Financial Crime World

PORTUGAL TIGHTENS BELTS ON FINANCE INDUSTRY WITH NEW ANTI-CORRUPTION LAWS

Major Changes on the Horizon

In a bid to root out corruption in the finance sector, Portugal has unveiled a new strategy that sets seven priorities aimed at preventing, detecting, and repressing corruption. The initiative is part of a broader effort to strengthen transparency and integrity within public institutions and the private sector.

New Reforms

The new anti-corruption laws introduce several key reforms, including:

  • Creation of MENAC: An independent administrative entity with legal personality under public law, tasked with developing activities at national level in the field of corruption prevention.
  • General Regime for Corruption Prevention (RGPC): A mandatory regime applicable to entities employing 50 or more employees, which requires the adoption and implementation of a range of anti-corruption measures.

Key Measures

The RGPC introduces several new requirements, including:

  1. Regulatory compliance program: Entities must adopt a regulatory compliance program and appoint a compliance officer.
  2. Risk prevention plan (PRR): A plan for preventing risks of corruption and related infractions must be created and implemented.
  3. Code of Conduct: Entities must adopt a code of conduct, which will serve as a guide for employees and management.
  4. Channel for Denunciations: A channel for reporting suspected cases of corruption or other wrongdoing must be established.

Penalties for Non-Compliance

Failure to comply with the new anti-corruption laws may result in significant penalties, including:

  • Administrative fines: Up to €44,891.81
  • Personal liability: Members of the management body, managers, compliance officers, and those responsible for areas of activity where administrative offenses are committed may be held personally liable.

Time is of the Essence

Entities employing 50 or more employees have a limited time frame to adapt to these new requirements. The implementation of the RGPC is mandatory, and non-compliance can result in reputational damage and financial penalties. Entities must take immediate action to ensure they are compliant with the new anti-corruption laws.

The introduction of MENAC and the RGPC represents a significant shift towards a more transparent and accountable finance sector. By implementing these measures, Portugal aims to strengthen trust between citizens, communities, and their democratic institutions.