Corporate Criminal Liability: Article 10 of the Convention against Transnational Organized Crime

Article excerpt

The UN Convention against Transnational Organized Crime (UNCTOC) establishes criminal liability of the corporation as a legal entity in addition to the individual liability of persons who may be acting on behalf of the corporation. The purpose of this article is to address corporate criminal liability for illicit business practices that may be committed by a corporation in violation of international human rights law. This article will discuss corporate criminal liability under international conventional law and will discuss the extent to which U.S. domestic laws recognize corporate criminal liability. The article will highlight new trends in international law related to corporate liability, as well as instances where the legitimacy of corporate liability has been legally denied. Using Article 10 and domestic precedent, this article will argue that the role corporations play in international trade and development warrants their accountability and responsibility once they are involved in illicit business practices.

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ARTICLE 10: AN INTERNATIONAL LEGAL FRAMEWORK

According to Article 10 of the UNCTOC a corporation may be held liable for n organized crime including participation in an organized criminal group, laundering of proceeds of crime, corruption, and obstruction of justice. (1) Corporate liability may be civil, criminal, or administrative provided that the sanctions are effective, proportionate, dissuasive, and it may be established without prejudice the criminal liability of a natural person. The sanctions may include a fine, forfeiture, confiscation, restitution, or closure of the legal entity. (2) Other sanctions that are designed to influence corporate behavior are disincentives such as suspension of a right or prohibition of a certain activity. (3) However, liability of a corporation is subject to the legal principles that apply to a legal person in a particular national system.

The Legislative Guide for the Implementation of the UNCTOC provides the justification for establishing liability of legal persons by stating that:

   Serious and sophisticated crime is frequently committed through or
   under the cover of legal entities, such as companies or charitable
   organizations. Complex corporate structures can effectively hide
   the true ownership, clients or particular transactions related to
   crimes ranging from smuggling to money-laundering and corrupt
   practices. Individual executives may reside outside the country
   where the offence was committed and responsibility for specific
   individuals may be difficult to prove. Thus, the view has been
   gaining ground that the only way to remove this instrument and
   shield of transnational organized crime is to introduce liability
   for legal entities. (4)

LIABILITY OF CORPORATIONS IN ACCORDANCE WITH INTERNATIONAL CONVENTIONAL LAW

There are several international and regional conventions that call for the liability of corporations that commit criminal offenses. For instance, the Council of Europe Convention on Action against Trafficking in Human Beings states that legal persons are liable for committing offenses such as recruiting, transporting, transferring, harboring, or obtaining a person through illegal means for the purpose of exploitation, forms of sexual exploitation, forced labor, slavery or practices similar to slavery, servitude, or the removal of organs. (5) The Convention establishes this liability when a natural person is acting on behalf of the legal person or when the legal person does not exercise the necessary steps of supervision or control. Such liability is to be imposed in addition to the liability of the natural person who committed the offense. (6) The Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions provides for the liability of legal persons for bribery of foreign public officials as long as such liability is recognized within the legal principles of domestic laws. …