• Exemption or mitigation of criminal liability of the legal person.

• • Having an Effective Compliance program may imply the inexistence of criminal responsibility or a considerable reduction of the penalty, regardless of the fact that court considers proven that a worker committed a crime.

• Decrease in the risk of submission to criminal or administrative proceedings.

• • Criminal investigations are extremely harmful even when they end in acquittal, and may last for years with the blocking or seizure of bank accounts and assets, the intervention of computer equipment or the requirement for sizeable bonds, besides the irreparable economic damage that could result.

• Greater corporate credibility before public administrations and business partners

• • The expression of willingness to comply and the adoption of measures to implement an ethical culture are values ​​that are taken into account for public procurement and private contracting.

• Improvement of reputation and brand image before potential clients and other companies endowed with similar systems of good governance and regulatory compliance.  

• Anticipation of future legislative reforms that, following the current line, may end up requiring Compliance programs to intervene in public tenders or contract with administrations, banking entities or insurance companies.

• More effective alignment of personnel to achieve strategic objectives.

• Development of control and compliance records, useful or even determining in cases of sales, mergers and other business operations.

• Greater control over the activities and processes of the workers, avoiding putting the company or its assets at risk, either voluntarily or imprudently.

• More effective prevention of forbidden behavior within the company.

For the purposes set forth in the Criminal Code, may be considered as legal persons and therefore be condemned any companies, entities or groups with legal personality, which includes associations, foundations, civil and commercial companies (SA, SRL …)

Are excluded:

• The state
• Territorial and institutional public administrations
• The Regulatory Organisms
• The Agencies and Public Business Entities
• International organizations of public law
• Any others exercising public powers of sovereignty or administrative

Particular cases:

• Public mercantile companies that execute public policies or provide services of general economic interest, may only be imposed the penalties provided for in letters a) and g) of paragraph 7 of article 33 (unless the judge or court considers that it was created for the sole purpose of avoiding criminal responsibility). Such penalties are:
  • Fine.
  • Judicial intervention to safeguard the rights of workers or creditors for as long as deemed necessary (Max: 5 years).

• The entities that, without having legal personality, act in commercial traffic (e.g. branches):
  • Although it is not expressly regulated, an important doctrinal sector considers that they may be criminally liable for those actions carried out in areas where they have acted as a legal entity.

Important points:

• Entities without legal personality, even outside the scope of criminal liability, can be subject to comparable penalties for a whole series of crimes, so it is advisable that they also have a prevention system. These penalties, regulated in article 129 of the Spanish Criminal Code, are:
  • Suspension of their activities (up to 5 years)
  • Closing of its premises and establishments (up to 5 years)
  • Prohibition to carry out in the future the activities in the exercise of which the crime has been committed, factored or covered up (temporary or definitive )
  • Impediment to obtain subsidies and public aid, to contract with the public sector and to enjoy benefits and tax incentives or Social Security (up to 15 years)
  • Judicial intervention (up to 5 years)

• The criminal liability of legal persons is NOT EXTINGUISHED by:
  • Transformation
  • Fusion
  • Absorption
  • Split

Crimes that may give rise to the Criminal Responsibility of a Legal Entity:

• Illegal trafficking of human organs
• Human trafficking
• Prostitution / sexual exploitation / corruption of minors
• Discovery and disclosure of secrets and computerized break-ins                            
• Scams
• Execution frustration
• Punishable insolvencies
• Computer damage
• Crimes against intellectual and industrial property, the market and consumers
• Money laundering
• Illegal financing of political parties
• Crimes against the Public Treasury and against Social Security (tax evasion)
• Crimes against the rights of foreign citizens
• Unauthorized construction or building
• Crimes against natural resources and the environment
• Relating to ionizing radiation
• Risks caused by explosives and other agents
• Crimes against public health
• Drug trafficking
• Currency counterfeiting
• Credit and debit cards and traveler’s checks forgery
• Bribery
• Influence peddling
• Crimes of hate and exaltation
• Financing of terrorism
• Smuggling

Crimes that may lead to the imposition of accessory consequences to entities without legal personality:

• Relating to genetic manipulation
• Alteration of prices in contests and public auctions
• Refusal to conduct inspections
• Crimes against worker’s rights
• Currency counterfeiting
• Illicit association
• Organization and criminal groups and terrorist organizations and groups

The penalties that may be imposed in case of being convicted the legal entity, provided in article 33.7 of the Penal Code, are:

• Penalty fee

• Dissolution of the legal person (death of the company)

• Suspension of their activities (up to 5 years)

• Closing of its sites and establishments (up to 5 years)

• Prohibition to carry out certain activities in the future (temporary or definitive)

• Disabling to obtain subsidies and public aid, contract with the public sector and enjoy benefits and tax incentives or Social Security (up to 15 years)

• Judicial intervention (up to 5 years)

Although each Compliance program is developed according to the sector and characteristics of the company, there are some common elements:

Risk Evaluation. 

Determination of the current and potential compliance risks, identifying the crimes whose commission by the company is most probable and the activities likely to contravene criminal or administrative regulations.

Establishment of Compliance Controls.

Implementation of high-level controls, aimed at addressing all types of risks in a transversal manner, and specific, in order to prevent breaches in particular environments, depending on the results of risk assessment.

Structuring of the Compliance Entity.

Determination of the most effective system to govern the program according to the company´s characteristics, with attribution of specific responsibilities in its implementation, supervision and reaction to incidents.  

Ethical Code.

Development of a Code adapted to the company aimed at implementing an ethical culture that involves all its members, encouraging their commitment to a series of essential values.

Training Plan.

Preparation of a training program for workers, managers and administrators to prevent and detect risky behaviors.

Whistleblowing Channel 

Configuration of a communication system for internal complaints to inform the competent person or entity of any conduct contrary to the assumed principles and rules, with a guarantee of confidentiality and susceptible to be extended to interested third parties.

Design of corrective actions.

List of consequences for workers and managers for their actions regarding values, principles and standards.

Periodic update.

Monitoring of the program. Frequent updates based on organizational changes, incidents, complaints, sanctions, legislation and case law.

Documentation of the Program.

Comprehensive documentation and collection of evidence regarding the development and application of the program, in order to prove its effectiveness.