This amendment, which has been termed the „biggest overhaul of criminal law in the last 15 years“, envisions new forms of punishment, a new approach to sentencing with respect to criminal corporations, and many other changes.
On November 13, 2024, the Czech government adopted a bill that amends several criminal-law provisions – specifically, the Penal Code, the Code of Criminal Procedure and the Act on Corporate Criminal Liability, among others. One of the key issues with which this amendment is concerned is the question of punishment – types of punishment, severity of penalties, circumstances to be taken into account when determining the sentence, etc. However, the draft bill also contains a number of innovations that are likely to be of interest to natural persons and companies engaged in business activities. In the following, we would therefore like to take a closer look at a selection of particularly interesting aspects.
New types of penalties for natural persons
A ban on the performance of public contracts or participation in public tenders or a ban on the receipt of subsidies and grants could previously only be imposed on an accused or convicted legal person. Newly, it should also become possible to prohibit natural persons from entering into public for one to ten years (cf. the upper limit of twenty years for legal persons), as well as from participating in procurement procedures or public tenders (for their own account or for the account of a third party), even in cases where the person concerned acts as the subcontractor, executive manager or ultimate beneficiary of a legal person wishing to participate in the public contract or tender. Similarly, a ban on applying for or receiving any funding, subsidies, repayable financial assistance, grants or other public aid should newly be possible. Any violation of this prohibition may possibly be considered a further criminal offense, namely, thwarting the enforcement of an official decision or a restraining order.
Acting on behalf of foreign powers
In the future, acts that threaten or damage the constitutional order, sovereignty and inviolability of the territory, defense or national security of the Czech Republic will be judged and punished as a separate criminal offense. In this context, we ought to mention the criminal offense of the violation of international sanctions, which is already enshrined in criminal law and which, especially in connection with the armed conflict in Ukraine, has become the subject of much more frequent enquiries and investigations by customs and police authorities in recent years, focusing, among other things, on entrepreneurs whose business and entrepreneurial activities play out in the affected areas of the Russian Federation and Ukraine.
Active participation of injured parties and defendants in criminal proceedings
The draft law suggests that the criminal prosecution and law enforcement authorities (i.e. police, public prosecutors and courts) create the conditions for the voluntary and active participation of the injured party and the accused in criminal proceedings in appropriate cases in order to remedy the consequences of criminal activity and restore the relationships affected by it. This is a reflection of one of the aims pursued by this criminal-law draft bill which, among other things, has the ambition to give greater scope to communication and negotiations between the parties involved in the proceedings and to find ways of compensating injured parties for the damage suffered as a result of the crime, while at the same time satisfying society’s desire to see the “perpetrator” (de jure the accused) punished, but in such a way that the criminal proceedings do not have the effect of destroying their existence but rather enable them to reintegrate into society afterwards. This plan also applies to entrepreneurs (both natural persons and legal entities) which find themselves involved in criminal proceedings – whether on the side of the accused or the injured party.
Discontinuation of criminal proceedings
Public prosecutors are now to be given the option of discontinuing criminal proceedings even if the results of the investigation, after all available evidence has been provided, do not provide sufficient grounds to bring the defendant to court and there is every indication that the court proceedings will not establish the facts necessary to prove the defendant’s guilt. This proposal will undoubtedly trigger intense debate among all professionals involved in criminal proceedings – especially public prosecutors and defense lawyers – because the assessment of whether or not the guilt of the accused is sufficiently proven is highly subjective, and divergent or downright contradictory positions will often be held, most often between the above-mentioned two groups of lawyers, who are on the proverbial “opposite sides of the barricade” in criminal proceedings.
Concentration of proceedings
The amendment bill contains a proposal to only allow an agreement on guilt and punishment (or a declaration of guilt, or an arrangement whereby certain facts are being established as being beyond contention) until the start of the evidentiary procedure in court. This proposal is again likely to trigger heated discussions among experts. After all, in practice, it is not uncommon for the agreement on guilt and punishment to only be reached at a later stage of the court proceedings, also in view of the direction which the proceedings have been taking, or even only in the appeal proceedings, e.g. taking into account the sentence already imposed in the first-instance proceedings, which is not yet legally binding.
Criminal-law settlement
The draft law relaxes the conditions for approving a settlement as one of the forms of so-called “diversions in criminal proceedings” (in which the criminal proceedings end without the defendant being convicted). Thus, the entire damage would no longer have to be compensated; the remediation of at least 30% of the loss caused would suffice if the defendant also undertakes to reimburse the injured party for the remainder in installments within an agreed period.
Proportionality of penalties imposed under the rules on corporate criminal liability
When determining the type of punishment and the level of punishment in the case of a convicted legal entity, the courts have so far taken into account the nature and seriousness of the criminal activity, the circumstances of the legal entity, its previous activity and financial circumstances, but also, among other things, whether the legal entity is engaged in an activity in the public interest which is of strategic or irreplaceable importance for the national economy, national defense or national security. The court also takes into account the conduct of the legal person after the offense, i.e. in particular whether there is active remorse to compensate for the damage or to remedy other harmful effects of the offense. It also takes into account the effects and consequences that the penalty is expected to have on the legal entity’s future activities. Newly to be added to this range of circumstances to be taken into account by the court when assessing the penalty are the number of employees and the scope of business of the company (which replace the previous criterion of financial circumstances), as well as whether the legal entity has introduced an effective set of measures to ensure compliance with the law and the prevention of criminal offenses (whereas this type of preventive measures is usually known as “compliance program”). Last but not least, the penalty may also be influenced by whether or how the legal entity has made efforts to compensate for the damage and remedy other harmful effects after the crime, or whether or how it has introduced a catalog of preventive measures and measures to prevent the risk of repeated or similar criminal activity (so-called restorative measures). The wording proposed in the draft bill anticipates that certain parameters will be used to check whether and how preventive measures and restorative measures have been designed and implemented.
Termination of criminal proceedings
Beyond the scope of the Code of Criminal Procedure, the amendment bill introduces further possibilities under which the prosecution of a legal person may be shelved or suspended or under which prosecution can be waived subject to certain conditions.
It will be interesting to see what discussions will take place regarding the individual ideas contained in the draft bill, not only between representatives of the legislature, but also among criminal-law experts, and in what form the amendment bill will ultimately be passed and become part of the legal system.
