Compliance – New times, new stances

In the previous article I was speaking to you about the memorandum published by the Spanish Ministry of Justice concerning the compliance programmes that need to be adopted by Spanish commercial firms which conduct economic activities abroad.

Briefly after the publication of the aforementioned, the Spanish General Prosecutor’s Office (Fiscalía General del Estado Español) issued on January 22nd 2016 a circular ”CIRCULAR 1/2016, SOBRE LA RESPONSABILIDAD PENAL DE LAS PERSONAS JURÍDICAS CONFORME A LA REFORMA DEL CÓDIGO PENAL EFECTUADA POR LEY ORGÁNICA 1/2010”.

This initiative of the General Prosecutor’s Office is commendable since it was necessary to issue such a document in order to guarantee the legal order and to provide answers to the questions that existed both in the legal sector and that of entrepreneurs.

The circular analyses concepts such as:

  1. The element of legal entities’ responsibility. It concludes that “Both titles of criminal prosecution demand […] a felony by a natural person established in concrete circumstances” but that the legal reform realised by LO 1/2015 “advances in the recognition of legal persons’ autonomous responsibility by regulating organizational and management programmes, to which the quality of exemption is granted if certain conditions are given”. That is, it emphasizes compliance systems’ quality of the EXEMPTION from criminal liability.
  2. Likewise, it emphasises the fact that the legal person can be held accountable not only for the deeds and actions of its managers, but for all the deeds and actions of any person with the “capacity to make decisions, of intermediary managers, all those legally empowered and any others to whom any function was delegated, including those of risk control, a function performed by the compliance officer”. This is of vital importance for two reasons: (a) it specifies that the legal entity is responsible for all the deeds and action of any of the agents that represent its interests and (b) also the actions of its compliance officer (“oficial de cumplimiento”). That is why it indirectly points to the fact that the compliance officer is part of the business. On the other hand, I consider that it would be of great risk to appoint to the position of compliance officer a person without training in this field as he would make, by omission, an efficient system cease being efficient.
  3. Specifies that the direct or indirect benefit of the business as consequence of a illegal act can be “costs savings and, in general, strategic, intangible or reputational ones.”
  4. Establishes that for a legal person to be held criminally responsible it must be in the situation of violating its “supervision, vigilance and control” obligations. That is, to not have in place a compliance programme or have in place an inefficient one.
  5. IMPORTANT: “Although a violation of supervision, vigilance and control obligations has not taken place, or took place without being of gravity, or the legal entity did not derive benefits from it, it is still possible within criminal field for subsidiary civil liability to be invoked. Thus, even if a mild violation of supervision, vigilance and control obligations takes place and the legal person does is not held liable from a criminal perspective, this does not mean it does not face civil liability.
  6. The elements of corporate compliance systems:

The document establishes that Prosecutors will analyse programmes in order to establish if if the requirements of the Criminal Code are met, and they will do so following the directives established by the circular. This fact sustains legal order since a more objective delimitation of the concept “efficient programme” ensues.

  1. Generically speaking, for a programme to be considered efficient several conditions/guidelines must be fulfilled: (a) the responsibility regime applicable to natural persons must not be left without content; (b) the objective of the compliance system must not be the avoidance of punishment but the insertion of ethical values ​​in business; (c) certificates issued by independent entities do not constitute a “green light” that ensures the exemption from liability, but these will be taken into account; (d) to have an effective system the company’s management must actively support the system and the compliance officer; (e) the corporation’s responsibility degree of stringency is directly proportional with the benefit obtained by the company as a result of the illegal action of its integrants; (f) if the company itself denounces the offense committed to the Prosecutor’s Office, the

prosecutors will request the exemption from criminal responsibility because such an action taken by company represents a high level of law upholding by the company; (g) effective measures of response to offenses and/or the breach of the code of conduct.

The bottom line is that, as I pointed out on previous occasions for, a compliance program to be able to generate the exemption from criminal responsibility it must be an EFFECTIVE program. It should not adopted to avoid criminal responsibility but to insert a responsible corporate culture which abides by with all applicable norms.


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