As a result of these myriad changes, it raises a question on the rule of law
in which corporate policies interact with the government, environment and
society. Particularly, several states have tried to determine as to how
corporations can be held responsible for wrongful conduct. Whereas, the major
issue regarding corporate criminal liability is creating a cognizant connection
between the corpus of criminal law and the harsh realities of corporate entities
which is a mixed bag of individuals and corporate hierarchies and structure.
Companies can just ever act through individuals, yet the activities of employees
or specialists dependably happen inside the framework of these corporate
structures and policies.
Respondent Superior is the underlying principle behind criminal liability of
corporations. Essentially, an entity is entirely responsible for the actions of
their employees committed during the course of the employment. Often, entities
are shocked to be involved criminally, when the officials are under the
impression that companies are acting according to the laws. However, the fact of
being unaware of the law will not excuse them from a penalty. Criminal Lawyers
of Dubai have shed some light on matters which can assist corporations in UAE
when facing criminal charges.
Legislation Governing Corporate Criminal Liability
UAE has an unusual approach towards criminal liability for corporations
differing from other jurisdictions. Federal Law Number 3 of 1987 concerning UAE
Penal Code (the Penal Code), is the key legislation which is applicable
throughout UAE including the free zones. Apart from the Penal Code, there are
numerous other legislation which may govern specific criminal matters undertaken
by the entities or their employees, highlighted below:
Federal Law Number 5 of 2012 regarding Combating Cybercrime, which governs
aspects of IT security, online financial and commercial matters. The concerned
legislation imposes penalties for unauthorized access of networks or data,
misuse of IT to commit an IT offence and tampering of confidential information
Federal Law Number 4 of 2002 regarding Anti-Money Laundering punishes the
entities or individuals for money laundering, financial terrorist or failure of
any entity to report such crime to the competent authorities.
Federal Law number 18 of 1993, UAE Commercial Transaction Code criminalizes the
directors of the company who commit acts of concealing information, destroying
relevant documents, acknowledging debts not due during the time of bankruptcy.
Federal Law Number 2 of 2015, Commercial Companies Law under which the directors
may be punished for distributing profits violating the regulation of the
Federal Law Number 8 of 1980 the Labour Law impose a penalty on the company who
hire foreign expatriates without a relevant work permit.
Pertinently, for each criminal action, the entity may be punished under one or
more legislation, and that penalty for such action is without prejudice to the
much greater penalty available under other laws.
The traditional approach under Penal Code for corporate criminal liability can
be located under Article 65 of the Penal Code which states that Corporations,
except government agencies, will be held responsible for any criminal act
committed from their account or by their director or agent. The penalty for such
action would be imprisonment or a fine of maximum AED 50,000. The provisions
explicitly impose a financial penalty of the corporate offender and
simultaneously penalizes the individual by way of imprisonment.
Police, Public Prosecutor, Criminal Courts are some principal authorities
involved acting upon criminal matters of corporate entities. Additionally,
numerous other government authorities are empowered to gather evidence on such
- Immigration officer;
- Inspectors of the municipality;
- Ministry of Labour;
- Ministry of Health;
- Border Guards.
Upon a criminal complaint, the police and the public prosecutor will initiate
the criminal investigation to collect evidence and witness for determining
whether or not the issue constitute a criminal action. The Criminal Procedure
Law under Article 7 exclusively authorizes the Public Prosecutor to initiate
criminal proceedings any individual or corporate entity unless otherwise
Once the report is drafted the Public Prosecutor usually transfers the file to
the Court of First Instance except in the cases of extradition which will be
referred to Court of Appeal. The accused or the public prosecutor, post
receiving an unfavourable judgment has the right to file an appeal before the
Court of Appeal within 15 days for the accused and 30 days from the Prosecutor.
The series of criminal activities undertaken by the company which can be
subjected for criminal action or penalty as defined under Article 65 of the
Penal Code is as follows:
- Money laundering;
- Breach of trust;
- Embezzlement of funds;
- Bounce cheque;
- Criminal acts by directors;
- Labour Complaints.
The emergence of multinational corporations had its own negative impact on the
economic, social and legal aspect and must be carefully considered in order to
resolve the issue of criminal liability undertaken by corporations. As noted
above, there are numerous laws which a company must abide before conducting
business within UAE and one blunder can expose them to hefty criminal penalties.
Ergo, to maintain clean criminal records companies must seek the assistance
of Lawyers in UAE to maintain adequate corporate governance and corporate