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All the jurisdictions covered in our review have enforcement mechanisms in place by which companies may be held responsible for wrongdoing. However, the basis for liability differs across countries:
There are major differences in how individual liability translates to corporate liability. In some jurisdictions, it will be necessary to determine who was responsible for the wrongdoing in order to hold a company criminal liable. In others it is not even necessary to identify an individual wrongdoer before the company may be held to account.
Criminal liability does not only concern domestic companies but may also extend to foreign companies. In most jurisdictions covered in our review, liability will extend to a foreign company in circumstances where a nexus to the wrongdoing alleged can be established. In some cases, extraterritorial jurisdiction also applies in relation to certain specific offences (e.g., bribery).
There is an increasing requirement across jurisdictions for companies, groups of companies and other business organisations to have in place appropriate policies and procedures to prevent wrongdoing by their workforce and agents. The effect of such policies on a corporate’s potential liability appears to be moving from simply having a bearing on the sanctions that might ultimately be imposed, to providing a defence, in part or in whole, to criminal wrongdoing. Prevention policies can even be a sword, i.e. their absence may itself lead to liability for the company.
Nonetheless, precise requirements for an appropriate policy are rarely spelt out in local legislation, leaving it to the courts to decide whether the policy in place can mitigate the company’s liability in any particular case.
Where they exist, the obligations on companies to implement compliance policies and self-report wrongdoing can be seen as part of a strategy by enforcement authorities to push the burden of policing corporate compliance onto the corporates themselves. Corporate wrongdoing can be difficult to uncover and expensive and time-consuming for an authority to investigate. Increasingly, corporates appear to be expected to carry out the legwork themselves.
Authorities across the globe are intensifying enforcement action for corporate wrongdoing, incentivising companies to prevent criminal conduct occurring in their organisation and beefing up the fines and penalties meted out to companies when misconduct occurs. And although the number of actual prosecutions still remains low, where companies are found liable for wrongdoing, penalties and fines may be significant.
A guide to Corporate Criminal Liability in 22 jurisdictions across Europe, Africa, the Americas and Asia-Pacific.
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