Every day, news outlets around the world report on corporate scandals and investigations, money laundering through shell companies in tax havens, arrests of executives, and multi-million-dollar settlements with prosecutors by big market players. Is this symptomatic of setbacks in the fight with corporate criminality, or is enforcement improving and uncovering more crime?
Books like Oliver Bullough’s Moneyland or Tom Burgis’s Kleptopia, or films like Steven Soderbergh’s Laundromat, might give the impression that the corporate world is in a dreadful state and dirty money is flooding the global economy.
However the reality might look, a keen observer may note that in recent years, law enforcement agencies pursuing corporate criminals have gotten better at cooperating on the global level. They are increasingly effective at handling complex multi-jurisdictional matters. They are also better oriented to market realities, raising their game in pursuing administrative and criminal proceedings against legal violations by corporations.
At the international level, cooperation and exchange of information between agencies is faster and more efficient, particularly within the EU. The scope of corporate criminal liability is being widened, penalties are harsher, and cooperation is rewarded.
These factors, combined with a clear trend toward protection of whistleblowers and leniency for self-reporting, mean that companies increasingly prefer to self-report irregularities and cooperate with law enforcement, rather than expose themselves to the uncertain consequences of litigation.
To some extent those tendencies can also be seen in Poland. The bottleneck for more enforcement is the current model for corporate criminal liability under the Act on Liability of Collective Entities for Punishable Offences. The primary reason is that criminal proceedings can be initiated against a collective entity only when an affiliated individual perpetrator has been convicted of an offence. In practice, such convictions are secured after trials lasting years, when there is often no will (and, in colloquial terms, no point) in bringing charges against corporate defendants.
But the law is expected to change. News reaches the public from time to time on legislative work on a new law on corporate criminal liability. One of the earlier drafts (which was published and submitted to the parliament, but work on which was discontinued due to end of the term of the previous parliament) provided for broader grounds for criminal liability of collective entities and tougher penalties, and would have generated more criminal proceedings against companies. This sparked a discussion on corporate criminal liability in Poland and caused many practitioners (particularly prosecutors) and scholars to reflect anew on how to use the existing law to combat corporate criminality more effectively.
This discussion inspired us to speak out and prepare a guide taking a fresh look at the existing law. We explore such issues as:
- Which “collective entities” can be held liable under the current law, and under what conditions?
- What sanctions do they face if convicted?
- How does the procedure work, and how can a company defend itself?
- If a company is sold, does it carry its criminal liability with it, and is there a danger of buying the proverbial “pig in a poke”?
We hope readers find the guide informative and useful.
Łukasz Lasek, adwokat, Jakub Znamierowski, adwokat, Business Crime practice, Wardyński & Partners