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Corporate Criminal Liability

Ana Llorente's picture
Published: 27/11/17 - Country: Argentina

The National Congress passed a new law setting forth corporate criminal liability . This law will come into force ninety (90) days after its publication in the Official Gazette of the Argentine.

Corporate criminal liability will apply only to private legal entities, of national or foreign capital, with or without state participation, and for the following specific crimes:

1) Bribery and influence peddling, national or transnational (articles 258 and 258 bis of the Criminal Code);

2) Negotiations incompatible with public office (Article 265 of the Criminal Code);

3) Extortion (article 268 of the CP);

4) Illicit gain by civil servants and employees (articles 268 (1) and (2) of the Criminal Code); and

5) Aggravated false balance sheets and reports (Article 300 bis of the Criminal Code).

Legal entities will be held liable if those crimes are carried out, directly or indirectly by them, with their intervention or on their behalf, in their interest or for their benefit. They will also be liable in case of intervention of third parties with no legal capacity to act on their behalf when the legal entity concerned would have subsequently ratified the actions carried out by such third parties in an express or tacit manner.

In case the legal entity held liable under this new corporate criminal liability law will be involve in a merger, takeover, spin-off or any other corporate modification, the resulting entity will remain liable.

The criminal action will expire after six years from the commission of the crime.

The penalties provided for in this law are: fines of two (2) to five (5) times of the undue benefit obtained or that could have been obtained; total or partial suspension of activities, which in no case may exceed ten (10) years; prohibition to participate in public tenders or bids for public works or services or in any other activity related to the State for ten (10) years at the most; dissolution and liquidation of the legal entity when it would have been created for the sole purpose of committing the crime, or when the malfeasance  would constitute the main activity of the entity; loss or suspension of government benefits and the publication of an extract of the conviction at the expense of the legal entity.

Exemption from penalties: In addition to certain cases of adjustment of the penalty, the legal entity may be exempted from it provided that the following requirements are met simultaneously: 1) the legal entity had voluntarily reported the crime after having carried out an internal investigation and detection process; 2) it had an adequate control and supervision system (Compliance Program) prior to the commission of the crime and 3) it had returned the undue benefit obtained.

It should be noted that the Compliance Program must not only be efficient, but it must be also so elaborate that, in order to violate it, "an effort on the part of the offenders would have been required". The law states the minimum content of the Compliance Programs.

In addition, the legal entity is obliged to have a Compliance Program to be able to contract with the State. This condition is not minor, since the legal entities that do not have it must adapt immediately if they wish to continue working with the State, and therefore with the Provinces and the Municipalities.

Furthermore, under this law (i) trials in absentia are not permitted and (ii) the legal person under indictment is allowed to make "collaboration agreements" with the Public Prosecutor in order to cooperate by disclosing information or data necessary to clarify the facts, the identification of the perpetrators or the parts involved in the crime or the recovery of the proceeds. This agreement will be confidential.

Our Law Firm has qualified professionals in this field and Mrs. Ana Llorente, partner of the Firm, is a Compliance Officer certified by the Argentinian Association of Ethics and Compliance (AAEC), certification that has international validity ("International Certified Compliance Practitioners - CIPC ").

Therefore, our Law Firm is qualified to assist companies in the development of their Compliance Programs in order to comply with the requirements of this new law.

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Ana Llorente's picture

Graduated in law at the School of Law and Social Sciences, Universidad de Buenos Aires, Buenos Aires, 2000. Magister in Administrative Law, Universidad Austral. Member of Colegio Público de Abogados de la Capital Federal (Federal Capital Bar Association).

She practiced law at Avogadro, Tesoriere & Asociados Law Firm (1994-1997) and at Marval, O'Farrell & Mairal, Law Firm (1997 – 2000) and she joined Fornieles & del Carril, Law Firm until its dissolution. Professor in the Master of Management of Construction and Real Estate Companies, Pontificia Universidad Católica Argentina.