ARGENTINA: FOLLOW-UP to the PHASE 3Bis REPORT & RECOMMENDATIONS
Total Page：16
File Type：pdf, Size：1020Kb
ARGENTINA: FOLLOW-UP TO THE PHASE 3bis REPORT & RECOMMENDATIONS July 2019 This report, submitted by Argentina, provides information on the progress made by Argentina in implementing the recommendations of its Phase 3bis report. The OECD Working Group on Bribery's summary of and conclusions to the report were adopted on 26 June 2019. The Phase 3bis report evaluated and made recommendations on Argentina’s implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. 2 This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. TABLE OF CONTENTS Summary and Conclusions of the Working Group ........................................................... 4 Phase 3bis Evaluation of Argentina: Two-Year Written Follow-Up Report ................ 15 4 SUMMARY AND CONCLUSIONS OF THE WORKING GROUP Summary of Findings 1. In June 2019, Argentina presented a written follow-up report on its implementation of the recommendations from the 2017 Phase 3bis evaluation by the OECD Working Group on Bribery in International Business Transactions (WGB). The WGB considers that Argentina has fully implemented 15 recommendations, partially implemented 23, and not implemented 7. 2. The WGB commends Argentina for implementing longstanding recommendations to introduce corporate liability for foreign bribery, provide nationality jurisdiction to prosecute this crime, and rectify several shortcomings in its foreign bribery offence. These legislative deficiencies were among the principal reasons behind the WGB’s decision to conduct the Phase 3bis evaluation of Argentina. In response, Argentina mobilised significant resources to enact the Corporate Liability Law 27 401 (CLL) which entered into force in March 2018. The WGB’s Phase 1bis Report analyses the CLL and identifies areas for improvement. Nevertheless, the enactment of this major piece of legislation in a relatively short period of time is a significant and exemplary achievement. 3. The situation with foreign bribery enforcement is less positive. Major domestic corruption cases are in the media spotlight, but most foreign bribery enforcement actions continue to face lengthy delays. One foreign bribery case is at trial, which is a positive development. But none of the eight foreign bribery cases that were on-going at the time of the Phase 3bis Report has reached trial or even indictment. Investigation into ten new foreign bribery allegations have been slow. Argentina states that it has initiated a greater number of investigations. This is encouraging, but the WGB expects Argentina to strengthen its ability to successfully conclude these investigations. 4. Case #6 – Tax Collection may also have been terminated before all sources of evidence were exhausted. An Argentine company had reportedly paid for 12 Guatemalan public officials’ expenses at a luxurious Argentine hotel before winning a Guatemalan procurement contract. Argentine authorities conducted searches and obtained mutual legal assistance (MLA). They have since closed the investigation for reasons that are not entirely satisfactory. The authorities say that bidding did not take place in Guatemala, but a contract that was awarded without tender should be a red flag for corruption, not a reason for closing the case. They also say that the hotel was paid so that Guatemalan officials could participate in an internship in Argentina, and that a cash flow of bribes was not detected. However, the hotel expenses, if it was paid for by the Argentine company, could have constituted a bribe. 5. This under-enforcement partly stems from Argentina’s slow progress in addressing concerns about its justice system which were also principal reasons for the Phase 3bis evaluation. Updated information on resources has not been provided. There is no evidence that the heavy workloads of judges and prosecutors have been lessened. The pace of judicial appointments has quickened, the situation of surrogate judges has been dealt with by a new law, but vacancies have not been reduced due to departures. After repeated delays, the implementation of a new Criminal Procedure Code has begun but will not be completed in Buenos Aires until 2025. The reform of the Judicial Council is still pending and may in any event be insufficient to strengthen the Council’s independence. PHASE 3BIS FOLLOW-UP: SUMMARY AND CONCLUSIONS ON ARGENTINA’S TWO-YEAR REPORT 5 Regarding the foreign bribery offence: Recommendations 1(a) and (b) – fully implemented: As noted in Section 1.2 of the Phase 1bis Report, the Corporate Liability Law (CLL) enacted a new definition of a foreign public official in Art. 258bis of the Penal Code (PC). The new definition seeks to address WGB concerns about a non-autonomous definition, officials of organised foreign areas or entities, and officials of state-owned or state-controlled enterprises. Future Working Group evaluations will follow up the interpretation of this provision. Recommendation 1(c) – fully implemented: As explained in Section 1.1 of the Phase 1bis Report, the CLL added the word “unduly” to the foreign bribery offence in Art. 258bis PC. The word modifies the phrase “offers, promises or gives”, and not the advantage provided to or received by the briber as in the Convention. The different placement of the word should be discussed with Argentine practitioners in future evaluations. Regarding jurisdiction: Recommendation 2 – fully implemented: The CLL also added a new Art. 1(3) PC which provides jurisdiction over all Argentine nationals for extraterritorial foreign bribery (see Phase 1bis Report Section 4). Regarding the liability of legal persons: Recommendation 3(a) – fully implemented: With the CLL’s entry into force in March 2018, Argentina can now impose criminal liability for “private legal persons” for foreign bribery. The Working Group’s Phase 1bis Report analyses the CLL and makes recommendations for improving the legislation. The Working Group will also follow up several aspects of the CLL in future evaluations. Recommendation 3(b) – fully implemented: The Working Group recommended that Argentina consider harmonising legislative provisions on corporate liability for foreign bribery and related offences such as money laundering and false accounting. Argentina considered this issue when it developed the CLL. In the end, it decided that the CLL would apply to foreign bribery and false accounting but Art. 304 PC would apply to money laundering. The Working Group will follow up this issue in future evaluations. Regarding sanctions and confiscation: Recommendations 4(a) and 4(b) – fully implemented: As noted in the Phase 1bis Report (Section 3.1.1), the CLL introduced a new Art. 259bis PC. Foreign bribery is now punishable by a fine of two to five times the value of the bribe. The fine is available even if the gain obtained by a briber is not pecuniary or does not go to the briber but his/her company, unlike Art. 22 PC which previously applied. The Working Group will follow up cases in which the monetary value of the bribe cannot be determined. Recommendation 4(c) – partially implemented: This recommendation asked Argentina to maintain detailed statistics of sanctions (including confiscation) imposed in cases of bribery and other economic crimes. Argentina’s follow-up report did not provide such statistics. Argentina considers that the provided statistics were “exhaustive for cases of complex economic crimes”. In fact, its report only included partial data from some law enforcement bodies, but much of the information concerned seizure – not confiscation – and covered all offences, not bribery and economic crimes. Argentina also describes some new efforts to improve the gathering of statistics in the Public Prosecutor’s Office (PPO). Whether these efforts will produce the needed statistics remains to be seen. PHASE 3BIS FOLLOW-UP: SUMMARY AND CONCLUSIONS ON ARGENTINA’S TWO-YEAR REPORT 6 Recommendation 4(d) – not implemented: Argentina refers to Decree 62/2019 which concerns unjust enrichment, not value confiscation. The Decree allows the confiscation of assets that a defendant acquires after the crime under investigation. But there must be proof that the assets do not reasonably correspond to the defendant’s income or represent an unjustified increase in his/her assets, in order to raise a presumption that these assets are proceeds of crime. Hence, if the proceeds of foreign bribery cannot be confiscated because they have been consumed or destroyed, then the Decree cannot be used to confiscate property of equivalent value that is clearly not proceeds of crime, such as income earned from legitimate sources, or income earned before the offence was committed. As mentioned in the Phase 1bis Report (Section 3.2.2), Art. 10 CLL applies the Penal Code and hence value confiscation is also not available against legal persons. Recommendation 4(e) – partially implemented: Support on asset recovery is provided to prosecutors through the PPO’s General Directorate of Asset Recovery and Confiscation (DRADB) in the Public Prosecutor’s Office and General Directorate for Economic and Financial Advice in Investigations (DAFI). This should help ensure that confiscation is routinely ordered in foreign