Although the existence of corporate criminal liability in Portugal can be traced back to 1984, it was not until 2007, with the approval of Law no. 59/2007 of 4 September 2007, that it was established in the Portuguese Criminal Code (“General Law”).

Under Portuguese law, a company may only be held criminally liable if a specific rule so provides. Where no such provision exists, only individuals may be held liable for crimes.

Crimes for which companies can be held liable under the General Law relate to white-collar crimes, crimes against property, crimes against physical and moral integrity and environmental crimes.

Apart from the General Law, there are some specific legal provisions which provide for companies to be held liable for criminal offences, such as crimes against the economy and public health, crimes compromising the security of computer data, systems or communication networks, tax crimes (including tax fraud, tax evasion and embezzlement), and crimes against the social security system.

In addition, the acts or omissions have to be attributable to the company. While the requirements for such attribution may differ, it is usually necessary for the crimes to have been committed in the name and on behalf of the company for its benefit.

Under the General Law, companies may be held liable for crimes committed by either (i) a person who holds a position of authority within the company or (ii) any person under their supervision, provided that the crime has been allowed to occur due to a breach of any duty of control or supervision of the former.

For these purposes, the company’s corporate bodies (órgãos) and any attorney acting on behalf of the company, as well as any other person who controls the company’s activities to any extent (which includes non-executive members of the Board of Directors, as well as members of the Supervisory Board and may also include, broadly, both top and middle level management), will be considered to hold a position of authority within the company. The Portuguese Constitutional Court has already ruled that companies can also be held liable for crimes committed by de facto directors.

However, in the case of tax crimes and crimes against the economy and public health, only the actions of senior executives (that is, those who hold a position on the company’s corporate bodies) will be attributable to the company.

Finally, as a general rule, a company will not be criminally liable for conduct committed by an individual acting unlawfully or in breach of a direct order or an instruction given by a person with the authority to do so.

When determining whether Portuguese law applies to a given crime, the General Law does not distinguish between foreign and national companies but rather whether the crime has been committed in Portugal or abroad. As a general rule, Portuguese criminal law will apply to crimes committed within Portuguese territory, regardless of the nationality of the perpetrator.

In this light, crimes committed (as explained above) by a foreign company within Portuguese territory will be punished exactly in the same way as crimes committed by a Portuguese company. As such, if a director of a company which is not incorporated under Portuguese law commits an act of bribery within Portuguese territory in the name and in the interests of the company, the foreign company may be held criminally liable (together or not with the director).

On the other hand, if a crime is committed outside Portuguese territory, Portuguese criminal law will only apply if given conditions are met. With regard to corporate entities, Portuguese law will only apply to crimes that have been committed outside Portuguese territory if they were committed by a company or against a company which is headquartered in Portugal.

Companies have the benefit of privilege against self-incrimination, which means that they are not required to disclose any criminal offences they have committed. However, voluntary disclosure may be considered a mitigating factor when determining any applicable sanction, as further detailed below.

Furthermore, some companies, particularly regulated companies (e.g. public companies and credit institutions) are legally bound to cooperate with the regulatory authorities and are required to provide information requested by the regulators. However, where criminal liability may arise from such cooperation, companies may refuse to do so based on their privilege against self-incrimination.

Whenever there is a suspicion that a crime has been committed, either by an individual or a company, the competent prosecution office is required to initiate an investigation to determine if there are sufficient grounds to submit the case to the court.

Nevertheless, subject to certain requirements, Portuguese procedural law allows the prosecution authority (Ministério Público) to suspend the criminal proceedings for up to five years for offences for which the penalty is imprisonment of less than five years or a penalty other than imprisonment.

Apart from the natural limitations applicable to legal entities, Portuguese law recognises the same procedural rights for a company as for individuals. Companies are therefore in a similar position to an individual in criminal proceedings, both in terms of rights and prerogatives and in terms of defence mechanisms.

Since companies can only be held criminally liable if the crimes are somehow attributable to them, it is always necessary to identify the individual perpetrator that has committed the wrongdoing.

However, article 11(7) of the General Law, as well as several other specific provisions, provide that corporate criminal liability is completely independent from the individual’s criminal liability. Thus, although identification of the individual perpetrator is necessary, the conviction of the latter is not necessary in order to prosecute and convict the company. In practice, when there is proof that a crime has been committed by both the company and the individual, the most common situation is for the proceedings to be conducted together. This will also be the case when, from the same set of facts, different criminal liabilities arise for the company and for the individual.

Under Portuguese law, cooperation with the prosecution authorities is always voluntary. However, this cooperation can be taken into account by the court as a mitigating factor, particularly when it takes place at an early stage of the proceedings, depending on the benefit of such cooperation to the overall investigation.

With regard to the importance of cooperation and as an example, subsequent to the publication of Law no. 94/2021 of 21 December 2021, which approved measures provided for in the National Strategy on Anti-Corruption 2020-2024 and, for what is now relevant, amended the General Law, the following has been established for cases of active corruption:

• the company will be exempted from the penalty if it has reported the crime prior to the commencement of criminal proceedings and provided that it has withdrawn the promise of advantage or requested its restitution or repudiation from the employee or third party prior to the commission of the act or omission which was contrary to the duties of the employee/third party;
• even if the company has not reported the crime prior to the commencement of the criminal proceedings, the company may still be exempted from the penalty where, during the investigation or pre-trial stage, it has contributed significantly to the discovery of the truth and provided that it has withdrawn the promise of advantage or requested its restitution or repudiation from the employee or third party prior to the commission of the act or omission which was contrary to the duties of the employee/third party;
• the penalty will also be subject to special mitigation if, before the conclusion of the trial, the company actively collaborates in the discovery of the truth and contributes in a relevant manner to the proving of the facts.

Also, companies will often cooperate with the prosecution authorities on a voluntary basis as a way to reduce the reputational damage of certain crimes.

The General Law provides for two different kinds of criminal sanctions that can be applied to companies: main penalties (i.e. monetary fines and winding-up) and ancillary penalties (i.e. judicial determinations, limitations to carrying out its business, prohibitions on entering into certain agreements or conducting business with certain entities, losing the right to public grants or subsidies, temporary closure of undertaking or the disclosure of the conviction to the media). Following the publication of Law no. 94/2021 of 21 December 2021, the General Law has now established that, if the main penalty applied to a company is a monetary fine, the court may replace that penalty with an admonition, a deposit for good conduct or a judicial supervision measure. 

Monetary fines are the most commonly applied main penalties for crimes committed by companies. In some cases, a monetary fine may be replaced by other penalties (such as admonitions, a good behaviour caution or judicial supervision of the company).

Where the penalty for an offence committed by a company is imprisonment, that penalty will be converted into a monetary fine, with the conversion mechanism taking into consideration the financial resources of the company and its staff costs.

Winding-up is the most severe penalty that can be applied to a corporate entity. This may only be applied if the company (i) is found to have been incorporated with the main purpose of committing crimes, (ii) is repeatedly committing crimes, or (iii) is being used to commit crimes by the persons in positions of authority.

Ancillary to these main penalties, the court may also order a company to take certain specific measures to prevent criminal activities. For example, the court may order that the company refrain from entering into certain agreements or negotiations with particular entities for a period of time from one to five years. It may also deprive the company from benefits such as public grants or subsidies for the same period of time, or even oblige the company to adopt a compliance programme in cases where the obligation to adopt a compliance programme has not been (either partially or completely) fulfilled.

The court may also order the company not to carry out certain activities for a period between three months and five years or close an undertaking for the same period of time. In some specific cases, the court may also order the court’s ruling to be published in the media.

Portuguese law also provides for the sanctioning of misdemeanours (contra-ordenações), which are essentially regulatory wrongdoings and administrative offences. The administrative fines’ amount depends on the company and its business area. For instance, in investigation proceedings carried out by the Portuguese Competition Authority, the administrative fines applied can go up to 10% of the turnover of the financial year immediately preceding the final decision regarding the finding of wrongdoing.

The regime applicable to misdemeanours also provides for several ancillary penalties relating to the operation of the company’s business.

Misdemeanours proceedings are conducted by regulatory authorities (e.g. the Securities Market Commission, the Bank of Portugal or the Competition Authority) which will both conduct any investigations and apply the applicable sanction. These decisions can then be appealed to the national courts. Portuguese law provides for several mitigating factors that can reduce the level of penalty and which are considered on a case-by-case basis.

For legal entities, the main mitigating factor is the existence of control mechanisms/compliance systems. This will not always prevent a conviction but it will almost certainly reduce the penalty imposed. In fact, after the publication of Law no. 94/2021 of 21 December 2021, the General Law now expressly establishes that if, prior to a crime being committed, the company had adopted and implemented an adequate compliance programme to prevent such wrongdoing, the court must specially mitigate the penalty. Such mitigation may also be considered by the court in cases where the company only adopted and implemented an adequate compliance programme during the course of the proceedings (i.e., after the crime was committed but before the final judgment is handed down).

Early acceptance of guilt and cooperation with the prosecution authorities may also be taken into account and lead to a reduced penalty. On the other hand, previous convictions and the profits arising from the crimes, together with the degree of culpability of the company, are usually aggravating factors that the courts take into account when determining the penalty.

As mentioned, the existence of adequate compliance systems is crucial when assessing a company’s criminal liability as it is a way for the company to argue that it has made all appropriate efforts to prevent crimes from being committed, thereby reducing or even eliminating its culpability.

The existence of control structures and effective compliance systems can lead to a finding that individuals committing crimes within the company were acting contrary to the company’s corporate culture and that, therefore, the company should not be liable for them.

The effect of having compliance structures in place depends on the specifics of the particular case. For example, when the wrongdoing was committed by the directors of a company or any of its managerial agents, the existence of a compliance system is less likely to affect the sanctions imposed than where the crime was committed by a company employee.

Pursuant to the publication of Decree-Law no. 109-E/2021, dated 9 December 2021, which approved measures provided for in the National Strategy on Anti-Corruption 2020-2024, Portuguese companies with 50 or more employees or foreign companies’ subsidiaries in Portugal with 50 or more employees are obliged to adopt a compliance programme. The compliance programme should include a prevention plan regarding corruption and corruption-related infringements, an internal code of conduct and training schemes for both directors and employees and the creation of an effective “reporting channel”. Simultaneously, Law no. 93/2021, dated 20 December 2021, which transposed Directive (EU) 2019/1937 of 23 October 2019 on the protection of persons who report breaches of Union law, also implemented rules regarding the “reporting channels” companies are obliged to establish and rules relating to the protection of whistleblowers.

The failure to adopt a compliance programme (or the adoption of an inadequate programme) is considered a misdemeanour and may be punished by a monetary fine (ranging from EUR 2,000 to EUR 45,000) or publication of the final decision in the misdemeanour proceedings. However, the application of this sanctions regime will only begin one year after the obligation to adopt compliance programmes enters into force and will not be fully applicable until the second half of 2024.

Finally, as mentioned, following the publication of Law no. 94/2021 of 21 December 2021, which approved measures provided for in the National Strategy on Anti-Corruption 2020-2024, the General Law now includes numerous rules that provide for the mitigation of penalties in cases where the perpetrator of the crime actively collaborates in the discovery of the truth and contributes in a relevant manner to the proof of the facts.

Given that Portuguese law recognises the same procedural rights for a company as for individuals, apart from the natural limitations applicable to legal entities, criminal proceedings against companies are conducted in a similar manner as for individuals, both in terms of rights and prerogatives and in terms of defence mechanisms.

Regarding the conduct of criminal proceedings in general, it is relevant to note that under Portuguese law, plea bargain deals are not permitted. However, early acceptance of guilt and cooperation with the prosecution authorities can be treated as mitigating factors, although they will not usually lead to the negotiation of the outcome of the case.

Conversely, in situations where a temporary suspension of the proceedings is applied by the prosecution authorities (see above), it is possible to negotiate the terms of such suspension.

So far, corporate liability has not played a significant role in Portuguese criminal proceedings. Nevertheless, criminal investigation authorities in Portugal (in particular, the public prosecutor) have been increasing their supervision of companies’ activities. This increase in supervision has simultaneously occurred in the field of misdemeanours through the investigations of the Portuguese Competition Authority, the Portuguese Securities Market Commission and the Bank of Portugal and has led to heavy administrative fines being imposed on some Portuguese companies.

It is worth noting that some in the judicial community favour the relaxation of requirements to attribute criminal and administrative wrongdoings to companies, including removing the need to identify the individual perpetrator, especially in the financial sector. Some recent court decisions relating to misdemeanours have imposed administrative fines on companies without determining the identity of the individual perpetrator. It should be noted, however, that this approach has not yet been considered in criminal proceedings. 

In terms of legislative actions, the trend has been to reduce the conditions needed to attribute an action to a company, with more recent legislation widening the group of persons whose actions can be attributed to the company so as to include employees and other staff.

As a result of several high-profile criminal cases and corruption scandals Portugal has experienced in recent years, corruption is currently one of the main topics of public debate. For example, the outcome in April 2021 of the pre-judgment phase of a major criminal case demonstrated the challenges Portuguese authorities face in the prosecution of white-collar crimes. In this case, 28 defendants (19 individuals and 9 companies) were accused of 189 crimes, 24 of which were corruption crimes. Those involved included holders of political positions, high public officials and Portuguese companies and their executives. The proceedings were dismissed because the accusations were considered time-barred and there was a lack of evidence (prova indiciária).

To address these concerns, in early 2020, a working group under the supervision of the Ministry of Justice began developing a national strategy on anti-corruption, aimed at defining measures to prevent, detect and repress corruption in Portugal. The National Strategy on Anti-Corruption 2020-2024 has since been approved and implemented through Law no. 94/2021, dated 21 December, and Decree-Law no. 109-E/2021, dated 9 December. As previously mentioned, these legal developments: (a) introduced the obligation for Portuguese companies to adopt compliance programmes regarding the prevention of corruption-related crimes; and (b) created an independent administrative body in charge of promoting transparency and ensuring the effectiveness of anti-corruption measures. It is likely that we will see an increase in the number of criminal proceedings brought against companies in the near future.