Criminal Liability of Company's Representative– Basis to be Penalized has been Amended
On 11 February 2017, the Act on Amendment of Legal Provisions in relation to Criminal Liability of Representatives of Juristic Persons (the “New Act”) was issued to amend the legal provisions of 76 existing laws. The amendment contains criminal punishment for juristic persons’ representatives such as directors (“Representatives”). The New Act came into effect on 12 February 2017.
Before the New Act several laws presumed that Representatives committed an offence jointly with juristic persons and thus the Representatives and juristic persons are jointly liable to criminal punishment. However, such a presumption was in conflict with Constitutional Law according to several decisions of the Constitutional Court. Therefore, the New Act was issued to amend this legal presumption under all the 76 laws, which include for example:.
Under the New Act, Representatives of the juristic person shall be jointly liable with juristic persons to criminal punishment under the amended 76 laws if the offence occurred from:
Although the basis for Representatives to be penalized has been amended, criminal offence and punishment under each of the 76 laws still exist. Representatives could still be penalized in the course of their duties. Therefore, the Representatives should be cautious performing duties on behalf of juristic persons and should seek advice from appropriate legal advisors.
We welcome any opportunity to discuss the relevance of the above matters to your business.
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