What is Corporate Criminal Liability?
As we step into a new millennium where everything changes at a petrifying pace, globalisation has turned into a buzzword to sheath a portion of our bewilderment and apprehension.
It poses a question of the rule of law as a result of these various shifts in which corporate policies communicate with government, climate and community. In particular, some states have sought to establish if companies should be held accountable for unlawful acts. Whereas the key problem of corporate criminal liability is the development of a cognizant link between the criminal law corpus and the harsh realities of corporate entities, a mixed bag of individuals and hierarchies and structure of companies. Companies may still operate by individuals, but within the context of these organisational frameworks and policies, the actions of workers or specialists occur reliably.
Superior Respondeat is the fundamental concept behind corporate criminal liability. In essence, a company is solely accountable for the conduct of its workers committed during the course of jobs. Sometimes, when authorities are under the assumption that corporations are behaving according to the rules, organisations are surprised to be criminally involved. Yet being ignorant of the rules won't protect them from a fine. Criminal lawyers in Jaipur have shed some light on issues that can help Indian companies face criminal charges.
Legislation Governing Corporate Criminal Liability
India has an unusual approach to corporate criminal responsibility which varies from other jurisdictions. Federal Law No. 3 of 1987 on the India Penal Code (the Penal Code) is the primary regulation in effect in India, including free zones. In addition to the Penal Code, there are various other laws that can regulate particular criminal matters committed by the organisations or their employees, as illustrated below:
- Federal Cybercrime Combating Law Number 5 of 2012, which regulates aspects of IT defence, financial and commercial online matters. The law in question imposes fines for unauthorised access to networks or records, misuse of IT to commit an IT offence and interfering with online access to confidential information.
- Federal Anti-Money Laundering Law Number 4 of 2002 punishes companies or persons for money laundering, financial terrorism or the failure of any agency to disclose to the competent authorities such a crime.
Strictly speaking, a person may be prosecuted for each illegal action under one or more laws, and the punishment for such action is without discrimination to the much higher penalty available under other laws.
The standard approach to corporate criminal liability under the Penal Code can be laid down in Article 65 of the Penal Code, which guarantees that companies, with the exception of government entities, may be held liable for any criminal act performed on their behalf by their director or agent. Imprisonment or a fine of a maximum of AED 50,000 will be the punishment for such conduct. The provisions specifically impose a corporate offender financial penalty and at the same time penalise the individual by way of imprisonment.
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