Compliance with global and local guidelines allows businesses to achieve risk management and implement efficient compliance programs. An efficient compliance program will depend on the willingness and incentive of all the business’s employees to adopt, adhere, apply, and comply with said program. Having a way to prosecute those who break compliance guidelines is just as important. Argentina complying with OECD Anti-Corruption laws shows its effort to create a transparent atmosphere for international businesses and a step toward enabling those efforts.
The Argentine congress enacted legislation to allow the prosecution of legal persons (i.e., corporations and other legal entities) for crimes involving illegal payments and other forms of corruption involving government officials. This law complies with most of Argentina’s international commitments assumed 16 years ago under the OECD Anti-Bribery Convention to combat corrupt business practices within Argentina. It takes the step of allowing criminal prosecution of private companies for acts of foreign and domestic bribery and of giving false financial information. Until now, criminal liability under Argentine law, with the exception of environmental crimes, applied only to individuals.
The anti-bribery law specifies several sentencing options for guilty corporate defendants. These include monetary fines ranging from two to five times the unlawfully obtained benefit, the revocation, for up to ten years, of any license to conduct business activity, a ban on government contracting for up to ten years, and mandatory dissolution.
The law impacts government contractors and the private sector in general. Companies contracting with (or aspiring to contract with) the federal government must have a comprehensive anti-corruption/anti-bribery compliance program. This program must include conventional features known throughout much of the world such as an ethics manual, specific procedures for government contracting, a whistleblower hotline and periodic training of personnel. For all other private sector companies, having an anti-corruption/anti-bribery compliance program will affect the type and severity of any punishment meted out because of a criminal investigation.
Features of the anti-bribery law contains mandatory elements and specifically creates an incentive for management to report corrupt acts. Reporting corrupt acts exculpates a company that (i) self-reports a corrupt act, (ii) demonstrates the existence of a meaningful compliance program and (iii) disgorges any ill-gotten benefits. The law provides another basis for governmental prosecution of illegal payments to public officials beyond the context of government contracting (e.g., bribes for licenses, permits or for other acts or omissions of a public official).
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The Argentine Government knows the key to enabling investors from the developed world to invest in the country is transparency. Through compliance programs the measures designed to promote the ethical values of the company within a regulatory framework enable anticipation of inherent risks in business. The complying with anti-corruption law and enacting its asset laundering (law 25.246) and the criminal tax laws (Law 24.769) are gears in a larger system of prevention, control, and detection of corrupt acts. It is a concerted effort to offer a more transparent playing field for international business through incentivizing compliance.
If you are involved or interested in government contracting, please contact Laurence P. Wiener ([email protected]) or Mariela del Carmen Caparrós ([email protected]) to discuss compliance with this law and to update your compliance program.
The foregoing article is adapted from previous articles about compliance. It is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.