Corporate Criminal Liability for Corruption

In the case CFP 2876/2018—which involved alleged fraud against the Federal State in roadworks that were being carried out on Federal Route 19 in the Province of Cordoba—prosecutors alleged that the contractor overstated the actual progress of the works, triggering undue payments by the State. These actions were allegedly carried out in collusion with public officials responsible for supervising the project. These officials are suspected of receiving kickbacks disguised as consulting fees and as machinery rental agreements through a limited liability company (SRL) and a simplified corporation (SAS).

Chamber II of the Federal Court of Appeals in Criminal and Correctional Matters upheld the indictment of the public officials and private individuals involved, including the contracting companies and their executives.

The Court’s reasoning is especially relevant for its grounds to affirm the indictment for bribery against the legal entities involved. The indictment against the legal entities was based on these factors:

• Failure to implement adequate internal control mechanisms.
• Contractors’ lack of due diligence (including lack of risk assessments, absence of audit procedures, and failure to implement employee training aligned with their roles).
• Failure to initiate an internal inquiry after learning of the ongoing criminal investigation.
• The fact that the irregularities benefited the company itself and not just individual directors acting in a personal capacity.
• Evidence of corporate acquiescence in the unlawful conduct.

This ruling sets a significant precedent for interpretating and applying Law 27401 on corporate criminal liability for corruption-related offenses committed for the benefit of the company.