ECUADOR: Whistleblower Protection Laws and Financial Crime Crackdown
In a significant move, Ecuador has revamped its laws to strengthen whistleblower protection and increase penalties for financial crimes. The new legislation, Organic Law No. 392, aims to combat corruption and promote transparency in public procurement.
New Corruption Crimes and Penalties
The law introduces three new corruption crimes:
- Obstruction of justice
- Overpricing in public procurement
- Private sector bribery
Those found guilty can face imprisonment ranging from three to seven years or other penalties, such as denial of parole or prohibition from concluding public contracts.
Existing corruption crimes have also seen increased penalties:
- Active and passive bribery: up to 10 years’ imprisonment
- Solicitation, trading in influence, and offering trading in influence: up to five years’ imprisonment
Liability of Legal Persons
The law introduces new provisions on the liability of legal persons, including:
- Sanctions such as dissolution or liquidation of the organisation
- Fines ranging from $500 to $1,000
However, these sanctions can be mitigated if the organisation cooperates with authorities and takes steps to prevent future corruption.
Whistleblower Protection
The law introduces measures to protect whistleblowers:
- Requires natural persons to report crimes
- Guarantees confidentiality of their personal data
- Eligibility for a financial reward ranging from 10% to 20% of the value of confiscated property if information provided leads to confiscation of proceeds of crime
New Powers for the Office of the Comptroller General of Ecuador (CGE)
The CGE has been given new powers:
- Detect cases of contract overpricing in public procurement
- Submit reports on indicators of crimes to the Attorney General’s Office
- Participate in investigations into financial crimes
International Monetary Fund (IMF) Assistance
The introduction of these amendments was a condition for Ecuador to receive $2 billion in financial assistance from the IMF.