May 2013

President Has Signed the Law on Criminal Liability of Companies

The President of Ukraine has recently signed the Law of Ukraine "On Amendment of Certain Legislative Acts Regarding Fulfillment of Plan of Actions for Liberalization of Visa Regime for Ukraine by the European Union Regarding Liability of Legal Entities" No. 314-VII, dated 23 May 2013 (the "Law on Liability of Companies"), which introduces the institution of applicability of criminal law measures to legal entities. This legislative act shall come into force on 1 September 2014.

The Law on Liability of Companies, inter alia, provides for:

  • criminal liability for institutions, companies or organizations, except for government agencies, local government authorities and organizations thereof, which are fully maintained at the costs of the state or local budget, Obligatory State Social Insurance Funds or Individual Deposit Insurance Fund as well as for international organizations; for a specific list of criminal offences, in particular (i) legitimization of proceeds of crime (money laundering); (ii) use of funds derived from the illicit traffic in narcotic drugs, psychotropic substances, its analogues, precursors, toxic or potent substances, medical products; (iii) commercial bribery; (iv) bribery of persons rendering public services; (v) offering and giving improper advantage to officials, and abuse of powers; and (vi) terrorism-related crimes.
  • list of criminal law measures which may be applicable against legal entities, namely: fine totaling from 5 to 75 ths of non-taxable personal income thresholds (from UAH 85 ths to UAH 1 mln 275 ths), confiscation of property and liquidation of a legal entity; which shall be used by a court in case of commitment by respective persons of any of the crimes related to terrorism activities;
  • limitation periods which may serve as the basis for the release of legal entities from criminal liability in case of the expiration thereof;
  • proceedings against a legal entity, which shall be performed simultaneously with criminal proceedings held against natural persons who acted on behalf and for the benefit of such a legal entity.

The Law on Liability of Companies results in respective amendments to be made to the Criminal Procedure Code of Ukraine, the Criminal Code of Ukraine and the Law of Ukraine "On Principles of Prevention and Fighting Corruption".

For further information please contact partner Vadym Samoilenko,
senior associate Oles Kvyat and associate Yaroslav Petrov

© Asters 2013
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