Clifford Chance

Corporate crime: firmly on the agenda in major markets

Clifford Chance launches Corporate Criminal Liability Report 2015

International law firm Clifford Chance today launches the 2015 edition of its Corporate Criminal Liability report. The report considers the corporate criminal liability landscape in 22 key markets across the world including the underlying principles of liability, the relationship between individual and corporate liability, whether there are specific defences and / or mitigating factors and the current level and nature of penalties imposed. The report finds that while local laws and enforcement appetite varies, the topic is gaining momentum across the world.

Judith Seddon, partner and corporate crime specialist explains: "In the wake of the financial crisis, businesses are increasingly under scrutiny as regulators and enforcement authorities seek to hold companies to account. Local laws – and their propensity for being enforced – vary across jurisdictions, which can make for an extremely complex global landscape for clients to navigate. This guide seeks to demystify this area, helping clients to understand better the legal context in which they operate."

Supplementing the detailed report is a heat map which draws broad conclusions on the topic internationally. The map ranks countries by the existence of liability in a given country along with its enthusiasm for enforcement.

Seddon continues: "It's unsurprising to find that the US ranks highly in both categories but many other jurisdictions are learning from its lead and beginning to play catch-up. China, the UK, the Netherlands and Japan all feature highly for both liability and appetite for enforcement, showing this topic is high on their respective agendas. Some jurisdictions are succumbing to international pressure to introduce criminal liability for corporates, while others are feeling the greater focus on corporates post financial crisis and are taking a more aggressive approach to the enforcement of those laws which do exist."

Other findings include:

• France: In December 2013 a new prosecutor's office was created dedicated to financial crime which has recently been very active in investigating corporate and financial institutions.
• Spain: Corporate criminal liability was introduced in Spain in 2010 and new legislation is about to come into force, mirroring the Italian Law 231, which provides a defence for corporates if they can show that they have implemented a crime prevention or compliance programme. 
• Poland: The number of prosecutions of corporates is increasing.  Recently the Polish anti-corruption authorities indicated that intend to take tougher action against corporates guilty of corruption, including debarment.
• Romania: The number of criminal prosecutions of corporates doubled in 2014.
• China: Corporates are susceptible to higher fines than before; further, given the blurring of lines between corporate and individual liability, corporates need to have strong corporate governance policies to avoid criminal liability.

Please visit http://www.cliffordchance.com/briefings/2015/03/corporate_criminalliability.html to download a copy of the report and see the map.