Accounting fraud
Accounting fraud is punishable under the special provisions of Law 4174/2013, which cover false or fictitious tax registrations, as well as the ones of Law 4548/2018 on public limited companies, which relate to inaccurate or false balance sheets and inaccurate or incomplete
management reports. Special accounting offences are also included in Law 4254/2014 in relation to fraudulent acts (off-book account keeping, recording of non-existent expenses, etc.) committed with the purpose of facilitating, concealing or disguising corrupt practices.
EU fraud
Fraud affecting the financial interests of the EU constitutes a separate offence relating to the misappropriation or wrongful collection, retention or illegal diminution of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities, through the use of false, incorrect or incomplete statements or documents, the non-disclosure of information in violation of a specific obligation, or the misapplication of a legally obtained fund or benefit. The relevant provision is found in Law 2803/2000 which ratified the Convention on the protection of the European Communities’ financial interests.
Embezzlement
Article 375 PC provides for the punishment of anyone who unlawfully appropriates a movable thing belonging (in whole or in part) to another person which came into his possession by any means, including cases where the thing has been entrusted to the responsible person out of necessity or due to his/her capacity as authorized representative of the harmed person or as a sequestrator or manager of another person’s assets. Article 258 PC deals separately with embezzlements committed by public servants.
Breach of trust
Breach of trust pertains to cases where the perpetrator, who is entrusted with the management or custody of property, does not misappropriate it, but knowingly reduces it in any manner. The behaviour in question is punishable under article 390 GPC when relating to private property, and under Article 256 GPC when affecting public property (or property belonging to a municipal entity or to a public law entity). In the latter case the damage must be induced with the intention to benefit the perpetrator or another person.
Market abuse
All manners of market abuse and securities fraud are contained in the Law regulating the operation of capital markets (Law 4443/2016), which corresponds to Directive 2014/57/EU of the European Parliament and the Council of 16 April 2014 on criminal sanctions for market abuse. These include: a) insider dealing and recommending or inducing another person to engage in insider dealing; b) unlawful disclosure of inside information, and; c) market manipulation through the dissemination of information which gives false or misleading signals as to the supply of, demand for, or price of a financial instrument, or a related spot commodity contract, or secures the price of one or several financial instruments or a related spot commodity contract at an abnormal or artificial level, where the perpetrators derive for themselves or for another person an advantage or profit from the dissemination of the information in question.
Bribery and corruption
Articles 235-236 PC typify the classical scheme of venality and bribery for an act of a national public official which relates to the exercise of his/her duties. Excluded from criminal liability are only advantages of minimum value or symbolic in nature, which the citizen concerned may perform in the context of socially appropriate manifestations of kindness or decency. The law also establishes the responsibility of supervisors of the offending official, as well as heads of businesses or any other person who is vested with a decision-making or control power in a business, where such persons fail to prevent the commission of the bribery offence. Arts 237, 159 and 159A PC typify as distinct forms of venality and bribery the ones that concern judges, arbitrators and political persons, and aim to affect their function in the exercise of the specific judicial or political duties entrusted to them. The bribery of foreign public officials and officials of public international organizations is also covered, while there are separate offences for trading in influence (Art. 237A PC) and abuse of functions (Art. 259 PC).
Tax offences
Tax evasion and general tax violations are extensively regulated in special provisions of the tax legislation (especially Art. 66 Law 4174/2013). The tax evasion offence was recently redefined in an effort to broaden its definition and include more cases of non-disclosure of income and non-payment of tax. The main tax evasion offenses are: a) the omission of filing or filing of false income tax return, or concealing income. By way of concealing net income, the law also covers cases of fictitious expenses or where fictitious expenses are invoked in the tax return, in order to hide the real net income; b) the non-remittance or incorrect remittance of VAT and other withholding taxes and duties; c) the issuance and receipt of false, fictitious or falsified tax records as well as the infringement of the rules of the Code of Books and Records; and d) the non-payment of debts owed to the State and third parties.
Customs offences
Customs violations are subject to severe sanctions according to the Customs Code (Law 2960/2001). Smuggling is defined as the import or export from a customs territory of any goods subject to duties, taxes or other levies due to the customs offices, without the written
permit of the competent customs authority or in another place or time than the one defined by it, as well as any action which intends to deprive the Greek State or the EU from the duties, taxes or other levies due to them from imported or exported goods, even if those were paid in a different time or place than the one defined by the law.
Unfair competition, IP and trademark violations
Special criminal provisions provide for the punishment of trafficking in counterfeit products (i.e. importing, exporting, distributing, selling or otherwise dealing in goods on which a trademark has been placed without authorization of the rightful trademark owner); the infringement of copyright protected works through the unauthorized reproduction, broadcasting, distribution and sale of non-authorized copies of such works; and business practices which are contrary to business morals, such as misleading advertising, defamation, infringement of third parties’ distinctive marks, disclosure of trade secrets, etc. These provisions are dispersed in various bodies of law, such as especially the Trademark Law (L. 4072/2012), the Copyright Law (L. 2121/1993), the Law on the Trading of Pharmaceuticals and Health Beauty Products (Legislative Decree 96/1973), and the Unfair Competition Law (L. 146/1914).
Anti-competitive practices
Law 3959/2011 regulates anti-competitive conduct by companies in conformity with the EU standards for the protection of free competition, and includes criminal provisions for the main anti-competitive practices, namely cartels, the abuse of a dominant position, as well as a number of minor violations. Bid rigging may also fall under the main fraud offence.
Money laundering
The legalization of proceeds from criminal activities is typified as a criminal offence in the Greek AML Law (L. 4557/2018) in accordance with Greece’s international obligations. The notion of money laundering includes, among others, a) the conversion or transfer of property, knowing that such property is derived from criminal activity, for the purpose of concealing or disguising its illicit origin; b) the concealment or disguise of the truth, as concerns the disposition, movement, use or ownership of property, knowing that it is derived from criminal activity; c) the acquisition, possession, administration or use of property, knowing, at the time of receipt or administration, that such property was derived from criminal activity; d) the utilization of the financial sector by placing therein or moving through it proceeds from criminal activities for the purpose of lending false legitimacy to such proceeds.
Environmental offences
Crimes against the environment are regulated in the main law for the protection of the environment (Law 1650/1986), as well as in a number of special laws regulating particular issues, such as Laws 743/1977 and 4037/2012 on marine pollution and Law 4042/2012
which incorporated Directives 2008/98/EC on waste and 2008/99/EC on the protection of the environment through criminal law. They range from operating a business affecting the environment without the required license or permit to causing large-scale pollution or environmental degradation.
Theft of professional secrets and data protection violations
According to Article 370B PC, copying, using or disclosing to third parties confidential professional information is a criminal offence. The same goes for the illegal creation of a personal data archive and the theft, storage, transmission, processing, publication or other use of personal data being part of an archive or having been collected through the breach of electronic communications (Laws 2472/1997 and 3471/2006).
Can corporate entities be held criminally liable?
The sanctions foreseen for business offences are threatened only against natural persons. Greece does not recognize the criminal liability of legal entities. Under Greek law criminal responsibility is based on the principle of individual culpability, which dictates that only a person may be held responsible for an act that he/she committed and be criminally punished (nullum crimen nulla poena sine culpa). Article 7 par. 1 of the Constitution defines crime as a person’s act constituting a criminal offence by virtue of a statute prior to its perpetration. Legal entities as such are not considered capable of acting and of having a guilty mind in respect of an act. Accordingly, punishment of a legal entity would mean a shift of criminal responsibility from individual persons to a kind of collective organizational liability which would run contrary to the above principles.
Can corporate entities be otherwise held liable for criminal offences?
While criminal penalties do not directly apply to legal entities in Greece, it is possible:
- that a legal person will be summoned to participate in criminal proceedings against its agents/employees, as bearer of civil liability for the payment of the fines which will be imposed on the perpetrators, based on relevant provisions of the Greek Code of Criminal Procedure;
- that, following a conviction, assets of the legal entity will be confiscated, to the extent that they constitute products of or means for the commission of the offence and that at the time when they were acquired the persons representing or controlling the company were aware of their provenance, based on relevant provisions of the PC and the AML Law;
- that, following a conviction, the Greek State will seek to execute the imposed monetary penalties against the company, as the one bearing civil liability for the actions of tis agents/employees, based on general principles of Greek civil law.
Nevertheless, these possibilities are largely theoretical and are not often made use of in practice.
Moreover, it is possible that the legal person involved shall be held administratively liable for violating the applicable regulations (e.g. in cases of tax or customs violations, breaches of the rules for the operation of capital markets, anti-competitive practices, etc.) or shall undergo separate administrative proceedings due to one of its employees having committed the criminal offence for its benefit. Apart from a series of special provisions introducing this possibility for individual offences (e.g. EU fraud, environmental offences, etc.), the main pertinent provision is Art. 45 of the AML-Law, as recently amended, which refers not only to money laundering offences but also to predicate offences, including all major business crimes.
The conditions of administrative liability under these provisions are a) that the offence was committed for the benefit of the legal person by a natural person acting either individually or as part of an organ of the legal person and who held a leading position within the legal person based on a power of representation or an authority to take decisions on its behalf or to exercise control within the legal person, or b) that the lack of supervision or control by one of the above natural persons made possible the commission, by a natural person under its authority, of the offence for the benefit of the legal person.
Administrative sanctions range from fines (on top of the duties, taxes, etc. eventually due) to the withdrawal or suspension of permits, the prohibition from carrying out specific business activities or from the establishment of branches or capital increase, and the final or
provisional exclusion from public grants, aids, subsidies, awarding of contracts for public works or services, procurement, advertising and tenders of the public sector. These administrative penalties may be imposed irrespective of the imposition of criminal sanctions.
Which natural persons shall be held criminally liable?
As to which natural persons shall be held liable for corporate crimes, these can be any members of the legal entity, such as managers, officers, directors or simple employees, to the extent that they fulfil the objective and subjective requirements of the relevant provisions. This been said, depending on the type of the offense, there may be special provisions in the applicable laws, expanding or restricting liability to individuals holding de iure or de facto certain positions in an entity. In practice the prosecuting authorities will often seek to locate the “legal representative” of the legal entity, which may refer to its CEO / General Manager or Director, or the Chairman of its Board of Directors or sometimes even the entire Board of Directors, irrespective of where these persons reside.
Are there special authorities for the investigation and prosecution of business crimes?
As with most crimes, criminal proceedings in cases of business crimes may be initiated following a complaint by the harmed person, a denouncement by a citizen, a denunciatory report by a State authority, or any other possible notitia criminis, i.e. information that a criminal offence has been committed. The public prosecutor – in most cases a prosecutor assigned to the competent court of first instance – is responsible for the prosecution of business crimes in the name of the Greek State, but also plays a central role as an investigating authority. Special prosecutorial offices have been established a) for tax offences and a
number of offences against the financial interests of the State and the EU (under the Prosecutor for Economic Crime), and b) for felonies committed by public officials and political persons (under the Prosecutor for Corruption).
Investigating officials are either members of the police force – the Hellenic Police, which includes a number of specialized departments involved in combating business crime, such as the Internal Affairs Division and the Financial Police Division – or of other law enforcement authorities with investigative powers regarding particular categories of business crimes, such as Customs and the Coast Guard. Investigations may also be conducted by the Financial and Economic Crime Unit of the Ministry of Finance (SDOE), as well as by regulatory authorities such as the Hellenic Capital Markets Commission and the Hellenic Competition Commission with regard to the breach of regulations falling under their competence. Members of the Hellenic Financial Intelligence Unit do not have full investigative powers; they can, however, conduct on-sight inspections and collaborate closely with other authorities in the fulfillment of their duties.
Law enforcement officials fall in principle under the supervision of the public prosecutor, whose orders they are obliged to follow and to whom they turn for guidance and permission to conduct special investigative acts. The various investigative agencies may have overlapping competences over some offences, in which case it is possible for them to collaborate and exchange information. Two inter-agency bodies have been established for the coordination of investigations against certain business offences, namely the Coordination and Operational Centre for combating the illicit trade of products subject to Excise Duty (SEK), and the Coordination Centre for overseeing the operation of the market and for addressing the trade in counterfeit and pirated goods, and in general all goods infringing intellectual property rights (SYKEAAP).
What kind of investigative measures can be taken by the competent authorities?
Judicial authorities, investigating officials acting on the order of a public prosecutor, as well as SDOE staff during their quasi-administrative investigations, have extensive powers to conduct financial investigations, under specific conditions, including the right to request any necessary information or data, the right to conduct searches of company premises, the right to lift tax, banking, capital market and professional secrecy, and the right to freeze bank accounts and seize assets, property or means used in connection with a crime. Access to bank account information of persons under investigation by law enforcement authorities, as well as the FIU, and the ability to freeze, where necessary, illicit assets held with financial institutions, have become more swift and direct following the establishment of a centralized register of accounts (as per Law 4170/2013) and will become even more so with the establishment of a beneficial ownership registry (as per Law 4557/2018).
Are there special rules for the prosecution and adjudication of business offences?
Deferred prosecution or non-prosecution agreements are not possible. Nevertheless, full restitution to the victim may lead to more lenient sentences, or even, with respect to some business crimes (e.g. embezzlement, fraud and breach of trust against private individuals or companies), to the perpetrator avoiding prosecution or avoiding punishment for misdemeanour charges. Moreover, even when felony charges have been filed, there is the possibility of applying simplified proceedings in respect of some business offences (fraud, computer fraud, embezzlement, breach of trust and usury), to the extent that they are not directed against the State. This possibility involves “penal conciliation”, i.e. a kind of mediation process between the victim and the defendant, taking place after the conclusion of the investigation (Art. 308B of the Code of Criminal Procedure) and leading eventually to lower penalties or to the non-imposition of punishment. A similar possibility was introduced in Law 4312/2014 in respect of all financial crimes against the State or State-owned companies, including tax and customs offences, corruption, money laundering, fraud, embezzlement, breach of trust, etc. It should be noted, however, that the application of the relevant provisions in practice is limited.
Apart from the above, financial crimes against the State falling under special Law 1608/1950 (fraud, bribery, embezzlement, et al.), offences committed by public officials falling under special Law 4022/2011, as well as a number of other offences specified in the Code of Criminal Procedure (such as tax and customs offences) follow expedited procedures, whereby the indictment of the accused does not require the exhaustion of the intermediate procedural stages foreseen for “regular” offences.
Finally, there are special rules governing the application of leniency measures in favour of the perpetrators of certain business crimes who cooperate with the judicial authorities. Such cooperation may not only function as a mitigating circumstance – as is the case with
any other crime – but may also lead, e.g. in the case of corruption or cartel offences (Art. 263B PC, Arts 25 and 44 of Law 3959/2011 respectively), to a suspended sentence or even impunity. Again, however, it is worth mentioning, that the provisions in question are rarely used in practice.
