April 14, 2016
Compliance Champion Spotlight
What is a Compliance Champion? A Compliance Champion is an individual or organization committed to fostering and raising the standards of anti-bribery compliance. TRACE Trends will include posts featuring Compliance Champions from time to time.
We hope you enjoy the following entry from this week’s Compliance Champion, and TRACE Partner Law Firm!
Today’s guest blog post is written by Mr. Ignacio Giraldo, a Colombian lawyer at Sanclemente Fernandez Abogados S.A., TRACE’s Partner Law Firm in Colombia. Ignacio works as a legal consultant in various industries for multinational companies with presence in Colombia on diverse matters, including compliance and anti-corruption policies.
On February 2, 2016, the Colombian Congress issued a new anti-bribery regulation imposing greater liability and sanctions on acts of transnational bribery violations.
Law 1778 of 2016, amending Law 1437 of 2011, increases the liability of Colombian companies for local and transnational bribery of public officials in exchange for performing, omitting, or delaying any public function related to company’s business or international transactions. The regulation not only holds the company liable for actions of its foreign branches, subsidiaries, officials, employees, and contractors, it further extends the liability to actions of spun-off companies, controlling companies, and companies absorbed or created in a merger process.
In addition, the regulation provides for the following steep corporate penalties for transnational bribery violations:
- Fines up to approximately USD $40,000,000;
- Debarment from contracting with the Colombian government for up to twenty years;
- Publication of the penalty in mass media and the company’s webpage for up to one year;
- Prohibition from accessing the Colombian government’s incentives or subsidies programs for a five year term; and
- Inscription of the penalty in the corporate registry.
(Individuals convicted of bribery will remain subject to imprisonment and substantial fines under Colombia’s Penal Code.)
Under the new anti-bribery regulation, the severity of penalties imposed against companies, along with the investigation of bribery acts, will be determined by the Superintendence of Companies. The Superintendence will consider criteria such as implementation of corporate policies on ethics and transparency, and cooperation with the investigating authorities. The Superintendence will be assisted by the reports of legal auditors who will not be allowed to plea professional secrecy.
Not only will the new anti-bribery regulation require implementation and mastering of effective compliance controls to avoid steep fines and penalties, it will also allow Colombia to meet OECD (Organisation for Economic Co-operation and Development) anti-bribery standards.
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