Argentina’s Corporate Responsibility Law is applied for the first time: Top points
For the first time since its enactment in 2018, Argentina’s Law 27.401 (the Corporate Criminal Liability Law) has been applied in a case involving a local branch of a foreign-owned security company.
The Corporate Criminal Liability Law establishes the criminal liability regime applicable to private companies for crimes of (i) bribery and influence peddling, (ii) negotiations incompatible with public office, (iii) extortion, (iv) illicit enrichment of officials and employees, and (v) falsification of financial statements and reports.
The entity involved in the case reported to a federal judge in 2020 that its company representatives had paid significant bribes to public officers for both personal gain and, eventually, the company’s benefit. The accusation derived from an internal compliance investigation triggered by a former employee’s anonymous complaint through the company hotline, in accordance with the organization’s integrity program. In certain cases, such self-disclosure is considered an exception of the sanctions set forth in the Corporate Criminal Liability Law.
Under scrutiny of that law, the company’s former executives were charged with defrauding the public administration, bribery, illegal gifts, and unfaithful or fraudulent administration. Consequently, nine members of the Board of Directors were arrested.
The case, which is being handled in a Federal Court in the Province of Buenos Aires, has attracted significant media attention and has resulted in more than 50 raids across the country.
Such application of Law 27.401 highlights the importance of company integrity programs in line with Anti-Corruption Office guidelines, as well as maintaining internal policies that allow for the detection and prevention of fraud or corruption. A functional integrity program is mandatory for contracting with the Argentina national government.
We will continue to monitor developments related to Law 27.401. For more information, please contact the authors.
