Companies focus on compliance as corporate criminal liability prosecutions increase

The increased focus of companies in Central and Eastern Europe (CEE) in tackling largescale corruption through corporate criminal liability has resulted in an increasing number of companies being prosecuted each year. Companies have, therefore, been paying closer attention to their compliance efforts. This article discusses the influence of the Covid-19 pandemic on the shifting focuses of prosecuting authorities in the CEE region, the compliance status of companies and corporate investigations, and provides an outlook on the future.

Discussion points in this article

• States’ shopping sprees for medical devices during the pandemic
• Influence of the pandemic on corporate investigation and compliance processes
• Digital corporate investigations and internal policies for digital-age compliance
• Zero-based redesign of the compliance management system
• Commencement of activity of the European Public Prosecution Office
• War in Ukraine and further related shifts

Common ground in the CEE region

The region of Central and Eastern Europe (CEE) is a unique place that stands out
owing to its rich tapestry of languages and its abundance of cultures – each embedded
in national histories vastly different from one another. This contrasts with the closeness
kept by a few groups of nations that share substantial parts of their histories (eg,
Slovakia and the Czech Republic – formerly Czechoslovakia).

The legislative and legal landscape of CEE countries and their approach towards
compliance is also influenced by each of their current political affiliations. The concept
of corporate criminal liability is still a relatively new concept for many white-collar
crime practitioners and prosecuting authorities in CEE countries. The concept more
or less followed the concept of individual criminal liability, which has created room for
many difficulties in application.

Most CEE jurisdictions either allow companies to release themselves from criminal
liability if they prove that they have an effective compliance management system
(CMS) in place that is able to prevent the investigated criminal behaviour, or consider
an effective CMS as a mitigating circumstance for which the company must react
with zero tolerance to non-compliant behaviour. Having an internal process in place
to investigate non-compliance is understood to be a part of any effective CMS.

For example, in the Czech Republic, companies can release themselves from criminal
liability if they prove that they have adequate measures (an effective CMS) in
place that could have prevented the crime. In September 2018, non-binding internal
guidelines – later modified in 2020 – for Czech public prosecutors were issued. This
is relatively atypical for the CEE region. The guidelines were inspired by international
guidelines, such as those by the US Department of Justice (DOJ), the UK Bribery Act
guidelines and the compliance standards ISO37001 and ISO19600, and are in the
form of an internal document that is intended to be used as non-binding guidelines
by public prosecutors.

The investigation process in each CEE country is unique, and cross-border
investigations across several European jurisdictions have often presented an array of
practical challenges. However, thanks to the decades of work put in by the European
Union, the Organisation for Economic Co-operation and Development (OECD) and
the Council of Europe, a clear trend is becoming apparent in which divergencies can
be converged, and multi-jurisdictional corporate investigations or compliance audits
can be conducted more easily than ever before.

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