In 2014, it was proposed to amend Section 23, a proposal that has not been promoted until now (Memorandum of the Penal Law (Amendment – Criminal Liability of Corporations), 5775-2014, hereinafter: the Amendment Memorandum, can be viewed at:
http://www.justice.gov.il/Pubilcations/Articles/Pages/Memorandum2910.aspx), also in this proposal, it was determined that the basis for imposing criminal liability on a corporation is the doctrine of organs.
The case law also insisted that the purpose of its legislation was to anchor the theory of organs as a basis for imposing criminal liability on corporations, as formulated in the case law on the eve of the amendment to the law. In Criminal Appeal 2560/08 State of Israel (Antitrust Authority) v. Yaron Wall (published in Nevo, 2009, hereinafter: the Wall case), the Honorable Justice E. Rubinstein ruled that section 23 does not limit the application of the theory of organs as it was developed in case law, but rather gives it explicit anchoring in legislation First of all (see also in this matter his words in the Melisron case Ltd., in paragraph 114 of his judgment).
Section 23 of the Penal Law establishes what is determined in case law before its enactment, that a corporation will be criminally liable when an organ of the corporation commits an offense (here it should be noted that section 23 of the Penal Law establishes the criminal liability of corporations for all types of offenses). The criminal liability of a corporation for offenses that require a mental element of criminal thought, such as the offenses that are the subject of the indictment before me, are based on the doctrine of organs, and therefore I will focus on this only (with respect to other offenses such as strict liability offenses, the vicarious liability model applies, but these are not the subject of this decision).
It was held that a corporation will bear criminal liability for an offense that requires proof of criminal thought or negligence: "If, in the circumstances of the case and in light of the person's role, authority and responsibility in managing the affairs of the corporation, the act in which he committed the offense, and his criminal thought or negligence, should be regarded as the act, and the thought or negligence, of the corporation...". In this way, section 23 of the Penal Law adopts the doctrine of organs. However, unlikethe Companies Law, the Penal Code does not use the term "organized" and does not provide a definition for this term. The case law also adopted, on the criminal level, the tests for being an organ person of a corporation, which were set out in section 46 of the Companies Law – hierarchical and functional (we need this test because the regulation of the criminal liability of an organ was made inthe Penal Law). A similar proposal, which was in the framework of section 75 of the Companies Bill, was not accepted at the end of the day).