For a company, participation in a criminal process can mean, in addition to the inherent risks, the absence of income-generating resources. Thus, protective measures imposed by the criminal justice authorities, the prosecutor/judge/court during the trial can create serious imbalances for the proper conduct of business, affecting the development of the company.

In practice, the lack of an effective response to the cancellation/limitation of these measures can lead to situations where a company is “sentenced” to bankruptcy long before it is convicted or acquitted in the criminal proceedings in which it is a party.

What are and when are preventive measures used in criminal proceedings?

Security measures (imposing arrest, which can be carried out in the form of bail and arrest) perform the function of guaranteeing compensation for estimated damage caused by a crime that is the subject of criminal proceedings. They may be violated at the stage of criminal investigation. On their basis, movable property (including sums of money) and/or immovable property belonging to persons who have certain qualities in the criminal process may be temporarily unavailable.

A company that is a suspect, defendant, citizen in a criminal proceeding, or considered a bad faith third party in such a case, has a high chance of seeing its assets seized or seized. Such a situation necessarily occurs, according to criminal legislation, in the case of such crimes as tax evasion, money laundering, respectively, corruption crimes. In addition, judicial authorities may take precautionary measures when they deem it necessary to avoid concealment, destruction, alienation or evasion of assets by a company or management.

How long can protective equipment be maintained and when should it be checked?

Although they are procedural measures of a purely temporary nature, injunctive measures can apply to a company’s assets long enough to block business activities or even cause irreversible damage. To define the time horizon, it is sufficient to mention that in the criminal justice system of Romania, cases of economic and financial crimes last between 5 and 10 years on average.

During this time, without having access to the goods that are the subject of the insurance measures, the company may face situations that are difficult to manage economically, such as difficulties in paying salaries, fulfilling some contracts with business partners, making investments or devaluation of some real estate owned companies, aspects that may cause the risk of insolvency.

From a procedural and criminal point of view, the year 2021 brought an extremely important legislative change in the issue of insurance measures, designed precisely to limit their negative impact on the property rights of persons affected by these measures.

Thus, the criminal justice authorities are obliged, after the establishment of preventive measures, to periodically check whether the reasons that led to the designation of a mortgage or the seizure of sums of money remain valid. It should be noted that this obligation is incidental both in criminal cases that are pending at the time of the amendments to the legislation and in those that were initiated later.

These inspections are carried out in a mandatory manner during the investigation of a criminal case with an interval of no more than 6 months from the moment of taking preventive measures, respectively, with an interval of no more than 1 year from the moment of their appointment at other procedural stages. Following these checks, the relevant security measures may be maintained, limited or extended, but they may equally be withdrawn.

What can a company do to (faster) restore access to disabled products?

In certain situations, the initiative to limit or cancel the preventive measure can be submitted by the company itself, provided that it proves the existence of a valid and sufficient guarantee of payment at the time of submitting the request to the judicial body that adopted the measure.

In the event that the judicial authorities reject such a request or if, as a result of periodic inspections, they consider it necessary to maintain preventive measures, the interested party has the right to file an appeal. The time limits are short, namely 48 hours or 3 days from the moment of announcement or, depending on the circumstances, from the moment of notification, depending on the procedural stage at which the decision is challenged. It is important to note that this appeal does not stop the enforcement of the preventive measure.

If the criminal proceedings are completed by a decision on the qualification or closure of the criminal proceedings, the preventive measures can be continued, but a possible request for recognition of their legal termination (after the expiration of the 30-day period) falls under the jurisdiction of the civil court, and the criminal court is removed with the decision of the request.

In summary, preventive measures imposed in criminal cases can become a major source of imbalance in the activities of companies, in certain situations they can lead to serious disruptions in the current activities, up to the closure of the business. The good news is that there are solutions that companies can use to counter or limit the negative effects of these procedural measures in a timely manner, including the ability for companies to actively promote their repeal.

Article by Dr. Magdalena Roybu, Managing Attorney, Criminal Offenses and Criminal Defense Attorney at Schoenherr and SCA Associates