by Juan Manuel González | Apr 13, 2022 | Noticias-en
In October 2021, the Central Bank of Uruguay issued Communication 2021/199, where in reference to the Financial Information and Analysis Unit, it enables and regulates the digital presentation of the report form for unusual or suspicious transactions by the subjects obligors of the non-financial sector (article 13 of Law No. 19,574).
Through the following link you can access the instructions for sending the aforementioned reports, prepared by the Central Bank of Uruguay.
by Juan Manuel González | Apr 13, 2022 | Noticias-en
The Shadow Report to the United Nations Convention against Corruption (“UNCAC”) published by the Non-Governmental Organization “Seeds for Democracy” towards the end of 2021 highlighted important advances in legislation and the development of anti-corruption public policies by the State Paraguayan between the years 2018 and 2021.
Thus, the report considered that Paraguay is inevitably in a process of strengthening public management policies that are really open and useful for citizens, pointing out as positive aspects:
- The regulatory adaptation related to the promotion of technologies for the fight against corruption through the development of open government action plans, with the participation of the State, civil society and the private sector.
- The adoption of an open contracting policy by the National Directorate of Public Procurement (DNCP), when reporting on its portal the adoption of said standard for the publication of data, making available to interested parties a series of data related to suppliers of the State and the respective award amounts in public contracts, allowing more effective citizen control.
- The promulgation in 2019 of the package of 10 laws within the framework of the government’s strategy to approve the evaluations of compliance with the 40 Recommendations of the Financial Action Task Force (FATF), with which several of the mandates were legislatively fulfilled. of Chapter V of the UNCAC; Y
- The existence of important advances with the latest modifications incorporated into the Political Financing Law, since the new legislation constitutes a challenge in terms of public policies to strengthen political parties, reduce asymmetries and prevent the entry of money of illicit origin into the electoral processes.
by Juan Manuel González | Apr 13, 2022 | Noticias-en
On October 28, 2021, following her speech at the American Bar Association’s National White Collar Crime Institute, Deputy Attorney General Lisa Monaco issued a memorandum regarding “initial reviews” of Department of Justice (DOJ) corporate crime enforcement policies (Corporate Crime Advisory Group and initial reviews of corporate crime enforcement policies). The memo is the first in what will likely be a series of changes to the
Biden administration’s approach to white-collar law enforcement, including investigations under the Foreign Corrupt Practices Act ( FCPA).
The memorandum announces changes, effective immediately for future and pending cases, in three areas:
` Consideration of a company’s full history of previous misconduct in
making decisions about charges and dispositions of investigations.
` Requirements for companies under investigation to resubmit “all relevant facts relating to
the persons responsible for the misconduct” in order to obtain full credit for their cooperation (emphasis added).
` Guidance on the use of corporate oversight by the DOJ.
The memorandum also announces the formation of a “Corporate Crimes Advisory Group” within the Justice Department, with a “broad mandate” to update the Department’s approach to various issues. The group will examine “the credit given for cooperation, corporate recidivism, and the factors that influence the determination of whether a corporate case should be resolved through a deferred prosecution agreement (DPA), a non-prosecution agreement (NPA), or a plea agreement”, among other issues. The memo further states that
the group will “solicit input from the business community, academia and the defense attorneys association” when considering updates to policies and practices, such as the use of new technology.
Consideration of the Totality of Previously Engaged Misconduct With language dating back to 2008, the current Justice Manual states that “prosecutors may consider a corporation’s history of similar conduct” when making decisions about indictments and final decisions (emphasis added). ).
The new memorandum states that “prosecutors are now directed to consider all [prior] facts of corporate misconduct” in making these determinations. Prosecutors need to take a “holistic approach,” as Deputy Attorney General Monaco stated in her speech: A prosecutor in the FCPA unit needs to have a broad, cross-department view of misconduct: Has it entered into Does this company conflict with the Division of Tax Administration, the Division of Environment and Natural Resources, the money laundering sections, the United States Attorney’s Offices, etc.? He or she must also weigh what happened outside the department: whether this company was prosecuted by another country or state, or whether this company has a history of conflicts with regulators.
Part of the DOJ’s justification for this approach is that “[a] corporation’s history of misconduct…can be indicative of whether the company lacks the appropriate corporate culture and internal controls to deter criminal activity, and to determine whether any proposed remediation or enforcement program, if implemented, will be successful.” Deputy Attorney General Monaco cited Justice Department statistics showing that between 10 and 20 percent of recent relevant corporate resolutions were signed by companies that had previously resolved other matters with the Justice Department. These statements are the most recent indication of the DOJ’s point of view, which has evolved over time, that a company’s culture is critical to crime deterrence and law enforcement; This is a viewpoint shared by many compliance professionals.
The inclusion of “criminal, civil or enforcement actions” abroad against the company or any of its affiliates could have a significant impact. In theory at least, this language substantially expands the universe of the “record” of a company’s behavior under consideration to include actions taken by foreign governments in connection with laws of a different nature than those of the United States or under legal systems that do not grant same due process or other considerations to the companies that are the object of said actions.
It remains to be seen how these assessments of the totality of misconduct will work in real cases, but they certainly deserve close scrutiny. Even recent cases, such as Credit Suisse’s deferred prosecution agreement (DPA) and related provisions, might have been viewed differently had this policy been fully implemented. In addition to an FCPA-related non-prosecution agreement (NPA) in 2018, Credit Suisse also made a large settlement with the DOJ in 2016 related to “
false and irresponsible representations about mortgage-backed securities.” In late 2020, Swiss authorities filed criminal charges against the bank for failing to prevent money laundering in Bulgaria-related transactions.
In her speech, the Deputy Attorney General, Monaco, stated that the Department of Justice will take a deeper look at the issue of corporate recidivism, including companies with repeated violations or provisions in different parts of the Department. She hinted that some repeat offenders may not be eligible for certain types of “pretrial stays” (such as DPAs and NPAs) in the future. She noted that the current focus on DPA and NPA compliance is also part of this evaluation.
Provision of all relevant information about the individuals to obtain credit for the cooperation
Over the past several weeks, several Justice Department officials, including Attorney General Merrick Garland, have emphasized that they are refocusing on prosecuting individual wrongdoers as a “top priority.” Deputy Attorney General Monaco also emphasized this, and the new memo states that “one of the most effective ways to combat corporate misconduct is to hold accountable the people who committed the crime.”
The memorandum reaffirms the requirement of the 2015 “Yates Memorandum” which states that, “in order to qualify for any credit for cooperation, corporations must provide the Department with all relevant facts relating to [all] persons responsible for the misconduct” ( emphasis added). The previous administration relaxed this requirement somewhat: the current language of the Justice Manual (dating from November 2018) focuses on information related to “all persons substantially involved in” possible wrongful acts (emphasis added). The new
memorandum states that companies must provide such information on “individuals inside and outside the company.”
Reimposing this requirement is likely to significantly increase the financial costs of cooperation for companies under investigation, by exposing a large amount of non-privileged information to potential disclosure, analysis and review. This requirement is also likely to further increase raised challenges already faced by the companies under investigation, for example, those related to national security and data privacy laws in place in other countries. Providing information related to “individuals peripherally involved in the misconduct” to the DOJ will increase the potential exposure of companies to data privacy claims or other issues from a larger universe of individuals,
The shift to supervision
The new memorandum revises or replaces parts of the 2018 “Beczkowski Memorandum,” which set a higher standard for the imposition of corporate supervision than had been used in the past (providing, for example, that “the imposition of corporate supervision will not be necessary in many corporate criminal resolutions”). In her speech, the Deputy Attorney General, Monaco, stated: With regard to previous Department of Justice guidelines suggesting that oversights were unfavorable or the exception, I am rescinding those guidelines. Instead, she made it clear that the department is free to require the imposition of independent oversight whenever it is appropriate to do so to inform our prosecutors if a company is meeting its compliance and disclosure obligations under a DPA or NPA.
The new memo states that monitors should be used in cases of “demonstrated need” and where there will be “a clear benefit.” Such a need might exist when a company’s program or related controls are “deficient” or “untested, ineffective, inadequately resourced, or not fully implemented at the time of a resolution.” If the opposite is true – the program is “vetted, effective, adequately resourced, and fully implemented at the time of a resolution – surveillance may not be necessary.” The new memo also emphasizes that any oversight must be “properly tailored,” which is generally consistent with the policy the DOJ has embraced over time.
The Deputy Attorney General, Monaco, stated in her speech that the Corporate Crime Advisory Group will continue to examine other aspects of corporate supervision, for example “how we select corporate supervisors, including standardizing our selection process across divisions and Offices”. While this policy revision likely heralds more controls in future cases, it does not change the fact that the best protection a company can have against the imposition of oversight is to have a fully implemented, rigorously monitored, risk-based compliance program. and regularly reviewed, as well as related controls, as well as a supportive corporate culture and ethical management.
by Juan Manuel González | Apr 13, 2022 | Noticias-en
In July 2017, Peru incorporated for the first time the so-called “administrative responsibility of Legal Entities” before the commission of crimes. Before the enactment of Law No. 30424, the idea was maintained that a legal person could not have criminal liability. However, this would mark a before and after not only for the world of Peruvian law, but also for businessmen, managers, shareholders, directors and workers and how they should act in the face of criminal risks.
The rule, among other points, exposed the possibility of exempting itself from liability or mitigating it, if the company had a “Crime Prevention Model”, which -to this day- remains voluntary.
Almost five years have passed and in the face of the criticism that this regulation has received, as well as the need to broaden its field of action, the Government presented to the Congress of the Republic a long list of modifications, among which the following stand out:
- Expansion of the catalog of crimes for which liability can be applied: Currently it focuses on crimes of corruption, as well as money laundering and financing of terrorism. It is proposed to include, among others, the following:
- private corruption
- environmental crimes
- customs offenses
- tax crimes
- Prohibited financing of political organizations
- Applicability in cases of reorganization of the legal person: Eliminates the limitations to establish liability in cases of Spin-off, Merger and Absorption.
- Determination of responsibility for the action of intermediaries or with the benefit of the natural person.
- New formulas for calculating fines: That increase the applicable monetary sanctions.
- Improvement of the definition of the prevention model: The voluntary implementation of the PM is privileged, with a profile based on risks, according to its size, nature, characteristics and complexity of its operations.
- The disclaimer does not apply when senior management personnel are involved.
The bill, after four months, was discussed in Congress, which after receiving different opinions from experts from both the public and private sectors, has drawn up a new amending proposal that reduces the field of what is proposed. For example, among other crimes, environmental crimes and those of private corruption are ignored.
It is interesting, however, that both the Government and Parliament have recognized the importance of clarifying the so-called “Prevention Model” that can serve as a defense. Based on this, entrepreneurs, shareholders, directors or any other person who is involved in the actions and management of the company must recognize not only the importance of having a Compliance system, but also that it must be appropriate to their needs. own characteristics.
In a scenario of constant political and economic risks, in situations of possible instability and regulatory changes that affect business development, today more than ever it is necessary to have a business culture that incorporates compliance with all external obligations and, in turn, integrates ethical and quality standards, ensuring that the performance of the company as a whole -and that of each of its members- is carried out in such a way as to guarantee the minimization of risks and with it, the continuity of the business.
by Juan Manuel González | Apr 13, 2022 | Noticias-en
What are the benefits and risks associated with the degree of conformity in compliance with official environmental requirements
Environmental protection and sustainable practices are now an essential standard that every company must have, being responsible with the environment has become yet another business product for companies, which generates tangible benefits such as increased sales, revaluation of the mark and reduction of sanctions.
Companies that apply policies, processes and actions to ensure compliance with regulations related to the environment have recognized that they not only strengthen their compliance programs in the face of a large number of risks; rather, this exercise has allowed them to discover opportunities to reduce operating costs, while reducing their environmental impact.
Benefits of an effective environmental compliance program
- Reputational and sales: Consumers and business partners give greater value to brands that have demonstrated their commitment to comply with environmental laws and that operate sustainably. In Costa Rica, as in many other countries, environmental standards have been incorporated into public purchases, such as the prohibition of purchasing single-use plastic products and the favoring of recycled raw materials.
- Cost reduction: Compliance with environmental regulations is usually linked to proper management of resources such as water, electricity, physical space and waste reduction, all of which contribute to a reduction in regular costs for companies.
- Legal defense against incidents: The successful application of procedures focused on respecting environmental regulations has been accepted by the authorities as evidence to reduce the legal liability of companies in the event of environmental incidents. In contrast, the authorities usually sanction more severely those companies that over time have shown themselves to be indifferent to complying with environmental regulations.
Risks of not having an effective environmental compliance program
Internationally it has been understood that the responsibility for damage to the environment falls on the companies that caused it, including their owners, especially in Costa Rica, the “Wildlife Conservation Law” establishes that companies that are part of it are also responsible. conglomerate (economic interest group), so the parent company of a company domiciled in Costa Rica can be held responsible for the environmental breaches of its subsidiary. Lastly, the growing international efforts to combat challenges such as climate change, water scarcity and marine pollution are increasingly increasing the interest of the authorities and society in general in ensuring that companies comply with the best environmental sustainability practices.
by Juan Manuel González | Apr 13, 2022 | Noticias-en
Law No. 20,393, which establishes the Criminal Responsibility of Legal Entities (RPPJ) , was published in our country in December 2009. In 2016, through Law No. 20,391, the crime of reception was introduced to the catalog of crimes susceptible to be committed by legal persons. However, it was not until its second reform, in November 2018, by Law No. 21,121, which incorporated economic crimes such as incompatible negotiation, unfair administration and bribery between individuals, among others, into the sphere of criminal responsibility of the legal entity . Criminal Compliance was really promoted in our country.
Since that reform, this law has been modified several times, and there is a clear tendency of the legislator to establish the criminal liability of legal persons with increasing frequency. Perhaps the most relevant bills in this regard are the Bill on Economic Crimes, which expands the list of crimes in Law 20,393 to more than 100, and the bill for the New Penal Code directly eliminates the list of crimes, establishing the potential liability of the legal person before any crime, to the extent that certain requirements are met.
It is relevant to attend to the most recent modifications to the law, which incorporated the responsibility linked to crimes from the Immigration and Immigration Law and those of the Law on Arms Control , in order to review the relevance of evaluating the risks of our organization. and update the risk matrices and applicable controls, as necessary.
Liability for gun control law offenses
On January 25, 2022, Law 21,412 entered into force, amending various legal bodies to strengthen Arms Control. Among the modifications introduced by this law, the incorporation to the catalog of crimes that are likely to generate criminal liability of the legal person is included, all the crimes contemplated in Title II of Law No. 17,798, on Arms Control. Consequently, the Legal Entity may be responsible for crimes committed in its organization, such as the crimes foreseen for those who organize, belong to, finance, provide, help, instruct, incite the creation and operation of private militias, combat groups or organized military parties. ; the carrying, possession or possession of firearms or explosives without the corresponding authorizations or registrations; the commercialization, manufacture, importation and internment into the country of weapons, artifacts and ammunition that are prohibited or subject to control; and the sale of ammunition or cartridges to someone who is not the possessor, holder or carrier of a registered firearm, among others.
Considering that this modification is already in force, it is necessary for organizations to update their Crime Prevention Models to current regulations , raising the risks of non-compliance, developing protocols and carrying out the corresponding training in order to effectively mitigate the risks detected.
Responsibility for the crime of human trafficking
Although the new Law No. 21,325 on Migration or Aliens was published in April 2021, it has not yet entered into force because the publication of its regulations is pending. Said regulation must be prepared by the Ministry of the Interior and Public Security no later than April of this year.
As far as we are concerned, this law toughens the penalty for the crime of human trafficking, while incorporating said crime into the catalog of Law No. 20,393. It should be remembered that human trafficking is typified in article 411 quater of the Penal Code, which sanctions anyone who ” through violence, intimidation, coercion, deception, abuse of power, taking advantage of a situation of vulnerability or dependency of the victim, or the granting or receiving of payments or other benefits to obtain the consent of a person who has authority over another person who recruits, transfers, shelters or receives persons so that they may be the object of some form of sexual exploitation.”
However, there is a question about the effective applicability of the criminal liability of the legal person for this crime, since the legislator did not expressly indicate what penalties would be applicable to the legal person in case of commission of this crime. This means that, in practice, it is impossible to impose a sentence on a legal person for committing this crime, since this would violate the principle of legality at its best: nulla poena sine lege previa .
Notwithstanding this, we recommend that companies incorporate the crime of human trafficking in their crime prevention model, showing proactivity in prevention and, at the same time, anticipating the complementation that will probably be made of the law in a short time. , in order to remedy this defect and fully apply the liability of legal persons for these very serious events.
Daniela Hirsch | Compliance Group Director | dhirsch@az.cl
Sofia Reizin | Associate | sreizin@az.cl
