Taktiky obhajoby ve věcech hospodářské kriminality

The Silent Threat in the Background of Business: Why Economic Crime Concerns You Too

This huge disproportion clearly shows that these are not minor transgressions. These are sophisticated acts with enormous financial consequences, often committed by educated and otherwise successful people in the course of their professional activities – so-called "white-collar crimes". The defence in such cases cannot, therefore, be superficial; it must be equally sophisticated and led by true specialists.  

The key factor that has dramatically increased the risk for every company is the criminal liability of legal entities, introduced in 2012. Since then, not only a specific natural person (an executive, a director) but also the company itself can be criminally prosecuted and punished. This puts at risk not only the assets and freedom of an individual, but also the very existence of the entire company, which faces substantial fines, a ban on its activities, or even dissolution.  

The defence of a manager and the defence of a company are two separate processes that often run concurrently. We describe the framework, i.e., how corporate criminal liability works and when an individual's actions are attributed to the company, in a separate guide.

This liability is based on the principle of attributability. Simply put, an illegal act committed by a statutory body, a senior employee, or even a rank-and-file employee on the instruction or with the consent of management is attributed to the entire company if it was committed in its interest or as part of its activities.  At ARROWS, we deal with this complex issue, which links the liability of the individual and the company, on a daily basis and help clients set up rules to avoid these existential risks. Need legal assistance? Contact our experts.

A Manager's Nightmare: The Most Common Accusations Faced by Company Management

The line between a bold business decision and a criminal act can be thinner than it seems. Law enforcement authorities often assess management's actions in retrospect, without understanding the context and business risk. Let's look at the most common offences that appear in practice and can easily turn a routine agenda into a serious legal problem.

Breach of duty in the administration of third-party property (Section 220 and Section 221 of the Criminal Code) This is probably the most common "managerial" criminal offence. Many mistakenly believe it only concerns direct embezzlement. The opposite is true. An accusation can also arise from concluding an objectively disadvantageous contract, making a risky investment that failed, or neglecting supervision, which led to damage to the company. It is important to note that even gross negligence can be punishable, not just direct intent.

Distortion of data on the state of business and assets (Section 254 of the Criminal Code) This section targets so-called "creative accounting". It concerns the distortion of financial statements, overvaluation of assets, or concealment of debts with the aim of obtaining a loan, maintaining investor confidence, or influencing business partners.  

Subsidy and credit fraud (Section 212 and Section 211 of the Criminal Code) A very common and high-risk offence, especially in connection with European funds. It is enough to provide false or incomplete information in a subsidy or loan application, whether concerning the company's financial situation, the project's purpose, or the fulfilment of conditions. The consequences can be fatal – the obligation to return the entire subsidy plus criminal prosecution.  

Tax offences (Section 240 et seq. of the Criminal Code) Tax evasion, failure to pay tax or insurance contributions. The line between legal tax optimisation and a criminal offence is often blurred. ARROWS lawyers commonly handle cases where law enforcement authorities uncritically adopt the conclusions of the tax office. Our job is to challenge these conclusions professionally and legally and to prove that the client acted in accordance with the law.

Abuse of information and position in commercial relations (Section 255 of the Criminal Code) This criminal offence covers, for example, so-called insider trading, i.e., the use of non-public information (e.g., about a planned merger or financial results) for personal enrichment on the capital market. However, it can also apply to other forms of abuse of position to the detriment of other competitors. 

Criminal offences related to public procurement Another significant area is criminal offences that penalise the manipulation of public contracts. The Criminal Code contains specific offences such as arranging an advantage in the award of a public contract (Section 256 of the Criminal Code) or collusion in the award of a public contract (Section 257 of the Criminal Code). These offences relate to situations where the transparent and equal competitive environment is distorted in favour of a particular supplier. This could involve, for example, someone demanding or accepting a benefit for refraining from participating in the procedure, or, based on an agreement, engaging in activities aimed at awarding the contract at an unfavourable price. For these criminal offences, the mere intent to cause damage or secure a benefit is sufficient, even if the damage does not materialise. Given that both natural and legal persons can commit them, it is crucial to have properly established internal processes. Our lawyers will help you with legal analyses and the preparation of documentation that will protect your company.  

Key Risks for Statutory Bodies and Management

Building an Ironclad Defence: Basic Strategies and Legal Principles

A successful defence in economic criminal cases is not based on a single argument, but on a well-thought-out strategy that combines several key legal principles. Unlike in general crime, where it is often disputed whether the act even occurred, the core of the dispute in economic offences is rather its legal interpretation. The transaction took place, the contract was signed, the invoice was issued. The question is whether it was a legitimate business operation or a criminal act. This is where the opportunity for an expert defence opens up.

Before we get to tactics, it helps to know the map. We discuss the individual phases from the initiation of proceedings to the main hearing and how criminal proceedings work as a whole in a separate article.

Tactic 1: Challenging the Subjective Element (Intent)

This is the absolutely crucial battleground. For an act to be criminal, in most cases, it must be committed intentionally. It is precisely proving intent that is extremely difficult for law enforcement authorities. Criminal law distinguishes between  

intent (direct, where the perpetrator wanted to cause the consequence, and indirect, where the perpetrator was aware of the consequence) and negligence (conscious, where the perpetrator, without reasonable grounds, relied on not causing the consequence, and unconscious, where the perpetrator was not even aware of the possibility of the consequence, although they should and could have known).  

Our job at ARROWS is to prove that the client did not intend to break the law. For example, a manager who signed a disadvantageous contract may not have done so with the aim of harming the company, but may have acted on the basis of incorrect or incomplete information, such as a misleading expert opinion. In such a case, it is not an intentional criminal act, but at most negligence, which may not be punishable.  

Tactic 2: Application of the "Ultima Ratio" Principle

The principle of subsidiarity of criminal repression, known as ultima ratio (the last resort), states that criminal law and its sanctions should only be used as a last resort when other legal instruments have failed. If a certain socially harmful act can be remedied by means of private law (e.g., compensation for damages) or administrative law (a fine), criminal prosecution should not be initiated at all.  

Imagine a situation where a company, through its actions bordering on unfair competition, causes harm to a competitor. ARROWS lawyers can successfully argue that this is a classic commercial law dispute that should be resolved in a civil court through a claim for damages, rather than by criminalising business conduct. This principle is a key corrective against the excessive zeal of repressive authorities.

Tactic 3: Defence of Due Managerial Care and the "Business Judgment Rule"

The duty to act with due managerial care is the cornerstone of the liability of every member of a statutory body. It consists of three components: loyalty (acting in the best interest of the company), necessary knowledge, and diligence. Closely related to this is the so-called Business Judgment Rule. This protects a manager from liability for damages if they can prove that in their decision-making, they acted on an informed basis, in good faith, and in the defensible interest of the company.

Business is by definition risky, and not every decision leads to profit. Courts should not retrospectively review business decisions just because they turned out to be loss-making. What is important is whether the decision-making process was sound. This is precisely where ARROWS provides key support. We help clients with the careful preparation of documentation that demonstrates compliance with due managerial care – minutes of meetings, background analyses, external opinions, and legal standpoints. In any potential criminal proceedings, such documentation is the strongest weapon of the defence, as it effectively refutes claims of malicious intent.

When the Police Knock: How to Behave During a Search at Your Company

A search of the offices by a police authority is one of the most stressful and chaotic situations a company can experience. The initial reactions and steps at this moment can fundamentally influence the entire subsequent course of the proceedings. The key is to remain calm and act according to a proven script.

The first and most important step is to contact your lawyer immediately. Do not try to handle the situation yourself. The presence of an experienced defence lawyer from ARROWS from the very beginning will ensure the protection of your rights and prevent irreversible mistakes. Our lawyer on site will oversee the legality of the entire procedure.

Ask the raid commander to present a written warrant for the search of other premises and land. This warrant must be issued by a judge and must contain the precise designation of the premises concerned and the reasons for the search. At the same time, request the presentation of the service IDs of all intervening police officers and record their names and identification numbers.  

It is your duty to provide the police with cooperation – to make the premises specified in the warrant accessible, to unlock cabinets and safes. Under no circumstances should you obstruct the search, destroy documents, or attempt to hide anything. This could be classified as the criminal offence of obstructing the execution of an official decision.  

At the same time, however, neither you nor your employees are obliged to provide any explanations or answer questions without the presence of a lawyer. It is absolutely essential that you instruct all employees not to communicate with the police and to refer them to the lawyer present or to the company's management.

An ARROWS lawyer on site will ensure that a detailed record of the search is drawn up, which will accurately reflect reality. They will ensure that a precise list of all seized items and data is made, and will continuously make copies of key documents and take photographic documentation. These steps are necessary for any subsequent challenge to the legality of the evidence obtained.  

The following table serves as a quick manual for a crisis situation.

Search at the Company: What to Do and What to Avoid

The International Dimension: When Criminal Activity Crosses Borders

In today's interconnected economy, economic crime increasingly has an international dimension. Whether it involves foreign suppliers, subsidiaries in other countries, international tax planning, or just a manager's business trip, the risk is not limited to the territory of the Czech Republic. It is in these situations that the strength and reach of a law firm are fully demonstrated.  

Thanks to our unique ARROWS International network, built over ten years, we are able to provide legal protection to our clients throughout Europe and beyond. We handle cases with an international element on a daily basis and can arrange and coordinate an effective defence in various legal systems. This is an advantage that local firms cannot offer.

One of the most significant instruments of international cooperation in the EU is the European Arrest Warrant (EAW). This is a simplified and expedited mechanism for surrendering persons between member states for the purpose of criminal prosecution or execution of a sentence. For a manager detained at an airport abroad, an EAW can be a shock with very rapid and serious consequences.

At ARROWS, we have extensive experience with EAW proceedings. Our specialists immediately review its validity (it must always be based on a valid domestic arrest warrant) and assess whether there are grounds for refusing surrender, as provided for by European law. At the same time, we immediately contact our partner firm in the country concerned and ensure a comprehensive defence on both fronts.

In addition to the EAW, there are other forms of international judicial cooperation, such as legal assistance in the narrower sense (letters rogatory), where judicial authorities of different states exchange evidence – requesting witness examinations, the production of documents, or the seizure of assets. Here too, professional coordination is key to protecting the client's rights and their trade secrets.  

Solving International Legal Challenges

Prevention as the Best Defence: How to Build a Resilient Company

The best and cheapest defence is the one that never has to start. The costs of prevention, however high they may seem, are a mere fraction of the financial, reputational, and personal costs associated with criminal proceedings. The goal of modern and responsible management should be to build a company that is internally resilient to the risks of economic crime.

The key tool for managing these risks is the implementation of an effective Compliance Management System (CMS). This is a set of internal rules, processes, and control mechanisms aimed at ensuring that the conduct of the company and its employees complies with legal regulations and ethical standards.  

The importance of a functional compliance programme cannot be overstated. It is not just a "piece of paper" for a potential audit. A well-designed and consistently enforced compliance programme can lead to the complete exoneration of a legal entity from criminal liability. The law allows a company to be absolved of liability if it can prove that it has made every effort that could be reasonably required of it to prevent the commission of the criminal offence. A functional CMS is the best evidence of this effort.  

At ARROWS, we specialise in the creation and implementation of preventive programmes. Our recommendations are not theoretical. They are based on a deep knowledge of the practices of law enforcement authorities and on experience gained from providing long-term services. We help our clients build a robust defence through specific services:

• Drafting internal policies: We prepare tailor-made codes of ethics, anti-corruption rules, rules for asset management, and other key documents that set clear boundaries.

• Preparing documentation that protects against sanctions: We create model contracts, checklists for executives, and other tools that minimise the risk of error in key decisions.

• Specialised training for employees and management: We conduct training that demonstrably increases legal awareness within the company and serves as proof of due managerial care.

• Legal audits and consultations: We perform in-depth analyses of internal processes and identify weak points before the police or the tax office find them.

Your Strategic Partner in Key Moments

An accusation of committing economic crime is undoubtedly an existential threat. However, as we have shown, with the right strategy, deep expertise, and a proactive approach, it is a threat that can not only be faced but also effectively prevented. The key is to have a partner by your side who understands not only the law but also your business.

The lawyers at ARROWS deal with this demanding area on a daily basis. Our teams combine top-tier legal knowledge with practical business thinking. We pride ourselves on speed, precision, and absolute discretion. Our recommendations are backed by experience from hundreds of cases and the long-term trust of major clients from both the corporate and public sectors.

Don't wait until it's too late. Whether you are facing an acute problem or want to protect your company and yourself preventively, we are here for you. Arrange a no-obligation consultation with us. Protecting your business and your peace of mind is our priority. At ARROWS, we are more than just lawyers. We are partners to our clients. We enjoy connecting interesting business opportunities and are always ready to listen to your business idea. Do not hesitate to contact our firm.