Three notes on the criminal liability of legal persons: Judgment no. 298/2024 of 8 April 2024

The very recent Judgment cited above, with a paper by the always suggestive Mr. Antonio del Moral, addresses three important aspects of the criminal liability of legal persons: i) the burden of proof regarding the effectiveness of Compliance models ii) profit as a prerequisite for the imputation of the legal person iii) the identity between the natural persons and the partners of the companies prevents a double conviction.

Briefly, the facts that are the subject of the trial consist of the commission of tax fraud by the administrators, the partners and the companies themselves, which were also initially convicted. The Supreme Court admirably analyses the legal issues raised by the appellants concerning the criminal liability of legal persons. Highlights:

i) On Compliance programmes and their effectiveness

The Judgment calls the fact that ‘there is no effective Compliance plan in place which had to be circumvented for the agent’s criminal action’ a negative core element of the criminal liability of a legal person, and as a novel element it understands that ‘the burden of alleging this factor excluding liability falls, in principle, on the defence’, a jurisprudential shift from the beginnings of jurisprudence on the legal person. After several important rhetorical arguments, it concludes:

‘The lack of inquiry and evidence on this negative element does not necessarily translate into a doubt as to its concurrence. The presumption of innocence does not oblige us to presume that all associations and organisations or commercial companies and legal persons in general have a Compliance programme in line with the requirements of the Criminal Code’.

The paradigm shift seems reasonable. As is the case with natural persons, who have to bear the burden of proving the circumstances modifying criminal liability in their favour, there was no reason to treat differently an entity, which was anomalously placed in a more advantageous position than a natural person was.

ii) On the benefit of the legal person

We know that Article 31 bis requires a direct or indirect benefit as a prerequisite for the conviction – and for the imputation – of the legal person. The paradigmatic Judgement STS 89/2023 (Pescanova case) already stated, in relation to profit:

‘It should therefore be made clear from now on that the term “profit” (or “benefit”) refers to any kind of advantage, even of simple expectation or referring to aspects such as the improvement of position with respect to other competitors, etc., profitable for the profit or for the mere subsistence of the legal person within which the offence of its representative, administrator or hierarchical subordinate is committed’.

In the present case, the Judgment qualifies as an ‘accessory element which is an essential part’ that the offence ‘must be of direct or indirect benefit to the legal person’. Guiding the typical restriction of this element, it relates it to the offence for which the conviction was handed down. Thus, it expresses:

‘The alluded benefit would be the result of obtaining the contract and, where appropriate, of the payment to the alleged commission agent or, in more vulgar but expressive words, to the procurer. However, whether or not that income was truthfully declared is something absolutely independent and unrelated to that benefit. It is a subsequent action that in no way generates an additional benefit for the company. What advantage has it brought to Kyz that Norberto defrauded the tax authorities?’

iii) On the contradiction between sentencing natural person partners and the legal person

The Supreme Court, as it has already established in previous decisions, restricts the possibility of conviction to the partners and the company, as double conviction for the same acts of the same persons makes no sense. In a tremendously plastic way, it states:

‘To convict, in addition to its only two partners, Ópalo Interiores S.L. supposes, as has been anticipated, a real contradiction: the two partners would suffer the penalties imposed on them for being responsible for the crime of tax fraud; and, in addition, another additional pecuniary penalty (charged to the company assets of which they are the exclusive owners) based on the fact that they have not established mechanisms for self-control and not committing crimes themselves (!!!). They are condemned first for their criminal actions and then, again, multiplying the pecuniary penalties, for their negligence in not establishing controls – self-controls – to conceal their own criminal actions’.

In short, we can see how case law on criminal matters concerning legal persons is gradually outlining solutions that move away from theoretical or abstract positions that are contrary to the commercial and social reality of certain companies.

Jorge Navarro Massip

Partner and lawyer of Molins Defensa Penal.

jnavarro@molins.eu

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