by Juan Manuel González | Mar 19, 2024 | Noticias-en, Opinions
In the field of corporate compliance, the effective implementation and implementation of programs and systems for the prevention and management of risks such as money laundering and corruption is increasingly important. One of the most recent documents from the United States Department of Justice (DOJ) points to this conclusion, which consists of a guide for the evaluation of corporate compliance programs, aimed at federal prosecutors in charge of prosecuting companies for participating in acts of corruption and transnational bribery, in application of the Foreign Corrupt Practices Act (FCPA).
The aforementioned guide is intended to give prosecutors tools to “make informed decisions about whether, and to what extent, the company’s compliance program was effective at the time of the crime and is effective at the time of the accusation” in order to determine its merit to exonerate liability or mitigate the penalty imposed on the company. The second of the three cardinal aspects that the guide gives to evaluate the programs, inquires about whether the company’s compliance program has adequate resources and powers to function effectively, and the third of the criteria to answer this question is directly related with compensation and consequence management structures, in other words, establishing incentives for compliance and disincentives for non-compliance.
The Superintendency of Companies of Colombia, as regulator of the most extensive compliance programs in the country (SAGRILAFT and PTEE), shares the opinion that sanctions and compensation schemes are an important, even essential, element of an effective compliance program. Therefore, both Circular 016 of 2020 (SAGRILAFT) and Circular 011 of 2021 (PTEE) instruct obligated subjects to include this element in their programs, as follows:
– Section 5.1.2. of Circular 016 of 2020 says that: “The SAGRILAFT must include sanctions or consequences for employees, administrators, associates or third parties, for non-compliance or non-observance of its provisions.”
– Section 5.1.5.3.2, literal g, establishes that the compliance officer must implement “internal investigation procedures in the Obligated Entity to detect non-compliance with the PTEE and Acts of Corruption”; and section 5.1.2. It says that “the PTEE must include, in a clear and simple way, the consequences of violating it.”
Additionally, the Superintendency clarified, in Official Letter 220-091819 of July 11, 2021, that “the obligated subjects will determine the mechanisms that will allow them to evaluate, monitor and control the risks and, in turn, will establish the relevant sanctions for non-compliance with the system in accordance with its organizational structure, sanctions that must cover both employees, administrators, associates or third parties. (…) Therefore, it is up to each obligated company to determine, in each particular case and in accordance with the characteristics of its organization, the sanctions applicable to associates who fail to comply with SAGRILAFT.”
Colombian companies that have been implementing these programs since 2016 have focused on following the regulations’ instructions to the letter, including simple sanctioning regimes in their compliance systems. In practice, the most common scheme consists of classifying non-compliance with the duties and obligations derived from compliance policies and procedures as disciplinary offenses, and the compliance area, in these cases, usually plays the role of investigator who presents the case. before the disciplinary authority. The consequences for non-compliance have then been limited, with good judgment, to what is permitted by labor regulations, from reprimands to suspensions from their duties without remuneration, and in serious cases even the termination of the employment contract with just cause, after developing a disciplinary due process. It is worth remembering that, according to the substantive labor code, disciplinary sanctions with pecuniary consequences are completely prohibited, except in cases in which the worker has unjustified delays or absences, in which case the hours or days not worked can be deducted from the salary. Such regulation completely prevents the imposition of economic sanctions for lack of compliance.
On the other hand, incentive or compensation schemes to encourage compliance seem to still be a field insufficiently explored by companies, which is a real shame because, although there are currently insufficient parameters to measure the effectiveness of adopting compensation schemes in compliance programs, the truth is that in other areas of the development of corporate culture, incentives have proven to be useful tools to promote cultural changes and the internalization of corporate values, so, from the perspective of corporate compliance, it would be a practical recommended to help translate paper compliance programs into the reality of companies.
Contrary to the situation in the United States, Colombian regulations do not require or suggest specific models of incentives and sanctions as a mandatory requirement in compliance programs. The assessment of these programs within the framework of the administrative sanctioning procedure lacks detailed government guidelines, and there is nothing to indicate that the compensation and sanction schemes are rigorously evaluated as a component of effectiveness to mitigate the administrative responsibility of legal entities in the framework of the sanctioning procedures initiated under the Anti-Corruption Statute (Law 1474 of 2011) and the Transnational Bribery Law (Law 1778 of 2016). However, Colombian regulation tends to imitate North American trends, which have become a true compliance standard for Latin America, therefore, it makes sense that we begin to take the tools seriously to make our compliance programs true instruments. for the prevention and management of risks in companies.
BONUS: Some ideas on incentive and sanction schemes to reinforce the compliance culture in your company:
Incentives:
• Public recognition: Reward ethical and transparent employees in meetings or internal communications.
• Ethical bonus program: Offer financial bonuses to employees who demonstrate outstanding ethical behavior.
• Ongoing training: Provide ethics and compliance training opportunities, with incentives for completing courses and certifications.
• Extra days off: Provide extra days off as a reward for maintaining high ethical and compliance standards.
• Participation in decision-making: Invite ethical employees to participate in key decision-making processes to foster their commitment.
Sanctions:
• Temporary suspension: Impose temporary suspensions on those who violate ethics or compliance policies.
• Affected performance review: Link performance evaluation to ethical conduct, so that those who do not comply face consequences in their reviews.
• Phased removal process: Implement a system of progressive warnings before termination for cases of unacceptable ethical conduct.
• Prohibition of promotions: Prevent promotions and promotions for those who have violated ethical policies until they demonstrate a change in their behavior.
It is important to adapt these measures according to the culture and specific needs of the company, promoting a balanced approach between incentives and sanctions to achieve effective results.
By Nicolás Castro Márquez, corporate criminal lawyer, Posse Herrera Ruiz.
by Juan Manuel González | Nov 16, 2023 | Noticias-en
The Constitutional Court has just ruled on a fragment of the new tax reform, specifically an article that included mining and oil companies. The article established the basis on which companies that exploit natural resources had to declare income. However, the high court declared that this adjustment is not in accordance with the constitution. Of the 15 lawsuits filed against the law, this was one of the two that the high court agreed to study, finally declaring it unenforceable.
The article of the law defined the basis on which companies that exploit non-renewable natural resources had to declare income. These types of companies have to transfer to the State a percentage of their profits in consideration, the so-called royalties. But in its article 19, the tax reform ensured that these royalties do not constitute a deductible from income tax, nor a cost or expense, but also that they must be recognized to the State through a tax percentage.
In April of this year, the Attorney General of the Nation, Margarita Cabello Blanco, had spoken out about this article, arguing that for her it was not “legitimate for Congress to prevent companies from deducting that payment.” In the concept that she sent to the Court, she explained that this type of use of natural resources generated a social and ecological impact that, until now, is compensated to the community through royalties. For her, these should be understood as expenses or costs associated with extractive activities, which when paid should translate into a deductible or discount as it currently works.
Source: El Espectador
For further information, contact:
Oscar Tutasaura | Partner Posse Herrera Ruiz | oscar.tutasaura@phrlegal.com
by Juan Manuel González | Sep 20, 2023 | Noticias-en
Through the new External Circular No. 100-000003 of September 11, 2023 (the “Circular”), the Superintendency of Companies issued the guidelines of the new Report 75 – SAGRILAFT AND PTEE, which unifies reports 50 – Risk Prevention LA/FT/FPADM (“SAGRILAFT”) and 52 – Transparency and Business Ethics Program (PTEE), as well as Report 58 – Compliance Officers.
The foregoing, considering that Chapter obliges all legal entities subject to inspection, surveillance and control to adopt a PTEE.
The reports indicated in the Circular are mandatory for the Obligated Subjects, and must be completed through the STORM USER web application, in the “Business Report Submission” Section.
REPORT 75 – SAGRILAFT AND PTEE
The Obligated Subjects in accordance with the provisions of Chapters (Report 50 and Report 52) as had been done in previous years.
This single report must contain the SAGRILAFT AND PTEE reports, and must be submitted annually in accordance with the last two (2) digits of the NIT of the Obligated Subject, without including its verification number. In this way, the corresponding dates are the following:
These deadlines cannot be extended.
Without prejudice to the above, and considering that these dates have already passed for the year 2023, the Circular has special deadlines to present Report 75 – SGARILAFT AND PTEE with a cut-off date of December 2022. These dates, also established in accordance with the two (2) last digits of the NIT of the Obligated Subject, not including its verification number, are the following:
It is reiterated that these dates have been set only for the 2023 cut-off report, and that in subsequent years the calendar presented in the previous point must be complied with.
REPORT 58 – COMPLIANCE OFFICER
In accordance with the provisions of Chapters In the event of appointment or change of the SAGRILAFT Compliance Officer and/or PTEE, the Obligated Subject must present Report
58 within fifteen (15) business days following the respective appointment or change, with a cut-off date corresponding to the date of the act. of appointment.
When sending Report 58, the following documents must be attached:
1. SAGRILAFT Compliance Officer:
to. Compliance Officer Resume
b. Certification of compliance with the requirements to be appointed Compliance Officer
c. A copy of the document that accounts for the registration of the SAGRILAFT Compliance Officer before the SIREL administered by the UIAF.
d. A copy of the extract from the minutes of the Board of Directors or Highest Social Body that records the designation of the Compliance Officer e. Document that accredits knowledge of ML/TF risk management or ML/TF/FPADM risk through specialization, courses, diplomas, seminars, conferences or any other similar matter.
F. Certificate of verification of disabilities and incompatibilities of the Compliance Officer signed by the legal representative
2. PTEE Compliance Officer:
to. Compliance Officer Resume
b. Certification of compliance with the requirements to be appointed Compliance Officer
c. Document that certifies knowledge of risk management
d. A copy of the minutes of the Board of Directors or Highest Social Body stating the designation of the Compliance Officer
e. Certificate of verification of disabilities and incompatibilities of the Compliance Officer signed by the legal representative. Report 58 will only be understood as received if it is accompanied by the presentation of all of the aforementioned documents.
For further information, contact:
Oscar Tutasaura | Partner Posse Herrera Ruiz | oscar.tutasaura@phrlegal.com
by Juan Manuel González | Sep 11, 2023 | Noticias-en
1 . New ways to punish
Customs users who commit a minor infraction may be punished with a reprimand instead of a
fine as long as they have not committed the same infraction more than twice, in a period of three years.
Minimum Sanction Any penalty, even those reduced for trespass, can never be less than 10 UVT (today
424,000 and, in the case of sanctions for (simulating import or export operations;;( reporting or
incorporating an address other than the one verified , or (incorporate supporting documents that do not correspond to
the commercial operation, will have a minimum penalty of 12,000 UVT (today 508,944,000).
Previously, customs users were sanctioned for each import declaration, now the
foreign trade operation carried out by transport document will be sanctioned.
2. Apprehension and confiscation
An Apprehension Review Committee is created to issue recommendations on the admissibility of this
precautionary measure, in order to unify criteria between the different customs sections.
The release cancellation procedure is eliminated as a procedure prior to arrest or the
imposition of sanctions due to impossibility of arrest.
The penalty for impossibility of apprehension may be reduced to 80 when the search occurs before
the sanction becomes final.
An extensive list of grounds for arrest is maintained (42 grounds), including grounds for formal matters.
3. Subsequent audits and dispatch
In compliance with the commitments of the Trade Facilitation Agreement, and the guidelines of the WCO and the
WTO, the DIAN is allowed to carry out Post-Dispatch Audits, to facilitate and promote
voluntary compliance with obligations and prevent the commission or recurrence of violations.
This Audit is subject to regulations.
4. Free Zone Users
Failure to comply with the obligations derived from the consolidated payment will no longer give rise to the
indefinite loss of this benefit, without prejudice to the corresponding fine.
The violation was eliminated for operating users for carrying out the activities without having obtained
guarantee approval from the DIAN.
Failure to authorize the entry or exit of goods through the Goods Movement Form within 15 days following the respective entry or exit is sanctioned.
5. Blank sanction types
With the objective of adapting this sanctioning regime to the next substantial customs regime,
blank sanctioning rates are established linked to the categories of obligations that will be established in said future regime.
6. Sanctioning procedure
The terms for issuing Administrative Acts that impose sanctions and decide the appeal for reconsideration are increased.
The DIAN may suspend, for up to 1 month, the term to issue the Act that imposes the sanction.
You may go to the contentious-administrative jurisdiction via Per Saltum, this is without filing the appeal for reconsideration.
An abbreviated procedure is established for minor infractions.
Reconsideration resources can be presented through the Electronic Resource System or physically.
Following the jurisprudence of the Council of State, it includes the obligation to notify administrative acts to customs users, allowing the application of Positive Administrative Silence.
7. Right to error
There will be no penalty when, within a period of three years, a minor infraction is committed for the first time and the error is proven to have been corrected.
8. New sanctions
Simulating export and import operations will have a fine of 100 of the FOB value of the merchandise, and
can never be less than 12,000 UVT (today 508,944,000).
A penalty of 400 UVT is included for not timely submitting the report with the list of import declarations that were supported in the Functional Unit Tariff Classification Resolution.
Authorized Economic Operators (AEO). Simplified Procedure Users and Free Zone Users who do not
make the consolidated payment in the terms and conditions established in the standard will be subject to the following sanctions:
Modification in the wording of the causes for suspension and cancellation of the AEO authorization and the applicable procedure.
Industrial Users may now be sanctioned for simulating foreign trade operations.
9. Validity and transition regime
The New Customs Sanctionary Regime came into force on June 9, 2023.
The applicable sanctioning regime will be the one in force at the time the foreign trade operation was carried out, without prejudice to the application of the principle of favorability if applicable.
The administrative sanctioning processes will be governed by the regulations in force at the time the respective terms began to expire.
For further information, contact:
Oscar Tutasaura | Partner Posse Herrera Ruiz | oscar.tutasaura@phrlegal.com
by Juan Manuel González | Apr 19, 2022 | Noticias-en
On the occasion of the issuance of Law 2195 of 2022, or the new Transparency Law, the administrative sanctioning regime against legal persons for the commission of crimes in organizational contexts has been extended and expanded in Colombia.
Previously, this regime was limited to the commission of a single crime (bribery for giving or offering) by the administrators or legal representatives of a commercial company or branch of a foreign company. Currently, there has been an expansion of both the objective aspect (crimes for which administrative sanctions can proceed against legal persons), and the subjective aspect (natural persons who can trigger sanctions through their crimes and legal persons who can be punished).
In relation to the first, it went from bribery for giving or offering to include in this catalog all crimes against the public administration (although technically not all crimes of this nature can be committed by administrators of private companies), crimes against the environment (recently reformed), crimes against the economic and social order (including smuggling, customs fraud, money laundering, among others), and some crimes related to the financing of terrorism and the administration of assets related to criminal organizations. In this way, the catalog of crimes was expanded, being possible to maintain that it evolved from a “sanctioning regime for acts of corruption” to a “sanctioning regime for criminal acts”.
Regarding the latter, while before only the criminal act of an administrator or legal representative triggered the jurisdiction of the Superintendency of Companies to sanction the legal entity, now this also extends to “officials”, a problematic word that could be understood to include to any employee of the organization.
Likewise, now not only commercial companies and branches of foreign companies may be sanctioned, but also State industrial and commercial companies, non-profit entities and, anti-technically, the new law also mentions legal persons that integrate consortiums or temporary unions, which would be framed in any of the previous categories.
It should not be forgotten that all these modifications have profound effects on all companies in the country, since the sanctions that the various superintendencies or supervisory bodies may now impose for these matters are not minor: fines of up to 200,000 SMLMV plus the highest value divided by the benefit obtained or intended; inability to contract with the State on a permanent basis; prohibition to receive incentives or subsidies from the State for up to 10 years; publication of the sanction in the media for up to one year; and/or removal of administrators or employees, all of which is registered in the Chambers of Commerce.
In this way, the implementation of true compliance programs that allow the effective prevention of crimes in their organizations and that, in a sanctioning process, allow discrediting compliance with the requirements that structure this administrative responsibility, returns to the center of the needs of companies. , namely, that the company did not benefit or seek to benefit from the crime and that it did not condone or tolerate its commission.
For more information you can contact:
Oscar Tutasaura | Partner Posse Herrera Ruiz | oscar.tutasaura@phrlegal.com
