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Corporate Criminal Liability for Corruption

Offences in Greece

The basic legal framework concerning the liability of business entities for corrupt
practices in Greece.

The fight against corruption worldwide is of great importance as it seems from the
increasing number of international convention available, the actions taken on behalf of
international organizations and finally from the fact, that the national lawmakers as well
as the law enforcement agencies put the corruption issues on the top of priorities. One
of the main issues arising in this context is the criminal liability of companies, because
the global anti-corruption policy address the issue of corruption as a structural problem
of society, where every actor play a significant role in the chain of corrupt events and
transaction. In this chain, the corporate actions claim a great deal of responsibility
especially concerning the public procurement and infrastructure projects. As a result, a
great deal of attention is given to the punishment of corporate action.
Corporate criminal liability is well-recognized in Common law tradition, but also in
several legal systems of Civil law tradition, such as France and Spain. Notwithstanding
criminal liability in Greece refers primarily to the individual consistent with the principle
“societas delinquere non potest”. According to this principle legal entities cannot be
held criminally liable. Moreover, the Greek Law is governed by two fundamental
principles. On one hand the imposition of a criminal sentence presupposes a conscious
action of a human being and on the other hand the culpability principle also demands
an acting human being. On these grounds the legal entities are not exposed to criminal
sanctions, but only to administrative or civil sanctions instead.
Greece though has ratified several treaties and conventions, among others, on
corruption, which include obligations for adoption of measures against entities in cases
where they benefit from the criminal actions of their employees. Although, it is not
provided for criminal liability of an entity in the strict sense of the term, but only
administrative liability that includes administrative measures mostly in the form of a
fine, which in most of the cases are so severe that can fall under the scope of the article
6 ECHR , since they can be considered as “criminal sanctions”. These provisions have
been included, among others, in Law 2656/1998 (OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions), Law
2803/2002 (protection of the financial interests of the European Community), Law
3560/2007 (Criminal Law Convention on Corruption and Additional Protocol), Law
3666/2008 (UN Convention on combating corruption), Law 3691/2008.

For example Law 3560/2007 acknowledges that legal entities are liable for bribery if the
acts of bribery were committed in their favor by individuals empowered to act on their
behalf (managers, directors etc.) or to make decisions in relation to the company’s
activities, and provide for a series of administrative penalties. The same penalties are
imposed as well when the legal entity through its directors/managers let corruption acts
to take place by virtue of the failure to exercise effective control at their subordinates.
The imposition of a sentence on a corporation depends on the following factors: entity
size and annual turnover; seriousness of the offence; damages caused; benefit amount;
and prior “criminal” misconduct. The actual imposition of the fine is done usually
through the Revenue Service, and apart from a fine, the competent authority may
impose other measures as well, e.g. prohibition of business activity for a period of time,
revocation of licenses and/or registrations, ban from public tenders or investment
programmes, etc. These provisions are applicable to all forms of participation in a
corruption act (perpetrators, accessories and instigators).

In the same context the Greek Parliament has recently adopted the law 4254/2014,
which led to significant modification of the substantive part of Greek Penal Code
concerning especially the bribery offences. According to the aforementioned
modification introduced in the Greek Penal Code for the first time criminal liability of
company directors for corruption actions conducted by employees of the company. So
according to the article 159A p. 2 and 236 p. 3 Penal Code (Poinikos Kodikas): “A head
of business or any other person who is vested with a decision-making or a control power
in business shall be punished by imprisonment, if the act is not punished more severely
by another criminal provision, if he/she by negligence failed to prevent a person under
his/hers command or subject to his/hers control from committing, to the benefit of the
business, any act of the preceding sections.”, that is, the act of active bribery of public
officials (domestic and foreign).
The constituent elements of this crime are the following:
1. An act that falls in the scope of active bribery on behalf of an employee in a broad
sense, which includes every person that acts under the authority or the control of the
head/s of business, independent of the legal relation between them. In addition, this
aforementioned act should promote or be able to promote the interests of the business.

2. An omission on behalf of the director of business (perpetrator) also in a broad sense,


which includes any persons having power to take decisions or exercise control within a
business, independent of the legal relation with the company, the range of managing
powers or the existence of more than one directors.
3. The omission should be carried out in breach of obligations that derive from his
position.

4. Causation between the employee’s bribery act (result) and the director’s omission in
breach of his obligations.
5. The perpetrator’s omission should be caused by his negligence, namely, due to the
lack of attention that he must and could pay.
It is obvious that the risk of criminal and administrative sanctions in relation to
corruption offences in Greece is very high nowadays. In this context, it is more than
necessary the adoption and implementation of effective compliance programs from
businesses of every size and sector consistent to the international legal and business
standards, as well as the detailed and constant preemptive legal advice on every day
legal matters, in order to secure the smooth and low risk navigation of a company
through the Greek and international business environment.

AUTHOR: Georgios Fouskarinis