I. Introduction
On February 23rd, 2024, the new Law 5090/2024 (Government Gazette Issue A 30/23.2.2024) was published, which amended several provisions of the Greek Penal Code and Code of Penal Procedure, aiming at a more substantial, effective and immediate conduct of the criminal trial, at the strengthening of the crime-preventive function of the penalty through the principles of general and specific prevention, as well as at the economy of the criminal proceedings. Law 5090/2024 enters into force on May 1st, 2024, with certain exceptions, such as the abolition of the requirement to submit a criminal complaint in order to initiate criminal proceedings (prosecution) for certain felonies, which will be effective as of July 1st of the same year, and certain provisions which are already in force since the publication of the Law.
The main purpose of the new Law 5090/2024 is to limit and supress “small and medium” crime, especially by ending the “impunity” which applied until now for criminal offences punishable by up to 3 years’ imprisonment, due to the provided suspension of the execution of the sentence.
Accordingly, the new penal provisions provide for the actual service of the sentence even when the offence is a misdemeanour, thus significantly affecting entrepreneurs in the business community, who are mainly threatened by the risk of conviction for misdemeanour offences during their business activities. In addition to that risk, the business community seems also to be affected by other legislative changes introduced into Greek criminal legislation by Law 5090/2024.
ΙΙ. Key legislative changes
According to the main changes of the new Penal Code, the following legislative provisions enter into force, which are expected to be of interest to entrepreneurs, traders, directors, managers, legal representatives and other persons entrusted with administrative or managing duties of legal persons.
A. Provisions for the service of sentence
Suspension of the actual service of sentence for misdemeanours is no longer the rule but the exception, since it is hereinafter granted only for prison sentence of up to 1 year, provided that any irrevocable previous convictions do not exceed 1 year. Therefore, in case a prison sentence of more than 1 year is imposed, priority shall be given to the actual service of the sentence, since the benefit of suspension is not provided for anymore.
In particular, prison sentences of up to 2 years shall be served primarily through alternative means of enforcement, i.e. by conversion of the prison sentence into a monetary penalty or by community service. On the contrary, sentences of up to 3 years’ imprisonment shall be served in a penitentiary centre or at home under electronic supervision, either partially for a minimum of 30 days and a maximum of 6 months and suspended for the remainder of the sentence, or in full. Furthermore, prison sentences of more than 3 years shall be served in full in prison, unless partial service of 1/5 to 2/5 of the sentence is sufficient in the court’s discretion.
Β. Tightening of penalties
Law 5090/2024 tightens the general rules governing the applicable to date framework of penalties. In particular, i) the maximum limit of temporary imprisonment (felonies) is increased from 15 to 20 years, ii) the maximum limit of imprisonment in case of combination of felonies is increased from 20 to 25 years and in case of combination of misdemeanours from 8 to 10 years, iii) the sentence of the completed crime is imposed also on the direct accomplice, and iv) the combination of several reasons for reduction of sentence does no longer result in a double reduction.
C. Prosecution of felonies
All committed felonies, including dishonesty, fraud, embezzlement and usury shall be prosecuted ex officio, and not by filing a criminal complaint as previously in force. In such manner, a horizontal provision for ex officio prosecution is introduced for all felonies.
D. Liability of legal persons and entities for bribery offences
With a view to enhancing transparency, specific liability of legal persons and legal entities is established in cases where bribes are paid to public employees for the benefit or on behalf of the legal person or entity by a natural person acting either individually or as a member of a body of the legal person or entity and holding a managerial position or having the power of representation or authority to take decisions or exercise control in that legal person or entity. In such cases, heavy fines ranging from EUR 10,000 to EUR 5,000,000 are foreseen, and in addition to a fine, revocation or suspension of the operating licence or prohibition to carry out the business activity may be imposed.
III. New Regulations & Business
The reformation of the Penal Code may contribute positively to the problem of the existing business delinquency, through the forthcoming tightening of the legal criminal system. However, although the service of sentence for misdemeanours may lead to a more effective prevention and thus a gradual reduction of small-scale crime – especially the economic one -, the new criminal provisions entail significant risks for persons operating in the business sector.
Primarily, the key change introduced by the new legislation regarding the possibility to suspend the sentence only if the imprisonment is less than 1 year, has the legal representatives of companies exposed in cases where the objective criminal liability is provided by law with a prison sentence of more than 1 year. Considering that in such a case the actual service of the sentence (partially or in full) is hereinafter the primal option, the legal representative of a company is threatened with the risk of being deprived of his liberty if sentenced to more than 2 years’ imprisonment, for example in case of the employer’s liability for accidents at work, even if he/she was not directly connected with the observance or non-observance of safety measures. The legal representative is threatened with the same risk in cases of dishonesty, extortion, fraud, embezzlement, false or misleading statements to the public in connection with certain corporate affairs of a société anonyme (A.E.) (Article 176 Law 4548/2018), as well as the members of the board of directors of a société anonyme (A.E.) for the offences provided for by the company law entailing criminal liability (articles 177 and 179 Law 4548/2018), if a prison sentence of more than 2 years is imposed, or in case the court does not recommend an alternative way of serving a sentence (conversion to monetary penalty or community service) of more than 1 year.
Furthermore, combining the provisions of the Code of Tax Procedure and the Penal Code, after the amendments of Law 5090/2024, it follows that the chairmen, managers, managing directors, CEOs, liquidators and any person entrusted with administrative duties of legal persons and legal entities, who commit tax evasion as a misdemeanour now face the risk of imprisonment in a penitentiary centre. In addition, due to the increase of the maximum limit of imprisonment from 15 to 20 years, stricter conditions are also foreseen in case of tax evasion committed as a felony.
Moreover, in cases of tax offences or non-payment of employer’s social contributions, the representatives of legal persons who are responsible for the offence of non-payment of debts to the State or public sector bodies are also threatened with the actual service of the sentence, in accordance with the rules noted above (II.A.), if the total debts exceed 100,000 euros.
Finally, the provisions of Law 5090/2024 also affect persons who assist in committing offences under the conditions of direct complicity. Consequently, direct accomplices, such as accountants who knowingly sign inaccurate income tax returns as proxies of legal entities, are further threatened with the same penalties.
IV. Final notes
The new regulation introduced in the Greek criminal system by Law 5090/2024 is an important step towards a more efficient prevention and suppression of small-scale business crime, which creates problems for the social and financial situation of our country to date. However, the restriction of the possibility of suspension of the actual service of sentence and the general tightening of the penalties has already caused concern among members of the business community, who are threatened with the risk of actual service of sentence in a penitentiary centre even for misdemeanours. This new reality can only raise concerns in the legal community too, since it has the consequence that legal representatives of companies are at risk of being deprived of their liberty for crimes committed without their intention, such as in cases of objective liability (e.g. accidents at work) or inability to repay debts to the State due to the difficult economic conditions of the country (e.g. economic and energy crisis, inflation, etc.).
In light of the above, the results and implications of the new criminal provisions will be seen in practice and it remains to be determined whether the purposes for which they were adopted will be achieved or whether they will have a deterrent effect to the strengthening of Greek entrepreneurship.