Bill that strengthens penalties for economic crimes is passed

A general compliance program will not be enough; companies will have to identify risks of different types of criminal offenses according to the new crimes that will be incorporated.

The bill that systematizes economic crimes and attacks against the environment, modifying several legal frameworks that typify crimes against the socioeconomic order and adapts the penalties applicable to all of them (Bulletins N°13.204-07 and 13.205-07) is passed into law.

The reform seeks to improve the treatment of these crimes, establishing, in turn, substantial amendments to Law No. 20,393, which establishes the criminal liability of legal entities.

Among the novelties of the project, we can highlight the following:

1- Increased scope: Currently, criminal liability only applies to private legal entities and state-owned companies. The project seeks to broaden the scope, incorporating as active subjects companies, corporations and universities of the State, political parties and religious legal persons under public law.

2- Incorporation of new crimes: The bill introduces changes with respect to the criminal liability of legal entities, which may be liable for the crimes referred to in Articles 1 to 4 of the Economic Crimes Law. In this sense, legal entities may be held criminally liable for more than 100 crimes, for which reason they must carry out specific and in-depth analyses of the risks to which they are exposed, according to their line of business.

3- New elements in the Prevention Models: The bill makes relevant modifications compared to the current law, as far as the elements of a prevention model are concerned. An effectively implemented model would allow exempting the legal entity from criminal liability when, to the extent required by its corporate purpose, line of business, size, complexity, resources and the activities it carries out, it seriously and reasonably considers the following aspects:

  • Identification of activities or processes that imply risk of criminal conduct.
  • Establishment of protocols and procedures to prevent and detect criminal conduct, including secure channels for internal complaints.
  • Assigning one or more persons responsible for the application of such protocols.
  • Periodic evaluations by independent third parties and mechanisms for improvement or updating, thus eliminating the certification provided for in the current Law No. 20,393.

4- Vacancy Period: The project contemplates a period of 12 months for the entities to adopt or adapt their system for the prevention of crimes for which they may be responsible. The work will require not only a formal modification of the documents that each company has, but also a thorough analysis of the activities that generate risks of committing any of the crimes that are incorporated into the new catalog of the law, to identify responsibilities, and allocate adequate efforts and resources in the prevention of those situations that are effectively risky.

Consequently, a general Compliance Program will not be sufficient, so entities will have to identify risks of various criminal types in relation to their regular or sporadic activities according to the new crimes that will be incorporated.

For more information on these topics please contact our Compliance group:

Francisca Franzani | Director Compliance Group – Tech |

Loreto Hoyos | Associate |

Jaime Viveros | Associate |

Francisca Macchiavello | Associate |