New Law - Corporate Criminal Liability
The National Congress finally approved the Law on Corporate Criminal Liability (the Law) for corruption offenses.
Criminal offenses listed by the Law
Legal entities may be sanctioned for the following corruption offenses:
(i) national and transnational bribery and influence peddling, (sections 258 and 258 bis Argentine Criminal Code - "ACC");
(ii) improper and unlawful transactions of public officials (section 265 ACC);
(iii) illegal exaction committed by a public official (section 268 ACC);
(iv) illicit enrichment of public officials and employees (section 268, subsections 1 and 2 ACC); and
(v) false balance sheets and reports (section 300 bis ACC).
Criminal Liability of the Company
According to the Law, legal entities will be responsible for the offenses above detailed committed with their intervention, or in their name, interest or benefit.
The legal person will not be prosecuted if the individual acted in its exclusive benefit with no profit for the company.
The Law also establishes the responsibility of the companies originated from mergers, acquisitions, or any other reorganization process.
Statute of limitations
The Law provides for a special statute of limitations of 6 years to initiate the criminal action, regardless of the statute of limitations that each above-mentioned offenses establish for the authors and accomplices.
The penalties provided by the Law for legal entities include fines of up to five times the improper benefit obtained; the suspension of commercial activities; special disqualification to participate in public tenders or bids; loss or suspension of governmental subventions, among others.
The penalties will be imposed considering their compliance program; the surveillance omission; amount of money involved; size and economic capacity of the company; and the spontaneous reporting of such offenses as a result of early detection or internal investigation.
If the company complies with (i) spontaneous denounce of the offense, (ii) implementation of an adequate compliance program and (iii) the return of the illegal benefit obtained as a result of the offense, will be exempted of liability and administrative consequences.
Adequate Compliance Program
The Law establishes guidelines for the judge to consider while imposing penalties to the legal entities, such as the level of control and supervision that each company adopted, through implementing an adequate compliance program, which should be prepared considering the specific risks of their commercial activity, their size and economic capacity. Such compliance program should contain, at least, the elements detailed in section 23 of the Law.
Application of the Law
The Law will not be applied retroactively to offenses that occurred prior to its enactment. The ACC would now be applicable to transnational bribery committed abroad by an Argentine citizen and/or legal entities domiciled in the country.
Aggravated penalties for corruption offenses
The Law establishes new additional penalties (fines) for corruption offenses, as incorporates fines from 2 to 5 times the undue benefit obtained.
Promulgation and entry into force
The Law will be effective after 90 days counted as of its publication in the Official Gazette.
Companies should seek the implementation of necessary measures to prevent, detect and alert the authorities about the commission of corruption crimes in their company.