Outline of the proposed Bill on Amendment to the Penal Code to prescribe separate criminal liability to a juristic person for a criminal offence

A juristic person or legal person (e.g. private limited liability company, public limited liability company, juristic partnership or foundation) is created and exists by virtue of particular laws, and has a certain legal capacity to carry out to the fullest extent possible, through its representatives or agents, certain actions in the course of its operation and existence. Consequently, there are legal consequences from such actions. 

In Thailand, it has been a long-established legal principle that a juristic person can be held liable for committing criminal offences and, consequently, be imposed with criminal punishment as prescribed by the applicable laws (see Supreme Court Judgement Nos. 787-788/2506; 584/2508¹; and 1620/2508). As set forth by various judgements of the Supreme Court, the ‘intent’ of the juristic person can be exhibited through the actions of its representatives or agents (its directors, managers etc.), and if such actions are carried out within the objectives of and for the benefit of, or for the assumed benefit of such juristic person (i.e. when such criminal conduct is for corporate gain), such juristic person can be prosecuted and held liable for the actions that constitute criminal offences carried out by its representative or agents. 

As a general rule under the Thai Penal Code and various other legislations (unless it is otherwise prescribed therein), there is a legal presumption that a reference to a “person”, whether as the offender/wrongdoer or as the injured person, will include a natural person and juristic person. As such, and through the judicial doctrine as developed by the application of criminal law by the court, a juristic person is capable of being liable for almost all criminal offences as prescribed by the Penal Code or other statutory legislations prescribing any actions to be punishable as criminal offences, including offences relating to life and body, such as the  offence of negligently committing an act resulting in the death of another person, per Section 291 of the Penal Code²  (see Supreme Court Judgement No. 3446/2537). 

It is important to note that, under Thai law, criminal prosecution of a juristic person is not a substitute for the prosecution of criminally culpable individuals, such as directors and employees, who actually commit the offence as accomplices together with such juristic person (see Supreme Court Judgement Nos. 97/2518; 4707/2534³; and 3446/2537). Consequently, such culpable individuals shall also be held criminally liable for the offence. This legal principle is also established in various statutory legislations e.g. Section  84 of the Trade Competition Act B.E. 2560 (2017)⁴, Section 300 of the Securities and Exchange Act B.E. 2535 (1992) and in various other legislations, which specifically prescribe the criminal liability upon a director or representative who directly commits (or is responsible for the commission of) certain offences.  

The general legal principle has been developed and established by the Thai court; that a “juristic person” can be held liable for a criminal offence.  However, the extent of the criminal punishment that can be imposed upon the juristic person under the Thai Penal Code is limited only to a “fine” and/or to “forfeiture of property” (forfeiture is the loss of any property without compensation as a penalty for illegal conduct) because, clearly, a juristic person cannot be sentenced to detention, imprisonment or death⁵. Consequently, in many cases where the offences are punishable by imprisonment or a fine (and/or forfeiture of property), or both, the juristic person is only punished by a fine or forfeiture of property; whereas other culpable accomplices who are individuals (e.g. representatives, directors and employees) would be subject to the other sentences, such as imprisonment.

Under the landscape of statutory legislations in Thailand, certain legislations already specifically prescribe criminal liability and specific punishment upon an offender who is a juristic persons, e.g. the Act Determining Offence Relating to Registered Partnership, Limited Partnership, Limited Company, Association and Foundation, B.E. 2499 (1956) or in the Organic Act on Anti-Corruption B.E. 2561(2018), which prescribes criminal liability toward a juristic person in addition to those said related individuals who commit the offence of bribery, acting for or on behalf of such juristic person, where, if the said juristic person does not have “proper internal control measures” to prevent the corrupt activity, the juristic person could also be deemed to have committed the offence and thus be subject to a specific fine under Section 176 of the Organic Act on Anti-Corruption B.E. 2561(2018). Nevertheless, currently, a large number of legislations including the Thai Penal Code do not prescribe specific and separate criminal liability and punishment for corporate or juristic persons.

In recognition of the foregoing limitation in regard to the extent of criminal liability and punishment to be imposed upon a juristic person, and in order to enact the statutory legislation to effectively and appropriately impose criminal liability and punishment for offences committed by a juristic person, the “draft Act on Amendment to the Penal Code (No…) (B.E.…)” has been proposed, which proposes to prescribe the criteria of determining criminal liability and punishment upon a juristic person for criminal offences, separately and  distinctively from those applicable to individuals  (the “Bill”). The Bill has been considered and approved by the Committee on Penal Code Reform of the Office of Council of the State.

Proposed Bill⁶

The key takeaways under the proposed Bill are as follows:

1.    Proposed addition of Section 18/1. The stipulation of criminal punishment for an offender who is a juristic person and the criteria for adjustment of the punishment in absence of a specific legal provision prescribing separate punishment to a juristic person for such crime; the details of which are as follows:

“Section 18/1.  Punishments to be imposed on an offender who is a juristic person shall be a fine and forfeiture of property.

• In the case where there is no law which prescribes specific punishment upon an offender who is a juristic person, the criteria for imposing punishment upon such offender who is a juristic person shall be as follows:
• (1)With regard to all offences prescribed by law to be punishable only by imprisonment or death, the punishment to be imposed upon an offender who is a juristic person for such offence shall be adjusted from imprisonment or death to a fine not exceeding Baht 10,000,000 (ten million Thai baht).
• (2)With regard to all offences prescribed by law to be punishable by imprisonment and a fine, or to be punishable only by a fine the punishment to be imposed upon an offender who is a juristic person for such offence shall be adjusted to a fine not exceeding five times the prescribed amount of fine for such offence; except for any offence prescribed by law to be punishable by other types of fine for which no exact amount of fine was prescribed, then the  punishment to be imposed upon the offender who is a juristic person for such offence shall be in accordance with the already prescribed fine punishment for such offence. 
• The prescription period for all offences committed by an offender who is a juristic person shall be in accordance with the prescription period applicable for the punishment as previously prescribed for any such offences.”

2.    Proposed addition of Section 18/2. The stipulation of discretional power to the court to order additional measures of punishments upon an offender who is a juristic persons; the details of which are as follows:

“Section 18/2.  In the case where the court renders judgement imposing punishment upon an offender who is a juristic person in accordance with the provision of Section 18/1, paragraph two and upon the court’s consideration of the seriousness of the circumstances and actions concerning the offence committed by such juristic person, regardless of whether or not there is any motion submitted to the court, the court may issue any one or more of the following orders:

• (1)To dissolve the juristic person, in the case where such juristic person was organised for the purpose of committing the offence or in the case where actions have been carried out in deviation from the prescribed scope of objectives of such juristic person in order to commit the offence.
• (2)To close down the place of business or the computer system, or to suspend the activity which causes the widespread of data, or to delete, computer data from the computer system which has been used in committing an offence; for a period not exceeding five years, or permanently.
• (3)To prohibit any fundraising activity from the general public for a period not exceeding five years, or permanently.
• (4)To prohibit any participation in bidding for any government contract or government concession, or from entering into any contract with the government, whether directly or indirectly, for a period not exceeding five years, or permanently.
• (5)To advertise or to disseminate the judgement rendered by the court, whether in whole or in part, in a daily national newspaper in the Thai language or a  local newspaper in the location of the principle place of business of such juristic person, or on an electronic media platform or in any other manner, thus to inform the general public of such judgement rendered by the court; for a period of no less than three consecutive days, where such juristic person shall be liable for all expenses.           
• (6)To prohibit the operation of business or any activity, whether directly or indirectly, related to the committed offence, for a period of not exceeding five years, or permanently.
• The orders as prescribed in (1) and (2), shall not be imposed upon a juristic person who is a state-enterprise.
• If the court issues any order as prescribed in paragraph one, the court shall immediately notify such order to the relevant competent authority or official under applicable laws in order to further arrange for execution of said order issued by the court.”    

3.    Proposed addition of Section 59/1. The stipulation of the criteria for determining criminal liability of a juristic person; the details of which are as follows:

“Section 59/1.  A juristic person shall be held criminally liable only when an act is committed by its representative or authorised person, in accordance with the scope of authority of such person, within the objectives of and for the benefit of such juristic person.

• A juristic person that is a central government body, regional government body, local government body, public organisation or other government agencies in any form whatsoever, excluding state-enterprises, shall not be held criminally liable, unless otherwise prescribed by the applicable law.   
• Regardless of whether or not a juristic person is criminally liable, it shall not release an individual who commits an offence or jointly commits an offence with such juristic person from any criminal liability.”     

4.    Proposed addition of Section 196/1. The stipulation of offence and punishment for violation of the court’s order; the details of which are as follows:

“Section 196/1.  A juristic person who violates or fails to comply with the order of the court issued under a judgement in accordance with the provision of Section 18/2, shall be liable to a fine of Baht 50,000 – 300,000 (fifty thousand to three hundred thousand Thai baht).

• If the juristic person, in committing the offence under paragraph one, gains or would gain any benefit from such violation or failure to comply with the court’s order, such juristic person shall be liable to a fine not exceeding two times the amount of the benefit so gained or which would be gained. In any case, the fine to be imposed herein shall not be less than the minimum amount of fine prescribed under paragraph one.
• In the case where the commission of the offence by such juristic person under paragraph one has resulted from the instruction or an action of a director, a manager or any person responsible for the operation of such juristic person, or in the case where such person has the duty to give instructions or take actions but refrains from doing so thereby leading to the commission of the offence by such juristic person, then such person shall also be liable to imprisonment for a term of not exceeding one year or to a fine of Baht 300,000 (three hundred thousand Thai baht), or to both.”     

The Bill underwent a public hearing, which ended on 15 July 2023 and is currently published on the website of the Office of Council of the State. It is expected that the Bill shall be submitted to the Cabinet for further consideration and, if approved by the Cabinet, the Bill shall be further submitted to the House of Representatives and the Senate in accordance with the prescribed procedures to enact the law under the Constitution of the Kingdom of Thailand B.E. 2560 (2017). 

Reference
1. Bill on Amendment to the Penal Code (No..) B.E. … (announced for public hearing until 15 July B.E. 2566 (2023)) ร่างพระราชบัญญัติแก้ไขเพิ่มเติมประมวลกฎหมายอาญา (ฉบับที่ ..) พ.ศ. .... (รับฟังความคิดเห็นถึงวันที่ ๑๕ กรกฎาคม 2566) https://www.krisdika.go.th/th/detail-law-draft-under-consideration-by-the-office-of-the-council-of-state?billCode=414&lawdraftType=between

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact the following:

Nuttaros Tangprasitti
Partner
Salisa Aninlabon
Associate

Authors