Financial Crime World

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Costa Rica Strengthens Regulatory Framework against Financial Crime

As part of its efforts to adhere to international standards and recommendations from the Organisation for Economic Co-operation and Development (OECD), Costa Rica has recently enacted two new laws aimed at strengthening its regulatory framework on compliance and anti-corruption. These reforms demonstrate the country’s commitment to combating corruption and meeting high international standards, particularly in regards to the OECD Anti-Bribery Convention.

Reforms to Anti-Corruption Laws

Law No 10373 introduces significant reforms, additions, and repeals to various anti-corruption laws, including:

  • The Penal Code
  • Code of Criminal Procedure
  • Law against Corruption and Illicit Enrichment in Public Service
  • Law on Liability of Legal Entities for Domestic Bribery, Transnational Bribery, and Other Crimes
  • Income Tax Act

The new regulation includes changes related to the legal treatment of corruption crimes, covering aspects such as:

  • Tax non-deductibility
  • New resources for investigating criminal acts
  • Reciprocal legal assistance and extradition
  • Imposition of sanctions
  • Confiscation

Additionally, the law extends the list of crimes where communication interception is authorized, allowing for the interception of oral, written, or other communications when it involves clarifying corruption crimes against public officials. It also modifies the functions of the Public Prosecutor’s Office to cooperate with foreign authorities investigating bribery of foreign public officials and false accounting to facilitate or conceal such conduct.

Protection of Whistleblowers and Witnesses

Law No 10437 aims to establish effective mechanisms for protecting whistleblowers and witnesses of corruption acts at the national or international level, encouraging reporting of these criminal acts. The law provides protection against complaints in both public and private sectors, but its scope only applies to criminal acts involving influence over public officials or the exercise of their functions to obtain an undue advantage.

The new regulation introduces a special jurisdiction for protecting whistleblowers who comply with established assumptions, which may be extended to:

  • Coworkers
  • Relatives
  • Third parties related to the complainant in the same work context

The law prohibits including clauses in employment contracts that limit reporting or testimony of corruption acts, establishing fines ranging from one to 1,000 base salaries for non-compliance.

Employers in the private sector are now obligated to establish internal reporting channels when they have more than 50 employees to attend to and follow up on complaints related to alleged corruption acts. These channels must be:

  • Properly identified
  • Easily accessible
  • Offer anonymous and electronic reporting options

Consequences of Non-Compliance

Failure to comply with the provisions of Law No 10437 will result in fines ranging from one to 1,000 base salaries, without prejudice to applicable civil or criminal liability.