CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in Oman

Under Omani law, several criminal offences must be reported to the authorities. These include:

Commercial Companies Law (Royal Decree 18/2019) ("CCL"):

• Article 206: Members of the board of directors and the executive management must report any acts in violation of the law, acts beyond the scope of their authorities, or any fraud, forgery, or negligence committed during the performance of their duties.

Penal Law (Royal Decree 7/2018) ("Penal Code"):

• Article 196: Public officials must report crimes they become aware of in the course of their duties.
• Article 223: Mandates the reporting of false reporting, failure to report, and refraining from rendering assistance. This includes:
  • Disseminating news of a crime not actually committed.
  • Notifying authorities of a non-existent crime, danger, incident, or disaster.
  • Providing false information related to a committed crime.
• Article 225: Requires individuals to report knowledge of the commission of a felony or an attempt thereof, at a time when it would have been possible to prevent it.

Law on Public Funds Protection and Conflict of Interest (Royal Decree 112/2011) ("PFPCoI"):

• Article 5: Government officials must prevent the misuse of public funds and report any violations related to public funds immediately to the competent authorities.
• Article 12: Government officials are required to submit a financial disclosure statement to the State Financial and Administrative Audit Institution, detailing all movable and immovable property owned by them, their spouses, and minor children, and the source of such ownership.

In a company, the responsibility for reporting offences typically falls on the management and the board of directors. The offences should be reported to the relevant authorities, which may include the police or other designated regulatory bodies, depending on the nature of the offence.

Public officials must report any misuse of public funds to the competent authorities immediately.

Failing to report a criminal offence or its perpetrator can result in significant legal consequences. Under the Penal Code, individuals who fail to report crimes can face imprisonment and fines. Specifically:

• Article 196: Public officials who neglect or delay reporting crimes can be punished with imprisonment for a period no less than a month and not exceeding a year, and a fine between 100 and 300 Omani Rials.
• Article 223: Individuals who fail to report false reporting, failure to report, and refraining from rendering assistance can face imprisonment for a period no less than a month and not exceeding three years, and a fine between100 and 500 Omani Rials.
• Article 225: Failure to report knowledge of the commission of a felony or an attempt thereof can result in imprisonment for a period no less than a month and not exceeding six months, and a fine between 100 and 300 Omani Rials.

The failure to report misuse of public funds is punishable by up to 2 years imprisonment.

Further, the members of the board of directors and the executive management may face liability for damages to the company, shareholders, and third parties, if they fail to report any acts in violation of the law, or acts beyond the scope of their authorities, or any fraud, forgery, or negligence committed during the performance of their duties.

Additionally, companies and their representatives may face reputational damage, legal liabilities, and potential financial penalties for non-compliance with mandatory reporting obligations.

Reporting a criminal offence can carry certain risks, including potential retaliation from the perpetrator, reputational damage, and legal implications if the report is found to be false or malicious.  However, the Penal Code provides several protections for individuals who report crimes in good faith. These include:

4.1 Exemption from Punishment for Reporting:

• Article 93:  provides an exemption from punishment for individuals who notify public authorities of a crime against state security before = it happens. There is also scope for exemption from punishment if the notification occurs after the crime occurs or during the course of the investigation, if it contributes to the arrest of other perpetrators or the perpetrators of another similar crime.

4.2 Protection Against Retaliation:

• Article 196:  implicitly supports the protection of whistleblowers by establishing a legal obligation to report, thereby providing a framework that discourages retaliation against those fulfilling their legal duties. 

4.3 Legal Immunity for Good Faith Reporting:

• Article 223:  provides a legal basis for distinguishing between malicious false reporting and good faith reporting, thereby offering protection to those who report crimes honestly and in good faith.

4.4 Encouragement of Reporting by Offering Legal Excuses:

• Article 224:  encourages individuals to come forward with the truth and report crimes without fear of severe penalties if they correct their statements in time.

4.5 Exemption from Accessory Liability:

• Article 42:  mplies that individuals who report crimes in good faith and do not participate in the criminal activity are protected from being held liable as accomplices.

There is a risk of accessory criminal liability for companies and individuals within the company if they are found to be complicit in criminal activities.  Individuals who assist, facilitate, or conceal criminal activities can be held liable as accomplices.  Article 42 states that a participant in a crime, whether perpetrator or accomplice, shall be punished by the punishment for the crime that was actually committed, even if different from the one intended to be committed, if the committed crime is a probable result of the participatory acts committed by him.  This means that companies and their representatives must exercise due diligence to avoid being implicated in criminal activities and ensure compliance with legal reporting obligations.