INTERNET LAW - International Survey about Criminal Liability of Companies

The internet made the world smaller; this phrase carries a profound meaning from a business-standpoint. This not only means that businesses may now reach distance markets and clients, but also that they can be subject to criminal liability abroad.  Lex Mundi is an international association of independent law firms that exchanges information regarding local and international laws. In 2008, Lex Mundi prepared a remarkable survey on criminal liability of companies that is worth to explore, particularly for companies offering goods or services abroad. This article provides some information on the criminal liability of companies as reported by Lex Mundi in its 2008 Survey.

Business Crimes and Compliance Criminal Liability of Companies Survey is the title of Lex Mundi's 2008 Survey that covers information about criminal liability of companies in 35 countries around the world.  Although the Survey covers many issues related to criminal liability of companies, this article purports to inform on how some of these 35 countries address the issue of corporate criminal liability; for more information on the Survey, please visit Lex Mundi"s website at www.lexmundi.com.

The Survey asked, among other questions, whether a company can be prosecuted in a similar way as an individual offender. The Survey revealed that some countries distinguish between criminal offenses and regulatory or statutory offenses under administrative law. Public prosecutors will prosecute common criminal offenses while administrative prosecutors will handle statutory offenses. Austria, for instance, introduced corporate criminal liability in 2006, but there is no criminal liability for statutory offenses in Austria. Article 3 of Law 9.605/98 establishes criminal liability of companies in Brazil, and Canada’s Criminal Code is equally applicable to corporations according to the Survey.  Criminal liability of companies is also possible in Cayman Island, Croatia, Cyprus, France, Israel, Italy, Jordan, Lithuania, The Netherlands, Portugal, Romania, South Africa, Switzerland, United Arab Emirates, and Puerto Rico.

Countries such as Denmark, Finland, Malaysia, Taiwan, Thailand, allow criminal liability of companies provided that the punishment is a fine. 

Some countries do not extend criminal liability to companies; for example, Colombia, Egypt, Germany, Greece, Kuwait, Latvia, Mexico, Peru, Spain, Turkey, Uruguay, and Venezuela.  Most of these countries, however, do extend liability to a company’s representative acting in its capacity when they commit certain crimes against the property or financial crimes. Colombia, for instance, does not extend liability to companies, but the Colombian Constitution does not prohibit such liability according to a decision by the Constitutional Court.  

In the United States, companies can be indicated by federal or state law by the criminal actions of their employees or agents when those actions benefit the company. Imprisonment, however, is never a punishment imposed to companies in the United States; a company’s representative may be sentenced to imprisonment depending on the criminal charges.  The doctrine of respondeat superior is usually the doctrine used to convict companies through their representatives.

This information is relevant for companies offering goods or services on the Internet.  As the Survey shows, most countries extend criminal liability to companies with some variation on the punishment imposed. Few countries plainly deny criminal liability to companies.

Martha L. Arias, Attorney at Law; IBLS Editor