Abstract
Corrupt practices seem to be encountered most frequently in cases involving public funding. Nonetheless, they can also play a negative role in private relationships, where no public money is handled or where such money is involved only indirectly. This paper contains analysis of Czech legislation providing for punishment of corrupt practices, under both criminal and civil law. Our analysis focuses both on purely private-law relationships and on transactions that involve – as one of the parties – an entity handling public resources.
This report was written in cooperation with:
prof JUDr Naděžda Rozehnalová, CSc, Professor, Masaryk University Faculty of Law, nadezda.rozehnalova@law.muni.cz;
JUDr Klára Drličková, PhD, Assistant Professor, Masaryk University Faculty of Law, klara.drlickova@law.muni.cz;
Mgr Pavel Málek, PhD, Public Prosecutor, High Public Prosecutor’s Office in Prague, PMalek@vsz.pha.justice.cz.
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Notes
- 1.
cf D Ružič, ‘Komparace právní úpravy korupce v České republice a Slovenské republice’ (Comparison of Legislation on Corruption in the Czech and Slovak Republics) (2011) Právní fórum, 6 (8) 262–269.
- 2.
cf P Šámal et al, Trestní zákoník II, Komentář, zvláštní část. (Criminal Code II, Commentary, Special Part.), 2nd edn (Prague, CH Beck, 2012) 3159–3177.
- 3.
cf Šámal et al (n 2), 3360–3364.
- 4.
cf Šámal et al (n 2), 3364–3370.
- 5.
cf J Fenyk and L Smejkal, Zákon o trestní odpovědnosti právnických osob a řízení proti nim, Komentář (Corporate Criminal Liability Act. Commentary) (Prague, Wolters Kluwer, 2012) 22–27.
- 6.
cf Šámal et al (n 2), 67–72.
- 7.
cf Šámal et al (n 2), 74–77.
- 8.
An international treaty by which the Czech Republic is bound may stipulate otherwise.
- 9.
Determination of the place where such effects arise can cause problems in practice; for more details see D Ondrejová, Nekalá soutěž v novém občanském zákoníku. Komentář § 2972–2990 (Unfair Competition in the New Civil Code. Commentary on Sections 2972–2990) (Prague, CH Beck, 2014) 16–17.
- 10.
The Regulation is applicable in all EU Member States except Denmark.
- 11.
Since the Regulation has priority in application, no conflict-of-law rules for non-contractual obligations arising from breach of rules of competition were embodied in the recodified provisions of new Act No 91/2012 Coll, on private international law.
- 12.
By way of exception, this does not apply to situations where an act of unfair competition harms only the interests of a single competitor. The general rules stipulated in Article 4 of Regulation Rome I shall apply in that case. Choice of law is not permissible for obligations under unfair competition. For more details, see, eg J Valdhans, Právní úprava mimosmluvních závazků s mezinárodním prvkem (Legislation on Non-Contractual Obligations with an International Element) (Prague, CH Beck, 2012) 183–189.
- 13.
The notion of foreign person is defined for the purposes of the Civil Code in Section 3024; a natural person with residence or legal entity with its registered office outside the Czech Republic is deemed a foreign person.
- 14.
The case law of the EU Court of Justice concerning freedom of establishment must also be taken into account in interpretation of this provision. See Ondrejová (n 9), 24.
- 15.
For example, Paris Convention for the Protection of Industrial Property of 20 March 1883.
- 16.
Ondrejová (n 9), 21–24.
- 17.
Prohibition of unfair competition is a necessary component of the general clause, absent which it would not be possible to apply the means of protection against unfair competition. See I Štenglová, S Plíva and M Tomsa, Obchodní zákoník. Komentář. (Commercial Code. Commentary.) 13th edn (Prague, CH Beck, 2010) 172.
- 18.
J Pokorná, J Kovařík and Čáp, Obchodní zákoník. Komentář. I. díl (Commercial Code. Commentary. Part I) (Prague, Wolters Kluwer, 2009) 199.
- 19.
See illustratively, eg, Ondrejová (n 9), 54–64.
- 20.
Pokorná et al (n 18), 192; Štenglová et al (n 17), 172.
- 21.
Štenglová et al (n 17), 172.
- 22.
Direct competitors are persons operating in the same field of business whose products are identical or very similar. Indirect competitors are persons operating in similar fields of business whose products are mutually substitutable. See Ondrejová (n 9), 6.
- 23.
Pokorná et al (n 18), 202.
- 24.
See, eg, Section 1(2), Section 2(3), Section 580 of the Civil Code.
- 25.
Pokorná et al (n 18), 203.
- 26.
Ondrejová (n 9), 42.
- 27.
Pokorná et al (n 18), 204; Ondrejová (n 9), 45.
- 28.
The notion of customer includes primarily consumers, but may also include any other person in the role of customer. Pursuant to Section 419 of the Civil Code consumer means a natural person who does not act within the scope of his business activities or within the scope of independent performance of his occupation. However, a customer may also be a legal entity not operating a business or an entrepreneur who is in the position of the weaker party in business relations. Harm need not threaten both groups (competitors and customers) simultaneously. Although the relevant provision is phrased in plural (“competitors or customers”), this criterion is met even if harm could be incurred by a single competitor or customer. For more details, see Ondrejová (n 9), 45–48, or Pokorná et al (n 18), 205.
- 29.
Pokorná et al (n 18), 204.
- 30.
Bribery within the meaning of this Act is constituted by an act whereby:
-
(a)
a competitor directly or indirectly offers, promises or provides any benefit to a person who is the member of a governing body or some other body of another competitor, or is employed by another competitor, in order to obtain, through that person’s unfair conduct, priority or some other undue advantage in competition for himself or for some other competitor at the expense of other competitors, or
-
(b)
a person under paragraph (a) directly or indirectly requests or accepts any benefit, or has such a benefit promised to him, for the same purpose.
-
(a)
- 31.
Ondrejová (n 9), 197; Pokorná et al (n 18), 229.
- 32.
See Ondrejová (n 9), 191–193.
- 33.
ibid 193.
- 34.
Pokorná et al (n 18), 229.
- 35.
Ondrejová (n 9), 195.
- 36.
Pokorná et al (n 18), 229.
- 37.
Pokorná et al (n 18), 229.
- 38.
Ondrejová (n 9), 196.
- 39.
Anyone whose rights have been infringed or threatened by unfair competition has locus standi pursuant to Section 2988. This will be true, in particular, of competitors who have locus standi in respect of all offences, including bribery. A customer may also be the entitled person in respect of selected crimes; however, this is not the case of bribery. A legal entity that is authorised to defend the interests of consumers or customers may also enforce claims following from unfair competition. However, it may file a lawsuit based on Section 2989 only in respect of selected offences, which do not include bribery. The so-called “other person” affected by unfair competition also has locus standi. This could be true, eg, of persons whose personal attributes have been illegitimately used in competition. Although, in theory, the rights of such persons may be affected by any crime, it is hard to imagine this could be true of bribery. In case of bribery, locus standi will exist, in principle, only on the part of a competitor, mostly a person competing with the bribe-taker (competitor).
- 40.
As a rule, the offender will be a competitor. However, in passive bribery, the offender may also be an “auxiliary person”, ie a person who is a member of the governing or other body of a competitor or is employed by a competitor.
- 41.
Pokorná et al (n 18), 243.
- 42.
Ondrejová (n 9), 251–252.
- 43.
See, in particular, the database at http://www.judikaty.cr/
- 44.
This provision is replaced in the currently applicable legislation by Section 580 of the Civil Code; according to Section 588 of the Civil Code, this invalidity is automatic (nullity).
- 45.
Explanatory memorandum, 30.
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Valdhans, J. (2015). Consequences of Corrupt Practices in Business Transactions (Including International) in Terms of Czech Law. In: Bonell, M., Meyer, O. (eds) The Impact of Corruption on International Commercial Contracts. Ius Comparatum - Global Studies in Comparative Law, vol 11. Springer, Cham. https://doi.org/10.1007/978-3-319-19054-9_4
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