5.3.2 The Policy of Punishment for Offenses Committed by a Corporation
5.3.2.a. Penalties that can be imposed on a corporation
The only penalty that is currently prescribed in the Penal Law and can be imposed on a corporation is a fine. This, along with the social condemnation of the conviction itself.
As for other measures that actually harm the defendants, these do not constitute formal punishment (although they can be taken into account in the framework of the defendant's sentencing within the punishment complex). Thus, for example, in the matter of forfeiture, which can be applied to a corporation in certain circumstances, it was determined that it does not constitute punishment (see: the Goldberg Committee Report, at p. 25, in section 8(a) of the majority proposal, as well as Crim. Appeal 7480/95 State of Israel v. Ben Shitrit, IsrSC 52 (2) 385, 410 (1998); Crim. Crim. 2333/07 Ta'anach v. State of Israel, (published in Nevo, 2010) andCrim. Crim. 6817/07 State of Israel v. Sitbon, para. 34 (published in Nevo, 2007). However, in other cases, this was treated as a quasi-punitive sanction aimed at deterring the defendant (Crim. Appeal 7646/07 Cohen v. State of Israel, para. 8 (published in Nevo, 2007); Crim. Appeal 4980/07 Alon Cohen v. State of Israel, para. 45 (published in Nevo, 2010). For a discussion of the question of whether this is an additional punishment, see: Waki Verbin, The Construction of Punishment, ibid., at p. 428. See also Yoni Livni, "White-Collar Criminality in Israel: Has We Done Enough, In: Justice? Criminal Procedure in Israel – Failures and Challenges 15 (hereinafter: Livni, White-Collar Offenses). A similar question concerns the criminal registry regarding corporations, and whether it is a matter of punishment (see, in this regard: Ruth Kamini, "The Proper Classification of the Criminal Registry: On the Difficulty and Its Significance of Transferring the Burden of Punishment to Private Hands," Alei Mishpat 327, 340 (2010).
There is no dispute that there are other penalties that can be imposed on a corporation that has committed an offense, and some of them are indeed prescribed in legislation in other countries. Thus, there are those who point to the liquidation of the company as a "death" punishment as far as it is concerned, for limiting the possibility of the corporation's activity, such as due to obstacles to participate in tenders due to a conviction for offenses (which is established in the United States in a law parallel to the Tenders Duty Law). Israeli law does not stipulate such a restriction, but the Public Entities Transactions Law, 5736-1976, stipulates in section 2b that a public body shall not engage with a person convicted of offenses under the Employment of Foreign Workers Law or other laws related to labor law.