Legal Entities Liability for Corruption Crimes: Ways to Mitigate or Eliminate Liability

On October 21, 2016 a bill was presented before the House of Representatives which provides for a criminal liability regime for legal entities for crimes against the public administration and international bribery (the “Bill”).

Notwithstanding all the topics addressed by the Bill, we deem relevant to list the measures contemplated in the Bill, in line with foreign legislation, to mitigate o eliminate such liability for legal entities.

Pursuant to the Bill, liability may be mitigated or eliminated if the entity can show it has implemented –before the offence is committed– an integrity program within the terms of the Bill.

Under the Bill, integrity programs are considered effective if they are suitable to prevent, detect, correct and report the relevant offences to the corresponding authorities, considering the risks of the activity carried out by the entity, its size and its economic capacity.

When evaluating the effectiveness of the integrity program, the judge will evaluate. the existence of the following:

1. A code of ethics or conduct, or the existence of integrity policies and procedures applicable to directors, managers and employees;
2. Specific rules and procedures to prevent unlawful acts within the scope of tenders, public bids, governmental control enforcement and/or any other engagement with the public sector;
3. The application of either the code of ethics or conduct or the integrity policies and procedures to third parties or business partners, such as suppliers, distributors, service providers, agents and intermediaries;
4. The performance of periodic risk analyses and the subsequent updating of the integrity program;
5. Periodic training sessions regarding the integrity program;
6. Visible unequivocal support of the integrity program by high officers;
7. Internal channels to file complaints which will be investigated and which can lead to sanctions;
8. Clear protection afforded to whistleblowers against retaliation;
9. An internal investigation system that respects the rights of the investigated parties and provides effective sanctions for transgressions to the code of conduct;
10. Procedures that verify the integrity and reputation of third parties or business partners, including suppliers, distributors, service providers, agents and intermediaries at the time of hiring their services;
11. Due diligence in checking for irregularities, unlawful acts or vulnerabilities during corporate reorganizations and acquisitions;
12. The continued monitoring and evaluation of the integrity program;
13. Appointment of a person in charge of the development coordination and supervision of the integrity program.

We deem it relevant to take these aspects into consideration as, regardless of the final text to be approved by Congress, these seem to be the general guidelines to which legal entities must abide to mitigate or avoid any liability for corruption crimes.