Abuse of trust in business operations
In the business operations, whoever breaches the duty to protect someone else’s property interests based on law, a decision by an administrative or judicial authority, a legal transaction or a trust relationship, thereby obtaining for himself or another person unlawful material gain and by doing that or in some other way causes damage to one whose property interests he is responsible for, will be punished by imprisonment from six months to five years. If substantial material gain has been gained or substantial damage caused, the perpetrator shall be punished by imprisonment for a period between one and ten years.
Substantial material gain and substantial damages, according to case law, are those over HRK 60,000.00.
Here are some examples of this crime in practice, e.g. the actions of a responsible person in a legal entity with the purpose of obtaining unlawful material gain for another legal entity, at the expense of their own legal entity (eg. making false reports, balance sheets, estimates).
Other cases include malpractice in the management, custody, disposal and care of others’ property, or legal transactions that are contrary to the authority or interest of the property owner.
Also, abuse by withdrawing funds from a company, which causes its creditors to have nowhere to compound or to barely do so – this is especially the case with related companies.
Moreover, the use of company assets to acquire the share of its member in another company, although there is no economic justification for such actions.
Interest free lending of one company’s assets to another company or member of the company or lending with unjustifiably low interest rates and a long term.
When a member of the company as a creditor lends funds to the company under unfavorable conditions and thus benefits from it in a way inappropriate to his position.
Withdrawal of assets from the company through fictitious businesses, often through offshore companies.
This criminal act may be committed by an act or omission. In assessing the existence of a crime, one has to start from the basic standard of conduct in business: by fulfilling one’s obligations, the responsible person is obliged to act as an orderly and conscientious businessperson.