Belgium - The Strategic View - Business Crime 2016
        

Stefaan Loosveld and Gert-Jan Hendrix review the reform of criminal procedure in Belgium, alongside plea bargains, criminal settlement and the reporting of crimes

Contributing firm

1. What trends, in terms of activity or focus, have you seen in the prosecution of business crimes in your jurisdiction in the last 12 months?

There have been no noteworthy new trends in the prosecution of business crimes in the last 12 months.

2. Are enforcement agencies particularly focused on any specific industries or crimes?

Generally, crimes are prosecuted by the Public Prosecutor’s office, which does not specifically focus on any industries or crimes in particular, but deals with all criminal cases.

However, administrative – and therefore not criminal – enforcement is carried out in specific industries by specialised enforcement agencies.  For instance, the FSMA (“Financial Services and Markets Authority”) can impose administrative sanctions (including fines) for breaches such as market abuse and the violation of conduct of business rules that apply to financial institutions.  The National Bank of Belgium also has the authority to impose administrative sanctions on credit institutions for violations that it discovers in the framework of its prudential supervision.  Similarly, agents of the Federal Ministry for Economic Affairs may also take enforcement actions, particularly for breaches of economic law affecting consumers.

3. Are enforcement agencies more or less focused on pursuing cases against corporations or individuals?

There is a general tendency towards an increased focus on pursuing cases against both corporations and individuals.

4. Does the legal framework concerning the prosecution of business crimes allow for extraterritorial enforcement? Are such matters being pursued?

As a general principle, Belgian law only allows for crimes committed in the Belgian territory to be prosecuted in Belgium.  However, several notable exceptions to this principle exist:

  • A Belgian or foreign national may be prosecuted in Belgium for crimes against the public’s trust that are committed abroad, such as fraud, counterfeiting Belgian or foreign currency, or forgery of securities, shares, or letters of debt;
  • A Belgian national may be prosecuted in Belgium for crimes committed abroad if that crime is punishable under Belgian criminal law by at least seven days imprisonment, and if the act concerned is also a criminal offence in the country where it is committed.
  • A foreign national may be prosecuted in Belgium for crimes committed against a Belgian national, if the crime is also punishable under the laws of the country where it is committed with a prison sentence of at least five years, and provided that foreign national can be found in Belgium.
  • Any person may be prosecuted in Belgium when he has committed active bribery abroad, i.e. offered a bribe to a public official, arbitrator, jury member, or judge, or when he has committed passive bribery abroad, requested, accepted, or received a bribe, as a public official, arbitrator, jury member, or judge.
  • Any person may be prosecuted in Belgium when he is an accomplice to or assisted in a crime committed by a Belgian national abroad, if that Belgian national is prosecuted in Belgium.

 

For the purposes of these exceptions to the principle of territoriality of criminal law, legal persons are considered Belgian nationals when their principal place of business is in Belgium.

5. What judicial or legislative developments have impacted the prosecution of business crimes in your jurisdiction in the last 12 months? Are there any significant proposals for reform of the legal framework that governs business crimes in your jurisdiction?

The past 12 months have seen a thorough overhaul of some parts of criminal procedure, through the Act of 5 February 2016 amending Criminal Law and Criminal Procedure and concerning several Provisions with regard to the Justice System.  The Act and the reform of criminal procedure contained in it are part of a larger reform of the Belgian judicial landscape, and aim at increasing the efficiency, speed and consistency of Belgian criminal justice.

While the Act contained a diverse range of modifications, two appear particularly noteworthy from a business crime law perspective:

  • First, the Act makes plea bargains available for certain crimes.  That is, the Public Prosecutor may now offer persons accused of crimes not punishable by more than five years of imprisonment the possibility to plead guilty and to agree with the Public Prosecutor on a sentence, which can then be below the statutory minimum.  Once an agreement is reached, it must still be approved by the court, which checks the free and informed character of the consent and the proportionality of the punishment.
  • Second, the Act puts certain limits on the pre-existing possibility of a criminal settlement with the Public Prosecutor.  Such criminal settlement agreement differs from a plea bargain in that the accused does not admit his guilt, but only admits that he committed a tort and is therefore liable for the resulting losses.

 

Specifically, the Act now makes it impossible for a criminal settlement to be entered into after a final criminal judgment is given.  In the past, criminal settlements were also possible after an appeal was lodged.  Furthermore, criminal settlements will, from now on, also be mentioned on the accused’s criminal record.

However, in a recent decision of the Constitutional Court on 2 June 2016, that Court held that the lack of judicial review of the criminal settlement agreement constitutes a violation of, among other rights, the right to a fair trial.  As a result, no new criminal settlements can be entered into until clarifying legislation is passed.

6. How common is it for enforcement agencies in your jurisdiction to exchange information and cooperate internationally with other agencies? What are the consequences of cross-border cooperation on prosecutions of entities and individuals in your jurisdiction?

As a party to the European Convention on Mutual Assistance in Criminal Matters, Belgium has the ability to request assistance in criminal matters from most other European countries.  This assistance may consist of, among other things, foreign enforcement agencies procuring evidence or transmitting articles to be produced as exhibits, communicating extracts from and information relating to judicial records, and summoning witnesses to appear.

Since the EU Council Act of 29 May 2000 on Mutual Assistance in Criminal Matters and the International Mutual Legal Assistance Act of 9 December 2004, the Belgian Public Prosecutor may, of his own motion or at the request of an Investigating Magistrate, also request that Joint Investigation Teams be created, which contain members of foreign criminal authorities.  Such Joint Investigation Teams may then carry out international investigations, although any measures of inquiry performed on Belgian territory must first be sanctioned by the Public Prosecutor or the Investigating Magistrate, depending on who is in charge of the case.

From the last statistics published by the Ministry of Justice (for the period of 2007–2009), it does appear that the Public Prosecutor’s office takes advantage of its ability to request assistance from foreign enforcement agencies quite regularly.  In 2009, a total of 26,154 requests for assistance in criminal matters were made to other European countries.  The large majority of these requests (20,404 requests) pertained to traffic violations.  However, 4,199 of those requests were letters rogatory, i.e. requests for all types of information exchange or other investigatory measures.  In recent years, there has been an increased use of this assistance in criminal matters.

Evidence gathered and information received through the procedure for assistance in criminal matters is fundamentally not treated differently from evidence and information gathered by the Belgian Public Prosecutor, and is admissible in Belgian criminal proceedings.

7. What unique challenges do entities or individuals face when enforcement agencies in your jurisdiction initiate an investigation?

Belgian criminal procedure has a few unique features that may be unfamiliar to foreign entities or individuals. These features include:

  • The “Antigoon” case law of the Belgian Supreme Court (Court of Cassation): Prior to a judgment of 14 October 2003, Belgian criminal law had a strict exclusionary rule with only a few exceptions, stating that irregularly obtained evidence was inadmissible in criminal proceedings.  However, in its judgment of 14 October 2003, the Belgian Court of Cassation greatly reduced the scope of this exclusionary rule.
    Irregularly obtained evidence is now only deemed inadmissible in one of three cases, namely (i) where the law explicitly states that the violation of a formality results in the nullity of the evidence, (ii) where the irregularity harms the credibility of the evidence, and (iii) where the use of the irregularly obtained evidence would result in a violation of the right to a fair trial.  This case law has since been formally adopted into Article 32 of the Preliminary Title to the Code of Civil Procedure, giving it a statutory basis.
  • The primacy of the criminal courts over the civil courts: Under Belgian criminal law, the civil courts are bound by any findings made by the criminal courts.  This is of particular importance to civil liability claims by a victim against the perpetrator of a criminal offence, as the finding of a criminal fault automatically obliges the civil court to accept that a civil fault was committed, for which damages may be due.
    Furthermore, the primacy of the criminal courts also entails that civil proceedings must be stayed as soon as a criminal investigation into related issues is started, to avoid any contradictory judgments from being rendered.  Only after the criminal case is fully over can the civil proceedings be recommenced.  However, Belgian law offers victims the possibility to bring their civil claim before the criminal courts rather than the civil courts.  If they choose to do so, the criminal court may rule on the civil aspects of the case together with the criminal case.
  • The criminal liability of legal persons: Under Belgian law, legal persons may be held criminally liable for all crimes that are either intrinsically linked to the realisation of their company purpose or their interests, or which were committed for their benefit.  However, where the legal person is to be held criminally liable because of the acts of an identified natural person, only the person that has committed the most serious fault may be convicted.  If the natural person has intentionally committed the crime, he can be nonetheless be held criminally liable together with the legal person.
  • The interruption of limitations periods: While criminal actions may become time-barred after the expiration of the applicable limitation period, the limitation period is interrupted, i.e. it starts running anew, each time either a so-called act of inquiry or a so-called act of prosecution is performed.  Acts of inquiry include all acts which have as their object the collection by the investigating authorities of sufficient evidence to bring the case before a criminal court.  Acts of prosecution are all acts which have as their object the conduct of the criminal proceedings.  Such acts of inquiry or prosecution can, however, not result in more than a doubling of the original limitations period.

 

8. Do enforcement agencies in your jurisdiction provide incentives for individuals or entities to self-report a business crime or otherwise provide assistance to the government? If so, what factors should individuals or entities consider when assessing whether to self-report a business crime or cooperate with a government investigation?

The voluntary disclosure of criminal conduct to the Public Prosecutor or the police after the commission of a crime will not automatically result in leniency or any other advantages under Belgian law.  However, in practice such voluntary disclosure is helpful, as it may make it easier to settle the criminal charges with the Public Prosecutor, engage in plea bargaining, or obtain a lower sentencing at a later stage.

There is no general protection of whistle-blowers under Belgian criminal or employment law, although specific regimes exist in certain cases.

In some circumstances, however, persons may have a duty to report crimes.  This is the case, for instance, under Article 30 of the Code of Criminal Procedure, which contains the general obligation for “everyone who has witnessed an attack on public security, or on a person’s life or property” to report those facts to the Public Prosecutor.  A person’s failure to report such facts cannot result in criminal punishment.  However, the failure to report the crime may constitute a fault under the law of torts, in which case the person failing to report the crime may be held liable for damages.  Article 29 of the Code of Criminal Procedure creates the same obligation for government officials and civil servants, albeit that they must report any crime that they become aware of in the performance of their duties.

Specific legislation also provides for a duty to report in certain cases.  For example, Article 25bis of the Act of 2 August 2002 creates the obligation for a financial intermediary in investment services to inform the Belgian Financial Services and Market Authority (“FSMA”), i.e. the financial regulator, of a transaction when it has a reasonable suspicion that the transaction constitutes insider trading or market manipulation.  Similarly, undertakings falling within the scope of the Anti-money Laundering Act of 11 January 1993, which includes financial institutions, have an obligation to report any transactions which they suspect relate to money laundering or the financing of terrorists.  Violation of these obligations can constitute a criminal offence.

9. Do enforcement agencies in your jurisdiction use non-prosecution agreements ("NPA") or deferred prosecution agreements ("DPA")? If so, how do such agreements work in practice and what can entities or individuals do to reach an NPA or a DPA with enforcement agencies? If not, do you believe it is likely that such agreements will become part of the legal framework in the next five years.

Yes, suspects of criminal offences which do not entail grave violence against the physical integrity of another person and which are punishable by no more than two years in prison may be offered a settlement proposal by the Public Prosecutor or the Investigating Magistrate.

Such a criminal settlement agreement will require the suspect to pay a certain sum of money, after which he can no longer be prosecuted for the facts covered by the settlement.  The suspect will, amongst other conditions, also have to have fully compensated victims (e.g. the tax or social security authorities, or the affected investors).  Such criminal settlement is also possible during the criminal trial.  Court approval of the settlement is, in certain situations, necessary.

See above (question 5) for the impact of the decision of 2 June 2016 of the Constitutional Court on the system of criminal settlements.

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