New out-of-court settlement in Belgium for bribery, fraud and money laundering offences

A new law has introduced an out-of-court criminal dispute resolution procedure which is available to, inter alia, a legal entity accused of bribery, fraud or money laundering. Provisions relating to another alternative to trial, the “settlement of claims”, have been partially annulled by the Constitutional Court. This article considers the changes, and the implications for banks. (Act of 5 February 2016 and Decision of 2 June 2016, case No. 83/2016)

New guilty plea procedure

A new "guilty plea" procedure enables the Public Prosecutor to negotiate a penalty in exchange for an admission of guilt. It is similar to the U.S. "plea bargaining" system.

In theory, the Prosecutor’s Office will save time and resources, while the accused may try to negotiate a lower penalty than that potentially imposed at trial, thereby avoiding the uncertainties associated with a trial. The avoidance of the publicity of a trial is another advantage of the guilty plea procedure. The Public Prosecutor will, either directly or at the request of the accused, propose the guilty plea procedure provided that the accused is willing to admit his guilt. The guilty plea procedure is available for virtually all offences except those excluded from its scope of application, ie certain offences which involve physical harm.

A negotiation over the penalty (ie for legal entities, over the level of the fine and the potential confiscation of assets) takes place between the Public Prosecutor and the accused. The guilty plea procedure may be initiated at any time before a final decision is rendered at first instance. However, if an investigating magistrate is seized, the Public Prosecutor will not be able to propose the guilty plea procedure before the investigating magistrate considers his assignment completed and transfers the file back to the Prosecutor’s Office.

There are several safeguards to protect the accused:

• The accused’s lawyer has a central role. The lawyer must be given access to the criminal file and must inform his client of his rights, the consequences of a guilty plea and how the guilty plea procedure works. The lawyer must be present when the accused formally admits guilt and signs the agreement with the Public Prosecutor.
• The accused is granted a ten-day waiting period before the agreement evidencing the admission of guilt and the penalty may be validly concluded.
• The agreement must be approved by a judge who must determine whether all procedural requirements have been complied with. The judge may either approve or reject the agreement, but may not modify the terms of the agreement. If the judge refuses to approve the agreement, the file will be transferred to a trial judge unless a new draft agreement is submitted or a “settlement of criminal claims” is offered. All documents relating to the guilty plea procedure remain confidential.

The “settlement of claims” procedure partially annulled

A recent decision of the Constitutional Court has partially annulled the provisions relating to the “settlement of claims”, which is an alternative out of court settlement procedure also applicable to criminal allegations of most financial, corporate and tax offences, such as fraud, bribery and money laundering. It is regarded as one of the most liberal out of court criminal dispute resolution procedures in the European Union. The accused negotiates with the Public Prosecutor over the payment of a lump sum of money in exchange for dropping the charges. Contrary to the guilty plea procedure, the “settlement of claims” does not include an admission of guilt and can therefore be considered as more attractive.

As a result of this decision, a settlement is no longer possible if an investigating magistrate or a trial judge has already been seized. The Constitutional Court’s main concern was that, when the settlement was offered at this stage of the proceedings, the settlement was not subject to any substantive control by a judge. The judge’s control was limited to assessing formal compliance of the settlement with the legal requirements. Should the legislator wish to allow the Public Prosecutor to offer a settlement at this stage of the proceedings, the legislator will most likely have to introduce a procedure comparable to the one applicable to the guilty plea procedure, ie substantive control of the settlement by a judge. In the meantime, the “settlement of claims” is now only possible before an investigating magistrate or a trial judge has been seized.

Comment

In order to determine whether a case is more suitable for a “settlement of criminal claims” or for a guilty plea procedure, a possible distinction might be made between indisputable and complex cases. In practice, the Public Prosecutor is likely to offer a “settlement of claims” in complex cases that require a lot of time and significant resources to prosecute or whose outcome at trial is uncertain, which is often the case in corporate, financial and tax offences. The Public Prosecutor might be less willing to offer a “settlement of criminal claims” when the facts are indisputable and where the accused is more likely to admit guilt in exchange for a negotiated penalty, thereby avoiding the uncertainty and publicity associated with a trial.

Moreover, as a result of the Constitutional Court’s decision, it will also be necessary to consider whether a trial judge has already been seized. In such a scenario, the “settlement of criminal claims” would no longer be possible.