Abstract:
This article examines the criminal offense of breach of trust in economic transactions (in Croatian: Zlouporaba povjerenja u gospodarskom poslovanju), a delictum proprium, under the Croatian legal framework. The phrase delictum proprium means that this offense can only be committed by certain individuals in specific roles, such as those responsible for managing others’ property or economic interests. Furthermore, it delves into the specific conditions and roles under which this offense can be committed, the legal obligations of individuals responsible for managing others’ property interests, and the implications of breach of these duties. This analysis aims to shed light on the complex interplay between corporate governance and criminal law.
- Introduction
Breach of trust in economic transactions is a specialized criminal offense in Croatian law, classified as delictum proprium. This designation means that it can only be committed by individuals in specific roles, particularly those entrusted with managing or safeguarding others’ property interests. This article aims to provide an in-depth legal analysis of this offense, exploring the scope of liability, legal definitions, and nuances of the Croatian legal framework governing economic transactions.
- Legal Framework and Definitions
Under Croatian law, the offense of breach of trust in economic transactions is defined by specific legal provisions, primarily focused on individuals who are legally responsible for protecting the economic interests of others. These include various roles in corporate structures, such as company managers, liquidators, and bankruptcy trustees. The law emphasizes that these individuals must fulfil their duties with honesty and conscientiousness, with failure to do so leading to potential criminal liability.
- Scope of Liability
The scope of liability for breach of trust is explicitly tied to the individual’s role and responsibilities. It includes situations where an individual’s actions or omissions result in damage to the property interests, they are responsible for. The law takes a strict stance on the misuse of authority or trust in these roles, with liability extending to both direct misappropriation and other forms of causing harm to property interests.
- Ways of Assigning Duties and Responsible Persons
The excerpt from Article 246, Paragraph 1 of the Croatian Criminal Code (hereinafter referred to as: the KZ) discusses the protection of others’ property interests and outlines four distinct methods of delegating the duty of protection:
Law: This refers to cases where specific duties for protecting others’ property interests are explicitly mandated by the law. This is common in regulated industries or in relationships where a clear legal obligation exists.
Decision of Administrative or Judicial Authority: This involves duties of protection arising from decisions made by administrative or judicial bodies. These decisions often base their reasoning on legal or contractual grounds.
Legal Transaction (Contractual Agreement): Here, the duty to protect another’s property interests stems from contractual agreements or legal transactions. This is a common scenario in business relationships where parties enter into agreements that include protective duties.
Relationship of Trust: This method refers to situations where the duty to protect arises out of a relationship of trust. This can be more abstract and is not necessarily based on legal or contractual obligations, but rather on the nature of the relationship itself, such as fiduciary relationships.
- Economic Activities
The KZ does not define what constitutes economic operations. In contrast, the Slovenian Penal Code offers a definition in its Article 99. As a result, in the absence of a specific definition in Croatian law, the understanding of economic operations must be derived from other branches of law, primarily private law.
Though there is no universal legal definition of economic activity, based on certain legal provisions, it is theorized that economic activity involves independent and continuous market operations with the intention of generating profit through chargeable legal transactions.
- Property Benefit
The essence of this crime is the occurrence of damage that is causally linked to the perpetrator’s action. It includes not only direct appropriation of property but also various management actions that result in damage to that property. The crime occurs if the perpetrator obtains property benefits for themselves or another, thereby causing harm to the person whose property interests they are supposed to protect. The concept of property benefit is defined as any increase or prevention of decrease in property value resulting from the crime, including any benefits derived from such property, regardless of its location.
- Intention
Crimes against the economy, so this crime respective crime as well, predominantly constitute intentional criminal acts, but indirect intent is also sufficient to establish criminal responsibility. This implies that the perpetrator consents to the consequences of their actions, such as causing damage to the property interests they are obligated to safeguard. This also answers the question of potential liability for the unprofessional conduct of an appointed board member. To be criminally liable, at least indirect intent must be established.
- Jurisdictional Challenges in Continuous Economic Crimes
Economic crimes, particularly those involving the misuse of trust in economic transactions, pose unique challenges for legal jurisdictions. In Croatia, such complexities are exemplified in the interpretation and application of Article 246 of the KZ and related legal provisions. Specific issue of jurisdictional authority occurs in cases where continuous economic crimes are alleged, based on recent legal developments and court decisions in Croatia.
The jurisprudence on the jurisdictional ambit for trials related to continuous economic crimes, particularly under Article 246 and Article 258 of the KZ, has seen varied interpretations.
Initially, municipal courts, recognizing the continuity in these crimes and interpreting Article 19.c of the Croatian Criminal Procedure Act (hereinafter referred to as: the ZKP), often declined jurisdiction, deeming county courts as the competent authority. However, county courts, like those in Zagreb and Sisak, sometimes confirmed the municipal courts’ decisions, whereas others, like in Split, Pula, and Karlovac, overturned them for procedural violations.
The turning point came with the legal opinion issued by the Supreme Court of Croatia (hereinafter referred to as: the VSRH) on the 26th of March 2018. The VSRH clarified that for cases initiated before the enactment of the new amendments, the court which was competent at the time of the indictment’s filing should conclude the case. This resolution, however, raised further questions about the confirmation of new indictments in continuous economic crime cases.
Subsequently, on the 10th of December 2018, the VSRH provided an additional legal opinion, stating that if a case concludes with a dismissal due to lack of jurisdiction, the “time of indictment” refers to when the indictment was raised before the court that issued the dismissal. This clarification aimed to resolve the long-standing jurisdictional ambiguities.
This evolving legal interpretation underlines the challenges in adjudicating continuous economic crimes, especially considering the statute of limitations. The practice of describing economic crimes with terms like “war profiteering” or “privatization processes” has been scrutinized, as the VSRH has stipulated specific conditions for such characterizations to apply.
In conclusion, the Croatian legal system’s handling of continuous economic crimes illustrates the dynamic nature of legal interpretation and the importance of clear jurisdictional guidelines.
- Conclusion
Breach of trust in economic transactions (Zlouporaba povjerenja u gospodarskom poslovanju) represents a crucial intersection of corporate governance and criminal law under the Croatian legal system. This article underscores the importance of understanding the legal obligations and potential liabilities of individuals in economic management roles. As the legal landscape evolves, so does the need for comprehensive legal awareness and adherence to safeguard the integrity of economic transactions.