NALED Helps Introduce Agreement on Admitting Violations Revealed by Inspections
Improvement of inspection oversight will reduce the room for unregistered entities, entrepreneurs and firms operating in the grey zone to avoid detection and sanction, and the manner in which they can reduce their penalty will be the conclusion of an agreement on the admission of violations (plea agreement). The agreement is currently applied to road traffic offenses, where it has yielded very good results, and at NALED’s initiative, this will soon come to life in the areas of trade and labor relations.
"Admitting to offenses will significantly reduce the duration and costs of misdemeanor proceedings and is useful for all three parties. Inspectors will not have to come to numerous hearings and will see the results of their work on detecting violations, the courts will be relieved of a large number of cases, while individuals, entrepreneurs and companies that commit misdemeanors will have lower penalties (particularly significant when prescribed very high penalties), – and will be able to agree with the inspection to not impose protective measures such as a ban on performing activities "- said Milan Stefanovic, NALED's Policy and Inspections Advisor at the second workshop for the implementation of the plea agreement.
General and specific guidelines for the implementation of the plea agreement, which NALED prepared within the framework of the project ‘Improvement of Capacities of Inspections, Misdemeanor Courts and Economy’, in cooperation with the Market Inspectorate and the Labor Inspectorate, were presented within the meeting. The project was supported by the MATRA Fund for Regional Partnership of the Kingdom of the Netherlands.
"The Dutch success is based on the ‘polder model’, the consensus of all relevant parties in order to solve complex problems. The fact that the workshops are attended by representatives of businesses, inspections and courts indicates the importance of this initiative. The dialogue on the introduction of plea agreement has the potential to significantly improve the judiciary system, make the business environment more transparent and reduce the scope of shadow economy" - said Oliver Šarov, Senior Advisor at the Dutch Embassy.
The plea agreement can be signed by individuals, entrepreneurs and companies for offenses where it is possible to eliminate the consequences of doing business outside of regulations, if they remove those consequences or if they did not occur. On the other hand, the agreement will not be able to be concluded by those who interfered with inspections, did not act in accordance with the measures imposed by the inspection, and in cases when the offence has a fixed monetary penalty, since a misdemeanor order is issued at the time.
The penalty amount will be affected by the amount of damage, the value and quantity of goods, the number of employees or customers who have been damaged, as well as whether the offense was committed for the first time or was repeated. Although the imposed sanction may be lower than the amounts prescribed by labor and trade laws (except for serious offenses), it cannot be less than the minimum of the Law on Misdemeanors - 5,000 dinars for persons, 10,000 for entrepreneurs and 50,000 dinars for enterprises.
In order to avoid imposing different penalties for the same acts, NALED proposed a unified sanctions system in the guidelines, using tables with established criteria and amounts. For example, for unregistered labor, the initial fine for a company committing the offence for the first time would amount to 150,000 dinars per worker and would increase by 100,000 dinars for every five unregistered employees, up to a maximum of two million dinars. The same model would be applied in the case of not paying salaries to employees.
In the trade sector, for a physical person who is found selling goods or providing services as an unregistered entity for the first time, the initial fine would be 100,000 dinars and could be increased to 145,000 dinars, depending on the value of the goods, from 120,000 to 195,000 for a repeated offense, and from 150,000 to 250,000 if the person has been caught in unregistered activities multiple times.
The conclusion of the agreement will be possible to propose by both the inspector and the defendant, and the levels of punishment will be determined in a clear, precise and equitable way according to the guidelines, which will be published. It is necessary for the violator to sign an admission and agreement on the type and amount of the sanction, with the final word given by a court that can accept and refuse the agreement. Neither inspections nor the accused person has the right to appeal to the decision of the court accepting the agreement.
The project ‘Improving Capacities of Inspections, Misdemeanor Courts and Economy envisages the introduction of a plea agreement for offenses within the jurisdiction of the Market Inspectorate and the Labor Inspectorate. If the new model ensures efficiency of the procedure, certainty and fairness of punishment, it is possible to extend it to other inspections.