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Oman’s New Penal Code: A Wake-Up Call for Businesses Operating in the Sultanate

Muscat, Oman - The Omani government has introduced a new penal code that aims to combat fraud, bribery, and corruption in the country. The code, which came into effect on [date], introduces stricter regulations and penalties for individuals and companies found guilty of these offenses.

Fraud and Corruption

According to Article 221 of the Penal Code, anyone who commits fraud in the performance of obligations under a contract with a government entity will face imprisonment for a term of not less than three years and not more than five years. The code also makes restitution a legal obligation and part of the total penalty for embezzlement, misappropriation of public funds, illegitimate collection of taxes, fees or fines, and trespass on government property.

The new code tackles corruption, which is known to have serious consequences for businesses and the economy as a whole. Corruption can result in the concentration of funds within organized crime groups, away from legitimate actors in society. It can also compromise the reputation of companies, leading to loss of business opportunities and customers.

Corporate Liability and Compliance

The code introduces corporate liability provisions, which mean that companies can be held criminally liable for offenses committed by their representatives, directors, or agents acting on their behalf. This has serious implications for businesses operating in Oman, as they may face fines and other penalties if found guilty of these offenses.

To combat bribery, the Penal Code has introduced provisions that make seeking and accepting bribes by public officials, as well as offering bribes to them, criminal offenses. The code remains silent on the definition of an illegitimate benefit, leaving it to the courts to determine what constitutes a bribe.

Transnational Organized Crime

The code includes a chapter dedicated to transnational organized crime, which aims to prevent organized criminal groups from establishing themselves in the Sultanate. The code defines an organized criminal group as a group of at least three participants who commit crimes with the aim of committing transnational organized crime.

Implications for International Businesses

The implications for international businesses operating in Oman are significant. The code requires companies to implement proper compliance policies and procedures to prevent corporate crime and conflicts of interest. This includes:

  • Conducting due diligence on external representatives, sub-contractors, and agents
  • Extending compliance obligations to contracting parties

Conclusion

In conclusion, the new Omani Penal Code is a wake-up call for businesses operating in the Sultanate. It is essential that companies review and update their compliance policies, conduct training sessions, and review their third-party agreements to prevent and detect any financial crime or non-compliance related issues. Failure to do so may result in serious consequences, including fines and reputational damage.

Sources

  • Omani Penal Code
  • International Chamber of Commerce (ICC)
  • Transparency International