Can entrapment help to prosecute companies? | In Principle

A new Corporate Liability Act which is currently before the Polish Sejm will put criminal law institutions in a new perspective. Certain instruments that were seen as appropriate only with respect to individuals will have to be redirected to be deployed in the case of corporate entities. Once the new laws take effect, corporate entities will be the focus of attention of law enforcement agencies. The new approach will affect among other things police entrapment operations (controlled handing over of a bribe), at the moment usually used with regard to businesspeople.

Agent provocateur under Polish law

Entrapment, in which there is always an element of deceit, is an issue that has been regulated in Polish law for a long time. Under the Criminal Code, for instance, an agent provocateur is liable, while liability does not apply to an officer (of the Internal Security Agency, Police, Border Guard, Military Counterintelligence, Military Police, and National Revenue Administration) acting as an agent provocateur in undercover operations. In such a case, liability does not apply due to the importance of combating organised crime, bribery, or white-collar crime. Entrapment may only be used to verify credible information that has already been obtained and to detect perpetrators and gather evidence against them.

Because this instrument is highly controversial and dangerous, especially when law enforcement agencies abuse it and use the results for illegal means, agent provocateur laws are very strict. They specify:

• The actions that may be taken during an entrapment operation (for example handing over or accepting material gain, offering material gain),
• That the accused can openly contest the outcome of entrapment in an ongoing criminal case (even though entrapment itself is not public knowledge),
• The purpose of provocation is only to be able to verify previously available reliable information on specific crimes (the list of which is defined in the Police Act), in order to obtain evidence that they have been committed and to detect the perpetrators.,
• That entrapment is only an auxiliary measure to be employed when certain facts cannot be ascertained by other, less injurious means,
• The proportionality requirement – the means employed must be necessary, appropriate, and proportionate to the goal.

Despite definition of these boundaries, in practice entrapment gives rise to a number of problems. For this reason, courts in Poland (principally appeal courts and the Supreme Court) and international courts as well (the European Court of Human Rights (ECHR)) have repeatedly had to find a balance between the needs of law enforcement agencies wishing to prosecute an individual under criminal law) and the interests of individuals who are the subject of entrapment operations.

Defined boundaries for entrapment – Strasbourg and Poland

The ECHR has commented repeatedly on the topic of the lawful limits of police entrapment operations (Teixeira de Castro v. Portugal, complaint 25829/94 and Ramanauskas v. Lithuania, complaint 74420/01) as an effective form of combating crime. It has also formulated a standard for use of evidence gained in entrapment operations in criminal cases against individuals and companies. This standard, approved by Polish courts, requires that each case be examined from the point of view of its merits::

• Whether the entrapment operation was conducted in accordance with the laws of the country in question,
• The impact of entrapment on the fairness of the entire criminal proceedings in which the evidence was used..

The first means that the law of the country concerned must set clear limits for those using the provocation and guarantees for the persons to whom it applies, i.e. safeguards against arbitrariness. The following needs to be examined in particular:

• Whether the goal of entrapment was in fact to verify credible information obtained beforehand regarding criminal activity of a particular individual,
• Whether the persons employing entrapment acted within the law, and in particular whether they encouraged the commission of an offence.

Only when this has been examined will the ECHR then examine whether the entrapment operation affected the due conduct of the overall criminal process in which the results were used. This means that the ECHR considers evidence rules in criminal cases to fall within the domain of national law. By the same token, it cannot prohibit signatory countries of the European Convention on Human Rights from using “tainted” evidence in criminal cases. Thus the ECHR does not determine automatically that proceedings in which a conviction was secured on the basis of evidence obtained illegally were not conducted in due fashion for this reason alone. This is because it has to be determined whether the parties had “equal weapons” in the criminal proceedings in question. This includes validity of specific evidence for conviction, and the accused having an opportunity to contest, in an effective manner, the use and significance of evidence obtained in that way (Shenk v. Switzerland, complaint 10862).

In this context, the ECHR’s ruling in Eurofinacom v. France is important. In this case, the plaintiff provided information and communication technology services in France that could be accessed by giving the appropriate code. The public prosecutor suspected that the system was being used by prostitutes to contact potential clients, and ordered a preliminary investigation. The investigation revealed that the company was an intermediary for clients seeking sexual services. The French criminal courts found the company guilty and fined it five million francs. In a complaint to the ECHR, the company alleged among other things violation of its right to due process due to evidence being admitted in criminal proceedings which had been obtained through “incitement” by police officers to commit a crime. The ECHR disagreed, and found in particular that incitement to commit a crime occurs when officers go beyond passive observation of criminal activity, and a crime is committed as a result of their activities. In the case, the ECHR held that the police operation was more infiltration than incitement to commit a crime, because prior to the operation the officers had information about how the company’s services were used. The ECHR found therefore that these activities were more passive than active in nature because they documented only the company’s criminal activity.

The new act and use of evidence gained in entrapment against a company

The main focus of the proposal for a new Corporate Liability Act is new rules concerning liability, penalties, and means (discussed here). It also introduces new procedures for conducting cases against corporate entities. Meanwhile, it does not amend laws on the police concerning operational and intelligence-gathering activities, including entrapment, in relation to corporate entities. This could be considered confirmation for example that police entrapment operations may be used to gather and subsequently use evidence against companies in criminal cases, while nothing could be further from the truth.

While it is clear that today entrapment can used against members of a company’s managing bodies, employees, or even specifically against a company, using evidence obtained in this way against it creates a problem.

Neither laws on the police, the current Corporate Liability Act of 2002, nor the proposed legislation, allow use of material obtained through entrapment to be used to institute proceedings against a company. These laws only state that material obtained through entrapment can be used to institute and conduct criminal proceedings. Of course, proceedings against companies are similar to criminal proceedings, but a distinction must be made between the two. This was confirmed for instance by the Constitutional Tribunal. The Constitutional Tribunal stated that the liability model under the Corporate Liability Act cannot be treated as criminal liability sensu stricto. At the most, this act provides for repressive liability.

Another reason why evidence of this kind cannot be used is that regulations on entrapment are a restriction of rights and freedoms, and therefore have to be interpreted strictly. In fact, use of information gained through entrapment against a company is impossible under art. 168a of the Criminal Procedure Code, which says that certain types of evidence are inadmissible due to the means in which they are “obtained”, but does not mention the issue of use of evidence of this type.

Therefore, if the laws mentioned above are not amended, it will not be possible to use evidence gained through entrapment to institute proceedings against a company. At the most, this will be grounds for a case against an individual, for example a CEO.

Summary

It has been seen in practice that regardless of the law, attempts are made to discredit any entrapment by demonstrating that it is unlawful. The standpoint in case law is that use of evidence obtained in unlawful entrapment does not by itself mean that criminal proceedings were not properly conducted. The issue that needs to be examined is the effect of the entrapment on the conviction.  Nevertheless, without legislative changes it will be very easy to defend companies against charges based on material gained through entrapment. Entrapment operations are employed in specific types of cases (bribery, narcotics-related) and thus material obtained in this way is usually the main and determinant evidence of commission, and has an impact on how the criminal proceedings against the subject develop.

Artur Pietryka, adwokat, Angelika Bednarz, Criminal practice, Wardyński & Partners