the conduct was conducive to the way in which the entity conducted its business; the conduct was helpful to the entity in the course of pursuing its business; and/or the entity had it in its power to determine if said conduct should or should not take place, and that, or similar, conduct was (or used to be) accepted by the entity; accepting conduct covers the situation in which the entity has failed to fulfil its reasonable obligations to prevent such conduct from happening.
Public Prosecutors generally are autonomous to initiate investigations regarding (alleged) crimes. Dutch law does not require the government to initiate investigations under particular circumstances. In exceptional cases subject to disclosure to the trial court the Minister of Justice can issue instructions to an individual Prosecutor how to handle a case. However, the use of coercive measures to be applied in the course of an investigation, e.g. search and seizure, interception of telecommunications, has been precisely regulated by Law (in the Code of Criminal Procedure). A prerequisite for such application is in general that reasonable grounds or a serious suspicion carry the thought that a crime has been committed. With regard to the vast amount of business related crimes penalised by the Economic Offences Act (WED), the situation differs substantially: the enforcement officers have the power to enter premises, to conduct investigations on site, and to seize what they want even if a lower level of suspicion would exist than the Code of Criminal Procedure prescribes for the application of similar measures in relation to (alleged) crimes penalised in the ordinary Criminal Code. The officers under the WED only have to feel that it is reasonably necessary for the fulfillment of their duties that said far-reaching coercive measures be applied.
Yes. See question 4.1. But the liability is not automatic nor strict: a criminal case must be made separately against the individuals.
As a rule, the period starts running the day after the crime has been committed. The Criminal Code sets out the following periods for crimes: 6 years, if the crime only carries a financial sanction or a prison sentence of less than 3 years; 12 years for crimes that carry a prison sentence of more than 3 years but less than 20 years; 20 years for crimes that carry a prison sentence of more than 20 years; and crimes that carry a maximum penalty of imprisonment for life are not subject to any limitation period.

Usually, no. But in the prosecution of a person for being a member of a criminal organisation that is an organisation that aims to commit crimes (even though the actual crimes may not have been committed yet) the limitations regarding the concrete or intended crimes of the organisation, do not block the possibility to prosecute an alleged member of said organisation. The crime of membership of such an organisation has its own limitation period.
The government has a wide range of tools at its disposal. Companies can be ordered to produce documents, company offices and homes of directors and employees can be raided, documents and computers can be seized and persons can be submitted to questioning. Very often telephone, fax and e-mail communications are intercepted. Covert use of microphones to tape conversations has also become popular. The CCP sets out coercive powers regarding general criminal law (e.g. deception, fraud, corruption, embezzlement). These powers are supplemented by numerous special Statutes, concerning specific (economic) offences, like the WED.
Document Gathering:
Yes. Certain official actions by a Public Prosecutor or a Judge can cause the limitations period to start all over again. In particular: when the Prosecutor issues an indictment; when the Prosecutor submits a request to the Investigating Judge to start a pre-trial investigation; or when the Prosecutor submits a request to the Investigating Judge to be given leave to start a financial investigation concerning the suspect.
The circumstances vary depending on the nature of the suspicion; the powers granted by special Statutes are more extensive than those enshrined in the CCP. The latter allows law-enforcement officers to
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issue a warrant to hand over documents, if there are reasonable grounds for suspicion that a crime that carries a maximum penalty of 4 years imprisonment or more has been committed. Investigating Judges can, if the Prosecutor so demands, issue a warrant to produce any documents that are liable to seizure. The power of all these officials is limited, as such warrants cannot be addressed to a suspect in a criminal case (the company under investigation). Issuing such warrants under special Statutes (e.g. the WED) is not restricted in this way, nor do those warrants require a reasonable grounds for suspicion (the mere interest of the investigation is enough to justify the warrant). See question 6.1. The CCP empowers different officials to enter and search premises and seize relevant materials. Generally the Investigating Judge and Public Prosecutor may enter the company premises and conduct seizure if they have reasonable grounds to suspect that a crime has been committed that carries a maximum prison sentence of 4 years or more. In some special Statutes such powers are granted to all law-enforcement officers and are not limited with regard to the seriousness of the alleged crime.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, do the Netherlands recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Dutch labour laws protect personal documents of employees, even if located in company files?
Netherlands
Anyone under investigation can be asked to voluntarily submit to an interview by any given law enforcement officer. There is no legal obligation to comply with such request because the suspect has the right to remain silent. In practice, the legal representative of the company under investigation can never be compelled to answer. Detained suspects can be subjected to interrogations by law enforcement officers, the Public Prosecutor and Investigating Magistrate; the right to remain silent prevails. At trial or in the appellate stage (legal representative of) the Defendant can be submitted to questioning by the Judges, the Prosecutor and the defence; the right to remain silent prevails.
The CCP mainly limits the powers to issue a warrant to deliver documents as follows: 1) as stated above, a warrant based on the CPP cannot be addressed to the suspect (even if it is a company); however the powers to issue a warrant based on some special Statutes are not restricted in this way; and Dutch law recognises professional privileges (e.g. granted to lawyers and physicians): attorney-client privileged communications and attorney work-products are, as a rule, exempt from seizure, unless the documents themselves are the object of a crime. However, in exceptional circumstances the attorney-client privilege can be overruled by the interests of establishing the truth. When allegedly privileged documents are being seized a special procedure kicks in: the documents are sealed pending a decision of the District Court if they indeed qualify as privileged.
Company staff or officials who are not suspected of the crime themselves, or any third person, can only be compelled to answer if they are ordered to do so by a Judge; no obligation exists to answer questions put to such third persons by any law enforcement officer or the Public Prosecutor. These third persons (witnesses) may refrain from answering questions if their answers could criminally compromise themselves or certain (close) relatives.
2)
See questions 7.6 and 7.7. Every law enforcement officer, Prosecutor and Judge who is going to question a suspect concerning the latters (possible) involvement in a crime must inform the suspect of his or her right to remain silent. Dutch Law does not (yet) give the suspect a general and enforceable right to be represented by an attorney during questioning by law enforcement officers or Public Prosecutor. However, prior to the start of the interview by such officials a detained suspect must be given the opportunity to consult an attorney. In the mean time practice shows that the defence is usually allowed to be present during client questioning in high profile cases. When interviewed by a Judge the suspect has the right to be represented by counsel. Witnesses have no right to be represented by an attorney during questioning. He or she is obliged to answer questions from any Judge, with two exceptions: 1) doctors, notaries, clergymen and attorneys (including their employees) have the right to invoke their professional privilege; and for ordinary witnesses: see question 7.7.
Dutch labour laws generally do not protect employee documents from disclosure.
The CCP provides the entry of private residences (the home of the employee) with more safeguards than the entry of other premises; in general only the Investigating Judge has the power to enter a private home if there are reasonable grounds for the suspicion that a crime has been committed that carries a maximum sentence of at least 4 years. Other than this the same rules apply as set out above.
2)
See questions 7.2-7.4.

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9.2
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Criminal cases are exclusively initiated by the Public Prosecutor.

The Public Prosecutor must prove every (vital) element of the crime beyond a reasonable doubt. So the trial and appellate judges will have to be convinced by the evidence in order to be able to reach a conviction.
Guidelines governing the Public Prosecutors decision to prosecute have been drafted for many different types of crime (e.g. discrimination, traffic, fraud). The guidelines serve to maintain equality when prosecuting quite common crimes.
The Judge is the arbiter of fact and will have to assess whether the Public Prosecutor has satisfied the burden of proof.
10
A defendant and the Public Prosecutor can enter into an out-ofcourt-settlement, meaning that the suspect pays a fine in order to avoid a hearing in open court. In many common cases offering an out-of-court settlement is part of the prosecuting guidelines. If the suspect does not accept the offer, an indictment will be issued. A special guideline exists concerning settlements of 50,000 and above and concerning sensitive or high profile cases. Reaching a deal in such cases requires that the Minister of Justice also agrees to the settlement.
Yes. Anyone who knowingly and wilfully cooperates with another person to commit a crime or instigates a crime can be held liable. Anyone who helps someone to commit a crime, by aiding and abetting during the crime or by giving opportunity, means or information to commit a crime can be held liable. The maximum penalty for the predicate offence in such cases is reduced by 1/3. Moreover: conspiracy to commit terrorist acts has its own provisions.
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Common Defences
See question 1.3. Indeed other agencies can e.g. seek civil or administrative monetary sanctions or a cease and desist order. In case of an administrative sanction, criminal prosecution for the same fact would violate the principle of ne bis in idem (double jeopardy rule). Other than that, a victim can seek financial compensation in criminal proceedings in case the crime caused damage which is easy to establish (if not, the victim can turn to the civil courts and file a suit against the convicted person).
Yes. But the burden of proof of mens rea (intent or negligence) still lies on the Prosecutor. To prove intent it is sufficient to demonstrate that the Defendant was aware of the considerable possibility that the crime would take place and nevertheless accepted that possibility (conditional intent or dolus eventualis).
9 Burden of Proof
Yes, but the number of cases in which such a defence has been successful is very limited, because generally everyone is presumed to know the law. The mistake of law defence can therefore only succeed in cases where the Defendant had gathered trustworthy information concerning the law from an undisputed expert.
The Public Prosecutor always has to present evidence on each and every (vital) element of the crime as enshrined in the indictment. It is not for the Defendant to prove that the indictment is a total mistake. Anything the defence wants to prove though, should obviously be made as compelling as possible.
Yes. The Defendant must be able to convince the Judges that he had
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a realistic reason not to be aware of the facts that constituted the unlawfulness. The threshold is lower than the ignorance of law defence. Again: the burden of proof of Defendants knowledge lies with the Public Prosecutor.
Netherlands
Not applicable. See question 14.1.
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Voluntary Disclosure Obligations 15 Elements of a Corporate Sentence
Generally: no. There are some exceptions not relevant to business crime. Moreover, there is an obligation to report for public entities (as well as civil legal entities and their staff whose tasks and duties are defined by law) and public servants who, during the discharge of their duties, obtain knowledge of a crime by a public servant in the course of his duties, for the investigation of which they are not responsible. No reporting obligation exists if the reporting person would, by reporting, risk incriminating himself or certain of his (close) relatives.
13
There are no strict sentencing guidelines for the Judges. There are no minimum penalties per category of criminal conduct. The Criminal Code and various special Acts only provide maximum sentences, and the trial and appellate courts are totally free to decide about appropriate sentencing, after having received advice in that respect from the Prosecutor. For a number of crimes the Prosecutors apply guidelines to reach their advice. In that system each crime is awarded a number of points; special circumstances, such as recidivism, may score extra points. Those points are converted into penalty points which represent a certain amount of fine, hours of community service punishment or days of imprisonment. As said: eventually, the court is at liberty to either adopt the prosecutor advice, or to decide otherwise. Fines are classified into six categories, and every crime has a connection with one of those categories. The range goes from category I: 370 to category VI: 740,000. For corporations there is a special regime, in that a fine can be imposed up to the amount of the next higher category, if the category that had originally been attached to the crime in question does not allow for appropriate punishment. In case of an Economic Crime the maximum fine for corporations can, under specific circumstances, even be two categories higher. Moreover: WED as well as CC facilitate financial sanctions by way of confiscation of illegally obtained assest/profits. Imprisonment can either be temporary or for life. Temporary imprisonment carries a maximum period of 30 years, subject to the crime. The legislator has determined the maximum period for each crime, which can be found in the CC or in separate Acts. Of course legal entities cannot be sent to prison. But those natural persons who were actually in charge of or ordered the crime to be committed, surely can. Life imprisonment for business crime seems unlikely (apart from Murder Inc.). Community service punishment (labour and/or some form of training) can be imposed for a maximum of 480 hours, of which a maximum of 240 hours may consist of labour. Accumulation of sanctions is possible: imprisonment and community punishment can be imposed next to each other. A fine can be imposed in addition to imprisonment as well as in addition to community punishment. Additionally the court could order its judgment to be made public through the media. In cases of Economic Crimes the judgment could also entail closing down the corporation which committed the crime.
Any suspect also those who voluntarily disclose criminal conduct - can request leniency on any given ground. Often those grounds focus on securing an out-of-court-settlement: then a fine is paid in order to avoid the case from going to a public trial. There are no general guidelines from the government or Public Prosecution on how to handle these kind of requests. Judges have no involvement with these settlements. If the case goes to trial the Defendant can present the same grounds to the Judges and request leniency.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in the Netherlands, and describe the favourable treatment generally received.
See question 13.1. There is no generally received favourable treatment in response to any voluntary disclosure of criminal conduct or cooperation in a criminal investigation.
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Plea Bargaining
No, plea bargaining is not part of Dutch criminal procedures. However, it is possible to enter into negotiations with the Public Prosecutor as explained in question 13.1.
Not as such. However, the court will take into account all relevant circumstances, such as: is the defendant a first offender, did he pay damages to the victim, or has the corporation in the mean time incorporated a proper system of compliance?

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16
Appeals
The appeal may be about points of law and/or about the assessment of the facts. Appeal is a trial de novo, but certain restrictions apply. See question 2.1.
Netherlands
In the Netherlands no distinction is made between the guilty verdict as such and sentencing. Verdict and sentencing are enshrined in the same written judgment. There is no specific sentencing hearing after a guilty verdict. The cases are being dealt with in open court and during those trial days every aspect of the case, including the personal situation of the defendant, is being discussed by the Prosecutor, defence and Judges. A non-guilty verdict an acquittal is appealable by the Public Prosecutor. A guilty verdict including the sentencing part thereof - is appealable by both Defendant and Public Prosecutor (who may find the sentencing too lenient or disagrees if the Defendant has been acquitted on some points, even if he got a guilty verdict on other points).
See question 16.1.

The appellate court may overturn any District Courts finding of fact or law, since appeal is a trial de novo. See question 2.1.
It can remedy any error on point of fact and/or law.
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Jan Sjcrona
Sjcrona . Van Stigt tHoenstraat 5 2596 HX The Hague The Netherlands
Enide Perez
Sjcrona . Van Stigt tHoenstraat 5 2596 HX The Hague The Netherlands
+317 0346 7472 +317 0392 4378 js@svsadvocates.com www.svsadvocates.com
+317 0346 7472 +317 0392 4378 ep@svsadvocates.com www.svsadvocates.com
Jan Sjcrona is a senior partner in the firms The Hague office. The International Whos Who Legal of Business Lawyers and The European Legal 500 annually qualify him as a leading practitioner in the field of business crime. He has extensive experience defending criminal investigations in cases of alleged economic and financial crime (tax, customs, corruption, insider trading, money laundering, complex fraud cases), in the first instance, in appeal and at Supreme Court level. Clients include national and multinational corporations, governmental bodies and banks. He is a recognised expert regarding mutual legal assistance and extradition. Mr. Sjcrona graduated from Leiden University in 1980 and joined the Bar in 1985. During the first half of the Nineties he also was Professor to the Chair of International Criminal Law at the University of Tilburg. He wrote his PhD thesis on Mutual Legal Assistance and has written a book on International Criminal Law with co-author ICTY Judge Alphons Orie; a new edition was released in 2009, with other specialists contributing also. Mr. Sjcrona is a frequent speaker at domestic and international conferences. He is founding-member of the Dutch Association of Criminal Defence Counsel and of the European Criminal Bar Association. He co-chaired the International Bar Associations Business Crime Committee in 2009-2010.
Enide Perez is a partner in the firms The Hague office; she started her career at the firms office in Rotterdam in 1997. She specialises in cases involving tax offences, fraud, corruption and economic offences, such as environmental offences and violations of health and safety regulations (industrial accidents). She advises on possible liability under criminal law of companies and its executives and on how to prevent such liability. She provides legal assistance at all stages of criminal proceedings: from dawn raids, during the interview of clients by special law enforcement agencies (e.g. Fiscal Intelligence and Investigation Service and the Health and Safety Inspectorate), during negotiations with Public Prosecutors on out-of-court settlements, and of course - during the trials and on appeal. Mrs. Perez has written articles on money-laundering legislation, on the documentation of data of criminal proceedings against both natural persons and legal entities and on the UK Bribery Act and its consequences for Dutch legal entities. She teaches Criminal Procedure as part of the vocational training for advocates and is a member of the Dutch association of Criminal Defence Counsel as well as the International Bar Association.
The Business Crime Practice of Sjcrona Van Stigt is an internationally recognised leader in representing corporations, boards of directors, management and other individuals who face white collar criminal investigation and litigation or internal (fraud) investigations. We are the largest specialist criminal defence firm in the Netherlands, with offices in The Hague and Rotterdam, and operate in an informal but highly effective network of similarly specialised firms worldwide. Thus we are well-positioned to help clients in the Netherlands and abroad with problems that may arise in the course of their business operations.

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Chapter 16
Poland
Clifford Chance
Bartosz Kruewski
Marcin Ciemiski

entity which failed to observe its statutory duties (e.g. Fiscal Offices conduct administrative proceedings against entities which violate their tax obligations, and the Polish Financial Supervision Authority ensures compliance with the rules on capital markets).

Business crimes are investigated and prosecuted by public prosecutors who are supervised by the General Public Prosecutor. As a result of recent amendments to the Act on Public Prosecutors, the General Public Prosecutor is currently separate from the government and the Minister of Justice no longer holds the post of General Public Prosecutor. Furthermore, the police have the authority to conduct investigations in specific circumstances provided by statute - the Code of Criminal Procedure. The investigation of certain types of offences may also be conducted by public agencies, e.g. the Central Anti-corruption Bureau and the Internal Security Agency. There are no other enforcement authorities at regional level.
1.2 If there are more than one set of enforcement agencies, please describe how decisions on which body will investigate and prosecute a matter are made. 2.1 How are the criminal courts in Poland structured? Are there specialised criminal courts for particular crimes?
There are three types of criminal courts: (i) district courts; (ii) regional courts, which also hear appeals referred by the district courts; and (iii) appellate courts, which hear appeals referred by the regional courts. Moreover, there is a criminal division in the Supreme Court, which has jurisdiction to hear cassation appeals referred by the regional and appellate courts. There are no specialised criminal courts for particular crimes in Poland. The district courts have jurisdiction over all cases except those reserved by law for the jurisdiction of a regional court. The regional courts are entitled to adjudicate felonies and certain misdemeanours expressly listed in the Code of Criminal Procedure (e.g. certain offences against life and health).
The competence of enforcement agencies to investigate and prosecute criminal offences is determined by statute. As a general rule, an investigation is conducted by the public prosecutor. However, in certain circumstances it is the police who are responsible for an investigation (e.g. in the case of offences punishable by up to five years imprisonment). The public prosecutor may also delegate the investigation of other offences to the police. Other enforcement agencies may prosecute offences within their jurisdiction (e.g. the Central Anti-corruption Bureau is responsible for investigating bribery of government officials). The public prosecutor supervises the proceedings conducted by other enforcement agencies and may decide to take over those proceedings.
No. There is no jury in criminal trials in Poland. However, with respect to the proceedings concerning a felony, the court sits in a panel consisting of one professional judge and two lay judges. Lay judges take part in the deliberations and voting on the judgment.

3.1 Please describe any statutes that are commonly used in Poland to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
Generally, public agencies are not authorised to bring civil enforcement proceedings against business crimes. If a business crime committed by an entity also violates administrative regulations, certain public agencies may also conduct administrative proceedings and impose sanctions on the
Under the Act on Public Offerings, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, criminal liability is incurred by a person who provides false data or suppresses true data, thereby materially affecting the information connected with the public offering. Under the Act on Trading in Financial Instruments, it is a criminal
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offence to engage in market manipulation, which is defined, in particular, as placing orders or executing transactions (i) which are or may be misleading as to the actual supply of, demand for or price of a financial instrument, (ii) which result in the price of one or more financial instruments moving to an abnormal or artificial level, (iii) with the intention to produce legal consequences other than the actual objective of the given legal transaction, (iv) while simultaneously misleading market participants as to the price of a financial instrument. o Accounting fraud
3.2
Poland
influence on a companys decision-making to accept a material or personal benefit or a promise thereof in exchange for conduct which may cause material damage to the company, an act of unfair competition, or an unacceptable preferential act for the purchaser or recipient of a product, service or benefit.
Under the Act on Accountancy, every company that violates its statutory duty to make and keep accounting books, records and accounts or produces unreliable data in its records commits a criminal offence. Moreover, under the Fiscal Penal Code an entity that keeps accounting books incorrectly or dishonestly may be fined. o Insider trading Under the Act on Trading in Financial Instruments, anyone who gains access to inside information (e.g. by virtue of membership of the governing bodies of a company or through criminal activities) is prohibited from using it. Persons who have access to inside information are not permitted to disclose it or trade in financial instruments on the basis of such information. It is a criminal offence for an insider to disclose and/or use inside information. o Embezzlement Under the Criminal Code, it is a criminal offence for a person who has been entrusted with a movable property to appropriate it. This is a qualified form of the offence of appropriation, due to the specific relationship between the offender and the aggrieved party. o Bribery of government officials Based on the Criminal Code, criminal liability is incurred by a person who gives a material or personal benefit or promises to provide such benefit to a person acting as a public official in connection with that persons public office. If such an act has been committed in order to induce a public official to disregard his/her official duties or if a person provides such a benefit to a public official who has disregarded such a duty, he/she will be liable to a severer penalty. o Criminal anti-competition The Competition and Consumer Protection Act does not provide for criminal liability for antitrust violations. Nevertheless, some anticompetitive acts may be qualified as criminal offences under other statutes (e.g. bid-rigging in public tenders). o Tax crimes The most commonly prosecuted offence is tax evasion. Under the Fiscal Penal Code, to be liable for tax evasion the taxpayer must have failed to disclose the taxable base or submit a tax declaration. Other tax crimes include providing false data in a tax declaration or failing to pay tax within the prescribed time limit. o Government-contracting fraud It is an offence to violate public procurement procedures, in particular, by awarding a contract (i) in breach of the provisions of the Act on Public Procurement concerning the prerequisites for the application of certain types of public procurement procedures, (ii) without the required notice, (iii) without applying the Act on Public Procurement. The Act on Public Procurement provides for fines for violations of the public procurement rules and procedures and introduces administrative enforcement thereof. Further, fraudulent dealing with the government falls within the general rules concerning fraud. o Managerial bribery Under the Criminal Code, it is a criminal offence for any person holding a managerial position in a company or having a significant
Is there liability for inchoate crimes in Poland? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Yes. There is liability for attempted offences in Poland. An attempted offence occurs if an offender with intent to commit an offence tries to commit the offence even if he/she is not him/herself unaware that the offence cannot be committed because of the lack of a suitable object on which to commit it or because there are no means for committing it. Attempted offences are punishable within the limits of the penalty provided for the given offence. However, in certain circumstances the court may apply extraordinary mitigation of punishment or even waive punishment. Action taken to create conditions conducive to an act leading directly to the commission of a crime may also be subject to a penalty.

The liability of entities for criminal offences is regulated by the Act on the Liability of Collective Entities for Punishable Acts (the Liability Act). The Liability Act is yet to be tested in practice. Under the Liability Act, an entity may be responsible for the conduct of a person acting on behalf or in the interest of the entity within the scope of his/her power or duty to represent it, make decisions on its behalf or exercise internal control, or exceeding his/her power or failing to perform his/her duty. The entity may be prosecuted if that person commits a certain offence specified in the Liability Act (e.g. a tax offence, bribery or paid patronage) and if the conduct of that person has resulted in a benefit for the entity. The liability of the entity is secondary to the liability of the person who committed the offence, i.e. the entity can be held criminally liable only after the person who committed the offence has been found guilty and sentenced.
The entitys liability for a crime does not automatically determine the personal liability of managers, officers and directors. However, if the entity is liable for a fiscal offence, the managers, officers or directors may be held accountable on the basis of auxiliary liability.
The enforcement-limitations periods depend on the offence committed. If an offence is: (i) the crime of homicide - the

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Where the mental state of the accused is concerned, generally, the above-mentioned crimes are committed with intent, that is when the accused is willing to commit the crime or foreseeing the possibility of committing it, he/she agrees to do so.
Clifford Chance
Poland
limitation period is 30 years; (ii) other crimes - 20 years; or (iii) misdemeanours - 15, 10 or 5 years, depending on the punishment provided for the given offence. The general rule is that the limitation period begins on the date the crime was committed. However, if the commission of the crime depends on the occurrence of a particular effect, the limitation period begins on the date that effect occurs. Additionally, the punishment adjudicated for the offence cannot be enforced if a certain time has elapsed (30, 15 or 10 years depending on the type of offence). This limitation period begins to run on the date when the judgment became final and binding.

Poland
In the case of so-called continuing offences (several offences forming a pattern), the limitation period is calculated on a different basis and begins to run when the last pattern of offences was committed. In the case of several offences committed in a similar manner before the first sentence has been given, the limitation period begins to run independently for each of the offences. However, the court should impose one penalty.
When gathering evidence and investigating offences, including business crimes, the public prosecutor, and in some instances the police, is authorised, to seize objects and search premises in order to locate objects which might serve as evidence in criminal proceedings. Moreover, after the proceedings have started, upon a motion from the public prosecutor the court may order surveillance and the recording of telephone conversations, in order to detect and obtain evidence for the pending proceedings or to prevent a new offence from being committed. Surveillance may be carried out and telephone conversations recorded for a period not exceeding three months, with the possibility of an extension, in particularly justified cases, for a period not exceeding another three months. The above measures may be taken once the formal investigations have been commenced. However, with respect to the person or company under suspicion, the prosecutor and the police have the authority to conduct searches necessary to secure evidence of the offence against loss, damage or destruction, even before an investigation has been formally instituted. The police and other enforcement agencies, such as the Central Anticorruption Bureau, may also engage in provocation in order to gain evidence of the offence, verify information and identify the offenders. Provocation is permissible in proceedings concerning certain offences, such as business crimes (e.g. bribery of public officials). All state, local government and community institutions, as well as private entities and persons, are obliged to aid and assist the agencies conducting criminal proceedings. Offices, institutions and entities operating in post and telecommunications fields, customs houses, and transport institutions and companies are obliged to surrender to the court or public prosecutor on demand any correspondence or communications significant to the pending proceedings. In addition, telecommunications institutions and entities are obliged to secure data stored on an IT carrier for a period not exceeding 90 days.
Yes. If during the limitation periods set out in question 5.1 above criminal proceedings are initiated, these periods are extended by ten or five years. The limitation period may also be tolled if a provision of law does not permit criminal proceedings to be instituted or to continue (e.g. in the case of an offender having diplomatic immunity, the limitation period is tolled until the immunity is set aside).
Document Gathering:
According to the principle of legality, the public prosecutors or agencies responsible for prosecuting offences are obliged to institute investigations when they have reason to believe that a crime falling within their jurisdiction has been committed. Nevertheless, the Code of Criminal Procedure lists circumstances in which criminal proceedings will not be instituted or, if already instituted, will be discontinued (e.g. where the act causes only negligible harm to society). In practice, investigations are initiated if the public prosecutor or the police have been notified of a suspicion that an offence prosecuted ex officio has been committed. Such notification may be filed by (i) government institutions which have been informed of an offence in connection with their activities, or (ii) any person who has learned that an offence has been committed. At the same time, investigations with respect to some offences may only be initiated by a private accusation. This does not generally apply to business crimes.
Every person or company in possession of objects subject to surrender may be called upon to release them voluntarily. Objects which may serve as evidence must be surrendered when this is ordered by the court or the prosecutor, or in special circumstances by the police or other public agencies. If it is reasonable to assume that the objects subject to surrender are located in specific premises or other places, those places may be searched. This applies both to companies under investigation and other premises where an object that might serve as evidence is located. A search may be conducted by the public prosecutor or, subject to a warrant issued by the court or public prosecutor, by the police, and in cases specified by law - by another public agency.
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7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Poland recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Polands labour laws protect personal documents of employees, even if located in company files? 7.8
Poland
Polish law generally recognises privileges protecting documents prepared by attorneys and communications between attorneys and clients. However, in some cases a criminal court may allow disclosure of privileged documents related to the role of an attorney. Nevertheless, this is not permitted with respect to privileged documents related to the role of an attorney who is the defence counsel in the criminal proceedings. In principle, Polish labour laws do not protect personal documents of employees from production or seizure. However, under the Code of Criminal Procedure personal documents surrendered or discovered during investigations should be immediately sent, without being read, to the public prosecutor or the court, in a sealed container.
Under the Code of Criminal Procedure, the following persons cannot be examined in the capacity of witness as to certain circumstances: (i) the defence counsel on facts communicated to him/her while he/she was giving legal advice or handling the case; and (ii) a priest on facts communicated to him at confession. It is also prohibited to question persons required to keep State or official secrets, unless they are released from that requirement. Moreover, the next of kin of a person under investigation may refuse to testify. A witness may also decline to answer a question if his/her answer would incriminate him/her or his/her next of kin or would bring him/her or his/her next of kin into disgrace. The witness may request interrogation in the presence of an attorney. However, the court or the prosecutor may refuse to allow the attorney to participate in the proceedings if they deem that the witnesss interests do not require this. During interrogation, the suspect is entitled to make statements. However, he/she may refuse to answer particular questions or refuse to give explanations at all, without stating a reason. The suspect is entitled to retain an attorney.
The general rules apply. Please see question 7.2 above.


The general rules apply. Please see question 7.2 above.
The general rule is that any person who may have information on a crime that has been committed may be summoned as a witness and is obliged to testify. The questioning generally takes place in the public prosecutors office or at a police station. However, a witness who cannot comply with a summons because of illness, serious disability or any other insurmountable obstacle, may be heard at home/hospital. In the case of corporate criminal liability proceedings, the persons forming the companys authorities authorised to represent the company in the proceedings may not be questioned as witnesses, but they are entitled to make statements. They may refuse to answer particular questions or refuse to give explanations, without stating a reason.
Criminal proceedings are initiated either by a private accusation or at the public prosecutors decision. In both cases, the court proceedings are preceded by an investigation conducted by the public prosecutor or the police. If during the investigation it is established that an offence has been committed, the public prosecutor or the police prepare an indictment against the accused, which sets forth the allegations against him/her. The indictment is then filed with the criminal court. With respect to the offences that may be prosecuted upon a private accusation, at the request of the aggrieved party the police will accept his/her oral or written charge and send the charge to the court.
Poland adopted the so-called legality principle, which means that in each case where a criminal offence has been committed, in general the public prosecutor or other relevant agency should charge an entity or individual irrespective of governmental policies or objectives.
A third person may be questioned as a witness. The general rules described in question 7.6 above apply.
The public prosecutor may only agree with the defendant to file a

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There are three forms of protection that may be asserted by a person questioned in criminal proceedings: (i) partial or complete prohibition of questioning certain categories of persons as witnesses; (ii) the right to refuse to testify; and (iii) the right to decline to answer a question.
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motion with the court to convict the defendant without a trial. The final decision on this is made by the court. Please see section 14 below.
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will be liable for aiding and abetting. Furthermore, whoever, acting against the particular legal duty to prevent the prohibited act, facilitates its commission by another person through his/her omission, will also be liable for aiding. The person liable for aiding and abetting may be held liable to the same extent as the offender. However, the court may apply an extraordinary measure of mitigation.
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11
Common Defences
If the defendant is convicted, the court may upon the motion of the aggrieved party (or another person so entitled) order the defendant to redress the damage caused by the offence. Moreover, until judicial examination commences at the main trial, the aggrieved party may file a civil suit against the accused in order to litigate, within the framework of the criminal proceedings, his/her property claims directly resulting from the offence.
9 Burden of Proof
Yes. With regard to offences punishable by more than three years of imprisonment, state of mind is an essential element of the offence. In such cases, the prosecutor must prove that the defendant had the requisite state of mind to commit the offence. In the case of misdemeanours, some may also be committed without intent, if the law so stipulates.
The defendant is presumed innocent until proven guilty. Therefore, it is the prosecutor who bears the burden of proof with respect to all elements of the business crimes referred to above. The defendant is under no obligation to prove his/her innocence or to incriminate him/herself. The same applies to affirmative defences. However, it is recommended that the defendant at least demonstrate that the circumstances are probable. The court is generally obliged to clarify all the circumstances of the case, therefore it may decide to allow evidence which was not submitted by any of the parties.
Yes. If a person commits an offence while justifiably unaware that it was an offence, it does not constitute a criminal offence. In order to determine that the defendant was justifiably ignorant of the law, it must be established that a reasonable person in the same circumstances would also have been unaware that the action was an offence. The defendants individual characteristics should also be taken into account. This defence is used very rarely in practice and might be accepted only with respect to some rather rare crimes.
In order to consider certain facts as proved, it must be established that it was virtually impossible or highly unlikely that the opposite occurred. The court makes the decision on the basis of its own conviction, which is founded on evidence taken and appraised at its own discretion, with due consideration for the principles of sound reasoning and personal experience.
If a particular offence may be committed only intentionally, the defendant may rely on a mistake-of-facts defence. A mistake of facts occurs where the defendant has committed an offence while under a misapprehension as to a circumstance that is a feature of the offence. However, if the offence may be committed also unintentionally, a mistake of facts does not release the defendant from liability, but demonstrates that he did not commit the offence intentionally.
It is the court that determines all the elements of the case.
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Yes. Whoever, with an intent that another person should commit a prohibited act, encourages him/her or facilitates by his/her behaviour the commission of the act, particularly by providing the instrument, means of transport, or giving counsel or information,
If a person becomes aware that an offence prosecuted ex officio (and not by means of a private accusation) has been committed, he/she is under a so-called civic duty to inform the public prosecutor or the police. However, he/she cannot be held liable for failing to report the offence. The Criminal Code penalises only a failure to notify
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the most serious offences (e.g. murder, terrorism) and a failure by the public authorities to report ex officio crimes which they have learned of.
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by up to ten years imprisonment, the circumstances surrounding the commission of the misdemeanour do not raise any doubts and the accuseds attitude indicates that the objectives of the proceedings will be achieved despite the lack of a trial. However, the court may disregard the prosecutors motion if it considers that there are no grounds to convict the defendant without a trial. A motion for an agreed conviction upon sentence without proceedings to hear evidence may be filed by a defendant who is charged with a misdemeanour. The court may grant the defendants motion only if the circumstances surrounding the offence have not given rise to doubt, the public prosecutor and the injured party concur, and the objectives of the proceedings will be achieved in spite of a trials not being conducted in full.
13
Yes. In some cases, disclosure of a wrongdoing before the investigation is initiated may even result in the offenders not being punished. This applies in particular to bribery of public officials. It is unclear whether this also applies to entities that might be liable under the Liability Act. Furthermore, a person under investigation may not be held liable for offences committed in an organised group or association if he/she discloses the circumstances of the case and turns states evidence in the criminal proceedings. This applies if the person under investigation has already made statements which could contribute to the disclosure of the offence and he/she undertook to further disclose the circumstances of the case in court. However, a person who coordinated the organised criminal group or association or committed manslaughter (or aided and abetted another person to commit manslaughter) cannot turn states evidence.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Poland and describe the favourable treatment generally received.
15
The court imposes the sentence at its own discretion, though within the limits prescribed by law. The Criminal Code provides for the minimum and/or maximum penalties to which a defendant may be sentenced for a particular offence. The rules concerning sentencing are enshrined in the Criminal Code. When sentencing the defendant, the court should consider the degree of guilt, the consequences of the offence on society. The court should also take into account the preventive and educational objectives which the sentence is to attain with regard to the convicted person. In particular, the court should take into account factors such as: (i) the motivation and conduct of the defendant; (ii) the type and degree of the defendants transgression; (iii) the type and dimension of any adverse consequences of the offence; (iv) the characteristics of the defendant; (v) his/her way of life prior to the offence and his/her conduct thereafter; and (vi) his/her efforts to redress the damage.
The Liability Act does not have specific provisions concerning the requirements that entities must meet in order to seek leniency in Poland. As indicated in section 4 above, the criminal liability of entities is largely still untested. However, as the court generally has discretion when considering the sentence to impose on an entity (see question 15.2 below), it cannot be ruled out that the entity will receive favourable treatment if, example, it has attempted to redress the damage or co-operated in uncovering criminal acts.
14
Plea Bargaining
Yes. There are two mechanisms which enable the defendant to decline to contest criminal charges in exchange for an agreed conviction upon sentence: (i) the prosecutors motion to convict the accused without conducting a trial; and (ii) the defendants motion for a conviction without proceedings to hear evidence.
Under the Liability Act, when considering the sentence to be imposed on a corporation, the court must take into account, in particular, (i) the amount of the benefit obtained from the crime; (ii) the corporations financial situation; and (iii) the social aspects of the punishment and its influence on the further functioning of the corporation. The Liability Act does not provide a closed list of factors that should be taken into account when the court determines the sentence, therefore the court has discretion in this respect and may also consider other circumstances that occurred in the case.
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Appeals
The prosecutors motion to convict the defendant without a trial may be submitted only if the offence is a misdemeanour punishable
Yes. Both guilty and non-guilty verdicts are appealable. However, the defendant may appeal against the verdict only if it is prejudicial to his/her rights or interests. Therefore, it is rather unlikely that a defendant who was found not guilty would have a locus standi to

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appeal against the verdict (unless there were other measures imposed upon him/her which he/she considered prejudicial to his/her rights or interests).
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Irrespective of the scope of the appeal, the appellate court should reverse the decision of the lower court if a violation of certain fundamental procedural rules occurred (e.g. the judgment was issued by a judge who was subject to disqualification under the Code of Criminal Procedure).
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Yes. The criminal sentence is appealable by all parties. However, the appealing party (e.g. the defendant or the private prosecutor in the case of offences prosecuted by way of a private accusation) may appeal only against the resolutions which are prejudicial to its rights or interests. This restriction does not apply to the public prosecutor.
The appellate court may overturn both findings of fact and law. The courts decision against which an appeal has been brought may be overturned if the appellate court finds that: (i) there was a violation of the provisions of substantive law; (ii) there was a violation of a procedural provision that might have affected the findings; (iii) there was an error in the findings of fact on which the court based decision; or (iv) the penalty imposed is manifestly disproportionate to the offence, or the application or failure to apply the preventive measure, or any other measure, was unfounded.
If the appellate court upholds the appeal, it may either amend the judgment of the lower court or reverse it (and refer the case for rehearing or discontinue the proceedings). However, the appellate court cannot reverse the verdict and convict the defendant if the defendant was found not guilty by the lower court. In such instances, the appellate court should refer the case to the lower court for rehearing.
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Poland
Bartosz Kruewski
Clifford Chance Norway House, ul. Lwowska 19 00-660 Warszawa Poland
Marcin Ciemiski
Clifford Chance Norway House, ul. Lwowska 19 00-660 Warszawa Poland
Bartosz Kruewski, a qualified Polish advocate, is a partner at the Warsaw office of Clifford Chance. He heads the Warsaw Litigation & Dispute Resolution Team and co-heads the Restructuring & Insolvency Practice. He is also a member of the firms International Commercial Arbitration Practice and White Collar & Regulatory Group. Bartosz has extensive experience covering commercial litigation, criminal law, regulatory investigations (including FCPA-related proceedings) and local and international arbitration. Bartosz regularly advises on criminal-related and regulatory matters. He also co-operates with professional organisations, business consultancy and advisory firms on the implementation of corporate governance standards on the Polish market, also through organising high-profile conferences on corporate risk management, as well as company directors and officers liabilities issues. In 2010 Bartosz was recommended as a leading Litigation & Dispute Resolution lawyer in Poland by both local and international legal directories including Forbes, Chambers Global, and Chambers Europe.
Marcin Ciemiski is a qualified Polish advocate and a counsel in the Litigation & Dispute Resolution Team of Clifford Chances Warsaw office. He specialises in white-collar criminal offences and criminal investigation matters. Marcin has substantial experience in advising clients on different aspects of criminal proceedings in Poland as well as in relation to FCPA proceedings. Marcin is an author of publications on civil and civil procedure law, arbitration and medical law.
Clifford Chance is one of the worlds leading law firms, with 29 offices in 20 countries and some 3,200 legal advisers. Many of the worlds leading organisations look to Clifford Chance not just for legal expertise but for advice on business critical issues and market opportunities. Clifford Chances global regulatory enforcement and white collar group is a core team of specialist partners and associates whose practice focuses on regulatory and compliance problems. We are able to assemble teams of specialists who have the skills and experience to help you manage the significant legal, commercial and reputational risks that are often associated with regulatory and white collar crime issues. We have experience of all the key areas of corporate, business and financial services regulation and we can advise on all aspects of regulatory enforcement, criminal investigations, fraud, crime and anti-money laundering work across multiple jurisdictions. We also have expertise in the recovery of the proceeds of fraud through civil court actions and liaison with criminal investigators.

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+48 22 627 1177 +48 22 627 1466 bartosz.kruzewski@cliffordchance.com www.cliffordchance.com
+48 22 627 1177 +48 22 627 1466 marcin.cieminski@cliffordchance.com www.cliffordchance.com
Chapter 17
Russia
Ivanyan and Partners
Vasily Torkanovskiy

reference to specific articles of the Criminal Code of the Russian Federation (hereinafter the RF CC). Any possible conflicts of competence (for example when different crimes are to be investigated together) or disputes concerning the powers of preliminary investigation shall be resolved by the state prosecutor (article 171 (7), (8) of the RF CPC).
Only state prosecutors and victims (albeit to a very limited extent) can act as prosecutors before the Russian courts. However, the preliminary investigations can be conducted by a variety of state bodies depending primarily on the subject matter of the alleged offence. The competent authority for a preliminary investigation of a given crime shall be identified in accordance with article 151 of the Code of Criminal Procedure of the Russian Federation (hereinafter the RF CPC). The powers to investigate crimes are primarily vested in the Prosecutors Office of the Russian Federation (in particular, into its Investigative Committee) and the Ministry of Interior of the Russian Federation, although certain types of crimes can be investigated by other, more specialised agencies such as, inter alia, the Federal Security Service of the Russian Federation, the Federal Customs Service of the Russian Federation or even the Federal Fire-Prevention Service of the Russian Federation. Administrative proceedings described in question 1.3 below can be conducted by various specialised state agencies. The authorities responsible for prosecution and preliminary investigation (hereinafter - the Responsible authorities) are competent to act on the federal as well as on the regional level; in the latter case they normally act through their regional subdivisions. The distribution of powers between the central offices and the regional subdivisions of the Responsible authorities is governed by their internal regulations.
The Rusian tort law is based on the principle of dlit gnral (article 1064 of the Civil Code of the Russian Federation; hereinafter the RF CivC) which means that any crime at the same time qualifies as a tort to the extent it causes any loss to others. The business crimes are no exception and frequently entail not only criminal but also civil liability. The procedure for the civil recovery is described in more detail in the question 8.1 below. As to the administrative enforcement it should be mentioned that the system of so-called administrative liability operates in Russian law in parallel with the system of criminal liability. The offences that call for the administrative liability (which shall be distinguished from crimes which can only be prosecuted through criminal proceedings) and the corresponding procedures are for the most part described in the Code of Administrative Offences of the Russian Federation (hereinafter the RF CAO). The term administrative in this context is the allusion to the fact that the administrative liability is for the most part applied extrajudicially by the competent enforcement agencies (although sometimes they can only enforce their decisions via special court proceedings). Many of the offences penalised by the RF CAO can be described as business crimes, but are less serious than their counterparts prohibited under the RF CC. The remedies provided by the RF CC and the RF CAO are substantially the same and the principle of ne bis in idem dictates that they can only be applied alternatively on the same charges. The offences provided by the RF CAO (and some other special statutes) can often be prosecuted in special court proceedings (if only to enforce the remedies already applied administratively), which differ from the civil proceedings and the remedies will again be those provided by the RF CAO and special statutes. Sometimes specialised federal agencies are allowed to apply and enforce administratively special statutory remedies to expediently and efficiently combat the wrongdoings which fall within their respective competences. Thus the Federal Tax Service of the Russian Federation is empowered to collect arrears, penalties and fines by means of direct instructions to the taxpayers bank (if the taxpayer is a legal entity or an individual entrepreneur), and to impose fines and
The rare occasions when the victims are allowed to prosecute crimes in court are defined in article 246 (2) of the RF CPC with reference to article 20 of the same Code. Such private prosecution is allowed for certain types of crimes only enlisted in article 20 of the RF CPC, such as the calumny or the infliction of light injuries. In all the other cases the state prosecutor is provided by the Prosecutors Office of the Russian Federation. As to the preliminary investigation stage, it has been explained in the preceding paragraph that the competence of various Responsible authorities is defined in article 151 of the RF CPC with
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penalties and recover arrears from the such taxpayers by means of directly enforceable decisions. The Federal Antitrust Service of the Russian Federation (hereinafter the RF FAS) has its special antitrust proceedings which can result into the binding decisions accompanied by binding orders enforceable by the court. Whatever remedies can be applied and enforced administratively they are, of course, subject to subsequent judicial review. It is not feasible to describe here all the judicial and extrajudicial proceedings associated with administrative enforcement of various rules and regulations. However, where it is particularly relevant the administrative offences and the administrative proceedings will be compared to their criminal counterparts.
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as well as, for example, organisation of a criminal community (a structured criminal group organised to commit grave or especially grave crimes), different types of contempt of justice and forgery. All those offences often accompany business crimes, and if the charges are brought jointly for several crimes only some of which can be tried by a jury, a jury (if requested by the accused) will be competent to try the case as a whole (this might be inferred from the Supreme Courts position expressed in paragraph 4 of its Ruling dated 22 November 2005 No 23).

3.1 Please describe any statutes that are commonly used in the Russian Federation to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:

2.1 How are the criminal courts in the Russian Federation structured? Are there specialised criminal courts for particular crimes?
The criminal cases in the Russian Federation are tried by the courts of general jurisdiction. Within those courts there is a separate parallel two-level system of military justice (specialised in criminal cases involving military personnel). All courts of general jurisdiction are supervised by the Supreme Court of the Russian Federation. The first level of this system are justices of the peace. Their competence in criminal law matters is limited to the first-instance trial of the crimes that are punished by not more than three years of imprisonment (with certain exceptions). The second level are the district courts which are competent to try most of the criminal cases in the first instance (at least most of the business crimes) and are the appellate instance for the justices of the peace. The third level courts are the (supreme) courts for the constituent entities of the Russian Federation. Those courts are competent as the first instance courts in the cases involving most serious crimes and as the cassation courts for the district courts acting both as first-instance or appellate courts. They also supervise the decisions and orders of the district courts and justices of the peace as well as their own cassation decisions. Within the system of the military justice garrison courts correspond to the first two levels of the general system and the circuit (naval) courts correspond to the third level of the same system. The highest instance in the system of courts of general jurisdiction in the Russian Federation (including military courts) is the Supreme Court of the Russian Federation, which serves as an appellate (cassation) court for the third-level courts and military circuit (naval) courts acting in the first instance. It also supervises all the decisions that can be supervised by third-level and the corresponding military courts, unless such supervision has already been effected; in that case it can supervise the supervisory decisions of the lower courts. The Supreme Court may serve as a trial court for certain types of cases (such as the cases against the members of the Russian parliament), in which case it also serves as an appellate (cassation) and supervision instance. To learn more about the competence of the courts of general jurisdiction, please, see articles 31, 355(3) and 403 of the RF CPC.
In 2009 the RF CC was amended to include 3 additional articles (namely articles 185.2, 185.3 and 185.4 of the RF CC) to cover specific types of offences at the securities market. The core Russian statutes used to prosecute the crimes of fraud and misrepresentation in connection with the sales of securities are: article 159 of the RF CC providing for liability for fraud as a misappropriation of anothers property by deception or abuse of confidence (it is a general rule against fraudulent behaviour that can be applied for situations when no special rule against fraud and misrepresentation at the securities market can be applied); article 185 of the RF CC providing for liability for abuse in the securities issuance process; article 185.1 of the RF CC providing for liability for persistent deliberate failure to provide information required under Russian law on securities to an investor or to a controlling authority; article 185.2 of the RF CC providing for liability for breach of the procedure for keeping records of the rights in securities; article 185.3 of the RF CC providing for liability for price manipulation in the securities market; article 185.4 of the RF CC providing for liability for obstruction or unlawful restriction of the securities holders rights; and article 186 of the RF CC providing for liability for counterfeiting of securities. All the listed crimes are intentional. The RF CAO also provide for liability for some wrongdoings at the securities market, e.g., for malpractice in the course of securities issuance, unlawful transactions with emissive securities and failure to disclose or incorrect disclosure of information which shall be disclosed under Russian law. o Accounting fraud This offence constitutes no breach of the provisions of the RF CC unless committed by an insolvent debtor or in view of hiding taxable income or property. But it is generally punishable under article 15.11 of the RF CAO. According to its provisions gross violation of accounting rules and of the financial reporting regulations, as well as of the regulations on storing of the accounting documents is punishable with an administrative fine for officials. This offence can be both negligent and intentional. The accounting fraud in bankruptcy is an intentional offence under article 195 of the RF CC if it causes serious damage.
Articles 30(2) and 31(3) of the RF CPC contain a list of crimes which can be tried with a jury. Most of them are not connected with business. However, bribery and commercial bribery are on the list

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Article 199.3 of the RF CC provides for criminal liability for hiding taxable income or property, which is an intentional crime that can be committed, inter alia, by means of an accounting fraud. o Insider trading In so far as the insider trading involves unauthorised and therefore illegal use of the commercial secrets of a corporation by an insider, that offence is punished by article 183(2) of the RF CC. Intention is a requisite element of this offence which means that the insider shall be aware that the information used is a commercial secret. The more classic definition is provided by the RF COA (article 15.21). If a person that has acquired confidential information (which is broader than the commercial secret) by virtue of his or her position, employment duties or in the course of contractual relationship and uses such information to trade at the securities market or passes this information for the same purposes to third parties, this offence is punishable by an administrative fine. This offence can only be committed by auditors, senior managers or public officials. As to state of mind by the defendant the offence is intentional more often than not; however, even negligence will suffice. It is to mention that from 2011 this article will be amended to prohibit any illegal use of insider information. Some instances of insider trading and market manipulation will also be criminalised (i.e. prohibited by the RF CC). o Embezzlement This offence is prohibited by article 160 of the RF CC. Misappropriation or embezzlement is the stealing of others property entrusted to the perpetrator. This crime may involve tangible property as well as intangible property (e.g., securities or money). The property may be entrusted to the perpetrator, for example, in the course of employment, contractual relationship or otherwise. This offence can only be intentional. o Bribery of government officials There are two offences to distinguish, namely: the bribe-taking and the bribe-giving. The first one is prohibited by article 290 of the RF CC. The second one is prohibited by article 291 of the same Code. Bribe-taking, as stipulated in the article 290, may be committed by a government official either personally or through an intermediary. The notion of the bribe encompasses various pecuniary benefits or gifts (money, securities, other assets) given to an official to alter his behaviour in favour of the giver. Bribe-taking is an intentional crime. Bribe-giving also may be effectuated either in person or by an intermediary. Bribe-giving is committed with direct intention. An attempt to give a bribe in order to make semblance of bribery to later blackmail the official involved is a separate crime envisaged by article 304 of the RF CC, and not an inchoate bribe-giving. o Criminal anti-competition This offence is stipulated by article 178 of the RF CC. Monopolistic actions prohibited by this article are, in particular, fixing monopolistically high or low prices, restricting competition by means of agreements or concerted actions, limiting access to a market, refusing unlawfully to enter into contracts, or setting or maintaining fixed prices. All these acts are by their very nature intentional. Criminal responsibility is envisaged for such activities only if they result in significant detriment to the state, legal entities or private individuals or allow earning or economising large amounts of money. The RF CAO provides for liability for abuse of dominance in the market, monopolistic agreements and concerted actions, unfair competition, restriction of competition by state and municipal authorities, failure to comply with the RF FASs lawful requests and to move for and obtain the RF FASs approval for market
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transactions where such approval is needed. Practically any violation of antitrust laws is penalised by the RF CAO; the liability is normally applied in the special administrative proceedings in the RF FAS, and its executory orders can be enforced by the court. o Tax crimes There are four articles in the RF CC that provide for criminal liability for the tax crimes. Those are articles 198-199.2 of the RF CC. The actions and omissions prohibited are: evasion by a natural person or by a legal entity of tax by failure to submit an income return in cases when the submission of a return is obligatory or by showing in a return data on incomes and expenses known to be false or by any other means; failure to perform duties of tax agent for the personal benefit; and concealment of money or property which can be used to collect arrears. All these offences shall be intentional to fall under the RF CC. Some tax offences are also punishable under the RF CAO, but the Tax Code of the Russian Federation is the primary source of liability for tax offences as it contains a whole chapter on tax law violations punishable by fines and penalties. The violations envisaged by these statutes are numerous and allow the state to prosecute various offences against its tax laws ranging from technical accounting mistakes to complicated fraud schemes. o Government-contracting fraud In Russian criminal law there is no liability for this type of offence unless the actions or omissions at issue are encompassed by more general provisions of the RF CC such as fraud, bribery, misappropriation of state funds, etc. Probably the only special provision to be mentioned is article 176(2) of the RF CC: the crime of illegal receipt of a state special-purpose credits. This offence is considered effectuated when such a receipt has caused large-scale damage to individuals, organisations, or the state. As to the state of mind of the defendant this crime may be implemented only with direct intent. The RF CAO contains provisions on the whole range of offences which may be committed primarily by the state officials in violation of the provisions on government-contracting. For the most part those cannot be regarded as business crimes, but some of them, such as the conclusion of contracts in violation of the tender terms or failure to report in good faith to or to answer the legitimate requests of the state bodies responsible for monitoring the government contracts can also be committed by private parties and are published by fines under the RF CAO (e.g., articles 7.30, 19.5, 19.7.2).
3.2 Is there liability for inchoate crimes in RUSSIA? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
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Russian criminal law provides for liability for inchoate crimes. Inchoate crimes can be subdivided into (1) preparations for an offence and (2) attempted offences. Preparations for a crime include collecting of means and resources for an offence, entering into necessary conspiracies, incitement and other actions aimed at creating circumstances in which the commission of the offence is possible. An attempted offence is an unsuccessful attempt to perform the actions which would otherwise constitute the offence. The liability for the preparations for an offence and the attempted offence can be imposed only if the offence has not been accomplished in spite of the wrongdoers will. The preparation only constitutes an offence if the crime prepared for is grave or especially grave (see question 5.1 below).
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5.2
Can crimes occurring outside the limitations period be prosecuted if they are part of a pattern or practice, or ongoing conspiracy?
According to article 19 of the RF CC only a natural person who has attained the statutory age stipulated by the RF CC (which, at least for business crimes, is 16) can be criminally liable for his or her actions. Legal entities may only be subject to civil and administrative liability.
Under the RF CAO any limitation period starts running only when the ongoing conspiracy is unveiled.
As explained in question 5.1 above this may only occur if the crime is punishable with life imprisonment.
The crime under the RF CC can only be attributed to the managers and officers of the company as explained in the preceding question. When a company is liable for an administrative offence under the RF CAO the senior managers and employees of such company responsible for the offence will also be liable under the RF CAO for breach of their duties (article 2.4 of the RF CAO). The sanctions imposed on the responsible managers and employees are normally lower than those stipulated for the legal entities.
Normally the investigation shall be effected as a part of criminal proceedings called the preliminary investigation. The conditions requisite for the proceedings in criminal case to be initiated are described in question 8.1 below. But even before the criminal case is initiated the responsible authorities are granted investigative powers which they may use to urgently collect and preserve evidence.
A person shall be released from criminal responsibility if the following limitation periods have expired since the day of commission of the crime (article 15 of the RF CC): a) two years after the commission of a crime of lower gravity (non-intentional crimes punished by not more than two years imprisonment); six years after the commission of a crime of medium gravity (intentional crimes punished by not more than five years imprisonment and the non-intentional crimes punished by more than two years imprisonment); ten years after the commission of a grave crime (intentional crimes punished by not more that ten years imprisonment); and fifteen years after the commission of an especially grave crime (intentional crimes punished by more than ten years imprisonment).

b)
c)
The Responsible authorities have a right (sometimes only upon a court warrant) to search premises and perform personal searches, examinations and cross-examinations, seize documents and objects, seize and inspect the postal and telegraph communications, to monitor and record conversations of the suspect, etc. The investigating authority under the RF CAO can issue a binding request for the information relevant to the offence. The administrative investigation as well as the special proceedings provided for the Federal Tax Service of the Russian Federation and the RF FAS are not as coercive as the criminal proceedings. The following paragraphs of this chapter will describe the rules applicable to criminal investigations.
d)
The limitation period shall be running (and may expire) from the day of committing a crime to the day of entry of the courts sentence into legal force. The running of a limitation period shall be suspended if the person who has committed the crime evades the investigation or court trial. In this case, the running of the limitation period shall resume from the time of detaining of the person or from the time he or she acknowledges the commission of crime. However, in case a crime is punished by lifetime imprisonment the application of the 15-year limitation period is entirely in the courts discretion. The limitation period under RF CAO (article 4.5) may be up to one year and starts running from the date of the commission of the offence, or, if the offence is ongoing, from the date when the offence was revealed or from the date of finding by the Federal Antitrust Service for the offences against free competition.
Document Gathering:
The search is based on the decision of the investigator. The investigator has a power to request and search for the items relevant to the criminal case. Prior to the raid the investigator offers the person to provide voluntarily the articles or documents which are due to be seized. If the

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As stated immediately above, if a wrongdoer is contriving to hide his or her offence under the RF CC, the running of the limitation period is suspended.

requested articles and documents are not provided voluntarily the investigator is entitled to invade premises to obtain those. The dwelling premises can normally only be invaded upon a court warrant. When conducting a search any premises can be opened if the owner refuses to open them voluntarily. The investigator may prohibit persons who are present at the place where a search is performed, to leave it, as well as to communicate with each other or other persons before the end of the search.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does the Russian Federation recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Russias labour laws protect personal documents of employees, even if located in company files?
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questioned person. The questioning may not exceed four hours. Continued questioning is allowed after a break of at least one hour for rest and meals, and total duration of the questioning during one day should not exceed eight hours. For medical reasons the length of the interrogation can be limited by a doctor. The court can also question witnesses upon the reasoned request of any party. If a witness cannot testify in person or his or her testimony differs from that obtained in the course of the preliminary investigation the court can allow the records of the previous questionings to be read aloud in the court.
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Personal data as well as trade secrets are protected by the Russian law from unlawful disclosures. However, no protection is granted against disclosure to the Responsible authorities in the course of an official investigation. The information obtained by advocates in connection with the legal assistance provided to their clients is, however, better protected: the advocates premises can be invaded only upon the courts mandate and the articles and documents obtained from the advocates (which could have been lawfully kept by the advocates) can only be used in the court against the accused when they are not kept in advocates files.
There is no difference between suspects and third persons in this respect.

The victim and a witness may not refuse to answer the questions posed by the investigator or the court. The suspected person and the accused have a right to refuse to answer the governments questions and are thereby protected from self-incrimination. The advocate cannot be questioned as a witness about the facts which he or she has become aware of in connection with the legal assistance provided or in the course of initial communications with potential clients. The advocate can be questioned only upon the courts warrant. The suspects and the accused have a right to counsel during the examination and other procedural actions.
The demand for documents is justified where the investigator reasonably believes that documents that are of significance for the investigation can be obtained from a person. The investigators decision is sufficient to raid office, but a court warrant is needed to invade a home unless such action exceptionally appears to be urgent. In the latter case, the investigator can invade home without the warrant but has to inform the court about the raid within 24 hours. If the court finds that the raid was unjustified, all the evidence collected shall be inadmissible.

The criminal case can be initiated where the investigator is satisfied that there are sufficient factual grounds to initiate a case and that there is a formal cause for the initiation. The cause is a formal communication of information about a crime which has been committed or is being prepared, for example, a criminal complaint (which is the only admissible cause for some crimes, including the criminal violations of the intellectual property rights), a perpetrators voluntary report on the committed crime, an officials report on the detected crime or a media report. If investigator believes that there is enough information available to him evidencing the requisite elements of crime he or she shall initiate a criminal case. In accordance with article 20 of the RF CPC a criminal case may be also initiated by a victim of a crime by filing an application with the court. Depending on whether the case in question is of private prosecution or of public-private prosecution the victim respectively can or cannot control the case further by withdrawing it on the ground of settlement with the perpetrator.
There is no difference between suspects and third persons in this respect.
The investigator does not have to provide reasons for the subpoena and can in principle question any person. The questioning is normally effected in the place where the preliminary investigation is conducted. The investigator may, if he or she deems necessary, conduct questioning at the location of the
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as well. The claim for civil remedies may be filed in the same proceedings if the civil law issues involved are not very complicated (see article 44(4) of the RF CPC) or in a separate proceedings in an appropriate civil court.
There are no elaborate rules or guidelines governing the governments decision as to whether or not the criminal case is to be initiated; the only test is whether the information obtained suggests that the requisite elements of a crime are present in a given case. The decision shall be made by the investigator upon conscious study of the information available to him or her. The investigators decision is subject to judicial review which is a guarantee against arbitrariness at this stage of proceedings (article 145(2) of the RF CPC). After the preliminary investigation the charges may be brought against the suspect. Here again we are not aware of any detailed regulations governing the investigators decision as to whether or not to bring charges. Presumably the investigator shall be satisfied that there is enough evidence to prove the that the crime has been committed by the accused and that the case has reasonable prospects of success in court. The charges may also be brought by a private party, which is allowed for a very limited range of crimes, including, notably, criminal violations of intellectual property rights. The charges are brought by the investigator in an accusation report which is sent to the prosecutor. This report shall contain factual background of the case and the legal basis for the accusations. The allegations made in the accusation report shall be corroborated by evidence appended to this report. If the prosecutor is satisfied that the accusation report in form and in substance is in conformance with the law, he or she approves the report and transmits it to the court.
9.1
For each element of the business crimes identified above, which party has the burden of proof? Which party has the burden of proof with respect to any affirmative defences?
The presumption of innocence is one of the basic principles of the Russian legal system. According to this principle the government bears the burden of proof for every element of any crime indicted. Article 14 of the RF CPC stipulates that the accused shall be regarded as non-guilty until his guilt of committing the crime is proved in accordance with the procedure, stipulated by the rules of the same Code. Moreover the guilt may be established exclusively by the court sentence, which has entered into legal force. The suspect or the accused is not obliged to prove his or her innocence. The defendant therefore is exonerated from the burden of proof, which doesnt diminish the role of defendants representative in the criminal proceedings. Another principle of criminal procedure in Russia is the principle of the adversarial nature of the court proceedings (article 15 of the RF CPC). Therefore any affirmative defences shall be proved by the defendant.
The criminal investigation can be amicably terminated at a pretrial stage. Different grounds for such termination may be envisaged depending on the situation. First of all the agreement might be reached between the wrongdoer and the victim in cases of private prosecution or where a crime of lower or medium gravity (see question 5.1 above) is committed for the first time. If the perpetrator provides full compensation for the harm inflicted and the victim agrees to the amicable settlement, the case is terminated. Another possibility is that the person that has committed a crime of lower or medium gravity for the first time actively corroborates with the prosecution and provides compensation for any harm inflicted and therefore can be considered to be not dangerous for the society, which is called efficient and effective repentance. Finally, the criminal liability for a tax crime shall be lifted is all the arrears, penalties and fines are paid before the preliminary investigation is completed.
Russian law doesnt contain elaborate provisions concerning the standard of proof that the party with the burden must satisfy. As provided in article 14(3) of the RF CPC, all doubts concerning the guilt of the accused, which cannot be eliminated, shall be interpreted in favour of the accused. That is to say that the standard of proof for the prosecution is analogous to the beyond reasonable doubt standard normally applied in criminal cases in common law jurisdictions. However, for the defendant the standard appears to be somewhat lower. If the evidence that has been submitted by the defence is only sufficient to cause doubts as to certain fact (whether affirmative or negative) the judge shall regard this fact as refuted unless the court can obtain the necessary clarifications from the other evidence already provided.
The sole arbiter of fact and of law in the Russian criminal proceedings is always the court (article 30 of the RF CPC). The court may be comprised of professional judges only, in which case these magistrates act as both arbiters of fact and of law. If, upon the defendants request, the court is composed of one judge and a jury (see question 2.2 above), the jurors shall be the arbiters of fact (article 339 of the RF CPC).
Yes. A crime may also cause civil damage and (as explained in question 1.3 above) in such case shall be regarded as a civil wrong

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9 Burden of Proof
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The RF CC provides a set of rules, set forth in chapter 7 of the RF CC) concerning the liability of the accomplices. Three types of accomplices are recognised: the organiser; the instigator; and the helper. They shall be liable for the same offence or inchoate offence as the actual perpetrator to the extent it has been actually perpetrated (unless he or she acts in excess of what was agreed between them). The punishment is determined within the limits provided in the RF CC depending on the role of each accomplice in the wrongdoing (articles 33, 34 of the RF CC).
There is no general duty to report the committed crime or the crime in preparation under Russian law. An exception to that rule is that any attempt to bribe a public official shall be reported by this public official to his or her superiors or to the prosecutors office or to other competent authorities. The public official that failed to perform this duty shall be reprimanded or even discharged from the state service. Reporting the committed or the planned crime may exonerate the perpetrator or the accomplices from liability in certain cases. Thus the bribe giver shall be released from criminal liability if he has informed the government about the offence on his own move (article 291 of the RF CC). The voluntary report of the committed crime or the crime being prepared is generally a mitigating factor that justifies application of a milder punishment (article 61 of the RF CC).
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Common Defences
The defendants state of mind is an essential element of the corpus delicti. Not all crimes have to be intentional though. The RF CC stipulates that some crimes may be committed recklessly or negligently (see article 24(2) of the RF CC). However, the crime is regarded as intentional even if the harm inflicted by the crime is not foreseen by the wrongdoer. It is enough that the actions directly prohibited by the RF CC are intentional. The burden of proof with respect to the intent of the defendant is borne by the prosecution.
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Please, see question 8.3 on pretrial settlement strategies available to the wrongdoer and question 12.1 on voluntary disclosure. The wrongdoer may choose to cooperate with the investigation by entering into formal cooperation agreement with the investigators in the course of preliminary investigation. To enter into this agreement the wrongdoer shall make full report on the crime committed; the article(s) of the RF CC applicable to this crime shall also be indicated in this agreement. The wrongdoer shall further undertake to provide information and render cooperation to help to investigate the crimes committed by other persons. It is not sufficient to provide cooperation with regard to his or her own criminal activities. It is unclear whether the charges brought as a result of the preliminary investigation can exceed those stipulated in the cooperation agreement. The agreement may be concluded at an early stage of the investigation and the investigator may found out more about the wrongdoers criminal activities in the course of the pre-trial proceedings. However, the simplified court proceedings provided for those who enter into the cooperation agreements are only possible if the charges are accepted by the wrongdoer. The cooperation agreements have only been introduced in 2009 and there is no court practice available to us to clarify the situation. If the wrongdoer fulfils all his or her obligations under the valid cooperation agreement, the court shall hold summary proceedings to issue sentence which shall not exceed a half (or, in exceptionally serious cases punished, inter alia, by the life imprisonment, the two thirds) of the maximum punishment provided by the RF CC for the crime at issue. The court may at its entire discretion show further leniency, but is not obliged to do so.
The general principle ignorantia juris non excusat is applicable, and the ignorance of law is no excuse. The defendant is presumed to know the law.
Such ignorance will be taken into account by the court when determining whether the necessary mens rea is shown. If the defendant should have known the facts he or she ignored, such conduct has been negligent and can constitute a criminal offence where intent is not a requisite element of the crime. If, on the contrary, the ignorance has been legitimate the criminal liability cannot be imposed.
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13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Russia, and describe the favourable treatment generally received.
Russia
such case, cannot exceed two thirds of the statutory maximum. On the contrary, if the crime is committed because of the racial, ideological or religious hatred shown by the wrongdoer or if the crime is committed by the organised group or if the wrongdoer played central role in the criminal activities or abused confidence gained by virtue of his official status or a contractual relationship, the crime is regarded as aggravated which might justify a stricter sentence within the statutory limits. If the offence is committed repeatedly the sentence shall be not less than one third of the statutory maximum; however, mitigating factors are still applicable in such case. If the court concludes that the circumstances show that the social danger of the crime is considerably reduced or if high level of cooperation with the investigators with regard to the crimes committed by other persons has been shown by the wrongdoer, the court may impose punishment which would be lower than the statutory minimum provided for the crime at issue. The Russian criminal law also provides for special means for the mitigation of punishment or for the complete release from punishment in some cases. The convict may be released on parole, released from punishment due to change of situation (where his actions are not regarded as socially dangerous anymore), released from punishment due to illness; the remaining term of punishment may be replaced with a milder penalty, and deferred sentence for pregnant women and women with minor children may be imposed. Leniency may be envisaged by the jurys verdict which is binding upon the court.
Please, see question 8.3 on pretrial settlement strategies available to the wrongdoer and question 12.1 on voluntary disclosure. In case the voluntary disclosure is referred to only as a mitigating factor and no other special provisions apply the punishment shall not exceed two thirds of the maximum punishment provided by the RF CC for the crime committed unless any aggravating factors have been shown. Please see question 13.1 with regard to the favourable treatment provided as a result of a cooperation agreement and the obligations implied thereby.
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Plea Bargaining
No plea bargaining is permitted by the RF CPC. The accused may, however, choose to plead guilty, which if the maximum punishment for the crime committed does not exceed 10 years imprisonment allows him to lodge a motion for simplified hearing without the court trial. In such case the court shall regard the facts to be established as accepted by the defendant; however, the court remains sole arbiter of law and shall apply the RF CC to the facts thus established by his own judgment. Leniency shall be shown in such case and the sentence shall not exceed two thirds of the maximum punishment stipulated by the RF CC for the crime at issue. See also questions 8.3 and 13.1 above.
As stated above, the corporations cannot be criminally liable under Russian law. When imposing the sentence the court shall take account of the characteristics of the crime and the defendant and his or her family situation. The sentence is aimed at prevention of further crimes and correction of the convict and shall restore social justice. When imposing a sentence the court shall decide whether the elements of the crime are proved, what punishment shall be imposed (including whether the leniency shall be shown or whether the release from punishment shall be granted), what correctional institution shall execute the punishment, whether any civil claims shall be granted and the confiscation ordered, who shall bear the costs of the proceedings, and what shall be done with the articles used as evidence.
The court remains ultimately responsible for the application of the RF CC to the facts accepted by the defendant (see question 14.1 above).
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Appeals
The minimum and maximum sentences are set forth in the articles of the RF CC. Generally in each particular case the court may impose punishment only of the type envisaged for a particular offence and within the scope stipulated in the relevant article of the RF CC. The court shall also take into account the mitigating and aggravating factors. The latter are listed in the RF CC, and for the former only a non-limitative list is provided. Thus, for example, the wrongdoers minority or pregnancy or the fact that the wrongdoer has minor children or that the offence was committed as a result of the victims immoral conduct shall mitigate the sentence which, in
The jurys verdict itself is not appealable in Russia. A defendant may appeal only the judicial sentence based upon the jurys verdict.
The sentence following the guilty verdict can be appealed before it comes into force (cassation) and after it comes into legal forth (supervision).

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According to article 354(4) of the RF CPC, the right to appeal against a court decision, which has not come into legal force, is vested in the convicted, his or her counsel and legal representatives, the public prosecutor or the superior prosecutor, the victim and his or her representatives. Further, article 354(5) of the RF CPC stipulates that the civil claimant, the civil defendant or their representatives have the right to appeal against the court decision exclusively in the part concerning the civil claim. As to the sentences that have entered into legal force, the same parties can file an application for supervision.
Russia
The appellate court (see question 2.1) may issue the followings decisions if it upholds the appeal: to vacate the sentence of conviction of the first instance court and to acquit the defendant, or to dismiss the criminal case; to vacate the acquittal sentence of the first instance court and to impose the sentence of conviction; or to alter the sentence of the first instance court. The cassation court (see question 2.1) upholding the appeal may issue the following decisions: to vacate the sentence of the first instance court or to dismiss the criminal case; to vacate the sentence and to remand the case to the court of the first or of the appellate instance; or to alter the sentence or the other challenged decision. The supervision court (see question 2.1), if the supervision is exercised in favour of the applicant, may: vacate the sentence and the subsequent decisions and dismiss the case; vacate the sentence and remand the case to a lower instance court for a new trial; vacate the sentence of the appellate court and remand the case for a new appellate examination; vacate the ruling of the cassation instance court and all the subsequent judicial decisions, and remand the case for a new cassation examination; or alter the sentence, the ruling or the resolution of a lower court.
Russia
The appeals against the decisions which have not entered into legal force allow the examination of the legality, the sufficiency of reasoning and the fairness of the sentence (only in the part in which it is appealed against). In accordance with articles 369 and 379 of the RF CPC the following grounds may be sited by the appellate (cassation) court to alter or annul the challenged decision: discrepancy between the court conclusions, stipulated in the sentence, and the factual circumstances of the criminal case; violation of the criminal procedure; incorrect application of the criminal law; and unjustness of the imposed punishment. The supervision, on the contrary, is not limited to the applicants complaint. The court may check the legality and the sufficiency of reasoning in the entire proceedings.
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Vasily Torkanovskiy
Ivanyan and Partners 4/1, 2nd Kazachiy pereulok 119180 Moscow Russia
Vasily Torkanovskiy is head of international practice at Ivanyan & Partners. He has extensive experience in international private and public law and has represented the interests of both the state and of private individuals at international forums. He has been involved in the handling of transnational disputes especially in connection with fraud related litigation. He works with clients on a range of issues concerning the organisation of their business operations both nationally and internationally. He has worked on all aspects of antimonopoly law including the comparative aspects and has recently successfully represented the interests of a large Russian company in the Federal Antimonopoly Agency of Russia in a case concerning the breach of the competition law through the illegal activities of the state bodies.
Moscow office 4/1, 2nd Kazachiy pereulok 119180 Moscow, Russia
Saint-Petersburg office Office 21H, 11 Moyka Embankment 119186 Saint-Petersburg, Russia
www.ivanyanandpartners.com
Ivanyan & Partners is a national law firm which covers all the major areas of commercial law and international business affairs. The firm provides legal, tax and public policy advice to the major corporations, state bodies and wealthy private individuals in Russia. The lawyers of Ivanyan & Partners have an outstanding record of handling multimillion litigation projects in corporate and real estate matters in Russia and in foreign jurisdictions, such as England, the USA and Switzerland. The firm has worked on multinational projects simultaneously involving state court litigations and international commercial arbitrations that covered issues of anti hostile takeover defense, insolvency, asset tracing, and serious civil and criminal fraud. Ivanyan & Partners has proved particularly efficient in working out cross-border strategies for tracing and recovery of assets stripped out from our clients or for wrongs caused to our client by acts of commercial fraud or deceit.

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+7 495 647 0046 +7 495 647 0045 vasily_torkanovskiy@iplf.ru www.ivanyanandpartners.com
Chapter 18
Singapore
Rajah & Tann LLP
Andre Yeap, S.C.
Hamidul Haq

Under Article 35(8) of the Constitution of Singapore, the AttorneyGeneral of Singapore has powers to institute, conduct or discontinue any proceedings for any offence. Section 336 of the Criminal Procedure Code (Chapter 68) (CPC) further provides that the Attorney-General shall be the Public Prosecutor, with control and direction of all criminal prosecutions and proceedings. The Criminal Justice Division and the State Prosecution Division in the Office of the Attorney-General are the organisational extensions of the Attorney-Generals role as the Public Prosecutor. As for the enforcement of law in Singapore, the main authority in Singapore empowered to do so is the Singapore Police Force (SPF). There are various departments within the SPF, including the Commercial Affairs Department (CAD) which was established in 1985 as Singapores principal white-collar crime investigation agency, and the Criminal Investigation Department (CID). Within the CID, its Specialised Crime Division takes charge of investigation and enforcement against specialised crimes such as intellectual property rights violation and its Technology Crime Division conducts investigation, forensic examination and prosecution into technology-related offences committed under the Computer Misuse Act, such as hacking and unauthorised access to account. Apart from the SPF, the Corrupt Practices Investigation Bureau (CPIB) is the independent anti-corruption agency, headed by a director directly responsible to the Prime Minister, which derives its powers of investigation from the Prevention of Corruption Act (Chapter 241) (PCA) and its purpose is to investigate and prevent corruption in the public and private sectors in Singapore. For white collar offences under the Securities and Futures Act (Chapter 289) (SFA), the CAD is the key enforcement agency. However, the Monetary Authority of Singapore (MAS) administers the civil penalty regime of market conduct offences under the SFA. The MAS and the CAD co-operate and have an agreed set of protocols and criteria for assessing market misconduct complaints in deciding whether a matter should be dealt with criminally or not. The Accounting and Corporate Regulatory Authority of Singapore (ACRA) may prosecute, by way of summonses, regulatory offences under the Companies Act (Chapter 50), such as failing to make timely disclosure of information and failing to file required documents with ACRA. ACRA may also issue penalties such as
composition fines instead of prosecuting the matter in court. As to anti-competition practices, the regulatory body in Singapore is the Competition Commission of Singapore (CCS). The consequences of breaching these practices generally attract civil sanctions such as avoidance of the anti-competitive agreements, imposition of financial penalty or private legal action. The CCS is also empowered to consider structural or behavioural remedies to remedy, mitigate or prevent any adverse effects of mergers that substantially abuse competition.
The power to prosecute is vested in the Public Prosecutor and the enforcement agencies report to the Public Prosecutor after conclusion of their investigations with recommendation on prosecution which decision ultimately lies with the Public Prosecutor. Each enforcement agency focuses on a specialised area with the bulk of the white collar crime cases being dealt with by the CAD or the police while the corruption cases are dealt with by the CPIB.
The MAS administers the civil penalty regime under the SFA and may enforce civil penalties against individuals or companies for market conduct offences under the SFA such as insider trading, false trading, market manipulation disclosure requirements by directors, etc. Section 232 of the SFA empowers the MAS, with the consent of the Public Prosecutor, to bring an action in court against a person who has contravened the SFA to seek an order for a civil penalty against that contravention. If the court is satisfied on a balance of probabilities that the person has contravened the SFA, the court may make an order against him for the payment of a civil penalty of a sum not exceeding 3 times the amount of the profit gained/loss avoided as a result of the contravention. Section 232(5) of the SFA allows the MAS to enter into an agreement with any person to pay a civil penalty without bringing an action in court. This is usually observed by MAS with an admission of liability by the person who contravened the SFA.
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Singapore

2.1 How are the criminal courts in Singapore structured? Are there specialised criminal courts for particular crimes?
All criminal prosecutions, except cases that potentially involve capital punishment, are conducted in the Subordinate Courts of Singapore, comprising the District Court and the Magistrates Court, at first instance. The District Court has the jurisdiction to try all offences for which the maximum term of imprisonment does not exceed 10 years or which is punishable with fine (it has jurisdiction to impose a fine not exceeding $10,000 per offence) only. A Magistrates Court has the jurisdiction to determine prosecutions of offences for which the maximum term of imprisonment provided by law does not exceed 3 years or which are punishable with fine only. Cases that potentially attract the capital punishment (non-white collar crime cases) are heard in the High Court at first instance and will be heard by the highest court in Singapore, the Court of Appeal, on appeal. Some white collar offences are heard in the High Court at first instance if it involves forgery or serious embezzlement. Appeals against the decisions in the District Court and the Magistrates Court are heard in the High Court of Singapore. There is also avenue to appeal further to the Court of Appeal when there are issues on points of law.
The penalties of these offences under the SFA are fines not exceeding $250,000 or imprisonment for a term not exceeding 7 years or to both for individuals and up to $500,000 for corporations. B. General offences of fraud under the Penal Code And generally, fraudulent conduct is also caught under section 415 of the Penal Code (Chapter 224), the definition provision for cheating offences. A person is said to cheat under this provision where he dishonestly or fraudulently deceives another. Cheating simpliciter is punishable with imprisonment for a term not exceeding 3 years or with fine or with both while aggravated cheating offences under sections 418 to 420 of the Penal Code attract punishments of a term of imprisonment of up to 10 years, or with fine, or both, depending on the particular provision. o A. Accounting fraud Falsification of Accounts
No. The jury system has been abolished since 1969 for all trials, whether civil or criminal in nature. All trials in Singapore are determined by a single judge at first instance.
Section 477A of the Penal Code provides that a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant would be guilty of an offence if he or she wilfully and with intent to defraud destroys, alters, conceals, mutilates or falsifies any book, electronic record, paper, writing, valuable security or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer. A person acting in any of these capacities who abets the commission of the offence under section 477A would also be guilty of the offence. A person convicted under section 477A faces imprisonment of a term not exceeding 10 years, or fine, or with both. B. Forgery Another relevant offence is that of forgery which is punishable under section 465 of the Penal Code with a term of imprisonment up to 4 years, or with fine or both. Under this provision, a person would be guilty of forgery if he makes any false document or electronic record or any part of them, including accounting records, with intention to cause damage or injury to the public or a person or with intent to commit fraud or that fraud may be committed. Forgery for the purpose of cheating under section 468 of the Penal Code attracts a higher punishment of a term of imprisonment which may extend to 10 years, and also a fine. o Insider trading Sections 218 and 219 of the SFA prohibit persons who are either connected to the corporation or not so connected, having possession of Price Sensitive Information (PSI) concerning that corporation, and who knows that such information is not generally available, from subscribing for, purchasing, selling or entering into an agreement to subscribe for, purchase or sell such securities or procure another person to do the same. A rebuttable presumption arises for a connected person in possession of PSI that he or she knew the information was not generally available and if the information were generally available it might have a material effect on the price or value of securities of that corporation. It has been clearly articulated in the SFA that it is not necessary for the prosecution to prove that an accused person intended to use the price sensitive information in contravention of the SFA. Thus there may be a technical contravention of the SFA as long as a person in possession of price sensitive information enters into a transaction on the shares of the company even though he did not intend to

3.1 Please describe any statutes that are commonly used in Singapore to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
o A.
Fraud and misrepresentation in connection with sales of securities Specific offences of fraud under the SFA in relation to securities
Offences of fraud, dishonesty and misrepresentation in relation to securities are principally found in sections 197 to 201 of the SFA. Section 197 of the SFA criminalises the conduct of creating false or misleading appearances of active trading of securities on a securities market and in respect of the prices of the securities. Under section 198 of the SFA, it is an offence to manipulate the securities market with an intention to induce other persons to subscribe for, purchase or sell securities of a corporation or a business trust. It is an offence under section 199 of the SFA to knowingly provide false or misleading statements that are likely to induce other persons to subscribe for securities, induce sale or purchase of securities by other persons or have the effect of raising, lowering, maintaining or stabilising the market price of securities. Section 200 of the SFA prohibits a person from fraudulently inducing or attempting to induce another person to deal in securities by making or publishing any statement, promise or forecast by dishonest concealment of material facts or the reckless publication or recording of misleading, false or deceptive statement, promise or forecast.

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It is an offence under section 201 of the SFA to employ manipulative and deceptive devices in connection with the subscription, purchase or sale of any securities. These manipulative or deceptive devices are fraudulent device, scheme or artifice, fraudulent or deceptive business act, course or practice or a one that is likely to operate as a fraud or deception upon any person.
Rajah & Tann LLP

misuse such information for his own gain. Section 218 or 219 is punishable with a fine not exceeding $250,000 or to a term of imprisonment not exceeding 7 years or to both. o Embezzlement
Singapore
Except where a person wilfully refuses to give information or document as required by the officer of CCS or fails to comply with the officers lawful demand in the discharge of his duties, the general penalty for offences under the Part V of the Competition Act is a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months or both. In the case of the former, the offender would be liable to a fine not exceeding $5,000 or a term of imprisonment not exceeding 12 months or both. Offences under the Competition Act or any subsidiary legislation made under it are also compoundable. o Tax crimes Offences relating to income tax are provided in Part XX of the Income Tax Act (Cap.134). There are offences for tax evasion and serious fraudulent tax evasion and each offence attracts a penalty of a fine or imprisonment or both. The tax evasion offence requires that the offender had an intention to evade or assist another person to evade tax by either omitting income that should be included in the return, making a false statement or entry in the return or any notice of assessment, giving a false answer to any question or request for information made or asked in accordance with the Income Tax Act or failing to comply with the requirements concerning the notice of assessment. A person would be guilty of serious fraudulent tax evasion if he had the intention to evade tax by falsifying of books of accounts or other records or using fraudulent means generally. Other offences in the Income Tax Act include the failure to make tax returns or making incorrect tax returns, which attract penalties of a fine or an imprisonment term in default. The Goods and Service Tax Act (Cap. 117A) also provides for other tax-related offences. o Government-contracting fraud Generally, offences relating to fraud (whether against a private company/individual or against the Government) are prosecuted under the Penal Code as well as other relevant legislation such as the Companies Act (which includes an offence of fraud conducted by a companys officer). In addition to the generally applicable legislation, Chapter X of the Penal Code provides for offences committed against or with public servants. For example, an offence under Section 177 for furnishing false information to public servants is punishable with a term of imprisonment which may extend to 3 years, or with fine, or with both. o A. Any other crime of particular interest in Singapore Money-laundering-related offences
Singapore
Actions of embezzlement or criminal breach of trust (CBT) are described under section 405 of the Penal Code, where property is entrusted with a person and is later dishonestly misappropriated or dishonestly converted to his own use. CBT simpliciter is punishable under section 406 of the Penal Code with a term of imprisonment which may extend to 7 years, or with fine or with both. Where an offender is a director of a company, a banker, public servant or an agent, he is usually prosecuted under section 409 of the Penal Code for CBT which provides for a mandatory imprisonment term for life or up to 20 years and also a fine. As for employees of a company who commit an offence of CBT, such an offender is usually charged with section 408 of the Penal Code for CBT which provides a mandatory imprisonment term of up to 15 years and also a fine. o Bribery of government officials Sections 5 (punishment for corrupt transactions) and 6 (punishment for corrupt transactions with agents) of the PCA are the main provisions prohibiting corruption in Singapore, whether in the private or public sectors. There are two stages in assessing whether an offence of corruption has been committed under Singapore law. There must first be a corrupt element in the transaction according to the ordinary and objective standard, followed by the offenders guilty knowledge that what he was doing was, by that standard, corrupt. For corrupt transactions involving a government official, section 8 of the PCA provides that there is a presumption of corruption against the offender if it is proved in any legal proceedings that gratification has been paid to or received by a government official. Offences under section 5 or 6 of the PCA are punishable with a fine not exceeding $100,000 or to an imprisonment for a term of 5 years or both. Where the offence under either section 5 or 6 relate to a contract or a proposal for a contract with the Singapore government or public bodies, the offender is liable to a fine not exceeding $100,000 or to a term of imprisonment not exceeding 7 years. Section 13 of the PCA also provides for penalties to be paid in addition to the punishment. The objective of imposing these penalties is to disgorge from the offender his ill-gotten gains from the corrupt transactions. Chapter IX of the Penal Code also provides for offences relating to Government officials and public servants. It includes public servants taking gratification in respect of official acts or any person taking gratification in order to influence a public servant and a public servant taking a valuable thing without consideration. o Criminal anti-competition With respect to the anti-competition regime in Singapore, criminal offences only pertain to conduct that obstruct investigations on anticompetitive practices or the exercise of the CCS power of enforcement. These offences are found in Part V of the Competition Act (Cap. 50B) and include conducts such as refusal to provide information or explanation of certain documents or refusal to produce documents, destroying or falsifying documents, provides false or misleading information to the officer of CCS during investigation and obstructing an officer of CCS authorised to act for assist CCS to discharge his duties under the Competition Act.
The Corruption, Drug Trafficking and Other Serious Crime (Confiscation of Benefits) Act (Cap. 65A) (CDSA) makes money laundering an offence. The main offences under the CDSA include assisting another to retain benefits of drug trafficking or criminal conduct (sections 43 & 44); acquiring, possessing, using, concealing or transferring benefits of drug trafficking or criminal conduct (sections 46 & 47); tipping-off another person which effect is likely to prejudice the investigation or proposed investigation under the CDSA (section 48); and failure to disclose knowledge or suspicion that any property is connected to drug trafficking or criminal conduct (section 39). The penalties for an offence under sections 43, 44, 46 and 47 of the CDSA is a fine not exceeding $500,000 or imprisonment not exceeding 7 years or both if the offender is an individual or a fine not exceeding $1,000,000 if the offender is not an individual. Tipping-off under section 48 of the CDSA is punishable with a fine not exceeding $30,000 or to imprisonment for a term not exceeding 3 years or to both whereas an offence under section 39 of the CDSA is punishable with a fine not exceeding $20,000.
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B. Banking-related offences
4.2
Singapore
Is there personal liability for managers, officers, and directors if the entity becomes liable for a crime?
3.2
Is there liability for inchoate crimes in Singapore? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Under section 408(3) of the Companies Act, an officer who is in default is guilty of an offence under the Companies Act if he is an officer of the corporation who is guilty of the offence or authorises or permits the commission of the offence. There are also instances where the prosecution may decide to only prosecute the individuals and not the entity even though the entity has also committed a crime.
Yes, a person can be liable for attempting to commit a crime whether or not the attempted crime was completed. Section 511 of the Code provides that the longest term of imprisonment to be imposed under section 511 shall not exceed 15 years where the attempt related to an offence punishable with imprisonment for life or one-half of the longest term provided for the offence in any other case. Further, for offences of criminal conspiracy to commit an offence under section 120A of the Penal Code and abetment of an offence under section 109 of the Penal Code, a person can be liable for these offences even though the principal offence was not completed.
In Singapore, there is no enforcement-limitation period for criminal offences, unlike the limitation period governed by the Limitation Act that civil cases are subject to. However, the Court may take into consideration the delayed or protracted prosecution and/or enforcement as a factor in deciding the case.

Yes, an entity may be charged for an offence under the Penal Code just like an individual as the Penal Code applies to any company or association or body of persons, whether incorporated or not. The word person in the Penal Code is defined to include any company or association or body of persons, whether incorporated or not. A corporation may also be liable for offences committed under the SFA and section 333 of the SFA provides that, save for some exceptions, the court could impose a fine not exceeding 2 times the prescribed maximum amount on the corporation. In particular, a corporation can also be liable for insider trading by virtue of section 226(1) of the SFA which attributes information in its officers possession in the course of performance of his duties to the corporation for the purposes of an insider trading offence. There is however a Chinese wall defence under section 226(2) of SFA which applies only if: (a) (b) the decision to deal was not made by the person/officer who possessed the price sensitive information; and there were existing arrangements in the company to prevent price sensitive information and advice by a person with price sensitive information from being communicated to the decision maker; and the price sensitive information and advice were not communicated to the decision maker.
Not applicable.
Not applicable.
(c)
Generally, the police may commence investigations when information relating to the commission of an offence is first received by them by way of a police report. From the information in the report, the police can make arrest(s) (after obtaining a warrant of arrest issued by a court for non-seizable offences) on the basis that there is a reasonable suspicion of a commission of an offence and proceed with investigations from that point. Additionally, investigations may also commence upon the lodgement of a Suspicious Transaction Report under section 39 of the CDSA filed by a person who has reasonable grounds to suspect that there is property which represents the proceeds of, or used in connection with, or was intended to be used in connection with drug trafficking or any criminal conduct (as defined in the CDSA). Upon any of these events occurring, investigations may be initiated, subject to the discretion of the relevant enforcement authorities.
Generally, the test applied in determining whether a corporation should be liable for the conduct of its employee is whether the employee concerned was the directing mind of the corporation in respect of the conduct in question.

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Banking secrecy is provided for in Singapores Banking Act (Cap.19). A breach of this banking secrecy by a bank or its officers is punishable as an offence under section 47(3) of the Banking Act with a fine not exceeding $125,000. The Banking Act also provides for other banking-related offences, including offences by directors, executive officers and agents of banks in regard to false and misleading information or book entries under sections 66 and 67. Offences under section 66 or 67 of the Banking Act are punishable with a fine up to $125,000 or an imprisonment term of up to 3 years or both.
Managers, officers and directors may be personally liable depending on the degree of their involvement in causing the entity to commit the crime. For example, section 331 of the SFA provides that where an offence under the SFA committed by the corporation was attributable to the consent or connivance or neglect on the part of the officer, both the officer and corporation shall be guilty of the offence.
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Singapore
Generally, the enforcement authorities are empowered to arrest, conduct a search and seizure of documents and property, including freezing bank accounts and compelling the attendance of witnesses and recording their statements in the course of investigating crimes. These powers are found in the CPC or certain enabling provisions in other legislations, such as section 18 of the PCA. Unlike in other jurisdictions, Singapore does not provide for specific powers of the police to use wiretaps.
CPC provides for three situations when the court may issue a search warrant (i) where the court has reason to believe that the person to whom a section 58 order or a requisition under section 59 of the CPC was addressed will not or would not produced the document; (ii) where the document is not known to the court to be in the possession of any person or a specific document or thing is known to be in the possession of the known person; or (iii) where the court considers that the purposes of justice or of any inquiry, trial or other proceedings under the CPC will be served by a general search or inspection. The police are also empowered to seize any property which is alleged or suspected to have been stolen or found under circumstances which create suspicion of the commission of any offence pursuant to section 68 of the CPC.
Document Gathering:
The investigative powers to search and seize documents and to compel the production of the documents are generally applicable to any person subject to the provisions of the CPC and a distinction in respect of investigative powers is not made vis--vis third persons.
Under section 58(1) of the CPC a person (which includes a company) may be summoned or ordered to produce documents if the court or the police considers that the production of those documents are necessary or desirable for the purpose of investigation, inquiry, trial or other proceedings. Under this section, any other items which are necessary or desirable for the purpose of investigation can also be compelled for production. The powers are very wide and rarely susceptible to challenge.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Singapore recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Singapores labour laws protect personal documents of employees, even if located in company files?
Pursuant to section 120 of the CPC, a police officer conducting an investigation may require the attendance of a person in Singapore, who appears to be acquainted with the circumstances of the case. If the person required to attend fails to do so, the police can report the said person to the Magistrate who can then issue a warrant to secure the attendance of the person. Subsequent to the persons attendance before the police, the police are empowered to conduct an official interview, in which a written statement may be taken from the said person as witness, and usually conducted at a police facility. The person is also obliged to sign the statement; a person who fails to do so faces an offence under section 180 of the Penal Code. Additionally, if a person refuses to answer a public servant authorised to question him, or gives false evidence to a public servant with intent to cause the latter to use his lawful power to the injury of another person, could face prosecution under sections 179 and 182 of the Penal Code respectively.
There is no special protection for a company against a summons or order of court or police for the production of documents for investigation purposes. Protection is only afforded by the law against the production of such documents in the prosecution process if they are considered privileged (e.g. legal professional privilege). In the same vein, the labour laws of Singapore do not provide additional protection in respect of production of personal documents of employees if there is a summons or order of court issued for their production. The only exception to the rule on production of documents which are necessary or desirable for the purpose of investigation is stated in section 58(3) of the CPC which provides that the order of production for documents or items under that section is not applicable to documents or items in custody of the InfoCommunications Development Authority of Singapore.
A third person is also subject to section 120 of the CPC as a witness because of the wide scope of the provision.
In addition to section 58 of the CPC, the court can issue a search warrant naming any person, to effect a search. Section 61 of the
Except in relation to corruption offences under the PCA, a person being questioned may assert his privilege against self-incrimination as provided in section 121(2) of the CPC. Therefore, the person
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being questioned may refuse to answer the questions by the investigating authority. However, if an accused person being questioned fails to mention particular facts which he could reasonably be expected to answer, the trial court may draw adverse inferences against the accused person in determining whether the accused is guilty of an offence. Save in the event that the person being questioned was arrested, there is no general right to counsel during questioning. Where a person is arrested, article 9(3) of the Constitution of Singapore provides that that person shall be allowed to consult and be defended by a legal practitioner of his choice. Nonetheless, the right to counsel is not triggered immediately upon arrest, but within a reasonable time after arrest. As such, in previous cases, the courts have balanced the need for efficient investigations with the arrested persons right to counsel. In practice, the arrested persons are usually not allowed to be accompanied by legal counsel at the time of questioning.
Singapore
prosecution for offences under the SFA only. As discussed above, the MAS administers the civil penalty regime under the SFA. In addition, a defendant can also be ordered to pay prosecution costs in some instances, as prescribed in section 401 of the CPC. The same provision also confers on the court the power to order the defendant to pay compensation to the victim or to any person determined by the court.
9 Burden of Proof

Unless provided otherwise in the legislation, the prosecuting party has the burden of proving the elements of the offence and the defendant has the burden of proving the affirmative defence.
Criminal cases are initiated when an accused is formally charged in court after the conclusion of police investigations and the Public Prosecutor decides to proceed with prosecution in the Courts.
The prosecuting party has the burden of proving the elements of the offence beyond a reasonable doubt.
The decision whether to charge an entity or individual with a crime lies in the Public Prosecutors unfettered discretion. Under Article 35(8) of the Constitution and section 336(1) of the CPC, the Public Prosecutor has the power to control all criminal prosecutions, including private prosecutions carried out by private persons. He also has the discretion to withdraw or amend the charges in the course of the prosecution.
The trial judge is the sole arbiter of fact and also the authority to determine whether the respective burdens of proof have been discharged by the parties.
10
While there are no formal rules or guidelines governing pre-trial diversion or deferred prosecution, it is an established practice in Singapore for a defendant to submit letters of representations to the Public Prosecutor to request for the discontinuation of ongoing investigation and/or reconsider the merits of preferring a charge against the defendant or reduce the gravity of the charge as part of the plea bargaining process. The decision whether to accede to the request in the letters of representation again lies in the discretion of the Public Prosecutor. The plea bargaining process here does not involve the courts.
Yes, subject to section 120A of the Penal Code, a person who conspires with another to commit a crime can be criminally liable and punishable under section 120B of the Penal Code. Criminal conspiracy is defined as two or more persons agreeing to do or causing to be done an illegal act or an act, which is not illegal, by illegal means. The material element in the offence of conspiracy is the agreement between the accused persons. A person is said to have abetted if he instigated, conspired or aided in the commission of the offence and will be criminally liable for the same offence pursuant to section 109 of the Penal Code. For abetment, the accused must have intended that the person abetted carry out the offending conduct and known that such conduct is criminal. It is not necessary for the principal offence to have been committed before convicting a person of abetting in the commission of that principal offence. In addition, section 34 of the Penal Code provides that if several persons act in furtherance of the common intention of all, each person is liable for that act as if the act were done by him alone.
Yes, civil penalties may be available as an alternative to a criminal

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11
Common Defences
12
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In many offences, the elements of the offence require that the defendant intended to commit the offence (mens rea) and actually carried out the offending conduct (actus reus). In these cases, if the prosecution fails to prove the defendants intention to commit the offence beyond a reasonable doubt, the prosecutions case fails and the defendant will be acquitted. The defendant only has the duty to raise a reasonable doubt in the Prosecutions case. However, there are offences that are of strict liability, in which it suffices that the defendant merely intended to carry out the conduct, without intending to commit the crime, and actually carried out the conduct to be criminally liable. In such cases, the lack of the intention of the defendant to commit the crime is irrelevant in conviction and as a defence. For example, as we had explained above, for an offence of insider trading under the SFA to be established, there is no need for the prosecution to prove that the defendant intended to use the price sensitive information it is sufficient for the prosecution just to show that the defendant entered into a transaction on the shares while in possession of price sensitive information irrespective of the intent.
Section 22(1)(a) of the CPC imposes a duty to report on every person who is aware of the commission of or the intention of another person to commit certain specified seizable offences. These offences include offences against the state and offences affecting the human body including death under suspicious circumstances. If triggered, section 22(1) of the CPC requires a person to make a report to a police officer at the nearest police station. It is notable that section 22(1) of the CPC does not include any of the major white collar criminal/property offences. Further, as discussed above, section 39 of the CDSA makes it mandatory for a person in the course of his business or employment (including a company) to lodge a suspicious transaction report as long as he knows or has reasonable grounds to suspect that any property represents the proceeds of, or was or is intended to be used in connection with, an act which may constitute drug trafficking or criminal conduct. The scope of this provision includes major white collar criminal offences.
13
Ignorance of the law is not a defence, save in circumstances where the law was not available to the public at the time of committing the offence. In practice, it suffices for the law to be published in the Gazette to qualify as being available to the public even though such information may not actually be in the possession of a defendant.
Yes, such a person who gives himself in to the authorities or cooperates in the criminal investigations may request for leniency from the prosecution. However in practice, this factor on its own is unlikely to convince the prosecution to exercise leniency in the matter. There is no legislation governing this aspect, and this is left to the discretion of the Public Prosecutor.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Singapore, and describe the favourable treatment generally received.
Except for strict liability offences, it is for the prosecution to prove beyond a reasonable doubt that the defendants necessary mental element, or mens rea, is made up. In strict liability offences, the mens rea of the defendant is immaterial. Defences which may be raised include a mistake of fact under section 76 of the Penal Code that is a person acted by reason of a mistake by fact, and not by reason of a mistake of law, believes himself to be bound by law to do it; and that of mistake of fact believing himself to be justified by law under section 79 of the Penal Code that is, a person acted justified by law, or who by reason of a mistake of fact and not by reason of a mistake of law in good faith believes himself to be justified by law, in doing it.
Entities which discover misconduct by its employees could take the initiative in reporting this to the enforcement agencies and provide full co-operation. Depending on the circumstances, the investigating authorities may look upon such conduct favourably and exercise leniency against the entity. Restitution, cooperation with the police and whistle-blowing are all relevant factors. In some cases where these factors are present, this could lead to a reprieve from prosecution.
14
Plea Bargaining
Yes, a defendant may voluntarily decline to contest criminal
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Save for the situation where the defendant had pleaded guilty to the charge, the defendant or the prosecution may appeal to the High Court or Court of Appeal against the conviction or acquittal by the court after the conclusion of a trial within a period of 10 days.
There are no formal rules or guidelines governing the plea bargaining process. However, it is an established practice in Singapore for a defendant to submit letters of representation to the Public Prosecutor to appeal against their decision to proceed on the charge(s) against a defendant and/or to ask for a reduction or amendment of the charge(s). The decision to accede to the request in the letters of representation lies in the unfettered discretion of the Public Prosecutor.
The criminal sentence is appealable by either the defendant or the prosecution within 10 days of the judgment being given. This applies regardless whether the defendant had pleaded guilty or was convicted after a trial.
15
In considering the appeal against conviction, the appellate court has to determine whether the prosecutions case has been proven beyond a reasonable doubt. The Singapore appellate courts are usually slow to interfere with the findings of facts of the trial court on the basis that the trial court is usually in a better position as the trier of fact to observe the demeanour of the witnesses to determine the credibility of their evidence. In considering an appeal against sentence, the court will consider, inter alia, whether the sentence was manifestly excessive or inadequate.
Yes, the court is guided by statutory provisions which set out the maximum and/or stipulated punishment for the offence, as well as precedents from decided cases for the same offences committed in a similar manner. Courts generally adopt a form of benchmark as a guide and depart from it, depending on the facts of the case. Sometimes, the Public Prosecutor may ask the court to impose deterrent sentences.
If the appellate court upholds the appeal against the acquittal of the accused, the appellate court can either reverse the order of acquittal and order a re-trial or further inquiry in the lower court or the appellate court can find the accused person guilty and impose a sentence. If the appellate court upholds the appeal against conviction of the accused, the appellate court can reverse the finding of guilt and acquit the accused or order a re-trial. Alternatively, the appellate court can alter the finding or amend the charge and maintain the sentence or, with or without altering the finding, enhance or reduce the sentence. Also, the appellate court can, with or without reducing or enhancing sentence, and with or without altering the finding, alter the nature of the sentence. If the appellate court upholds the appeal against sentence, it can reduce or enhance the sentence or alter the nature of the sentence accordingly. If the appellate court upholds the appeal against any other order, it can alter or reverse the order accordingly.
The primary objective of sentencing a corporation is deterrence. The justification of fulfilling the deterrence objective lies in the theory that a company engages in wrongful conduct as a calculated risk and usually economically motivated. Therefore, a corporation can be deterred if such wrongful conduct represents a risk not worth taking. However, this theory is balanced with the consideration that imposing overly onerous conditions on a corporation just to ensure compliance with regulatory provisions may cause corporations from reporting the wrongful conduct of the individuals responsible for steering the corporation.

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charges in exchange for the prosecution proceeding on reduced charges. This is of course subject to the prosecutions sole discretion in deciding on the charges to proceed against an accused. However, there cannot be an agreement on sentence as such sentence to be imposed on the offender upon conviction is up to the Courts discretion subject to the maximum prescribed punishment provided in law for the offence. This can be part of the plea bargaining process with the Public Prosecutor.
16
Appeals
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Andre Yeap, SC
Rajah & Tann LLP 9, Battery Road, #25-01 Straits Trading Building Singapore 049910
Hamidul Haq
Rajah & Tann LLP 9, Battery Road, #25-01 Straits Trading Building Singapore 049910
Singapore
+65 6232 0306 +65 6225 9630 andre.yeap@rajahtann.com www.rajahtann.com
+65 6232 0398 +65 6225 9630 hamidul.haq@rajahtann.com www.rajahtann.com
Senior Counsel Andre Yeap, Senior Partner of Rajah & Tann LLP, has spearheaded numerous high profile fraud, securities and white collar/business crime cases, often involving bribery and corruption as well as its impact in relation to underlying contracts not only in Court proceedings, but also in international arbitrations. Andre acted for one of the worlds largest disk-drives producers in a claim where certain employees fraudulently hijacked ownership of their Dubai and Singapore operations and utilised their assets to create a new billion dollar enterprise. Based on fraud against various shareholders, he double lifted the corporate veils of Cyprus and Singapore entities to restrain a Singapore company and its Cyprus parent from effecting repayment of US$180 million pursuant to certain equity leveraged loan securities. Andre recently completed the defence of one of Singapores most highly publicised white collar crimes relating to a charitable institution.
Hamidul Haq leads the White Collar Crime Practice Group in Rajah & Tann LLP which provides expert legal advice on, and invaluable insight into, the prosecution and enforcement process of all aspects of white collar crime and financial fraud. As a former Senior State Counsel / Deputy Public Prosecutor of the Criminal Justice Division, Attorney-Generals Chambers and former Head Legal of the Commercial Affairs Department, Haqs presence has bolstered Rajah & Tann LLPs strength and dominance in the legal circle, particularly in the area of securities, business crimes, fraud and commercial litigation practice. As well as representing clients who face criminal prosecution in court, Haq frequently advises companies, including several MNCs, and banks on matters relating to forensic investigations, corporate governance and regulatory compliance. He also advises several companies and directors on issues relating to securities offences, anti-corruption, anti-money laundering and disclosure obligations.
Founded in 1955, Rajah & Tann LLP has grown to be one of Singapores leading full service law firms, with around 300 lawyers, many ranked among the very best in their specialist practice areas. Were proud of the fact that, in an age of mergers and joint ventures, we remain independent. Were delighted that Rajah & Tann consistently wins high praise from objective observers - for example, recently becoming the only Asian law firm to be ranked among the worlds top 25 arbitration practices, as well as picking up law firm of the year awards for our Shipping and Construction practices at the ALB awards. And were unashamedly ambitious, aiming to establish ourselves not just as the go-to firm for legal expertise in Asia, but as the first truly international Singaporean law firm - an objective we are well on our way to achieving.
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Chapter 19
Spain
Oliva-Ayala Abogados
Laura Martnez-Sanz
Pablo Molina


2.1 How are the criminal courts in Spain structured? Are there specialised criminal courts for particular crimes?
Under Spanish Law the only authority that is entitled to prosecute business crimes are the Criminal Courts. The judge initiates the proceedings as soon as he notices a crime might have been committed, but the accusation (public or private) must continue. The judge does not have the authority to accuse so the role of the public accusation in our system is essential during the proceedings. In Spain the proceedings are divided in two different phases: (i) the investigation phase; and (ii) the oral trial. In the first phase mentioned the judge is in charge of managing the process in order to clarify the facts and decide either to continue and open the oral trial or to close the case since not enough evidences have been found. The public prosecutor, the police and any other agency or individuals will be assisting the judge for the investigation and any measure to be taken will need the explicit consent of the judge.
Criminal courts in Spain are structured as follows, with some Courts specialising in crimes against the State (Audiencia Nacional) and violence against women: Juzgados de Instrucccin (Examining Magistrates Court): Said courts act as Examining Magistrates investigating and preparing criminal cases to be tried in the relevant courts. They may also try minor cases. Juzgados de los Penal (Criminal Courts): Presided over by a single professional judge, they hear cases where the maximum penalty prescribed by law does not exceed five years imprisonment. Juzgados de Menores (Minors Courts): Presided over by a single professional judge they hear all cases, including criminal charges, involving minors under the age of 18. Juzgados Centrales de Instruccin (Central Examining Magistrates Court): Act as Examining Magistrates investigating and preparing cases to be tried either the Central Criminal Courts or the Criminal Chamber of the Audiencia Nacional. Juzgados Centrales de lo Penal (Central Criminal Courts): Located only in Madrid at Audiencia Nacional and presided over by a single professional judge, they hear cases involving crimes against the State which are punishable by less than six years imprisonment. Audiencia Provincial (Provincial Court): One in each province and presided over by a panel of three professional judges. Named after the Province, its jurisdiction extends throughout that Province. They try all criminal cases where the prescribed sentence could exceed five years imprisonment and hear appeals against sentences by the lower courts. Audiencia Nacional: Constituted as the Provincial Courts but with National jurisdiction. It tries all cases involving crimes (including, among others, major drug trafficking and monetary offences) which are deemed to have been committed against the State and may attract a sentence of over six years imprisonment. It also decides on extradition requests and hears appeals against sentences by the lower central courts. Tribunal Supremo (Supreme Court): The highest level of justice in the Spanish system. It is divided into five Chambers (Civil, Criminal, Labour, Military & Public Affairs) and hears appeals for the annulment, or revision, of sentences handed down by the National or Regional High Courts. It would also try civil or criminal cases against the President of the Government, Ministers,
As mentioned in our previous answer the only body duly entitled to investigate is the Criminal Court. However, the role of this judge investigator is to clarify the facts. The role of accusing will be played by the public prosecutor (always) and the private accusation when it appears before the Court.
Under the Spanish Criminal Procedural System, prosecuting parties (public and/or private) are permitted to bring a civil action within the criminal proceedings, which is very usual. Therefore, the Criminal Court would most likely have to decide over both criminal and civil compensation of damages caused by the offence- matters and both parts of the decision will have to be enforced.

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Members of Parliament etc. Tribunal Constitucional (Constitutional Court): Limits itself to considering constitutional matters and cases in which it is alleged constitutional rights have been infringed. If so, decisions are returned to the offending Court for correction. Tribunal Superior de Justicia de las Comunidades Autnomas (Regional High Courts): Each Autonomous Community also has one of these Courts. They have no direct involvement in criminal cases unless these infringe the privileges and immunities of local government officials or the judiciary. Generally involved in commercial disputes and litigation against Public Sector bodies. Juzgados de Violencia contra la Mujer (Courts for violence against women): There are 17 Courts throughout Spain dealing with specialist cases of neglect and violence against women, such as domestic violence. Juzgados de Vigilancia Penitenciaria (Penitentiary Surveillance Judge): Provide Judges who look after the operation of prisons and the legal rights of detainees. Responsible for granting parole and conditions attached to it.
Spain
o Insider trading
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According to section 285 CP, insider trading punishes: (i) the direct use or through a third person of any confidential information about any kind of securities; and (ii) the supply of such information to a third party. The information must be precise and specific, not available for the public investor and suitable to affect the value of one or several securities in the official markets. As a result of this behaviour the benefit for the individual or a third party must be higher than 600,000. This section affects internal stuff (employees, partners, directors, etc.) as well as external (auditors, advisors, etc.). It is required that their knowledge regarding the confidential information is due to their professional activities within the company. However, it is not clear that third parties that benefit from the supply of the confidential information are subject to this section. The sentence goes from one to four years in prison, a fine for the same amount to three times the amount of the benefit and special disqualification from two to five years. Subjective element: intent is required. o Embezzlement This offence comprises different hypothesis. According to section 432 any civil officer or public authority that steal, or allow a third party to do so, any public active due to their professional responsibilities will be subject to a prison sentence from three to six years and total disqualification from six to 10 years. In case the offence is particularly serious (in regards to the active affected) the sanction will increase to a prison sentence from four to eight years and total disqualification from 10 to 20 years. However, if the quantification of the damage is less than 4,000, the sanction will decrease to a prison sentence from six months to three years, a fine from two to four months and disqualification of up to three years. The CP also considers the possibility that public officers use public actives for private purposes of different nature. o Bribery of government officials The bribery of government officials is regulated in sections 419 to 427 of the CP. There are different behaviours included in this crime. From a general perspective, this offence could be divided into: (i) unlawful acts executing public responsibilities; (ii) unjustified delay or not carrying out an act that must be realised by the public authority; (iii) lawful acts benefiting a third party; (iv) asking or receiving a reward for any of the previous behaviours; (v) receiving a gift or a present due to the post and the responsibilities of the subject; and (vi) bribery of a European Union or another country of the EU public authority. Therefore, taking into account the different cases where bribery can take place, different sanctions would be imposed. o Criminal anti-competition This crime is regulated under sections 278 to 288 CP. More specifically, regarding the behaviour to distort prices, it is possible to differentiate three assumptions: (i) violence, threats or misrepresentation; (ii) spreading news or rumours; and (iii) the use of confidential information. It is required that the benefit is higher than 300,000 to appreciate intent, although it is not clear that intent is proved for causing the damage even when the amount reaches that quantity. The sentence goes from six months to two years in prison, a fine from 12 to 24 months and special disqualification for the intervention in the stock market as actor, agent, middleman or informant. Subjective element: intent is required.
Under Spanish Law, there is not a right to a jury; on the other hand, rules governing jurisdiction in Spain establish that juries are appointed for trials dealing with crimes against persons, breach of trust/confidence by civil servants, defamation, personal freedom and arson offences. On the scope of business crimes, most relevant crimes which may be heard by a jury are: infidelity in the custody of documents; bribery; influence peddling; and extortion.

3.1 Please describe any statutes that are commonly used in Spain to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
Under the new Criminal Act (CP) section 282. bis, the objective element mainly affects the information brochure that companies must submit periodically. This tool is used by investors in order to decide a particular investment. Any misrepresentation in this document, among others, will be considered as an alleged crime. The sentence goes from one to four years in prison. If any harm is actually made, the sentence to be imposed will be increased from two and a half to four years. Additionally, in the event the offence is seriously harmful the sentence will be increased from one to six years. Subjective element: intent is required. The misrepresentation needs to be carried out with funding purposes. o Accounting fraud Section 290 CP sanctions the falsification of the accounting statements in order to misrepresent the legal and economic position of the company to harm the company itself, its partners or any third party. The sentence goes from one to three years and a fine from six to 12 months. If any harm is actually made the sentence will be imposed in its superior half. Subjective element: intent is required.
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o Tax crimes in prison.
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Subjective element: intent is required. o Government-contracting fraud Sections 420 and 424.3 New CP sanctions both the individual (active) and the civil officer (passive). The offence comprises the fact of giving or receiving any gift or present affecting the government-contracting system and its principles of transparency and fairness. The sentence goes from two to four years in prison, a fine from 12 to 24 months and special disqualification for public responsibilities from three to seven years. Subjective element: intent is required.
3.2 Is there liability for inchoate crimes in Spain? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Three years for those crimes considered less serious. One year for defamation crimes. Six months for misdemeanour. The enforcement-limitations period begins running from the day the crime is committed.
The enforcement-limitations period for crimes under these circumstances will begin running from the day the last offence took place, the unlawful situation ceased or the behaviour concluded.
The Spanish Criminal Act establishes criminal liability for the attempt, the conspiracy and the incitement. There is liability for attempting to commit a crime according to section 15.1 CP. Nevertheless, criminal responsibility is excluded if the individual successfully and voluntarily took all the necessary steps to avoid the end result of the crime.
The limitations period will be interrupted when the proceedings are being followed against the accused, running again from the beginning when the proceedings are paralysed or finished with no sentence.

The Act modifying the Spanish Criminal Code which, will enter into force on 23 December 2010, extends criminal liability to companies. Thus, under the new regulation, entities will be liable for those offences which specifically foresee said possibility. Employees conduct may be imputed to an entity for those crimes committed in their name and for their benefit by people authorised on their behalf or for those offences committed for employees due to an inadequate control by the company.
According to our criminal legal system, the judge not the public prosecutor shall conduct the enquiries phase assisted by the police and government agencies. Prior to said enquiries phase the police, the public prosecutor or the government agencies might conduct its own investigations but any time they find out that an offence might exist, they shall report the judicial authorities to activate the criminal proceedings.

The new Criminal Code states that criminal liability for individuals mentioned above and for the entity remains independent of each other.
In Spains Criminal system the procedures for gathering information or any other measure both from a company or any individual will necessarily be authorised by the judge. This is normally requested by the police or the public prosecutor, who assist the judge in the investigation phase, but it is the judge who finally decides whether the measure to be taken is appropriate or not. The judge can request any particular measure if it is considered as an essential piece of the investigation process to clarify the facts.
The Spanish Criminal Code provides a calculation system for enforcement-limitations periods, which is as follows: 20 years for crimes that are sanctioned with 15 or more years

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The objective element for this offence (section 305 CP) is (i) not satisfying the taxes due, or (ii) taking advantage of unlawful refunds. The amount of money evaded in this crime needs to be higher than 120,000. Under the new CP the sentence goes from one to five years in prison, a fine from the same amount to six times the amount evaded and inability to benefit from subsidies.
15 years for crimes that are sanctioned with 10 to 15 years in prison or disqualification for over 10 years. 10 years for crimes that are sanctioned with prison or disqualification from five to 10 years. Five years for crimes that are sanctioned with prison or disqualification from three to five years.
Document Gathering:
7.2 Under what circumstances can the government demand that a company under investigation produce documents to the government, and under what circumstances can the government raid a company under investigation and seize documents? 7.8
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See question 7.1.

7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Spain recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Spains labour laws protect personal documents of employees, even if located in company files?
If the individual summoned by the Court is in his/her condition as imputado, meaning as the previous step to be formally accused, that person has the right not to say anything against himself, to a plea of non-guilty and to be considered innocent until it is proved otherwise. During the whole detention process and the deposition before the police and the judge the imputado has the right to be represented by an attorney. On the contrary, in the event the individual is summoned as a witness this person is obliged to attend and it is required to say nothing but the truth. Witnesses are not obliged to declare anything against direct relatives.
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See question 7.1. As a general principle, the communications between clients and attorneys are protected.

See question 7.1.

See question 7.1.
Spanish law entitles any individual or organisation and not only the public prosecutor to instigate criminal actions, whether or not they have been affected by the alleged criminal acts. The proceedings can also be started at this point by the Court itself if it becomes aware of the perpetration of a criminal offence (notitia criminis). If the proceedings start with a denounce (denuncia) any person, whether offended or not, can file either before a Spanish judge, public prosecutor, or the police, an oral or written statement setting out the details of an offence or a criminal complaint (querella) the aggrieved person may file an accusation in writing before a judge, stating that a certain person is charged with a designated crime, either a public or a private crime the Court has to decide previously if the facts in the claim appear to be of a criminal nature.
In the Spanish Criminal system the investigation phase is carried out by the Court, therefore the judge is entitle to summon whoever considers might be relevant to clarify the facts of the alleged crime. That person (employee, officer, director, etc.) will have to attend such requirement and the forum for that depends on whether the individual has been summoned as witness or defendant (imputado). The other parties involved in the proceedings (public prosecutor, private accusation, defendant, etc.) can request an individual to be summoned as imputado or witness, but will need the judges authorisation.
The government, by means of the Ministry of Justice, the Chief Prosecutor Office or the State agencies, among others, may publish and circulate guidelines for its members and workers containing specific instructions to prosecute some activities and detect and prevent crimes. The content and the format will differ depending on the priorities of the administration. The state attorney represents the state in those cases where its interests are affected. The public prosecutor is subject to the legality principle and as soon as is aware of the alleged crime will have to be part of the proceedings exofficio.
Similar to the previous answer, the judge (investigator) is entitled to summon anybody who might be deemed responsible for committing a crime or because of the relation with the facts as a witness.
Our system is based on the accusatory principle, meaning the judge cannot issue a sentence where the sanction is higher than the highest requested by the accusation (public or private). This means that an agreement can be reached beforehand and this agreement will be negotiated solely between these parties.
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8.4
In addition to or instead of any criminal disposition to an investigation, can a defendant be subject to any civil penalties or remedies? If so, please describe the circumstances under which civil penalties or remedies are appropriate.
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Common Defences
9 Burden of Proof
It is definitely a defence to a criminal charge in those cases where the defendant did not have the requisite intent to commit the offence (mens rea/dolo). The discharge proof with respect to this will be on the defendants part, in order to consider the lack of intent of the offence due to the neglect and careless conduct of the defendant.
The burden of proof in criminal proceedings corresponds to the private and the public prosecutor. It might as well be the popular prosecutor when the offence is against the general interest. The reason for this is that the defendant has the right to be considered innocent before the Court until it is proved otherwise. Having said this, the defendant hast the right to provide any discharge proof considered as relevant for the defence of his interests.
As a general principle, ignoring the law does not exclude its fulfilment. The ignorance of the law, when due to an invincible error, about a conduct that is unlawful excludes any criminal liability. An error in this context is considered to be invincible when it was not possible for the individual to be avoided regarding the personal and social circumstances and when there was no negligence in the conduct committed. In the case the ignorance of the law is due to a mistake that could have been overcome, this will be a mitigating circumstance degrading the sanction between one or two grades. The burden of proof, as explained in section 9, is held by the accusation, however, it is possible for the defendant to submit any discharge proof and, of course, the ignorance of the law (that has to be proved by the defendant) can exclude criminal liability or, at least, be a mitigating circumstance.
Whatever proof is enough to prove the culpability of the defendant. In the event the Court does not considered the evidence presented is enough to defeat the constitutional presumption of innocence, the defendant will not be considered guilty in accordance with the principle in dubio pro reo.
It is necessary to differentiate between the investigation phase and the oral phase. Both phases are managed by two different judges. In the first phase (the investigation phase) the judge will have to consider all proofs presented before the Court by the claimant and the prosecutor (who hold the burden of proof) and the ones presented by the defendant (discharge evidence). Once the investigation is over the judge has to decide whether there exists enough circumstantial evidences to open the oral phase or to close the case due to the lack of evidence (inconclusive) against the defendant. If there is enough evidence to continue with the trial and the oral phase is opened, it will be another judge who will have to reproduce the evidence and make the final decision about the culpability or innocence of the person in question.
The ignorance of the facts that might eventually be a criminal offence, when due to an invincible error, also excludes any criminal liability. Cases where ignorance of the facts, considering the circumstances as well as the personal situation of the defendant, could be defined as not invincible, will be punished as negligence.
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Besides the author of the crime, the Spanish Criminal Code foresees criminal liability for those who aid and abet committing a crime. The participants of a crime are criminally liable as they have also been involved with the performance of any act needed to commit the crime. Nevertheless, for participants, the Spanish Criminal Code establishes lower penalties.
According to paragraph 259 of the Spanish Criminal Procedure Act, those who had notice about the commission of a public crime must report to judiciary authorities or face a fine from 25 to 250 pesetas (0.15 to 1.50).

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See question 1.3.
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not necessary to be instructed, the sentence will reflect the sanction agreed. However, section 655 of the Spanish Criminal Procedure Act notes that in case the sanction is not suitable in relation to the offence committed, the Court will open the oral trial. The same outcome will result if there is more than one defendant and not all of them reach conformity.
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As a general rule in determining penalties, the guilty party who confesses the offence to the authorities, before knowing that legal proceedings are being brought against him, will benefit from mitigating circumstances to determine his criminal liability. In addition, there are some crimes which contain special mitigating circumstances for those who confess a crime or his participation.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Spain, and describe the favourable treatment generally received.
The new Criminal Code provides that, to be considered mitigating circumstances of the criminal liability of entities, their legal representatives must carry out the following activities: a) b) To confess the offence to authorities before knowing that legal proceedings are brought against her. To collaborate at any stage in the investigation of the facts, providing new and decisive evidence to clarify the criminal liabilities arising. To act at any time during the procedure and prior to trial to repair or minimise the damage caused by the crime. To implement, before the start of the trial, effective measures to prevent and detect crimes that might be committed in the future within the entity.
The sentencing process under Spanish Criminal Law is as follows: (i) the sentence needs to be duly motivated; (ii) a thorough analysis of the facts will be made by the judge processing all the evidence provided by the prosecutor, the claimant and the defendant and deciding what facts are considered to be proved; (iii) merits of law pertaining to be facts of the particular case; and (iv) finally the sentence can never be superior to the sanction range of the law for that particular offence and cannot be higher than what it has been asked by the prosecutor or the claimant. Additionally, the judge when imposing the sentence will have to take into account the mitigating and aggravating circumstances that can eventually affect the sanction to be imposed.
c) d)
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Plea Bargaining
Under the new regulation of the Criminal Code the elements of a sentence on a corporation that need to be satisfied are developed in section 31 bis, 1). The main goal of the new regulation is intended to punish corporations for those offences that are committed for the benefit of the company and by the managers acting on its behalf, as well as those offences committed by the employees due to the lack of appropriate measures to avoid such behaviour. The criminal liability of the corporation will be excluded in those cases where the implementation of an internal system to prevent criminal offences by executives, managers and other employees was properly established.
Under section 655 of the Spanish Criminal Procedural System the defendant has the opportunity to agree with the facts in the terms displayed by the public prosecutor and any other claimant. Additionally, this conformity will also affect the sanction requested, with only the possibility of accepting the highest sanction requested by these parties. Then, such decision is required to be ratified by the defendant. Once it is ratified the sentence will be issued by the judge with no further delays, in the same terms as agreed between the prosecutor and the defendant. It is not possible for the judge to impose a higher sentence. The sentence when conformity has been reached will be reduced by one third (this applies to fast-track trials).
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Appeals
The verdict from a jury cannot be appealed itself by either party involved in the proceedings. However, it could be appealed indirectly through the sentence issued by the judge considering the jurys verdict.
The conformity is a negotiation process that takes place between the public prosecutor and the defendant. If such agreement is reached and the defendants lawyer considers the oral trial phase is
A criminal sentence following a guilty verdict, as mentioned in the previous answer, can be appealed by the defendant, but it could also be appealed by the prosecutor and the private accusation if they consider the guilty verdict is not severe enough for the offence committed.
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possible to reverse the sentence to a lower sanction or even to an acquittal. It is important to bear in mind that according to the principle reformation in peius and when the only party that appeals is the accused that it is not possible to reverse a sentence that aggravates the sanction to be imposed. However, it is recurrent that not only the accused appeals but the public prosecutor and/or the private accusation as well. In this case, the final decision will take into account all the arguments presented by the parties at this time, so the sentence could be reversed in either way.
The standards of review are very rigid in our system; therefore there are more probabilities for a sentence to be confirmed than to be revised by the Appellate Court.
In the event that the Appellate Court does uphold the appeal, it is
Laura Martnez-Sanz
Oliva-Ayala Abogados Miguel ngel, 14 3, 28010 Madrid Spain
Pablo Molina
Oliva-Ayala Abogados Miguel ngel, 14 3, 28010 Madrid Spain
+34 91 391 1290 +34 91 310 3455 l.martinez-sanz@oliva-ayala.com www.oliva-ayala.com
+34 91 391 1290 +34 91 310 3455 p.molina@oliva-ayala.com www.oliva-ayala.com
Laura Martnez-Sanz specialised in Criminal Law and spent the first years of her career in this law firm, which she rejoined after managing for eight years the Criminal Law Department of the Baker & McKenzie international law firm, where she acquired broad experience in advisory services and defence provided to large Spanish and international companies. She has a command of all areas of Criminal Law, and her training and practice led her to engage particularly intensely in business or economic, patrimonial and company Criminal Law. She is currently a Professor of Criminal Law at the Carlos III University in Madrid, with more than fifteen years of experience in criminal litigation. Languages: Spanish, English and a basic knowledge of French.
Pablo Molina has been a member of the Madrid Bar Association since 2006. He specialises in Spanish Criminal Law and more particularly in business and company Criminal Law. Before joining the firm in 2010 he worked at the Banking & Finance department of Jones Day in Madrid, focusing on project finance and insolvencies. In addition to his legal background, Pablo holds a MBA from IE Business School, and he has travelled worldwide in order to acquire business expertise in different countries. Languages: Spanish, English and intermediate French.
Problems with criminal legality usually extend beyond national borders and require a multi-jurisdictional specialisation with an indepth knowledge of the increasingly exhaustive international criminal legislation as well as legislation of the various European Union Member States and Community regulations. Corporate Liability: Preventive criminal defence, compliance policies. The firm helps Spanish and international clients, and reviews, develops and implements what has traditionally been called a preventive criminal defence policy. The current evolution of criminal law imposes the need to introduce programmes for legal compliance and the preservation of corporate criminal liability (criminal compliance). Prevention, detection and action are the three basic pillars that can limit the criminal liability of legal persons, their directors and employees. International Work: The law firm is located in Madrid, and provides integral service to the whole of Spain. It also has the collaboration of international reference law firms. The international procedural experience of the firms lawyers extends to proceedings in the USA, France, Germany, United Kingdom, Italy, Portugal and others, and also to the European Court of Justice in Luxembourg, the European Court of Human Rights and other international jurisdictional bodies. This experience surpasses the barriers of Spanish Criminal Law, and opts for qualified advice with a clearly international vocation.

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Chapter 20
Switzerland
Homburger
Flavio Romerio
Roman Richers
Preliminary Remark
In the past, each of Switzerlands 26 cantons had its own criminal procedural law. As of January 1, 2011, this system will be simplified with the entry into force of a unified Federal Code of Criminal Procedure (CCP) that will apply to the investigation and prosecution of most business crimes. We base the following analysis on the provisions of the new CCP.
1.2
If there are more than one set of enforcement agencies, please describe how decisions on which body will investigate and prosecute a matter are made.

The CCP specifies whether cantonal or federal authorities should investigate and prosecute a crime. In principle, the cantonal authorities are in charge, unless the law stipulates that a specific crime falls within the federal jurisdiction. If a crime falls within the federal jurisdiction, the AG is competent to investigate and prosecute the matter, although the AG has the right to delegate the case to a cantonal authority (CCP 25). The AG also decides jurisdictional conflicts if several authorities are competent to deal with a certain matter (CCP 26). The rules of the CCP are designed to avoid parallel proceedings and therefore contain several provisions allowing the concentration of proceedings in one forum (e.g. CCP 29, 33, 34). The authorities at the companys seat are in charge of proceedings against an enterprise, as well as related proceedings against individuals (CCP 36).
Generally, business crimes are investigated by the criminal police and the public prosecutor (CCP 12). The criminal courts adjudicate on criminal cases brought by the public prosecutor (CCP 13). For certain administrative infractions (including certain breaches of the Financial Markets Supervision Act, export restrictions or embargos), the competent administrative authorities are in charge of the prosecution, in lieu of the public prosecutor (CCP 17, 357). For instance, certain white-collar crimes such as a violation of the disclosure rules are prosecuted by the Federal Department of Finance. While the CCP unifies the criminal procedural law for all of Switzerland, the cantons continue to organise the police and prosecutors office as well as their courts within the boundaries of the CCP. Hence, there will remain a certain variety in the way criminal law enforcement agencies are organised throughout Switzerland. In particular, some of the larger cantons such as Zurich will continue to have specialised departments in charge of prosecuting business crimes. On the federal level, criminal prosecution is mainly concentrated with the Office of the Attorney General (AG). The AG is responsible for the prosecution of offences that are specifically subject to federal jurisdiction. Generally speaking, these offences target federal institutions and interests of the general public, and may include offences such as espionage, corruption, breaches of the War Material Act and of the Goods Control Act, international organised crime and certain white-collar crimes. It is currently proposed that the AG will be given the authority to prosecute cases involving insider trading and market abuse. The AG further deals with the execution of certain requests for mutual assistance from foreign prosecution authorities, to the extent they are not dealt with at a cantonal level.
Civil enforcement against business crimes as known, e.g., in the United States does not exist in Switzerland. For certain infractions such as breaches of provisions governing the financial markets, export restrictions or embargos, the administrative authorities in charge of the subject matter may have the power to prosecute related breaches of criminal provisions (CCP 17, 357). Such infractions are dealt with in a simplified proceeding (CCP 352 et seqq.).

2.1 How are the criminal courts in Switzerland structured? Are there specialised criminal courts for particular crimes?
The cantons are free to structure their own authorities and courts, as long as they stay within the boundaries of federal law (CCP 14). For example, federal law demands that two court instances exist in each canton. Due to this substantial cantonal freedom, there is considerable variety between the various cantons. In particular, the larger cantons have more specialised prosecuting authorities and specialised criminal courts of first instance, whereas smaller cantons
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tend to allocate criminal cases to their general district courts. On a federal level, the Federal Criminal Court decides all cases within federal jurisdiction to the extent the proceedings have not been delegated to a canton. The court is also in charge of dealing with certain administrative criminal matters (Criminal Court Act 26).
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applicable to the sale of securities, such as the requirement of obtaining certain permits, having a proper accounting, establishing true and complete financial reports and prospectuses etc. The breach of certain of these provisions is punishable with imprisonment of up to three years if the perpetrator acted intentionally, and a fine of up to CHF 250,000 if committed unintentionally. Furthermore, fraud and misrepresentations in connection with the sale of securities may also breach the provisions of the Stock Exchange Act, which may result in a fine or, under certain circumstances, punishment by imprisonment of up to three years. o Accounting fraud Accounting fraud is primarily punishable based on the general fraud provision of article 146 CC (see above). Frequently, accounting fraud also involves the preparation of incorrect accounts and other financial documents. Depending on the circumstances of the case, this may constitute a forgery of documents or an illegal certification of relevant facts, punishable with imprisonment of up to five years or a monetary penalty (see above). o Insider trading Insider trading is prohibited pursuant to article 161 CC. Unlike in other jurisdictions, only certain defined persons qualify as potential perpetrators (e.g. members of the board of directors, the management, auditors or agents of the company or its subsidiaries or parent company). In particular, stockholders are not, as such, insiders in the sense of the provision, although they may qualify as de facto officers under certain circumstances. The elements of the crime consist in essence of intentionally obtaining a financial benefit by exploiting the knowledge of a material non-public fact, the disclosure of which will, in a foreseeable way, substantially influence the price of securities of a company or options thereon which are listed on a stock exchange in Switzerland. The punishment is imprisonment of up to three years or a fine. In addition, a person who receives such confidential information from a primary insider (whether directly or indirectly) and obtains a pecuniary benefit by intentionally exploiting it, is punishable with imprisonment of up to one year or a monetary penalty. Furthermore, the Swiss legislator is currently considering revising the insider regime with a view to further broadening the applicable rules, for example by submitting it to federal jurisdiction, making the relevant crimes predicate offences for money laundering, and substantially extending the personal scope of application of the insider trading crime by expanding the scope of application of the insider trading provision, in particular by abolishing the limitation on certain persons qualifying as perpetrators. o Embezzlement The main provision governing embezzlement is article 138 CC. Embezzlement requires that the perpetrator appropriate a tangible asset which had been entrusted to him or her. Alternatively, embezzlement can also consist of illegally using assets entrusted to the perpetrator in the interest of the perpetrator or a third party, i.e. by breaching statutory or contractual duties of care regarding the assets. The crime requires intent regarding all elements of the crime as well as the perpetrators intent of illegitimately enriching him- or herself. The punishment is imprisonment of up to five years or a fine. If the perpetrator acts as a member of an authority, custodian, professional asset manager or in a profession for which he or she needs the authorisation of an authority (e.g. employees of banks, audit firms, lawyers, public notaries, etc.) the punishment is imprisonment of up to ten years. A related crime is the criminal breach of trust stipulated in article 158 CC. It consists in the breach of a duty under statutory law, a contractual arrangement or a mandate awarded by an authority to manage assets or to supervise the management of assets, the breach
No, the new CCP has abolished all jury trials in Switzerland. It should be noted, however, that the courts of first instance in many cantons include lay judges.

3.1 Please describe any statutes that are commonly used in Switzerland to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
There is no special statutory provision governing fraud and misrepresentation in connection with sales of securities. Article 146 of the Criminal Code (CC) prohibits fraud in general. For a fraud to be committed, the perpetrator must deceive another person by means of a false representation or concealment of facts or by reaffirming the error of another. The perpetrator must act maliciously, which is the case for instance if the perpetrator prevents the defrauded party from verifying false information or where such verification does not take place due to a particular relationship of trust, clear rules or assurances. Provision of information which the counterparty can check without great effort is not deemed to be malicious. Further, maliciousness is always assumed where the perpetrator constructs an entire scheme of lies. The perpetrators acts or omission must lead to an error based on which the deceived person acts detrimentally against his or her own or anothers assets, causing a corresponding damage. The perpetrator must act with intent (dolus directus or dolus eventualis) regarding all elements of the crime. Further, the perpetrator must act with the intent of illicitly enriching him- or herself or a third party. Fraud is punishable with imprisonment of up to five years or a fine; if the perpetrator makes a trade or business of such acts, the punishment is imprisonment of up to ten years. Fraud in connection with sales of securities usually involves the promulgation of an incorrect documentation. Depending on the circumstances of the case, the preparation or use of such documentation may constitute forgery of documents, in particular in the form of illegally misstating material facts (CC 251). The incorrect certification must violate generally valid and objective guarantees warranting the truthfulness of the document; this is in particular the case where the person issuing the certification has particular examination duties or where statutory law precisely determines the contents of the document. In connection with the sales of securities, incorrect statements in a prospectus may for example be a forgery of documents. The perpetrator must further have acted intentionally (i.e. with dolus directus or dolus eventualis); in addition, the person must have had the intention of damaging someone elses property or other rights or to obtain an illegitimate advantage. Forgery of documents is punishable with imprisonment of up to five years or a monetary penalty. Fraud and misrepresentations in connection with the sale of securities may also fall under the criminal provisions of the Collective Investment Schemes Act (CISA). The CISA contains stipulations

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of which results in a monetary loss. Alternatively, a person becomes liable if he or she abuses the power to represent another person and thereby impairs that persons assets. Breach of trust is punishable with up to five years of imprisonment if committed with the intent of illegal enrichment. In practice, prosecution of breach of trust is rarely successful and has little practical relevance in connection with the mismanagement of companies, due to the requirement of acting intentionally. Attempts to expand the crime to gross negligence have so far been unsuccessful. Furthermore, several other subsidiary crimes exist, such as illegitimate appropriation of property (CC 137), illegitimate use of assets (CC 141bis), abuse of salary deductions (CC 159) or embezzlement or deprivation of collateral or retained property (CC 145). o Bribery of government officials Switzerlands anti-corruption laws have been heavily influenced by, and adhere to, the respective international conventions, such as the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the Council of Europe Criminal Law Convention on Corruption and the United Nations Convention against Corruption. Articles 322ter, 322quater and 322septies CC make it a crime for any person to offer, promise or grant a Swiss or a foreign official a bribe, or for any Swiss or foreign official to solicit or accept a bribe. Swiss law demands in particular that such bribery be made in connection with an official activity and for an activity or inactivity that is either in breach of the officials duty or within his discretion. Such bribery is punishable with imprisonment of up to five years or a monetary penalty. Articles 322quinquies and 322sexies CC more generally forbid offering, promising or granting officials an undue advantage, and prohibit the solicitation or acceptance of such an advantage, as long as the advantage relates to the officials conduct of his or her office. Such granting of an undue advantage is punishable with imprisonment of up to five years or a monetary penalty. Finally, bribery in the private sector also constitutes a crime pursuant to articles 4a and 23 of the Unfair Competition Act, and is punishable upon demand of the victim with imprisonment of up to three years or a monetary penalty. o Criminal anti-competition No sanction of an explicitly criminal nature exists for anticompetitive behaviour. However, the Cartel Act (CA) provides in its article 49a sanctions against companies involved in certain anticompetitive behaviour. While these sanctions were conceived as sanctions of administrative law, they are considered to be part of criminal law as well. The behaviour sanctioned encompasses certain abuses of a monopoly (CA 7) as well as the elimination of effective competition through certain agreements between competitors (CA 5(3), (4)). The sanction consists of a fine of the involved companies of up to 10% of the turnover of the last three years achieved in Switzerland. Recently, the Swiss Anti-Trust Authority issued a fine of over CHF 220 million against a Swiss company, but the fine was overturned on appeal by the Federal Administrative Court. A company in breach of an enforceable decision of, or a settlement with, the competition authorities may be sanctioned similarly (CA 50); additionally, the involved persons may be fined up to CHF 100,000 (CA 54). As set out above, anti-competitive behaviour in the form of bribery in the private sector may also be punishable. o Tax crimes In comparison to other jurisdictions, tax crimes have traditionally been treated rather leniently in Switzerland. Intentional or
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negligent tax evasion (e.g. incomplete tax reporting or overstatement of deductions) is only punishable with a fine (Direct Federal Tax Act (DFTA) 175 et seqq., respectively Tax Harmonization Act (THA) 56 et seqq.). Tax fraud as such is punishable with imprisonment of up to three years or a fine of up to CHF 30,000 (DFTA 186 et seqq., respectively THA 59). However, tax fraud under Swiss law requires that the perpetrator forge documents or illegally certify relevant facts. In practice, tax fraud has its main relevance in connection with the taxation of businesses. Assisting foreign tax evasion is not punishable under Swiss law, unless such assistance itself constitutes a crime (such as forgery of documents, fraud etc.). o Government-contracting fraud There is no special provision governing government-contracting fraud. However, the above-mentioned rules applicable to fraud (CC 146) and anti-competitive behaviour (CA 49a and 5) may be applicable. o Further crimes of particular interest in Switzerland Due to the relevance of the financial sector for Switzerlands economy, money laundering crimes (CC 305bis and 305ter) play a significant role. Additionally, the provisions of the Money Laundering Act (MLA) introduced due diligence obligations, including an obligation of all financial intermediaries to report suspicious transactions. Switzerlands legislation in this field is among the most rigorous in the world. Furthermore, Switzerlands economy is heavily export-oriented, and therefore the potential sanctions applicable to breaches of embargoes (articles 9 et seqq. Embargo Act) and export restrictions (Goods Control Act 14 et seqq.) are of great practical importance. Finally, the crimes of conducting forbidden acts for a foreign state (CC 271) and economic espionage (CC 273) are of high practical relevance in connection with investigations involving foreign authorities, international legal assistance proceedings as well as transnational litigation in general.
3.2 Is there liability for inchoate crimes in Switzerland? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
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Attempted crimes and offences (i.e. behaviour sanctioned with imprisonment) are punishable under Swiss law (CC 22 and 105(2)), even where the law does not explicitly mention this. Attempted infractions (i.e. behaviour sanctioned only with a fine), on the other hand, are only punishable if the law explicitly states so. Certain preparatory acts for grave crimes have been made crimes in themselves, even if they have not yet reached the intensity necessary to constitute an attempt (CC 260bis). Furthermore, the participation in a criminal organisation is also punishable in itself (CC 260ter).

Under Swiss law, criminal liability of an enterprise exists only in limited circumstances, and there are no published precedents where a business organisation was held criminally liable. Corporate criminal liability may exist for all legal entities under private law, certain legal entities of public law, partnerships as well as proprietorships (102 (4) CC).
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Two different statutory bases for enterprise criminal liability exist: Pursuant to article 102(1) CC, an enterprise may become criminally liable if a crime is committed in the exercise of the business activity and if, due to deficient organisation of the enterprise, the person cannot be identified who committed the criminal act. In such case, the crime is attributed to the enterprise and it is punished with a fine of up to CHF 5 million. The enterprise is only liable in the event no individual can be punished. Pursuant to article 102(2), an enterprise may be punishable regardless of whether or not an individual can be identified and punished. Should one of the crimes listed in the provision be committed (e.g. the participation in a criminal organisation, financing of terrorism, money laundering, active bribery of a Swiss or a foreign official, or bribery in the private sector), the enterprise is punishable if it failed to take all necessary and reasonable organisational measures to prevent such crime. Hence, in this alternative the enterprise is not liable for the impossibility of attributing the crime to an individual, but rather for not preventing the commission of the crime itself. The punishment is the same as under CC 102(1).
Investigations are initiated by the police or the prosecutor based on their own observations, or if a victim or third party files a criminal complaint. Based on CCP 301, anyone may file a criminal complaint. The members of certain authorities, such as all criminal authorities and the Swiss Financial Markets Supervisory Authority (FINMA) also have an obligation to report offences they become aware of in their official capacity (CCP 302). A preliminary proceeding is initiated by any investigatory activity of the police or by the opening of an investigation by the public prosecutor (CC 300). If a certain offence is only punishable if a formal request for prosecution has been made by the victim (30 CC), the police or the public prosecutor will open an investigation only once such a formal request has been filed (CC 303).

The criminal liability of an entity does not, as such, lead to personal liability of the individuals involved. Rather, their criminal liability is determined independently based on their own acts and conduct.
The term of limitations periods depends on the sanctions in question. Crimes punishable with imprisonment of more than three years become time-barred after 15 years; offences punishable with a shorter sanction become time-barred after seven years (article 97 CC). Infractions punishable with a fine become time-barred after three years (article 109 CC). No time-barring occurs once a judgment of first instance has been rendered. The limitation period begins on the day of the crime or, in case of continued criminal conduct, the day of the perpetrators last criminal activity (article 98 CC).
The prosecuting authorities have a wide range of powers at their disposal for gathering information. They have in particular the right to question the accused persons (CCP 157 et seqq.) and any potential witnesses (CCP 162 et seqq.) as well as other informants (CCP 178 et seqq.). The authorities may further involve experts (CCP 182 et seqq.) and obtain access to objective evidence such as objects, documents, reports and written information, or may conduct inspections (CCP 192 ff. et seqq.). Of particular relevance in any investigation are the coercive measures available to the prosecuting authorities. Under the new CCP, these powers comprise in particular the power to request the attendance of persons for a deposition and to summon them if they do not appear voluntarily; to search for suspects, to detain them and to keep them in pre-trial custody if the necessary prerequisites are met; to issue search warrants and to search records, persons and objects, to examine persons and to conduct DNA analyses as well as record personal information, take voice or writing samples, confiscate objects and assets, conduct secret surveillances, including the interception of mail and telecommunications, conduct hidden observations, monitor bank accounts and conduct sting operations.
Document Gathering:
The Swiss Federal Tribunal has recently rejected this possibility.

The limitations periods cannot be tolled, with the exception of certain administrative infractions (cf. article 11 Administrative Criminal Law Act), where the limitations period is two years.
The criminal authorities have the right to confiscate any object or asset of an accused person or a third party, including documents (CCP 263 et seqq.). Whoever possesses such documents is obliged to produce them, and the authorities may order the production of such documents under the threat of sanctions for contempt (CCP 265). The accused and whoever has a right to refuse testimony, as well as enterprises if they risk criminal liability or, under certain

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circumstance, civil liability, are not obliged to produce documents. The authorities may seize any documents that are not produced upon order or if a production order is likely to frustrate the purpose of the measure, e.g. because the recipient would destroy documents. The authorities may also raid a company (CCP 244) or search files and records (CCP 246) to obtain documents that can be confiscated.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Switzerland recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Switzerlands labour laws protect personal documents of employees, even if located in company files?
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consider to have any factual knowledge that assists in ascertaining the truth. Excluded are only facts which are irrelevant, obvious, already known or sufficiently evidenced (CCP 139). Different forms of questioning exist, depending on the role of the person. The public prosecutor, and exceptionally the police, may question most persons as witnesses (CCP 162 et seqq.); the witnesses have an obligation to testify truthfully. However, the public prosecutor and the police must question certain categories of persons only as so-called informants; in principle such informants are not under an obligation to testify (CCP 178 et seqq.). Similar rules apply to the questioning of accused persons, who have to be informed of their particular rights (CCP 157 et seqq.). There are no specific rules regarding the forum in which questioning can take place. Usually, questioning takes place in the authorities offices. The law also provides for the possibility of questioning via video conferencing (CCP 144) or by requesting a written report in addition to, or in lieu of, questioning (CCP 145).
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The right of the accused to remain silent (CCP 158), the privilege of certain persons to refuse to give evidence (CCP 168 et seqq.) and an enterprises right against criminal (or limited civil) selfincrimination also includes a right to refuse the production of documents (CCP 265). This does not limit the authorities right to seize documents, however. In addition, certain documents are generally protected from protection or seizure (CCP 264). This includes in particular: (i) correspondence with defence counsel: (ii) personal records and correspondence if the privacy interest outweighs the interest of prosecution; and (iii) records and correspondence with certain privileged persons with a right to refuse to give evidence (namely based on official secrecy, professional secrecy and source protection of the media). There is no particular protection of personal documents of employees other than the above rights. Unlike in the United States, the Swiss prosecutors may seize attorney-client communications that are in the possession of an accused or third parties (with the exception of correspondence with defence counsel). However, documents may not be seized from the attorney, except under very specific circumstances.
See above.
An accused person has the right to be informed about the fact that an investigation is conducted against him or her, the offences under investigation, the right to remain silent and the right to be represented by a lawyer (CCP 158). Witnesses, and in certain cases informants, are required to testify, but also benefit from the right to refuse to testify based on specific grounds. Such grounds are a close relationship to the accused; to prevent self-incrimination or incrimination of persons with whom a close relationship exists; official secrecy obligations; professional secrecy obligations; and the source protection of media representatives (CPP 168 et seqq.). Any person involved in a criminal proceeding, including witnesses, may be represented in the proceedings by an attorney (CCP 127(1)). Further, special rules apply to the representation of enterprises in criminal proceedings. The enterprise has to nominate a representative in the proceedings (CCP 112); this person and its members of staff are treated as mere informants and have the right to remain silent (CCP 178(g)). The enterprise itself enjoys the rights of an accused.
There are no special rules applicable to employees. Therefore, employees have the same obligations to produce documents, and, under the above-mentioned rules, the same right to refuse such document production as anyone else. Equally, the authorities may raid the home or offices of an employee under the circumstances set out above.

See above.
Criminal cases are initiated whenever the police investigate certain matters or when the public prosecutor opens an investigation (CCP 300). Frequently, the filing of a criminal complaint leads to such an initiation of a criminal case (CCP 301 et seqq.).
The criminal authorities can, in principle, question anyone they
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circumstances with the same care (CCP 4, 6). If the facts necessary for a conviction have been proven with the necessary degree of certainty, it becomes, as a matter of fact, the task of the accused person to prove his innocence. The accused therefore have the right to make motions to have their evidence taken (CPP 318, 331(2), 345).
8.3
Can a defendant and the government agree to resolve a criminal investigation through pretrial diversion or an agreement to defer prosecution? If so, please describe any rules or guidelines governing whether pretrial diversion or deferred prosecution are available to dispose of criminal investigations.
See above.
Pretrial diversions or deferred or non-prosecution agreements do not exist under Swiss law. In principle, if the criminal authority becomes aware of the commission of a crime, they have to investigate and prosecute it (CCP 7). Certain exceptions from the obligation to prosecute exist where the consequences of a crime are very minor, where the perpetrator has done everything to remedy the damage caused or where the perpetrator is him- or herself gravely affected by the consequences of the crime (CC 52 et seqq.). Furthermore, the authorities may abstain from prosecuting offences if they are very minor in comparison to other matters already under prosecution (CCP 8).
In Switzerland, the criminal courts act as finder of fact, and also determine the sentence; juries do not exist anymore. The courts also decide on any evidentiary issues, including whether the burden of proof has been met. Depending on the gravity of the offence, the court may be composed of a single judge or a panel of judges (CCP 19).
10
A person committing a crime together with other perpetrators is liable as a perpetrator him- or herself if the criminal act is jointly executed based on a joint plan. A person can be punished as an instigator if he or she intentionally induces someone else to commit an offence; the punishment threatened for committing the offence as a perpetrator also applies to the instigator (CC 24, 104). Aiding and abetting is also punishable under Swiss law. The aider or abettor must intentionally and causally advance the perpetration of the offence; both physical and psychological assistance is punishable. The punishment for aiding and abetting must be mitigated compared to the punishment threatened for the perpetrator (CC 25). Aiding and abetting an infraction is only punishable if specifically stipulated in statutory law (CC 105(2)). Someone can also be punished as a perpetrator if he or she commits the offence through an unwittingly acting third person. It should further be noted that the elements of the offence of many crimes already include conspiracy and assistance as forms of perpetrating the crime, and are therefore punishable as perpetrations of the crime. Finally, the participation in a criminal organisation is in any event punishable in itself (CC 260ter).
Civil penalties in the Anglo-American sense do not exist in Switzerland. While the state may take legal action if an individual or an enterprise causes an economic loss to the state, such proceedings are considered to be of a purely civil law nature, and therefore outside of the scope of criminal law. A party injured by an offence may file its civil claims within the criminal proceedings. The criminal courts will adjudicate these claims if the perpetrator is convicted or if they are ready for decision by the time the court concludes the criminal proceedings; otherwise, they will refer the claimant to the civil courts (CCP 122 et seqq.).
9 Burden of Proof
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Under Swiss law, any accused person or enterprise is presumed innocent until convicted by a final judgment. The criminal courts freely assess all the evidence based on their conviction of the facts as they result from the entire proceedings. If doubts remain regarding certain facts, the court shall assume the facts more beneficial for the accused (in dubio pro reo; CPP 10). It is therefore the task of the criminal authorities to prove all facts beyond a reasonable doubt to convict the accused. They must act independently and investigate all relevant circumstances, and must in particular investigate incriminating and exonerating
Common Defences
In principle, a perpetrator must act intentionally, unless the law explicitly stipulates that the offence can also be committed by negligence (CC (1)). As for all elements of a crime, the criminal authorities bear the burden of proof for establishing that a perpetrator acted intentionally (CCP

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If the prosecuting authorities consider that sufficient evidence exists, they have a duty to charge the respective entities and individuals (CCP 324). From a legal point of view, the authorities have only a very minor scope of discretion in this respect (see below question 8.3). However, in practice, their scope of discretion is considerable, given their power to assess the available evidence.
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10). In practice, the courts frequently infer from the circumstances of the case that the perpetrator must have acted intentionally.
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behaviour during the investigation with substantial reductions of the punishment. In principle, there are no strict rules or guidelines governing such reductions. One notable exception concerns anti-trust law, where the Cartel Act Sanctions Ordinance details how sanctions are determined and in particular to what extent voluntary cooperation may mitigate or even exclude punishment. In tax law, voluntary disclosure may also lead to a mitigation or exclusion of punishment, depending on the circumstances of the case (DFTA 175(3), 186(3); THA 56(3bis), 57b, 59(2ter)).
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Switzerland, and describe the favourable treatment generally received.
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CC 21 stipulates that a perpetrator is not punishable if he or she did not know, and could not know, at the time of committing the act in question that he or she was acting unlawfully. If the error was avoidable, the punishment is mitigated. The normal rules regarding the burden of proof apply (see above question 9.1). In practice, this defence plays only a minor role and rarely is successful, as the courts apply a high standard to what a perpetrator should have known.
The criminal courts assess the perpetrators acts in his or her favour on the basis of the facts he or she assumed to exist. If the perpetrator could have avoided the error, he or she is punishable for negligence if the negligent commission of the offence is punishable (CC 13). The normal rules regarding the burden of proof apply (see above question 9.1).
Except for the Cartel Act Sanctions Ordinance mentioned above, there are no strict guidelines on the requirements of cooperation. In practice, leniency is achieved by an unreserved and truthful cooperation during the entire investigation and prosecution of the offence, including producing all requested documents, assisting in the analysis of the incriminated acts, providing for the possibility of interviewing all relevant employees, repairing to the extent possible any harm caused, and voluntarily disclosing or confessing any offences committed. The favourable treatment consists mainly in a reduction of the punishment. A complete waiver of punishment cannot take place, as the courts may consider the cooperation only within their discretion in determining the sanction. Certain exceptions exist in anti-trust law (see above question 13.1) and under certain rare other circumstances (see above question 8.3).
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Plea Bargaining
There is no general obligation to report crimes in Switzerland. As set out above, only the criminal authorities and other authorities pursuant to specific provisions of the cantonal or federal law have an obligation to report crimes (CCP 302). The breach of such a duty to report may under certain circumstances constitute a crime in itself (CC 305). Duties to report exist in particular under the Swiss anti-money laundering provisions, where financial intermediaries have wideranging obligations, including an obligation to report cases of suspected money laundering (MLA 9). Wilful failure to report may be fined with up to CHF 500,000, or in the case of negligence with up to CHF 150,000 (MLA 37).
The new CCP introduced the concept of an abbreviated proceeding, which in effect provides for the possibility of a (limited) plea bargaining. Under the provisions of CCP 258 et seqq., the accused may apply to the public prosecutor for an abbreviated proceeding if the relevant facts are admitted and if the punishment sought by the public prosecutor does not exceed 5 years of imprisonment. Furthermore, the accused must accept at least in principle any civil claims raised by the injured party. The public prosecutor decides whether to conduct an abbreviated proceeding (CCP 359). Its decision is not appealable. If an abbreviated proceeding is conducted, the public prosecutor submits an indictment to the court, containing among other elements the requested punishment. All parties (including any injured party who formally participates in the proceedings) have a right to oppose the indictment within 10 days. If any party opposes, an ordinary proceeding is conducted. If no one opposes, a court hearing takes place. This hearing is limited to (i) verifying whether the abbreviated proceeding is appropriate, (ii) whether the indictment is in line with the results of the hearing and with the file, and (iii) whether the requested sanctions are appropriate. No evidence is taken at this hearing. If the court agrees that these factors are met, the indictment is converted into a judgment. If the court rejects the abbreviated proceeding, the public prosecutor has to conduct an ordinary proceeding. The courts decision on this is
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The Swiss courts traditionally reward confessions and cooperative
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not appealable. A judgment rendered in the abbreviated proceeding is only appealable if a party argues that it did not agree to the indictment or that the judgment deviated from the indictment. As the abbreviated proceeding is a new instrument under Swiss law, it is difficult to predict whether abbreviated proceedings will become frequently used. There is some scepticism, in particular due to their limited scope of application (e.g. the limitation of a maximum penalty of 5 years) and the possibility of any party to prevent an abbreviated proceeding. On the other hand, plea bargaining has de facto, even if not de iure, existed in Switzerland for many years, and it is likely to continue to be an important instrument in dealing with complex cases, in particular in business crime.
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gravity of the underlying offence, the gravity of the organisational deficit, the size of any damage caused and the economic capacity of the enterprise. The courts should also consider any mitigating circumstances (CC 48). No sentencing guidelines exist, and the court has considerable discretion in determining the sanction.
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Appeals
Under Swiss law, there is in principle no division into a trial phase and a sentencing phase. Exceptionally, a bifurcation may be granted upon request. An appeal is only possible against the final verdict (CCP 342). Procedural orders and measures of the police, the public prosecutor and the courts of first instance, as well as decisions on compulsory measures, can be appealed to a cantonal court (CCP 393 et seqq.), or to the board of appeal of the Federal Criminal Court in cases of federal jurisdiction (Criminal Court Act 28). Also, any partial or final judgment of a cantonal court of first instance may be appealed to a cantonal court of appeals (CCP 398 et seqq.). Whoever participated in the appeal proceedings on a cantonal level or in a criminal proceeding before the Federal Criminal Court may appeal the judgment to the Federal Supreme Court, provided they can show a legally relevant interest; such interest is presumed in particular for the accused, the public prosecutor and, under certain circumstances, the injured party (Federal Supreme Court Act (FSCA) 78 et seqq.).
See above.
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The court must determine its sentence according to the degree of guilt of the accused (CC 47). In principle, no binding sentencing rules or guidelines exist under Swiss law (with few exceptions such as the Cartel Act Sanctions Ordinance or for certain types of infractions). The court has to determine its sentence within the (usually very wide) range determined by statutory law for the offence in question. In sentencing the offender, the court also has to take into account his or her life in the past, his or her personal circumstances and the impact of the sanction on his or her life. In assessing the degree of guilt, factors such as the gravity of the infringement, the reprehensibility of the act, motives and goals of the perpetrator, and in how far he or she could have avoided the breach of law given the subjective and objective circumstances (CC 47). The court may also mitigate the punishment under certain circumstances, for instance if the offence was committed with respectable motives, under duress or by obeying an order, if the perpetrator was seriously tempted or provoked by the victims behaviour, if the offence was committed in the heat of the moment or under great psychological strain, if the offender showed honest remorse and tried to repair the harm or if a long time has passed since the offence (CC 48). In such cases, the court may impose a sanction which is below the threatened statutory minimum or a different sanction (CC 48a). If the offender commits several offences, the overall sanction is calculated based on the asperation principle, i.e. the gravest offence determines the sanction, which is then increased by a maximum of 50% (CC 49).
Criminal sentences are appealable as part of the judgment rendered by the court (see above).
The cantonal appellate court can fully review the appealed order or judgment, including legal errors, denial and delay of justice, incorrect or incomplete determination of the facts, and inappropriate exercise of discretion (CCP 393, 398). An appeal against a conviction for an infraction can only be reviewed for legal errors or a manifestly incorrect determination of the facts, and no new facts may be pleaded (CCP 398). The Federal Supreme Courts reviews appeals for legal errors and manifestly incorrect findings of fact (FSCA 95 et seqq.).
All appellate courts can either remedy the injustice themselves by deciding on the merits in lieu of the lower court, or refer the matter back to the lower court for a new decision together with instructions on how to decide certain issues (CCP 397, 408, 409; FSCA 107). In practice, the cantonal appellate courts usually decide themselves on the merits, whereas the Federal Supreme Court frequently refers the case back to the cantonal courts to decide on the merits, in particular where the cantonal courts need to establish additional facts.
If an enterprise is punishable pursuant to CC 102 (see above question 4.1), the fine is determined in particular based on the

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Dr. Flavio Romerio, LL.M.

Homburger AG Weinbergstrasse 56|58, 8006 Zrich P.O. Box 194, CH-8042 Zrich Switzerland
lic. iur. Roman Richers, LL.M.

Homburger AG Weinbergstrasse 56|58, 8006 Zrich P.O. Box 194, CH-8042 Zrich Switzerland
Switzerland
+41 43 222 1000 +41 43 222 1500 flavio.romerio@homburger.ch www.homburger.ch
+41 43 222 1000 +41 43 222 1500 roman.richers@homburger.ch www.homburger.ch
Flavio Romerio heads the White Collar | Investigations group of the firm. He graduated from the University of Basle (Dr. iur.) and the University of California, Berkeley (LL.M.) and is admitted to all Swiss courts. Flavio Romerio has extensive experience with the challenges facing Swiss clients appearing before United States courts and regulators. He represents clients in investigations by Swiss and foreign governmental agencies, has led large scale internal investigations of Swiss clients, and represented them before Swiss and U.S. regulators, including the U.S. Department of Justice and the Office of Foreign Assets Control. Flavio Romerio regularly advises corporations and their directors and managers on all aspects of white collar crimes.
Roman Richers is a senior associate with Homburgers Litigation and Arbitration Team and a member of the firms White Collar | Investigations Team. He graduated from the University of Basle (lic. iur.) and University of Cambridge (LL.M.) and is admitted to all Swiss courts. Roman Richers regularly advises and represents businesses in relation to criminal investigations and proceedings and related judicial assistance proceedings as well as internal investigations. His practice further focuses on complex international and domestic arbitration proceedings and commercial litigation, including conflict of laws, international legal assistance and enforcement proceedings. Roman Richers is fluent in German, English and Spanish.
The Homburger White Collar | Investigations team represents corporations and their directors and managers in matters involving compliance, internal and regulatory investigations, and white collar crime. In particular, Homburger: conducts internal and regulatory investigations of Swiss corporations, particularly in connection with the supervision of the financial services industry, competition matters, and the health care sector, and advises clients on proper measures to address deficiencies; represents its clients in connection with criminal and regulatory investigations before Swiss and foreign regulators; assists its clients in developing and improving their compliance programs, codes of conduct and whistle-blower programmes; advises and represents businesses in a variety of other white collar areas, including breach of capital market rules, criminal fraud, insider trading, and efforts to combat money laundering and corruption. The Homburger White Collar | Investigations team also has extensive experience in international judicial assistance procedures both in administrative and criminal matters.
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Chapter 21
Thailand
Tilleke & Gibbins
Michael Ramirez
Poomjai Kudidthalert

business crimes relating to unfair competition. Other organisations with such power include the Revenue Department in tax cases and the National Anti-Corruption Commission in governmentcontracting fraud cases.

The Office of the Attorney General is an independent organisation as provided for in the Constitution of the Kingdom of Thailand. The Offices public prosecutors have the power to prosecute all criminal matters including business crimes. This is the only organisation with general criminal enforcement authority on both the national and regional level. However, some specialised crimes may involve other enforcement agencies such as the Department of Special Investigation and the Securities & Exchange Commission of Thailand (SEC). In addition, Section 28 of the Criminal Procedure Code allows for criminal charges to be filed privately by aggrieved individuals.
1.2 If there are more than one set of enforcement agencies, please describe how decisions on which body will investigate and prosecute a matter are made. 2.1 How are the criminal courts in Thailand structured? Are there specialised criminal courts for particular crimes?
The Office of the Attorney General is the only enforcement agency with the power to criminally prosecute unless another agency is given exclusive jurisdiction by statute. The process begins with an investigation by an inquiry official who collects evidence to establish: the facts related to the alleged offence; the identity of the offender; and the guilt of the offender. The inquiry official forwards the file and opinion to the public prosecutor. The public prosecutor has the power to independently determine whether to prosecute or request an additional inquiry into the matter.
The Thai judiciary has a three-tier system: the Court of First Instance; followed by the Appeals Court; and then the Supreme Court (Dika). In Bangkok, the criminal caseload is shared among different Courts of First Instance. Alleged offenders may appear in Criminal Court, the Bangkok South Criminal Court, the Thon Buri Criminal Court or Min Buri Provincial Court, depending on the place of arrest, alleged offenders residency or origin of inquiry. In other provinces, criminal matters can be adjudicated in Kwaeng (District) courts or Jang-Wad (Provincial) courts. Kwaeng courts have the power to adjudicate criminal cases where the maximum punishment by law does not exceed three years imprisonment and/or a 60,000 baht fine. Jang-Wad courts have unlimited original jurisdiction in all criminal matters within its own district. The Intellectual Property and International Trade court is a specialised court with exclusive jurisdiction to adjudicate criminal matters involving intellectual property.
There is no right to a jury trial in the Thai law system. Cases are adjudicated by judges.

3.1 Please describe any statutes that are commonly used in Thailand to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
The Office of the Attorney General can also civilly enforce business crimes on behalf of injured persons. The injured person must have a right to claim restitution for being deprived by the alleged offence; or have the power to apply for restitution of property/value in any of the following cases: theft; robbery; piracy; extortion; cheating and fraud; criminal appropriation; and receiving stolen property. Some organisations have the power to administratively enforce business crimes if the matter is sufficiently relevant to the organisations authority. For example, the Trade Competition Commission has the power to administratively enforce against
Sections 238 through 244 of the Securities and Exchange Act B.E. 2535 (1992) provide general protection against fraud and misrepresentation in connection with the sale of securities. Section 238 provides that [no] person having an interest in the securities shall impart any false statement or any other statement with the

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intention to mislead any person concerning the facts relating to the financial condition, the business operation or the trading prices of securities of a company . . . .. The alleged offender must have intentionally misled the victim with the statement. Under Section 296, violators potentially face a maximum of two years in prison or a fine not exceeding two times the benefit received or should have been received as a result of the offence. Furthermore, the fine will not be less than 500,000 baht. o Accounting fraud Under Section 39 of the Accounting Act B.E. 2543 (2000), a person who makes a false entry, alters or neglects to make an accounting entry is criminally liable. An offender potentially faces a maximum of two years in prison and/or maximum fine of 40,000 baht. If the offender had a duty to keep accounts, he or she potentially faces a maximum of three years in prison and/or maximum fine of 60,000 baht. The requisite mens rea can be satisfied by showing negligence or intent to make or alter or falsify an accounting entry. o Insider trading Section 241 of the Securities and Exchange Act B.E. 2535 (1992) provides protection against the use of insider information in the sale or purchase of securities. The elements in Section 241 require that no person (directly or indirectly) can purchase or sell securities in such a way to take advantage of other persons by using undisclosed information material to changes in securities prices. Furthermore, the person must have accessed the information by virtue of his office or position. Alleged offenders face the same potential liability as listed in Section 296 (see fraud and misrepresentation in connection with sales of securities). o Embezzlement Sections 352 and 353 of the Criminal Code of Thailand provide for general protection against misappropriation. Misappropriation is being in possession of a property belonging to another person, or of which another person is a co-owner, and having a dishonest intention to convert such property to himself or a third person. More specifically, Section 3(4) of the Anti-Money Laundering Act B.E. 2542 (1999) lists embezzlement offences in its definition of predicate offences. o Bribery of government officials Section 144 of the Criminal Code of Thailand protects against the bribery of public officials. The section requires the alleged offender to induce a government official to act, fail to act or to delay an act, which is contrary to his or her functions, by giving or offering to give property or any other benefit. Alleged offenders potentially face a maximum of five years in prison and/or a maximum fine of 10,000 baht. Government officials also face liability for malfeasance in office under the Criminal Code. o Criminal anti-competition The Trade Competition Act B.E. 2542 (1999) provides general protections against anti-competitive behaviour by business operators. The Act protects against both unilateral conduct and collusion including price fixing, geographic market allocation and other anti-competitive behaviour. The Competition Commission monitors and investigates potential anti-competitive behaviour and refers matters to the Attorney General who may proceed with a criminal case. The public prosecutor would have to show substantive violations of any provision in Sections 25-29 of the Trade Competition Act. o Tax crimes Under Section 37 of the Tax Revenue Code of Thailand, tax evasion is a fraudulent crime. Anyone who evades or attempts to evade payment of the tax and duty by falsehood, fraud, or who knowingly or wilfully furnishes false information, makes false statements,
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gives false answers or produces false evidence to evade taxes is liable. Tax evaders are subject to imprisonment from three months to a maximum of seven years and a penalty ranging from 2,000 baht to 200,000 baht. o Government-contracting fraud The Act Concerning Offences Relating to the Submission of Bids to Government Agencies B.E. 2542 (1999) is the key statute regarding government-contracting fraud. The Act has the capability of punishing either corrupt government officials or wrongful parties. The Act covers wrongful actions including avoiding fair price competition through collaboration and depriving other parties from submitting fair bids. o Computer Crime The Computer Crime Act B.E. 2550 (2007) provides criminal liability for computer-related crimes. The Act protects against a wide variety of computer crimes including unauthorised access, preventing access, forging computer data, damaging the computer data of a third party, etc. o Copyright Infringement The Copyright Act B.E. 2537 (1994) provides criminal liability for copyright infringement. Sections 27 to 31 of the Act provide a list of copyright infringement offences, but also provide for exceptions for personal use, news-related use and non-profit research. o Money Laundering The Anti-Money Laundering Act B.E. 2542 (1999) provides criminal liability for money laundering. Section 5 of the Act criminalises transfers or the receipt of transfers for the purpose of concealing or disguising the original source or asset . . . .. Under Section 60 of the Act, an alleged offender potentially faces one to ten years in prison and/or a fine ranging from 20,000 to 200,000 baht.
3.2 Is there liability for inchoate crimes in Thailand? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
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Yes, there is liability for inchoate crimes when the commission of an offence would have likely caused damage or injury. A person can be liable for attempt regardless of whether the attempted crime is completed under Section 80 to 82 of the Criminal Code of Thailand.

Yes, there is entity liability for criminal offences. There are several corporate criminal liabilities, which deem the managing partner, president, manager or person empowered to run the business of the company to be a co-principal in the commission of the offence unless it can be proven that they took no part in the commission of such offence (i.e. acted within the scope of their authority).
There is no personal liability for a manager, officer, or director if the entity becomes liable for a crime unless the employee acted on his personal behalf, without authority or beyond the scope of his authority.
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Document Gathering:
In a criminal case, the enforcement period begins running from the date of commission of the offence. The limitation periods range from one year up to twenty years. In case of a compoundable offence, the injured person must make a complaint within three months from the date that the offence and person responsible for such offence became known.
Under the law, competent government officials can issue written orders or summon persons to make statements or deliver documents. Government officials also have the power to seize documents with a proper search warrant as provided for in Section 69 of the Criminal Procedure Code of Thailand.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does Thailand recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do Thailands labour laws protect personal documents of employees, even if located in company files?
No. The limitations period begins from the date that the offence and person responsible for such offence became known. Proceedings must be initiated within the specified limitations period.
Yes, the limitations period can be tolled if the offender escapes or is deemed legally insane and the court gives an order to suspend the trial for a specified period.
Thailand has protections against the production of confidential documents or facts in regard to professional obligations or duties. An example would be the privilege protecting documents as prepared by attorneys, or the privilege protecting documents of employees, or any process, design or other work protected from the public by law. However, these are not absolute privileges. The court can order the authority or person requesting privilege to explain the need for the privilege. Afterwards, the court may decide whether there is a sufficient basis to refuse the production of documents. If the court finds that the refusal is groundless, then the court can order a party to produce such evidence.
In a criminal offence, initial investigations are started by an inquiry official, but in the case of a compoundable offence, the inquiry will begin when a regular complaint has been made. The inquiry official can collect any kind of evidence to determine the facts and circumstances relating to the alleged offence, to ascertain the offender and to prove the offenders guilt. The Criminal Procedure Code provides the rules and guidelines on inquiry proceedings. Some acts such as the Trade Competition Act provide inquiry powers to a committee or to sub-committees to investigate the commission of listed offences.
A government official can demand that a companys employee produce documents under the circumstances of an investigation and also raid the home or office of an employee to seize documents with a proper search warrant as provided for in Section 69 of the Criminal Procedure Code of Thailand.

The government has general power to gather information, issue written orders, summon witnesses to make a statement, request documents, and to enter buildings to examine or seize documents involved in the commission of the offence. However, a search warrant must be issued for the seizure of any documents as provided for in Section 69 of the Criminal Procedure Code of Thailand.
The government can require any person to produce documents or raid the home or office of any person and seize documents under the circumstances of an investigation with a proper search warrant as provided for in Section 69 of the Criminal Procedure Code of Thailand.
The government can demand that an employee, officer, or director

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of a company or any other responsible person submit to questioning in order to ascertain the circumstances of the alleged offence. However, the questioned person has a constitutional right not to make self-incriminating statements.
8.4
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In addition to or instead of any criminal disposition to an investigation, can a defendant be subject to any civil penalties or remedies? If so, please describe the circumstances under which civil penalties or remedies are appropriate.
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7.7
Under what circumstances can the government demand that a third person submit to questioning? In what forum can the questioning take place?
The government can demand that a third person submit to questioning in order to ascertain the circumstances of the alleged offence. However, the person has a right not to make selfincriminating statements.
A defendant can also be subject to civil penalties or remedies. A public prosecutor may apply for restitution of property or of the deprived value on behalf of the injured person. The injured person must have been deprived through the offence of theft, snatching, robbery, gang-robbery, piracy, extortion, cheating and fraud, criminal misappropriation or receiving stolen property.
9 Burden of Proof
In a criminal case, a person has the right to legal counsel. In an inquiry or during a preliminary examination, a person has a constitutional right not to make self-incriminating statements. Furthermore, the questioned person is allowed to have legal counsel present at this time.
In general, the burden of proof is on the prosecutor in a criminal case unless stated otherwise in the law.

The prosecutor has the burden of proof to prove the crime beyond a reasonable doubt.
Upon completion of an investigation, an inquiry official will refer the case file and provide an opinion on whether to prosecute to the public prosecutor. At this point, the public prosecutor has independent discretion in deciding whether to prosecute.
The judge is the arbiter of facts and determines whether a party has satisfied its burden of proof.
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After review of the inquiry officials opinion, the public prosecutor has independent discretion in deciding whether to prosecute. However, there are guidelines to aid public prosecutors on making a decision to issue a non-prosecution order. Issues covered include the filing of a lawsuit against the public interest, public order or good morals.
Under Section 83 of the Criminal Code of Thailand, a person can be liable for conspiring or assisting another with a crime. If a person is a participant or conspired in the commission of the offence, he or she is considered a principal and will be subject to the full punishment of the offence.
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Common Defences
In the Thai legal system, a criminal offence cannot be resolved through pre-trial diversion or an agreement to defer prosecution. However, the offence may be settled upon agreement with the public prosecutor.
Section 59 of the Criminal Code of Thailand requires intent for criminal liability unless the law provides for negligence or strict liability. The prosecutor has the burden of proof to prove intent beyond a reasonable doubt.
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Plea Bargaining
Under Section 64 of the Criminal Code of Thailand, ignorance of the law is not an excuse for criminal liability. However, the court may take it into account and provide lighter punishment.
No, the defendant cannot voluntarily decline to contest criminal charges in exchange for reduced charges or an agreed-upon sentence.
Under Section 62 of the Criminal Code of Thailand, ignorance of facts may be a defence. If the defendant mistakenly believed a fact existed, then the defendant may not be guilty, may be exempt from punishment, or may receive a lighter punishment. However, the defendant may still be liable if the mistake of fact was due to the defendants negligence.
During the inquiry proceeding, a criminal matter may be settled by the alleged offender by voluntary agreement/settlement with the competent official without court approval.
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The judge has independent discretion in sentencing the defendant. However, the judge must not go beyond the maximum punishment prescribed in relevant statutes used in prosecution.
There is no obligation to report a crime to the government and a person will not be liable for failing to report the crime.
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No, if the prosecution has proved the elements of the crime beyond a reasonable doubt, then the judge may issue a sentence in compliance with the relevant statute.
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Appeals
The government cannot offer leniency in exchange for voluntary disclosure of criminal conduct or cooperation. Only the court may consider reducing the punishment on an offender.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in Thailand, and describe the favourable treatment generally received.
Generally, an appeal can be made on both the facts and the law in regard to a guilty verdict. However, the Criminal Procedure Code of Thailand does not allow some appeals in cases where the defendant is found guilty with small terms of imprisonment. Both parties can appeal in the case of appeal on questions of law.
The court may consider reducing the punishment of an offender during the inquiry proceeding, preliminary examination or during trial. The court may also consider extenuating circumstances in determining punishment if the offender has shown repentance and has made an effort to minimise the injurious consequences of the offence or has given information for the benefit of trial. However, the court can only reduce the punishment by not more than one half.
The guilty party can appeal a criminal sentence. If needed, the Appellate Court has the power to reduce or quash the criminal sentence.
The Appellate Court will review the summary of the facts or the points of law relied upon in the appeal. All points of law relied upon by the parties lodging the appeal must have been raised in the

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Court of First Instance. The Appellate Court can consider additional evidence that it may consider itself or direct the Court of First Instance to consider if the decision is remanded.
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The Appellate Court can order the Court of First Instance to carry out a new trial and give a new judgment or order according to the merits of the case.
Michael Ramirez
Tilleke & Gibbins Supalai Grand Tower, 26th Floor 1011 Rama 3 Road, Chongnonsi, Yannawa Bangkok 10120 Thailand
Poomjai Kudidthalert
Tilleke & Gibbins Supalai Grand Tower, 26th Floor 1011 Rama 3 Road, Chongnonsi, Yannawa Bangkok 10120 Thailand
+66 2653 5794 +66 2653 5678 michael.r@tillekeandgibbins.com www.tillekeandgibbins.com
+66 2653 5780 +66 2653 5678 poomjai.k@tillekeandgibbins.com www.tillekeandgibbins.com
Michael Ramirez is a senior consultant in the dispute resolution group at Tilleke & Gibbins in Bangkok, Thailand, where he assists clients in domestic and international dispute resolution matters. Michael has held office management and consulting positions with Authur Andersen LLP and practiced with Sedgwick, Detert, Moran & Arnold in San Francisco, California, where he concentrated in areas of product liability, environmental and general civil litigation defence. In addition to serving as corporate litigation counsel, he counsels clients in risk prevention, warnings and compliance. Michael has authored several articles on dispute resolution and is a regular presenter on the subject. Michael earned a BA in Economics from the University of California, Berkeley, and his JD from the University of California Hastings College of the Law in San Francisco, California.
Poomjai Kudidthalert is a paralegal in the dispute resolution team at the Bangkok office of Tilleke & Gibbins. Since joining the firm, Poomjai has worked on a wide range of legal issues involving domestic and international dispute resolution matters. Her areas of concentration include civil litigation, products liability, and mediation. Poomjai earned her Bachelor of Laws from Ramkhamhaeng University.
Tilleke & Gibbins is the oldest and largest independent multiservice law firm in Thailand with offices in Bangkok and Phuket, as well as in Hanoi and Ho Chi Minh City, Vietnam. Established in 1890, the firm takes great pride in its 120-year history of providing high-quality advice, knowledge, and judgment to best accomplish its clients objectives. Tilleke & Gibbins engages in a diversified general commercial, corporate, intellectual property, and litigation practice, with over 12,000 clients ranging from large multinational corporations and financial institutions to privately held companies, not-for-profit entities, and individuals in Thailand and abroad. When compared with other international firms in Thailand, Tilleke & Gibbins is unique because it has the expertise and legal sophistication to handle complex legal matters, yet it is local and possesses the cultural understanding and community base necessary to deliver practical and cost-effective results.
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Chapter 22
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Gary DiBianco
Gary A. Rubin

1.3
Is there any civil or administrative enforcement against business crimes? If so, what agencies enforce the laws civilly and which crimes do they combat?
The United States has a federal system of government. Both the federal government and the state governments promulgate and prosecute violations of their own laws. At the federal level, there are 93 United States Attorneys, appointed by the President, who are principally responsible for investigating and prosecuting federal crimes that occur within their judicial districts. By statute, they have authority to prosecute all crimes against the United States occurring in their district. The U.S. Attorneys and their assistants are part of the Department of Justice (DOJ), the federal agency responsible for representing the United States in courts of law. The DOJs Criminal Division is headquartered in Washington, DC, and has several divisions and sections that specialise in prosecuting particular types of crimes, including Tax, Antitrust, and Environment Divisions. At the state level, the powers of particular enforcement authorities vary. Generally, each state has an Attorney General who is the chief legal officer of the state. In addition, criminal prosecutions generally are the responsibility of county-level public prosecutors within each state (States Attorneys or District Attorneys). The jurisdiction of the state Attorneys General, States Attorneys, and District Attorneys extends to violations of state and local criminal law that occur within the borders of the respective state or county.
Yes. In addition to criminal enforcement of violations of law by the DOJ, various federal agencies are authorised to investigate and bring civil enforcement proceedings. In civil proceedings, agencies can seek civil monetary penalties, disgorgement (forfeiture), and injunctive (non-monetary) relief. Generally, criminal statutes apply to knowing and wilful criminal conduct, while the standard of intent for civil violations is lower. Examples of agencies that regularly conduct civil enforcement matters are: Commodities Futures Trading Commission: cases involving commodities exchanges. Environmental Protection Agency: environmental-quality cases. Federal Trade Commission: antitrust cases. Internal Revenue Service: tax cases. Securities and Exchange Commission: securities-fraud, insider-trading, accounting, and foreign bribery cases. Certain U.S. federal agencies also may conduct administrative proceedings involving persons subject to regulation by those agencies. These proceedings involve adjudication by agency officials rather than a federal court. If the agency determines that a person has violated a rule or statute, it can order the person to cease and desist from committing such violations in the future, and can also impose injunctions, such as prohibiting or conditioning the persons continued engagement in particular commerce.

2.1 How are the criminal courts in the United States structured? Are there specialised criminal courts for particular crimes?
As a general matter, federal prosecutors are responsible for prosecuting violations of U.S. (national) law, which includes specific federal crimes, such as bribery of foreign officials, and more general crimes, such as embezzlement or fraud, that occur in multiple states or in federal territories like federal-government buildings and national waterways. State-level prosecutors prosecute violations of state law. When criminal conduct potentially violates both U.S. and state criminal laws, the authorities may negotiate to which agency will lead an investigator and prosecute. The U.S. constitutional prohibition against being tried twice for the same offence (double jeopardy) generally does not prohibit dual prosecutions by state and federal authorities, because they are considered separate sovereigns.
Both federal and state courts generally are divided into three types: (i) trial courts of general jurisdiction; (ii) first-level appellate courts that hear all appeals from the trial courts; and (iii) a second-level appellate court that hears selected appeals from the first-level appellate courts. Defendants who have lost at the trial-level court may appeal as of right to the first-level appellate court. Appeal to the highest court is frequently by discretion of the court rather than by right. At the federal level, all courts hear both civil and criminal cases; there are no specialised criminal courts. At the state level, whether there are specialised criminal courts varies by state.

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o Tax crimes
Yes. In both federal and state courts, except in cases of certain petty offences, criminal defendants have the right to trial by jury.
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The most commonly prosecuted crime is tax evasion, which prohibits wilfully attempting in any manner to evade or defeat any tax. To be liable for tax evasion, a person must take at least one affirmative act constituting an evasion or attempted evasion of the tax. Other tax crimes include wilfully failing to collect and pay over tax that is due (such as employment taxes) and wilfully failing to file a tax return. o Government-contracting fraud It is unlawful for any person to falsify, conceal, or cover up any material fact, to make any materially false statement, or to use any false document in dealing with the United States. A person who knowingly and wilfully does any of these things may be subject to criminal liability. o Environmental crimes The major federal environmental laws, including the Clean Air Act, Clean Water Act, and Resource Conservation and Recover Act, criminalise knowing, wilful or, often, negligent violations of the laws requirements. Examples of specific conduct that is criminalised under environmental laws include: the discharge of pollutants to water bodies without a permit; the improper removal and disposal of asbestos-containing materials; the disposal of hazardous waste in unpermitted areas; tampering with emission- or discharge-monitoring equipment; the export of hazardous waste without the permission of the receiving company; and submitting false statements or reports to the federal government.
3.2 Is there liability for inchoate crimes in the United States? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
3.1
Please describe any statutes that are commonly used in United States to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
It is a criminal offence for any person to wilfully employ any device, scheme, or artifice to defraud, or to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made not misleading, or to do anything else that would constitute a fraud or deceit upon any person in connection with the purchase or sale of any security. o Accounting fraud Every company that has its securities registered with the Securities and Exchange Commission must make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company. There is no materiality element to this statuteany inaccuracy may constitute a violation. o Insider trading Insider trading is a form of securities fraud. It involves trading a corporations securities by individuals who have access to nonpublic information about the company, such as an imminent settlement in litigation, a regulatory approval for a significant product, or recent financial performance. Such individuals are called insiders. Insiders include corporate officers, key employees, directors, and shareholders who are beneficial owners of at least 10% of the companys shares. o Embezzlement Embezzlement is the fraudulent conversion of property to a persons own use by a person who has been entrusted with it. It is different from theft in that the embezzler has a relationship of trust with the victim under which the embezzler was lawfully in possession of the property until he or she appropriated it. o Bribery of government officials It is a crime corruptly to provide, promise, or offer to any government official of the United States, or to a person who has been selected to become an official, directly or indirectly, anything of value in order to induce the official to act in any way. In addition, under the Foreign Corrupt Practices Act the (FCPA), it is a crime for any person corruptly to provide, promise, or offer anything of value to any person while knowing that all or part of it will be given to a foreign government official in order to induce the official to direct an advantage to any person. o Criminal antitrust violations Under the Sherman Act (one of the US antitrust statutes) a person commits an offence when he or she enters into an agreement that unreasonably restrains competition and that affects interstate commerce. A person also commits an offence when he or she has monopoly power in the marketplace and wilfully maintains that power through means other than natural growth or development, or historical accident.
Yes, there is liability for attempted crimes in the United States, both at the federal and state levels. Generally, attempt statutes require proof of: (i) intent to commit a specific crime; and (ii) an action in furtherance of the attempt, which need not constitute criminal conduct on its own.

Yes, under both federal and state law, a legal entity can be convicted of a crime. An entity may be responsible for the conduct of an employee when the employee is acting: (i) within the scope of his or her employment; and (ii) for the benefit of the entity. The employee need not intend to benefit the entity to the exclusion of his or her own benefitif an employees action will benefit the entity at least in part, this element of the test is satisfied. When entitys state of mind is an element of the offence, the knowledge of its employees, officers and directors may be imputed to the entity to the same extentknowledge is imputed to the entity when an employee obtains the knowledge while acting: (i) in the course of his or her employment; and (ii) for the benefit (at least in part) of the entity. In addition, under the Collective-Knowledge Doctrine, the knowledge of the entity is the aggregate of the imputed knowledge of every employee acting within the scope of his or her authority, even if no one employee has sufficient knowledge for form criminal intent.
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4.2
Is there personal liability for managers, officers, and directors if the entity becomes liable for a crime?

The government generally has three types of procedural tools at its disposal to gather information in criminal investigations: (i) an informal request, which is a request by the government to a person to voluntarily produce documents or provide information; (ii) a subpoena, which is a demand issued by a court to produce documents or appear for questioning; and (iii) a search warrant, which is a warrant issued by a court authorising the government to search a persons premises for particular items. The government may use a subpoena to compel a person to provide formal testimony. In civil investigations, the government may issue a civil investigative demand (CID), which is a formal demand by an investigative agency for documents or information.
At the federal level, the enforcement-limitations period, when applicable, begins running on the date the offence is committed. Capital offences and certain other serious crimes are not subject to any limitations period. Generally, unless otherwise specified, federal crimes are subject to a five-year limitations period, and a number of banking-related crimes are subject to a ten-year period. The limitations period generally begins when the last act in furtherance of the crime is committed.
Document Gathering:
Yes. Crimes that are part of a continuing offence, such as a conspiracy, may be prosecuted even if the limitations period for some of the crimes within the continuing offence has lapsed, so long as the last crime constituting the continuing offence occurred within the limitations period. A continuing offence is an offence committed over a span of time.
Prosecutors and law-enforcement officers may demand documents via a subpoena. A subpoena is issued by the Grand Jury at the request of a prosecutor. A Grand Jury is a group of residents of a judicial district (at the federal level) or county (at the state level) who are summoned by the court to hear evidence presented by the government and to determine whether the government has sufficient evidence to proceed to prosecute a defendant. A law-enforcement officer also may seek authority to raid a company to seize documents via a search warrant. Only a United States District Court (at the federal level) or a state court of general jurisdiction may authorise a law-enforcement agency execute a search warrant. The warrant must be based on an affidavit setting forth the facts known to the officer that provide probable cause to search for and seize property. Probable cause is a low quantum of proof: it means that facts exist that would lead a reasonably prudent person to believe that evidence of a crime will be discovered in the place to be searched. The locations to be searched and the types of evidence that may be seized must be defined in the search warrant.
7.3 Are there any protections against production or seizure that the company can assert for any types of documents? For example, does the United States recognise any privileges protecting documents prepared by attorneys or communications with attorneys? Do United States labour laws protect personal documents of employees, even if located in company files?
The limitations period may be tolled for a number of reasons, most significantly, if the government can show active concealment of the crime. In addition, if the DOJ requires the assistance of overseas authorities to obtain evidence, it may apply to the court for a temporary stay of the limitations period. The government and the potential defendant may enter into an agreement to toll the limitations period, which a potential defendant may do if it is cooperating with the government and hopes to enter into a settlement agreement.
Prosecutors generally are free to initiate investigations when they have reason to believe that a crime falling within their jurisdiction has been committed. U.S. law generally does not require the government to initiate investigations under particular circumstances.
The United States recognises two protections against production or seizure: the attorney-client privilege and the work-product doctrine. Some states recognise additional protections against disclosure, but they are more rarely invoked. Generally, the attorney-client privilege protects from disclosure confidential communications between an attorney and a client regarding legal advice. It applies whether the client is an individual or a company, and, if the client is a company, the privilege applies

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There is no automatic criminal liability for managers, officers, and directors when their entity is convicted of a crime. Rather, a criminal case must be made separately against the individuals. Under most statutes (with some exceptions), managers, officers, and directors are not strictly liable for the transgressions of a corporate entity.

whether the attorney is in-house or outside counsel. The federal courts generally hold that if any employee of a company communicates with an attorney about the subject matter of the employees employment, that communication may be privileged. Some state courts, however, hold that only the communications of senior personnel who control the company are made on the companys behalf and thus subject the privilege.
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if the officers have probable cause to believe that the person has been involved in the commission of a crime. In addition, the Grand Jury may issue a subpoena to an employee, officer, or director, commanding the individual to appear before the Grand Jury to answer questions. The U.S. Constitution protects individuals from being compelled to provide testimony that would tend to incriminate themselves, and thus an individual may refuse to testify before a Grand Jury on this basis.
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The attorney-client privilege does not apply when the client communicates with the attorney in order to obtain assistance in committing or to plan a crime or a fraud (the crime-fraud exception to the attorney-client privilege). The work-product doctrine generally protects from disclosure documents or tangible things made by or for an attorney in preparation for litigation. The purpose of the doctrine is to protect the attorneys opinions and impressions of facts learned by the attorney from disclosure. When the government requests documents from a company or causes a subpoena to be issued to it, the company generally will review any documents relevant to the request or subpoena to determine whether or not they are protected from disclosure. The company may withhold those documents and generally must provide a list of any documents so withheld. If the government believes that any assertion is improper, it may ask a court to compel the company to produce improperly withheld documents. When the government seizes documents under a warrant, it may decide to follow special procedures to segregate privileged documents so that it is not later barred from using seized materials in its prosecution. U.S. labour laws generally do not protect employee documents from disclosure.
The government may seek to question third persons to the same extent, and using the same procedures, that it seeks to question employees, officers, or directors of a company.
Persons being questioned by the government have an absolute Constitutional right to remain silent and not provide answers that would tend to incriminate the person. Persons being questioned by the government also have the right to consult with an attorney. When the questioning is being conducted on a voluntary basis by a law-enforcement officer, the person may refuse to answer any questions at any time, and may insist that his or her attorney be present during the questioning. When the person is testifying before the Grand Jury, he or she may consult with his or her attorney before answering any particular question, but the attorney is not permitted to attend the testimony in the Grand Jury room. The person does have the right to refuse to answer any questions whose answer would tend to incriminate the person.
The government may seek documents from an employee to the same extent, and using the same procedures, that it may seek documents from the company.

The government may seek documents from a third person to the same extent, and using the same procedures, that it may seek documents from the company.
For serious crimes punishable by more than one year in prison, if the Grand Jury has probable cause to believe that a crime has been committed by a person, it will return an indictment against the person. The indictment is drafted by the prosecutor and sets forth allegations against the person. For minor crimes, the prosecutor may commence a criminal case without a Grand Jury by filing an information with the court, setting forth the allegations against the person.
The circumstances and manner in which the government can question an individual are strictly circumscribed. Law-enforcement officers may seek a voluntary interview with employees, officers, and directors answer questions, but these individuals may refuse to do so. Law enforcement officers also may detain a person for questioning
Yes. At the federal level, the Principles of Federal Prosecution, which is a DOJ policy, governs prosecutors decision to charge an entity or individual with a crime. When a federal prosecutor has probable cause to believe that an individual has committed a crime and that the prosecutor has sufficient admissible evidence to convict the individual in court, the
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prosecutor should commence a criminal case against the person unless the prosecutor believes: (i) no substantial federal interest would be served by prosecution; (ii) person is subject to effective prosecution in another jurisdiction; or (iii) an adequate non-criminal alternative to prosecution exists. Federal guidelines also set forth the following additional factors in assessing whether a corporation should be charged criminally: the nature and seriousness of the offence, including the risk of harm to the public; the pervasiveness of wrongdoing within the company; the companys history of similar misconduct; the companys timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation; the existence and effectiveness of any pre-existing compliance programme at the company; the companys remedial actions; collateral consequences, including whether there is disproportionate harm to shareholders, pension holders, and employees; the adequacy of the prosecution of individuals responsible for the companys malfeasance; and the adequacy of remedies such as civil enforcement actions. These factors encourage companies involved in a DOJ investigation to cooperate with the prosecutors in order to maximise the likelihood that they will receive leniency, as described below in section 13.
8.3 Can a defendant and the government agree to resolve a criminal investigation through pretrial diversion or an agreement to defer prosecution? If so, please describe any rules or guidelines governing whether pretrial diversion or deferred prosecution are available to dispose of criminal investigations. 9.2
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in question 1.3. Often, a civil enforcement proceeding will run in parallel with a criminal proceeding. In addition, if a defendant is a government contractor, it may lose its ability to sell goods or services to the government if it is convicted of a crime involving embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax violations, or receiving stolen property. The lead government agency with which the defendant contracts will determine whether the government may continue to contract with the defendant.
9 Burden of Proof
9.1 For each element of the business crimes identified above, which party has the burden of proof? Which party has the burden of proof with respect to any affirmative defenses?
The government has the burden to prove every element of any crime charged. The defendant has the burden to prove every element of any affirmative defence asserted.
The government must prove every element of the crime beyond a reasonable doubt. Reasonable doubt is doubt that a reasonable person could have based on the evidence presented at trial, or lack of evidence. It is the highest standard of proof possible in U.S. jurisprudence. Defendants generally have the burden of proving any affirmative defences by clear and convincing evidence or a preponderance of the evidence, which are lower standards of proof. The preponderance-of-evidence standard means that all of the evidence, taken together, makes a particular fact more likely than not. The clear-and-convincing standard is between the preponderance and beyond-a-reasonable-doubt standards.
In the case of organisational defendants, the prosecutor may agree with the defendant to defer prosecuting the defendant (a DeferredProsecution Agreement or DPA) or not to prosecute the defendant at all (a Non-Prosecution Agreement or NPA) using the standards set out above in question 8.2. A DPA is an agreement that involves the government filing criminal charges against a defendant, but not prosecuting the defendant on them (deferral of the charges). An NPA is a type of settlement under which the government does not file any criminal charges against the defendant. Under both types of agreements, the defendant admits to a statement of facts concerning the offence. If a prosecutor believes that an individual would benefit and be less likely to commit a future crime if he or she were diverted from the traditional penal process into community supervision and services, the prosecutor may place the individual in pretrial diversion. Only defendants who are not repeat offenders and who meet certain other criteria are eligible for pretrial diversion.
The trial juryknown as petit juryis the arbiter of fact in a criminal trial, unless the defendant waives his or her right to be tried by jury. Thus, the jury determines whether each party has satisfied any burden of proof. At any time after the government completes putting on its evidence, however, the defendant may ask the judge to enter a judgment of acquittal of any offence for which the governments evidence was insufficient to sustain a conviction as a matter of law. This can include a motion to set aside a jury verdict finding the defendant guilty if the verdict is against the weight of the evidence.
10
Yes. Where the defendants criminal conduct also constitutes a violation of U.S. civil law (such as, for example, securities law), the defendant may be subject to civil penalties or remedies as part of a civil enforcement or administrative proceeding, as described above
Yes. Anyone who conspires with or aids or abets another person to commit a crime can be held liable as principal to the same extent as that person.

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The elements of criminal conspiracy are satisfied when two or more persons agree to commit a crime and at least one of those persons takes at least one overt act toward the committing the crime.
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it, the person is guilty of a crime called misprision of felony. To be guilty of misprision of felony, the defendant must have taken an affirmative step to conceal the crime.
11
Common Defences
13
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Yes. Where the law defines an offence as requiring a particular state of mind by the defendant, the state of mind is an essential element of the offence. In such cases, the prosecutor must prove that the defendant had the requisite state of mind to commit the offence beyond a reasonable doubt.
Generally, defendants are presumed to know the law. Thus, when a defendant commits a crime, he or she is presumed not only to have performed the acts constituting the crime, but also to have intended to violate the law that prohibited those acts. For this reason, a mistake-of-law defence is generally not available. The mistake-of-law defence is available in certain instances where the government is required to prove specific intent on the part of the defendant to violate the law. In these circumstances, the mistakeof-law defence is available where the defendant has a genuine, good-faith belief that he or she is not violating the law based on a misunderstanding caused by the laws complexity. Because specific intent is an element of the crime, the government has the burden of proving the defendants intent beyond a reasonable doubt.
Yes. Under the Principles of Federal Prosecution, discussed above, DOJ prosecutors take into account a companys voluntary disclosure of wrongdoing and cooperation in the governments investigation in making its charging decisions and sentencing recommendations. Where a company discloses its own wrongdoing or voluntarily shares company information with the government in connection with its investigation, the prosecutor may agree to charge the company with a lesser offence, or may enter into a DPA or NPA with the company. In addition to the Principles of Federal Prosecution, the U.S. Sentencing Guidelines (see question 15.1 below) also provide leniency for companies that cooperate with government investigations.
13.2 Describe the extent of cooperation, including the steps that an entity would take, that is generally required of entities seeking leniency in the United States, and describe the favourable treatment generally received.
Generally, the government will consider leniency when the companys disclosures and cooperation materially assist it in uncovering and investigating criminal acts it could not have uncovered and investigated without the companys assistance, or could not have uncovered and investigated without expending significant resources. Typically, leniency requires that a company fully investigateon its ownany criminal activity that is or may become the subject of a government investigation: a so-called internal investigation. The company would generally be expected to share the results of this internal investigation with the government, and thus assist the government in focusing and resolving its own inquiry. The government also would expect a voluntarily agreement to produce relevant documents to the government and to make relevant employees available to be interviewed by law-enforcement officers. In addition to merely assisting the government in its own inquiry, prosecutors will also give credit to companies that use the result of their own internal investigations to alter their business practices, for example by disciplining employees who engaged in misconduct and strengthening their compliance organisations and internal controls.
The mistake-of-fact defence is available when the defendants honest mistake negates the requisite state of mind for the offence. For example, if it were a crime intentionally to give a gift to a government official, and the defendant honestly believed that the person to whom he gave the gift was a private citizen and not a government official, then the defendant should be found not guilty because his mistake prevented him from forming the requisite intent to commit the crime. The government has the burden to prove the defendants state of mind beyond a reasonable doubt.
12
Voluntary Disclosure Obligations 14 Plea Bargaining
There is no affirmative obligation to report knowledge that a crime has been committed. However, if a person knows of the commission of a felony (a serious crime) by another, and conceals
Yes. A defendant may enter into a plea agreement with the government under which the government will charge the company
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with agreed-upon offences and will agree to recommend a particular, usually reduced, sentence to the court.
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There are two categories of benefit a defendant may hope to achieve from a plea agreement: reduced charges; and reduced sentence. Charges: The government has discretion to charge (or not to charge) defendants with particular offences. Nevertheless, under DOJ policy, federal plea agreements should honestly reflect the totality and seriousness of the defendants conduct; any departure from this standard must be disclosed in the agreement. The court does not approve the governments charging decisions, but the court does have the power to approve or reject an entire plea agreement, of which any reduced charges are part. Sentence: While the prosecutor decides what charges to bring, the court has ultimate discretion on what sentence to impose. A plea agreement may include a recommendation to the court to impose a particular sentence, but the court is not bound by those recommendations. There is a narrow category of federal plea agreements under which both the charges and sentence are agreed between the government and defendant, and the court is asked either to reject or accept the entire package. Such agreements are disfavoured both by courts and the authorities.
In considering imposing a sentence on a corporation, the court must consider the nature and circumstances of the offence and the history and characteristics of the defendant. In addition, the sentence should: reflect the seriousness of the offence, promote respect for the law, and provide just punishment for the offence; and be serious enough to deter future criminal conduct and to protect the public from further crimes of the defendant. In making these determinations, the court will consider whether the company has implemented any compliance organisation and internal controls or disciplined the employees who were responsible for the misconduct.
16
Appeals
If a defendant is found guilty at trial, the defendant may appeal the verdict on any available grounds, but, if the defendant is found notguilty, the government may not appeal.
15
Both federal and state laws provide the minimum and maximum sentences (i.e., the amount of fine, term of imprisonment, or both) to which a defendant can be sentenced for a particular offence. The minimum and maximum sentences may be set forth in the specific statute defining the particular offence, or they may be set forth in a separate general statute that sets forth permissible sentences for different classes of crimes. In addition, at the federal level, the alternative fines statute provides that a defendant may be sentenced to pay a fine of up to twice the amount of the pecuniary gain realised by the defendant, or the pecuniary loss to others caused by the defendant, from the criminal conduct. At the federal level, once the court determines that a defendant is guilty and determines the maximum sentence for the offence of conviction, the court conducts a calculation using the U.S. Sentencing Guidelines. The Sentencing Guidelines comprise a series of steps that convert an offence of conviction and certain other relevant conduct into a numeric score, which the court then can use to determine the potential range of fines or term of imprisonment to which to sentence the defendant. Generally, the Sentencing Guidelines account for the severity of the defendants crime and the defendants criminal history. The Sentencing Guidelines provide for reduced sentences for defendants who disclose wrongdoing to the authorities and actively assist the authorities in their investigation of any criminal conduct. In addition, the Sentencing Guidelines provide for reduced sentences for companies that implement compliance programmes designed to detect and prevent wrongdoing by employees.
A defendant who has been convicted of a crime, whether after trial or as part of a plea agreement, may appeal a sentence if the sentence: (i) was imposed in violation of law; (ii) was imposed as a result of an incorrect application of the Sentencing Guidelines or is greater than the maximum sentence provided in the Sentencing Guidelines; or (iii) was imposed for an offence for which there is no Sentencing Guideline and is plainly unreasonable. If the defendant pleaded guilty under an agreement specifying the fine to which the court must sentence the defendant, the defendant may only appeal if the sentence violated the law or misapplied the Sentencing Guidelines. The government may a appeal a sentence if the sentence: (i) was imposed in violation of law; (ii) was imposed as a result of an incorrect application of the Sentencing Guidelines or is less than the minimum sentence provided in the Sentencing Guidelines; or (iii) was imposed for an offence for which there is no Sentencing Guideline and is plainly unreasonable. The Attorney General, Solicitor General, or Deputy Solicitor General of the United States must approve any appeal by the government.
An appellate court may only overturn a trial courts finding of fact if it were clearly erroneous. This means that the appellate court may only overturn a factual finding when it is unsupported by substantial evidence or contrary to the clear weight of the evidence. An appellate court owes no deference to the trial court, however, respecting its conclusions of law, and may review those conclusions de novo, which means afresh.
The appellate courts remedial power depends upon the basis for the appeal.

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If the appeal was from the trial courts sentence, the appellate court may vacate the sentence and remand the case to the trial court for re-sentencing consistent with any instructions of the appellate court. If the appeal was from the defendants conviction, the appellate court may vacate the trial courts judgment of conviction and
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remand the case to the trial court for a new trial. In exceptional circumstances, if the appellate court finds that the trial court erred in not entering a directed verdict of not guilty, the appellate court may remand the case to the trial court with instructions to do so and to release the defendant.
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Gary DiBianco
Gary A. Rubin
Skadden, Arps, Slate, Meagher & Flom LLP 1440 New York Avenue Washington, DC, 20001 USA
40 Bank Street, Canary Wharf London, E14 5DS United Kingdom
+44 20 7519 7000 +44 20 7519 7070 Gary.DiBianco@skadden.com www.Skadden.com
+1 202 371 7000 +1 202 393 5760 Gary.Rubin@skadden.com www.Skadden.com
Gary DiBianco is a partner in the firms London office and heads the London-based Corporate Investigations practice. Mr. DiBianco has extensive experience defending criminal and civil investigations; conducting internal investigations; and defending civil litigation in anti-corruption, fraud, securities and related matters. He has been involved in a number of significant matters representing U.S. and non-U.S. entities in a variety of industries and business sectors, including manufacturing, pharmaceuticals and life sciences, financial services and professional services. His experience under the U.S. Foreign Corrupt Practices Act and related laws includes global internal investigations, response to Department of Justice and Securities and Exchange Commission inquiries, defence of parallel international enforcement actions and shareholder litigation, and due diligence in connection with corporate transactions. He has performed investigations relating to anti-corruption issues in dozens of countries, including in Europe, Asia, the Middle East and Latin America.
Gary A. Rubin, a counsel in the firms Washington, D.C. Litigation and Government Enforcement Group, represents individuals and domestic and foreign companies in civil and criminal investigations, complex litigation, and parallel proceedings involving private litigants and state, federal, and foreign regulators and prosecutors. He also advises clients on federal and foreign anticorruption compliance issues. Mr. Rubin primarily focuses on conducting internal corporate investigations with significant overseas components involving the U.S. Foreign Corrupt Practices Act and federal securities and criminal statutes, as well as foreign anticorruption laws. He frequently addresses conflicts of laws, cross-border discovery issues, and dataprotection issues.
The Government Enforcement and White Collar Crime Practice of Skadden, Arps, Slate, Meagher & Flom LLP and affiliates is an internationally recognised leader in the representation of corporations, boards of directors, management and other individuals in connection with a broad range of government investigations, enforcement actions, internal investigations, and white collar criminal investigations and litigation. The close coordination between criminal and civil regulatory authorities when investigating allegations of wrongdoing has increasingly blurred the line separating criminal, civil and administrative offences, resulting in heightened risks when conducting business, both domestically and internationally. Skadden is well-positioned to help clients navigate the legal landscape when business conduct results in concurrent criminal, civil and/or administrative proceedings that require a strategically coordinated response.
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The International Comparative Legal Guide to:

Business Crime 2011

The International Comparative Legal Guide to: Business Crime 2011

Country Question and Answer Chapters:

110 118 128 137 144 153

Alan Falach LL.M Managing Editor Global Legal Group Alan.Falach@glgroup.co.uk

Navigating Rough Waters: Managing MultiJurisdictional Investigations

II. Data Preservation and Collection

ICLG TO: BUSINESS CRIME 2011

Skadden, Arps, Slate, Meagher & Flom LLP

Navigating Rough Waters

III. Employee Interviews

IV. Fact Analysis and Reporting

ICLG TO: BUSINESS CRIME 2011

Skadden, Arps, Slate, Meagher & Flom LLP

Navigating Rough Waters

VI. Employee Discipline

V. Multi-Jurisdictional Disclosure Obligations

ICLG TO: BUSINESS CRIME 2011

Skadden, Arps, Slate, Meagher & Flom LLP

Navigating Rough Waters

ICLG TO: BUSINESS CRIME 2011

Skadden, Arps, Slate, Meagher & Flom LLP

Navigating Rough Waters

40 Bank Street, Canary Warf London, E14 5DS United Kingdom

40 Bank Street, Canary Warf London, E14 5DS United Kingdom

Tel: Fax: Email: URL:

+44 20 7519 7000 +44 20 7519 7070 Gary.DiBianco@skadden.com www.Skadden.com

Tel: Fax: Email: URL:

+44 20 7519 7139 +44 20 7072 7139 Matthew.Cowie@skadden.com www.Skadden.com

ICLG TO: BUSINESS CRIME 2011

Whistleblower Laws: Protections for Employees, Risks to Corporations

ICLG TO: BUSINESS CRIME 2011

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.

ICLG TO: BUSINESS CRIME 2011

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.

ICLG TO: BUSINESS CRIME 2011

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.

ICLG TO: BUSINESS CRIME 2011

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.

17. 18. 19.

ICLG TO: BUSINESS CRIME 2011

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.

45. 46. 47. 48. 49. 50.

ICLG TO: BUSINESS CRIME 2011

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.

Tel: Fax: Email: URL:

+1 212 880 9410 +1 212 856 9494 jsack@maglaw.com www.maglaw.com

Tel: Fax: Email: URL:

+1 212 880 9505 +1 212 856 9494 btrencher@maglaw.com www.maglaw.com

ICLG TO: BUSINESS CRIME 2011

The UK Bribery Act: Is There a New International Standard?

3. Principal offences under the Bribery Act

2. Reforming English bribery law

Requesting or receiving a bribe

ICLG TO: BUSINESS CRIME 2011

Simmons & Simmons

The UK Bribery Act

5. The corporate offence

ICLG TO: BUSINESS CRIME 2011

Simmons & Simmons

The UK Bribery Act

ICLG TO: BUSINESS CRIME 2011