Internal corporate investigations in Greece

September 2023 | SPOTLIGHT | FRAUD & CORRUPTION

Financier Worldwide Magazine

September 2023 Issue

Internal corporate investigations are a powerful tool helping companies to identify, assess, terminate and remediate any kind of criminal or regulatory infringement through a structured, legally robust process. Investigations are closely related to criminal policy, crisis management, corporate responsibility and legal technology.

The various benefits of investigations have become evident over recent decades in countries such as the US and Germany, where they are now firmly established within legal practice. Greece is only now discovering the benefits and implications of investigations.

Τhe favourable context for investigations in Greece

The phenomenon of economic globalisation, which sees multinational companies operating in Greece, while listed, for example, on US or British stock exchanges through their subsidiaries, establishes a parallel jurisdiction for US or UK authorities with regard to corruption offences committed in Greece. The legal basis for this is the scope of, for example, the US Foreign Corrupt Practices Act, the UK Bribery Act or the German Ordnungswidrigkeitengesetz. There are many examples of such cases in Greece, especially concerning technology, pharmaceutical and military equipment companies.

The fact that these multinational companies are not only familiar with the practice of investigations but also necessarily adopt it for their subsidiaries, regardless of their location, in order to be accountable to the legal system where the parent company is located, will lead to the widespread use of this tool in Greece as well.

In this context, Greece is entering an era of modernisation in many areas. According to the National Recovery Plan – entitled ‘Greece 2.0’ – the country will draw significant capital from the Recovery Fund, which will be used in the following areas: (i) transition to green growth; (ii) transition to the digital age; and (iii) implementation of major public infrastructure projects. It is expected that all of those projects will be executed primarily by large multinational groups familiar with investigations, thereby strengthening the practice in Greece.

To this should be added the enactment of Law 4990/2022 which implemented the European Whistleblowing Directive. Based on the provisions of this law, companies will conduct investigations in response to reports made through their internal whistleblowing channels.

Benefits of investigations for companies in Greece

The main advantage of conducting investigations is that a company can, at the appropriate time, in the appropriate manner, without risking its reputation and without overly affecting its business, investigate whether a complaint is justified. Conducting an investigation also helps a company to decide quickly and take any necessary actions, including notifying authorities. Otherwise, it would have to wait for the authorities’ decision on every report, which in Greece would take several years. The company may also be subject to parallel administrative sanctions and other measures, which would overly affect its business and damage its reputation.

A number of provisions, although they do not explicitly mention investigations, incentivise companies to use investigations to their advantage. In particular, since financial offences are no longer prosecuted ex officio (under article 405 of the Greek Penal Code), affected companies must conduct an investigation to define the offence, the scope of the damage and the persons involved, and assess whether to file a criminal complaint. Since the decision will be based on an expert’s opinion (i.e., that of the investigators), board members will have comfort that they are making the right decision, avoid being accused of abuse of trust or defamation, and avoid liability for damages under article 102 of the Greek Companies Act.

With regard to administrative sanctions under the Greek Anti-Money Laundering Act that may be incurred by benefitting from money laundering, any investigation may help to mitigate any prescribed sanctions, since the behaviour of the person after the act is taken into account under article 45 of Law 4557/2018.

In addition, article 263A of the Greek Criminal Code provides for leniency measures for individuals who disclose acts of corruption. Article 396 (2A) of the Greek Criminal Code contains similar provisions. Conducting an investigation and submitting a thorough final report to the competent authorities can therefore benefit the parties involved.

Benefits of investigations for the Greek justice system

The investigating team, as an objective third party, with sufficient human resources and relevant expertise, will be in a position to efficiently collect and assess the evidence. It should become clear in the preliminary stage of an investigation whether or not there is sufficient evidence that an offence has been committed.

Public prosecutors, as well as supervisory authorities, often lack the necessary resources to effectively investigate and pursue complex criminal cases. Hence, conducting an investigation would reduce the burden on state resources.

Above all, however, investigations should help to accelerate all stages of the criminal procedure process. Having a team of experienced professionals (criminal lawyers) conduct a targeted investigation reduces the risk of serious deficiencies in collecting evidence and substantiating the accusation, which may otherwise result in delay or dismissal of the case on formal grounds. Given the serious delays in the administration of justice in Greece, this would be a welcome development.

Conducting investigations

For reasons of transparency and reliability, an investigation should be carried out by independent investigators. This independence, together with the status of lawyers, ensures confidentiality and protection of the investigation material. It is also extremely beneficial for the internal investigator to be an expert on white-collar crime.

This way, the investigation will be carried out not only in accordance with the rule of law but also take into consideration the special characteristics of the alleged offence. Mistakes that could jeopardise obtained materials and a fair trial can be avoided. Proper collection and processing of data under the European General Data Protection Regulation (GDPR) will also be guaranteed.

The material collected will be accurately and thoroughly assessed based on criminal law. The findings of the investigation will give the company’s management the confidence and knowledge to proceed. Finally, if the company is a subsidiary of a multinational, the way in which the report is drawn up will also make it usable by foreign authorities in the context of judicial assistance.

Legal and cultural obstacles to overcome

Investigations are not regulated in Greece. There is a legal vacuum in this field. The country’s supervisory authorities, such as the Capital Market Commission, sometimes require listed companies to conduct internal audits. This shows that simplified forms of investigations are already de facto recognised.

Regarding cultural issues, as far as criminal procedure is concerned, the Greek legal order is still dominated by a perception that investigations are for state authorities to conduct with the aim of finding the truth (principle of legality). Therefore, there is a concern that private investigations may actually suppress the principle of legality in favour of the principle of purpose (e.g., by speeding up the process and settling the case). There is also the issue of trust of the legal system and of society in the objectivity and reliability of investigations.

We believe it is only a matter of time before these cultural issues are resolved, as both practitioners and society become familiar with investigations. The practice of investigations will ultimately be assimilated into Greek law, like so many other Anglo-Saxon practices (such as plea bargaining), in line with the gradual adoption of restorative justice principles in the new criminal code.

Conclusion

Regardless of whether there will be legislative initiatives to formally institutionalise investigations, it is only a matter of time before they become a powerful tool to help companies to comply and authorities to deliver justice. Investigations can be a driving force for transparency, a quicker, more efficient justice system, and a more investment-friendly environment in Greece.

Anastasios M. Andrianesis is senior foreign associate at Hogan Lovells International LLP, and Ovvadias Namias is a managing partner and Vasileios Petropoulos is a partner at Ovvadias S Namias Law Firm. Mr Andrianesis can be contacted on +49 89 290 12 116 or by email: anastasios.andrianesis@hoganlovells.com. Mr Namias can be contacted on +30 210 723 9738 or by email: ovvadias.namias@namiaslaw.gr. Mr Petropoulos can be contacted on +30 210 723738 or by email: vasileios.petropoulos@namiaslaw.gr.

Anastasios M. Andrianesis

Hogan Lovells International LLP

Ovvadias Namias and Vasileios Petropoulos

Ovvadias S Namias Law Firm