Criminal Liability for Risk and Compliance Management Deficiencies Under Argentina’s Anti-Corruption Law
Introduction
A recent surge in anti-corruption efforts has brought attention to the importance of effective risk and compliance management in preventing criminal liability under Argentina’s Anti-Corruption Law.
Indirect Criminal Liability
According to experts, while there is no direct criminal liability for risk and compliance management deficiencies alone, companies that fail to implement proper risk management practices may still face penalties and sanctions if they are found to have committed crimes such as bribery or corruption. Companies without a proper integrity program or those that fail to detect and prevent criminal activities may be ineligible for reductions or exemptions from penalties.
Civil Liability
Members of governing bodies and senior management may also face civil liability for breach of compliance management obligations if they fail to establish proper risk and compliance management practices and act in a way that is considered a breach of their fiduciary duties.
Administrative Sanctions
The Central Bank of Argentina and the Financial Information Unit are authorized to impose administrative sanctions, including fines, suspensions, and disqualifications, on individuals who fail to comply with established obligations.
The Importance of Risk and Compliance Management
In a recent case, the “notebooks” case, many officers of Argentine companies are being investigated for allegedly paying bribes to local public officials. If proper corporate risk and compliance management had been in place, the companies and individuals involved may not have been implicated in the ongoing criminal case.
Factors Considered When Imposing Penalties
Experts note that there is no specific defense for corporate risk and compliance management failures under anti-money laundering and anti-terrorism financing regulations, but certain factors may be considered when imposing penalties, such as:
- Compliance with internal rules and procedures
- Omission of vigilance on the actions of wrongdoers
- The size, nature, and economic capacity of the legal entity
Government Initiatives
The government has also implemented initiatives to promote transparency, ethics, and compliance in state-owned companies and those with government participation. The Administrative Decision 85/2018 sets out guidelines for good governance that address risk and compliance management.
Digital Transformation
In terms of digital transformation, there are no specific regulations addressing machine learning, artificial intelligence, robots, blockchain, or other digital technologies. However, companies involved in these areas would still be subject to the Anti-Corruption Law and other applicable regulations.
Conclusion
As Argentina continues to strengthen its anti-corruption efforts, companies must ensure that they have effective risk and compliance management practices in place to avoid criminal liability and penalties.