CORPORATE LIABILITY FOR CORRUPTION OFFENCES IN LATIN AMERICA 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. CORPORATE LIABILITY FOR CORRUPTION OFFENCES IN LATIN AMERICA TABLE OF CONTENTS CORPORATE LIABILITY FOR CORRUPTION OFFENCES IN LATIN AMERICA ............................... 2 INTRODUCTION .......................................................................................................................................... 4 THE INTERNATIONAL LEGAL FRAMEWORK FOR CORPORATE LIABILITY FOR CORRUPTION OFFENCES ..................................................................................................................................................... 5 INTERAMERICAN CONVENTION AGAINST CORRUPTION ............................................................ 5 Article VIII, Transnational Bribery .......................................................................................................... 5 OECD CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS .................................................................................. 5 Article 2, Responsibility of Legal Persons ............................................................................................... 5 Commentary 20 ........................................................................................................................................ 5 Annex I: Good Practice Guidance on Implementing Specific Articles of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ............................................ 5 UN CONVENTION AGAINST CORRUPTION ........................................................................................ 6 Article 26. Liability of legal persons ........................................................................................................ 6 CORPORATE LIABILITY FOR CORRUPTION OFFENCES IN LATIN AMERICAN COUNTRIES ..... 7 BELIZE ........................................................................................................................................................ 7 Prevention of Corruption Act, 2007 ......................................................................................................... 7 CANADA .................................................................................................................................................... 7 Criminal Code (R.S.C., 1985, c. C-46) .................................................................................................... 7 CHILE .......................................................................................................................................................... 8 Law on Criminal Responsibility of Legal Persons ................................................................................... 8 COLOMBIA .............................................................................................................................................. 12 Law 1474 of 2011 .................................................................................................................................. 12 Criminal Procedure Code ....................................................................................................................... 12 DOMINICAN REPUBLIC ........................................................................................................................ 12 Law 448-06, on Bribery in Commerce and Investments ........................................................................ 12 EL SALVADOR ........................................................................................................................................ 13 Criminal Code ........................................................................................................................................ 13 GUATEMALA .......................................................................................................................................... 13 Criminal Code ........................................................................................................................................ 13 JAMAICA .................................................................................................................................................. 14 Corruption Prevention Act ..................................................................................................................... 14 MEXICO .................................................................................................................................................... 14 Federal Penal Code ................................................................................................................................. 14 Federal Anticorruption Law in Public Procurement .............................................................................. 14 NICARAGUA ........................................................................................................................................... 19 Criminal Code ........................................................................................................................................ 19 PANAMA .................................................................................................................................................. 20 Penal Code.............................................................................................................................................. 20 2 PERU ......................................................................................................................................................... 20 Criminal Code ........................................................................................................................................ 20 UNITED STATES OF AMERICA ........................................................................................................... 21 Foreign Corrupt Practices Act, 1977 ...................................................................................................... 21 3 INTRODUCTION 1. Enacting and enforcing corporate liability legislation remains, for States Parties to international anti-corruption conventions,1 one of the single greatest challenges to implementing an effective framework to prevent and punish corruption. Emerging case law involving cross-border corruption indicates that corporate entities, such as foreign subsidiaries, frequently act as vehicles for bribery. The use of elaborate financial frameworks and accounting techniques to conceal illegal transactions is also common. In addition, complex corporate structures, decentralised and global business operations and multiple layers of managerial authority make it difficult to attribute responsibility for wrongdoing to a particular person or persons. 2. Yet, establishing an effective corporate liability regime is integral in the fight against corruption. The ability to hold companies liable—and not just individuals—sends a clear message that ‗corruption is not just part of doing business.‘ 3. Pursuant to Article 2 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Convention) and to Article 26 of the UN Convention against Corruption (UNCAC), each Party is required to take ‗such measures as may be necessary, in accordance with its legal principles, to establish the liability of legal persons‘ for the bribery of a foreign public official and other corruption offences. The liability of legal persons may be criminal, civil or administrative. Article VIII of the InterAmerican Convention against Corruption (ICAC) requires States Parties to ‗prohibit and punish the offering or granting, directly or indirectly, by its nationals, persons having their habitual residence in its territory, and businesses domiciled there, to a government official of another State‘(emphasis added). A sound corporate liability framework can also enable a country to more effectively combat money laundering, provide mutual legal assistance and confiscate the instruments and proceeds of crime. 4. This compilation brings together the international standards on corporate liability for corruption, with examples of national legislation designed to hold companies liable for corruption offences, in either an administrative, civil or criminal context. The legislative extracts have been taken from reviews by the OECD Working Group on Bribery (WGB), the Mechanism for Follow-Up on the Implementation of the Inter-American Convention against Corruption (MESICIC) or the TRACK Legal Library of the United Nations Office on Drugs and Crime. The appearance of the legislative extracts in this compilation should not, however, be considered as an endorsement of their effectiveness. This compilation is instead designed as a reference for countries planning to amend their existing corporate liability framework, or to introduce corporate liability—administrative, civil or criminal—for the first time, noting that corporate liability frameworks must to be tailored to the specific characteristics of the legal system in question. 1 For example Article VIII (Transnational Bribery) of the InterAmerican Convention against Corruption (IACAC; 1997), Article 2 (Responsibility of legal