Suspensions and Disqualifications from Operating: A Growing Concern for Businesses

In an effort to combat regulatory breaches and promote transparency, Argentina’s National Superintendence of Insurance has been empowered to impose administrative sanctions on insurance and reinsurance entities. These sanctions can include fines, warnings, and suspensions to operate.

The Consequences of Non-Compliance

Undertakings may face more severe consequences, such as difficulties in obtaining financing from local or international financial institutions, if they fail to comply with risk and compliance management regulations.

Criminal Liability for Risk and Compliance Management Deficiencies

While undertakings do not face criminal liability under Argentina’s Anti-Corruption Law for deficiencies in risk and compliance management, legal entities may still be affected by deficiencies in their integrity programs. These deficiencies can lead to:

• Ineligibility for reductions or exemptions from penalties
• Breaches of applicable regulations and criminal liability, such as bribery charges if a company’s anti-corruption compliance program is found to be deficient

Liability of Governing Bodies and Senior Management

Members of governing bodies and senior management can face:

• Civil liability for breaching their fiduciary duties of loyalty and care by failing to establish proper risk and compliance management systems
• Administrative sanctions, including fines, suspensions, and disqualifications from operating

Corporate Compliance Defense

Under Argentina’s Anti-Corruption Law, corporate compliance is considered an element that judges must take into account when deciding on penalties. Legal entities can be exempted from penalties and administrative responsibility if they:

• Spontaneously self-report a crime
• Have established a proper integrity program before the facts under investigation
• Return any undue benefits obtained

Recent Cases

While there are no leading cases specifically addressing corporate risk and compliance management failures in Argentina, recent cases such as the “notebooks” case highlight the importance of effective risk and compliance management systems. In this high-profile anti-corruption and bribery case, companies and executives were allegedly involved in paying bribes to public officials.

Government Obligations

The Argentine government has implemented several initiatives aimed at promoting transparency, ethics, and compliance within government agencies and state-owned enterprises. These initiatives include:

• The creation of a special committee to monitor compliance with anti-corruption goals
• Guidelines on good governance for state-owned companies

Digital Transformation Framework

While there are no specific regulations addressing digital transformation in Argentina, companies involved in this area would still be subject to existing regulatory requirements, including risk and compliance management regulations. Effective risk and compliance management systems can help mitigate potential risks and ensure compliance with applicable regulations.