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.
On August 17, 2023, the “New Law on Economic Crimes” was published in the Official Gazette. It is a regulation that began its processing in the Chamber of Deputies in January 2020 through the project “that systematizes economic crimes and attacks against the environment” of the consolidated Bulletins No. 13.204-07 and 13205-07.
The new law brings important changes to the punitive system, as well as to Law N°20,393, which establishes the criminal liability of legal entities.
In this sense, it represents an important challenge for the Boards of Directors and Senior Management of companies. Therefore, some points to be considered are:
– Tone from the top: Directors have a fundamental role in establishing a Compliance Culture. This will be reflected in the adoption of an effectively implemented Crime Prevention Model. In this way, the new law takes up a concept already used by the U.S. Department of Justice, namely, tone from the top, which seeks to show that the effective implementation of a Crime Prevention Model can be observed through the commitment shown by the Board of Directors, managers, executives and, in general, the company’s Senior Management in matters of Compliance.
– Evaluation of business risks: The activities carried out in the line of business of the company must be evaluated in order to determine and prioritize the risks to mitigate them adequately, considering that the focus will be placed on the risk activities or processes developed by the legal entity, instead of the catalog of crimes contemplated by law. In this regard, the Board of Directors will have to evaluate the scope and effectiveness of existing controls to determine the need to expand them.
– Ongoing monitoring and periodic evaluations by independent third parties: Senior Management will have a relevant role in the monitoring and review processes, to identify gaps and opportunities for improvement. This is contemplated in the new law as one more element of the Crime Prevention Model, without which it will be difficult to consider that the company has an effectively implemented Model. It is therefore important to strategically define the roles and responsibilities associated with the new prevention system.
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: