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Suspensions and Disqualifications from Operating: A Growing Concern for Companies
In recent years, the National Superintendence of Insurance has increased its efforts to combat breaches of regulations by insurance and reinsurance entities in Argentina. As a result, companies are facing tougher penalties, including fines, warnings, and suspensions to operate.
The Consequences of Non-Compliance
- Fines and warnings
- Suspension to operate
- Difficulty obtaining financing from local or international financial entities
- Legal liability for criminal offenses related to deficiencies in risk and compliance management programs
Liability of Governing Bodies and Senior Management
Members of governing bodies and senior management are also at risk of facing civil liability for breaches of their fiduciary duties. If they fail to establish proper risk and compliance management programs or act in a way that is considered a breach of their duties, they may be held liable.
Administrative Sanctions
- Fines
- Suspensions
- Disqualifications from operating
Corporate Compliance Defense
The Anti-Corruption Law No. 27,401 provides a corporate compliance defense for legal entities that have established proper integrity programs before the facts under investigation. These companies may be exempted from penalties and administrative responsibility if they:
- Spontaneously self-report a crime
- Had established a proper integrity program beforehand
- Return any undue benefits obtained through the crime
Recent Cases
There are currently no judicial leading cases specifically addressing corporate risk and compliance management failures in Argentina. However, there have been several high-profile cases involving corruption and bribery, which highlight the importance of effective risk and compliance management programs.
Government Obligations
The Argentine government has also taken steps to promote transparency, ethics, and compliance within its own agencies and state-owned enterprises. In 2019, the federal government enacted a Federal Anti-Corruption Plan, which includes initiatives to monitor compliance with anti-corruption goals.
Some government agencies have voluntarily implemented compliance management processes and obligations, including:
- Compliance programs
- Codes of conduct
- Training
Digital Transformation
While there are no significant regulations specifically addressing digital transformation, companies involved in this area would still be subject to the Anti-Corruption Law No. 27,401 and other relevant laws and regulations.
Conclusion
As companies continue to navigate the complex regulatory landscape in Argentina, it is clear that effective risk and compliance management programs are essential for avoiding suspensions and disqualifications from operating. By establishing proper integrity programs and complying with regulations, companies can reduce their exposure to liability and maintain a strong reputation in the market.