UNIC appeals to the Government with proposals on the concept of reforming of the legal entities' liability

The Ukrainian Network of Integrity and Compliance (UNIC) addressed the Head of the Office of the President of Ukraine, Andriy Yermak, with a request to assist in finalizing the concept of reforming the institution of legal entities' liability for bribery of foreign state officials as well as to take into account several proposals to address this issue.

 

As stated in the appeal, UNIC fully supports the state's desire to revise the principles of legal entities’ liability and thereby ensure conditions for further development of anti-corruption compliance in Ukraine, however, the UNIC members disagree with the position on this issue developed by the working group under the Office of the President of Ukraine. The community believes that the proposed concept is not entirely consistent with international standards and raises significant concerns about excessive risks for business.

 

In particular, the working group proposes to introduce legal entity’s civil liability based on the model of civil forfeiture. Thus, the authors of the concept seek to shift the burden of proof from the state to the business, which must prove its innocence of the alleged act.

 

"UNIC agrees that such an approach is justified for high-ranking officials who have made their fortunes through illegal means. However, the logic of such a decision is unacceptable when it comes to business entities, as it contradicts the fundamental principles of prosecution, encroaches on the inviolability of property rights guaranteed by Article 41 of the Constitution of Ukraine, and creates significant preconditions for pressure on business and covert raiding," the statement says.

The community members are deeply convinced that the reform can only achieve positive results if the institution of legal entities’ criminal liability is further improved and autonomised through criminal law measures.

 

The UNIC experts offer to introduce the following proposals that reflect the best practices for implementing OECD standards:

 

• provide the legal entity liability for actions taken by an individual while implementing powers in a wide range of decision-making systems in the company;
• introduce the institute of agreements with the investigation and the possibility for a business entity to initiate such agreements;
•  to provide that an agreements with the investigation can be reached both before and after the filing of charges, with or without the company's plea of guilty;
• to introduce the compliance obligations institution as one of the types of sanctions (conditions) in agreements with the investigation;
•  to establish an institution of an external compliance monitor, which will carry out external control and evaluation of the legal entity’s activities with its compliance obligations and report to the National Agency of Corruption Prevention.

Given that the concept of reforming the institution of legal entity liability after its implementation will relate to the further development of the entire Ukrainian economy sector, UNIC proposes to involve UNIC experts, as well as leading experts from other business associations, such as the American Chamber of Commerce in Ukraine, the European Business Association and the Union of Ukrainian Entrepreneurs, in the analysis of this concept to develop a single agreed concept of legal entity liability.

 

Full text of the UNIC position https://bit.ly/3Kog1wF