Regarding a conversation related to the new Economic Crimes Law, we had a question about whether there is expressly a legal obligation that orders me to submit to the internal regulations of third parties related to my activity. The above, considering that, if effective, this implies that I must read, know and apply all the policies and manuals of my clients and, eventually, other third parties.

In that sense, and at least as far as it concerns a contractual relationship with clients or counterparties on an equal footing in negotiation, it is reasonable to maintain that if I sign a contract with a third party, in which my complete opposition to the commission is expressly mentioned of crimes within my organization, and I have a living, controlled and regularly updated prevention model, it should not be an imperative to have to submit to the self-regulation of my related parties.

In addition to being somewhat extreme, requiring all companies to comply with each of the internal obligations of their related parties, which commonly also depend on the needs, logic and legal techniques of each original regulation, it is tremendously expensive—in terms of time and efficiency—think that each company has to submit, purely and simply, to each and every one of the policies and manuals that make up the Crime Prevention Model of related third parties, simultaneously avoiding its potential application and also ensuring to be attentive to the possible modifications of each of such models (in foreign, and sometimes even foreign, computer servers), which is what is usually asked to accept, ex ante, in such types of regulations.

Although the “obligation” referred to above is inserted in the context of the elements that a crime prevention model must contain, in accordance with the provisions of Article 3 No. 3 of Law No. 20,393, in practice it is observed that These obligations, prohibitions and sanctions mainly deal with the establishment of specific prohibitions relating to certain topics (eg, making facilitation payments, making decisions through undeclared conflicts of interest, carrying out illicit activities in the context of the execution of the contract) and compliance with obligations to report any suspicious situation through established reporting channels, among other points. But the problem, also practical, is that the way of approaching how these obligations, prohibitions and sanctions are implemented for those who contract with another has generally consisted of the supposed duty of having to accept, as noted, purely and simply , the entirety of a certain Crime Prevention Model that is imposed on the other, as a condition of the conclusion of the respective contract.

Consequently, and reflecting on the actual implementation of the new Economic Crimes Law, it is to a certain extent unfeasible, and, at the same time, excessive, to think that all companies must sign the internal regulations of their related third parties and accept them in a closed package. Without prejudice to the foregoing, the failure to incorporate clauses relating to compliance with the crime prevention model could entail risks for the provider when accrediting compliance with its management and supervision duties, especially when what is in question, eventually, is the liability of the legal entity for criminal acts committed in the context of the supplier/client contractual relationship.

From a practical perspective, it should be noted that a serious and relevant situation that involves the commission of an illegal act will require addressing potential criminal contingencies as a first priority, which will allow for early mitigation of possible contractual risks related to non-compliance with these clauses.

Thus, today it is essential to review the contracts with my related third parties and not rest on the fact that there is an identical standard clause in all of these and that it must be accepted automatically or sine qua non to conclude the contract. We think that essential base points can be established, with common objectives, with a view to safeguarding the legal assets protected in Law No. 20,393, such as the obligations, prohibitions and sanctions already mentioned, and contractually refine the relevant points for both parties, but this It does not mean that I must necessarily submit to the internal regulation of my suppliers and clients.

By the way, as part of such essential bases, the controls through the contracts and monitoring of the correct fulfillment of the services agreed in this will be an important armor in the eventual case that said third party commits a crime in the context of the functions that are the subject of my contract.

* Francisca Franzani is director of the Compliance group at Albagli Zaliasnik and Andrés Illanes is manager of Corporate Affairs at Bodegas San Francisco.

Source: El Mercurio

For more information you can contact :

Francisca Franzani  | Compliance Group Director | ffranzani@az.cl