RESPONSIBILITY OF LEGAL PERSONS ON DOMESTIC, TRANSNATIONAL BRIBERY AND OTHER CRIMES

RESPONSIBILITY OF LEGAL PERSONS ON DOMESTIC, TRANSNATIONAL BRIBERY AND OTHER CRIMES

Law 9699 effective as of June 10th, 2019

 

INTRODUCTION:

On June 10th, with the publication of Law 9699 in the Official Gazette (Scope 130), a law came into force that regulates the criminal liability of  legal persons in domestic bribery crimes, international bribes contemplated in the Law No. 8422: Law against Corruption and Illicit Enrichment in the Civil Service, of October 6TH 2004, in Articles 45, 47, 48, 49, 50, 51, 52, 55, 57 and 58 and the offences provided for in Law No. 4573 , Penal Code of May 4th 1970, in Articles 347, 348, 349, 350, 351, 352, 352a, 353, 354, 355, 361, 363, 363a and 368a.

The transcendental innovation of this legislation is that for the first time in the Costa Rican legal system the imputation of criminal liability to legal entities other than natural persons is admitted, as has been the tradition in our penal systems based on the idea of ​​personal responsibility only.This new conception comes from avant-garde positions in contemporary criminal law for the need to hold legal persons accountable for specific issues such as corruption, the environment, tax regime, public health and other issues of broad-spectrum in social harm where moral entities – understood as non-physical social legal subjects – gain great economic benefits through harmful behavior in detriment of the social conglomerate.  It is a topic of great significance and discussion that has criminal doctrine in effervescence, but we will not go into detail for the sake of the present newsletter.

 

SCOPE OF APPLICATION:

They shall apply only in the following offences:

Law Against Corruption and Illicit Enrichment in the Public Function (45), Reception, legalization or concealment (47),the Legislation or self-serving administration (48),Irregular surcharge (49),Falseness in the receipt of contracted goods and services (50), Payment  ((51),the Trade in Influence (52),Transnational Bribery (55),the Influence Against public finance (57),and The Fraud of Law in administrative function (58).

 

 

From the Criminal Code: 1.- Proper domestic bribery (347) or improper (348), aggravated Corruption (349), acceptance of gifts by a fulfilled act (350), corruption of judges (351),Penalty for the Corruptor (352 and 352 bis),Illicit Enrichment (353),Incompatible Negotiations (354),Extortion (355), Graft (361) , Embezzlement (353), graft and embezzlement of private funds (363 bis) and falsification of accounting records (368 bis).

 

DETERMINATION OF LEGAL PERSONS:

The scopes of application of this new law are to:

  1. Legal persons of Costa Rican private law – those constituted and domiciled in the country, regardless of the origin of the capital -. or foreign – it is presumed foreign domiciled in Costa Rica if they had in the country an agency, subsidiary or branch, or made some kind of contract or business in the country, but only regarding the acts or contracts entered into by them-, all domiciled, residents or with operations in the country.
  2. State and non-state public enterprises and autonomous institutions, which are linked to international commercial relations and commit the crime of transnational bribery, as well as the crimes of receiving legalization or concealment of property, as a result of transnational bribery.
  3. The present law will also be applicable to legal or de facto legal persons who operate through a trust, company, corporation of any kind, foundations and other non-commercial associations, that have the capacity to act and assume the legal responsibility for their acts.
  4. Parent companies shall be liable when one of their subordinates, or a company under their direct or indirect control, engages in any of the conduct set out in law, when they obtain direct or indirect profit or act on their behalf or representation.
  5. They will also be responsible, according to the present law, the legal persons who commit the aforementioned conducts for the benefit, direct or indirect, of another legal entity or act as their intermediaries.

 

PENAL SANCTIONS TO LEGAL PERSONS:

The following penalties are applicable to legal persons:

1.- PRINCIPAL:

  1. a) In all crimes applicable to this law, will be imposed a fine of one thousand to ten thousand base salaries (1 current base salary is 431,000 colones), except for the companies referred to in Article 10 of this law as small and medium sized companies, which will be subject to a fine of thirty to two hundred base salaries. If the offense is related to a public procurement procedure, the previous legal fine or up to ten percent (10%) of the amount of its offer or adjudication, whichever turns out to be greater, will be applied to the responsible legal entity. In addition, disqualification from participating in public procurement procedures for ten years.
  2. b) Loss or suspension of state benefits or subsidies for three to ten years.

c) Disqualification to obtain subsidies and public aids to contract or participate in public tenders or bids or in any other activity related to the State, for a period of three to ten years. The disqualification will be extended to legal persons controlled by the directly responsible legal entity, their parents and their subordinates.                d) Inability to receive benefits or tax incentives or social security, for a period of three to ten years. The disqualification will be extended to legal persons controlled by the directly responsible legal entity, their head offices and their subordinates.

(e) Cancellation of all or part of the operating permit, concessions or contracts obtained as a result of the crime.

(f) Dissolution of the legal person. This penalty may be applied only if the legal person has been created for the sole purpose of the commission of the crime or if the commission of offences constitutes its main activity.

 

2.-ACCESSORY:

Publication in the official paper or other newspaper of national circulation the extract of the sentence that contains the operative part of the final conviction. The legal entity will bear the costs of the publication.

 

OPTIONAL ORGANIZATION MODEL, PREVENTION OF CRIMES, MANAGEMENT AND CONTROL:

Parallel to the regulations that criminal repression provides, this same body of laws (Law 9699) promotes the adoption of an optional type of model of organization, crime prevention, management and control, containing transparency programs and internal anti-corruption and control mechanisms by Costa Rican legal entities. This model of organization must relate to the risks of the activity they carry out, their size, complexity and their capacity in order to prevent, detect, correct and bring to the attention of the relevant authorities the criminal acts covered by this law.

 

Definitely this new legislation opens a new field in the development of Business Criminal Law, where we will not only have to elaborate new and greater knowledge in the repressive area before these crimes of corruption, but for the first time a self-preventive activity is promoted (models or compliance protocols) that allows the possible subjects of criminal imputation – legal persons – to adopt measures within their organizations that allow them to limit and even exclude their responsibilities.

 

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