February 25, 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 Ms. Laura Medina, Senior Associate of Jiménez Cruz Peña, TRACE’s Partner Law Firm in the Dominican Republic. Jiménez Cruz Peña is one of the Dominican Republic’s largest international law firms that provides creative business solutions to local and global clients with utmost dedication to integrity, responsiveness and professional excellence. Ms. Medina advises on business operations and labor policies in the Dominican Republic.
As in any developing country, corruption has been an issue of concern in the Dominican Republic for several decades. The main focus of the country’s anti-corruption legislation has always been the public sector, and in particular public officials; however, recent legislative developments have also started to address corruption in the private sector.
On December 19, 2014, the Dominican Congress enacted Law 550-14, amending the Penal Code to include a provision on criminal liability of companies that have committed acts of corruption or bribery. Although corporate criminal liability had previously been established in the General Law 479-08 on Business Associations and Limited Liability Proprietorships, the new provision in Law 550-14 specifically addresses acts of corruption and bribery. The applicable sanctions for this provision include seizure or confiscation of assets directly or indirectly related to the corrupt act; temporary or permanent closure of the place of business; temporary annulment of business license or permit; and debarment from public procurement or making public offerings in financial and banking securities markets.
Law 550-14 was scheduled to enter into force one year after its enactment, but it was recently declared unconstitutional for reasons unrelated to the corporate criminal liability provision. Congress must now pass a new amendment to the Penal Code that complies with the Court’s decision. However, the corporate criminal liability provision was not challenged, so it is likely to remain the same under the new amendment.
Demand for good governance overall, as well as adoption of effective measures leading to economic and social progress, is increasing. Corruption hinders economic and social progress and the Dominican Republic is committed to eradicating it wherever it occurs, whether in the public or private sector. Regardless of the ultimate outcome, initiatives such as the corporate criminal liability provision of Law 550-14 and similar future legislative actions demonstrate such commitment.
For more on this topic, please see the following resources:
Law 550-14 amending the Penal Code (in Spanish)
General Law 479-08 on Business Association and Limited Liability Proprietorships (in Spanish)
TRACE Matrix – Dominican Republic
TRACE Compendium – Embraer (Dominican Republic)
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