Could my SL Spanish company be liable if I do not implement a criminal compliance program?

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Definite yes and here is why

On March 26th of 2015, the Spanish Parliament approved the reform of the draft law which amended the Organic Law 10/1995 (the Spanish Criminal code), that came into force on July 1st of 2015.

This law reviews criminal accountability of legal persons in relation to criminal offences, which in turn affects the criminal responsibility of companies and other organizations and strives to give better characterization of an adequate compliance program.

Article 31 bis of the Criminal Code states that any representative of a company can be criminally liable in either of the two following instances:

  • Offences committed by management in the name of the organization.
  • Offences committed by employees, due to lack of satisfactory control by the organization.

The new article contains a detailed description of an appropriate compliance management system, known as corporate crime prevention plan, which will only help to exonerate those being empowered to manage and control the organization, its directors, as well as if carried out by its dependent employees, if before committing the crime, the company has put in place, in an effective way, the necessary compliance program.

The new Criminal code looks to exempt companies and organizations that have a satisfactory criminal compliance program operating inside the organization before any possible crime is committed.

The compliance program should aim to have organizational and management models, surveillance measures and the best methods to prevent the crime. It can do this by detecting areas in the organization where criminal acts are most likely to be committed, employing a protocol for decision making and financial resource management, employing a disciplinary system that penalizes failure to comply, implementation of a whistleblowing system to permit reporting of non-compliance law regulations and the organization should appraise and inspect the system periodically.

The Supreme Court has just explained recently the requirements to be taken into account in assessing the responsibility of companies and organizations according to Article 31a of the Penal Code.

Firstly there must be a crime by an individual who is a member company or organization, and secondly, that the company or organization has breached its obligation to establish surveillance and control measures to prevent possible crimes.

The Supreme Court explains that: “The determination of the act of the legal person, relevant for the purposes of the statement of criminal responsibility is to be established from an analysis of whether the crime committed by the individual, has been facilitated by the absence of a culture of respect for the law and regulations within the organization and independent structure of each of the legal entities that make it up, which would manifest itself during specific monitoring and control of the behaviour of the managers aimed at avoiding the these crimes being committed.”

At Pellicer & Heredia we can help your company to comply with this new regulation and prevent you from incurring any possible penalties such as fines, dissolution of the company, suspension of activities for a period of time, closure of premises, etc…

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