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

Any criminal offence that could lead to a potential prison sentence of five years or more must be reported.

Most corruption-related criminal offences - such as fraud in course of business operations, tax evasion, accepting and offering bribes in the course of business activity, money laundering, abuse of corporate responsibility, embezzlement, influence peddling - are punishable by five years or more of imprisonment. As a result, they must be reported by the responsible person within a company.

Laws often provide for different prison terms for the same offence, depending on the specific circumstances set out in the legislation.

For example, under Article 227 of the Criminal Code, only cases of abuse of corporate responsibility that result in a gain or loss exceeding RSD 1.5 million (approx. EUR 13,000) are punishable by more than five years in prison. This highlights the threshold for triggering severe penalties and mandatory reporting.

Additionally, a responsible person in a company is required to report any criminal offence, punishable by life imprisonment, committed by a subordinate in the course of his or her duties. In practice, this is a rare situation, as only the most serious crimes are punishable by life imprisonment, which is extremely rare in companies.

The responsibility to report a criminal offence in a company lies with the responsible person who has become aware of the offence while performing his or her duties, especially if the offence is punishable by five years or more of imprisonment.

The term “responsible person” means “a person who, on the basis of laws, regulations or an authorisation, performs certain management, supervisory or other tasks from the business activity of a legal entity, as well as a person who is actually entrusted with the performance of these tasks”.

The company as a legal entity does not have the obligation to report the criminal offence.

The obligation to report covers not only the offence but also the offender, if known. This means the offence can be committed even if the perpetrator is known but not reported by the responsible person in the company.

The criminal offence is reported by filing a criminal complaint with the public prosecutor's office or the police.

If the criminal offence is not reported, although it is required by law, the responsible person in a company can be prosecuted and convicted by the criminal court for the criminal offence: failure to report an offence or an offender. The criminal liability of the responsible person may trigger the criminal liability of the company, if the responsible person had the intention of obtaining a benefit for the company, and the civil liability towards the injured persons or entities.

In terms of criminal law risks, if the responsible person in a company fails to report a criminal offence or its offender that he or she has become aware of in the course of his or her duties, he or she may face a prison sentence from six months to five years.

Some categories of persons may not be punished for the offence - failure to report an offence or an offender. These are the offender's defence counsel, doctor or religious confessor, as well as the offender's spouse, cohabitant, direct blood relative, sibling, adoptive parent or adoptee, and the spouse of any of the aforementioned persons or a person who cohabits with any of the aforementioned persons.

If the offence and the perpetrator are reported to the competent authorities, the public prosecutor, with the assistance of the police, is obliged to prosecute the person responsible for the criminal offence if there is sufficient doubt for prosecution. In such a case, they will collect relevant information and evidence and order a criminal investigation against the suspects to bring them before the competent criminal court, with the ultimate goal that the court will sentence them in accordance with the law and confiscate unlawfully obtained benefits.

Criminal prosecution of the person responsible for the reported offence may result in criminal prosecution and criminal liability of the company if the responsible person had the intention of obtaining a benefit for the company. The criminal liability of the company may result in fines ranging from RSD 100,000 (approx. EUR 850) to RSD 500 million (approx. EUR 4.275 million).

Civil law liability will exist primarily toward the damaged persons or damaged entities. In addition, the company and the defendants may also face reputational damage, which is difficult to predict.

Once a criminal offence has been committed, providing assistance or aid to the offender or perpetrator is prohibited and punishable. 

In particular, any individual who hides the perpetrator of a criminal offence or helps him/her not to be discovered by concealing the means by which the crime was committed, traces or in any other way, or who hides a convicted person or takes other actions aimed at preventing the execution of the sentence imposed, the security measure or the educational measure of referral to an educational institution, will be punished by a fine or imprisonment of up to three years.

Anyone who helps the perpetrator of a crime punishable by more than five years in prison can face the imprisonment of six months to five years. If the crime is punishable by life imprisonment, the penalty increases to one to eight years in prison.