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Criminal compliance, an indispensable plan for companies

The objective of compliance should be understood as the privatization of the fight against corruption, by virtue of which the management bodies of companies must adopt and effectively implement, prior to the commission of a crime, organizational and management programs that include the appropriate monitoring and control measures to prevent crimes of the same nature or to significantly reduce the risk of their commission.    

An illustrative case that drove the origins of compliance was that of Arthur Andersen. when it was sentenced by the federal courts of Houston on Saturday June 16 from 2002 for crimes of obstruction of justice, destruction and alteration of documents related to the Enron bankruptcy and the irregularities committed by that corporation, condemned in the first instance one of the largest companies in the sector in the world will be deprived of being able to continue exercising its auditing and consulting functions for companies registered in the stock exchange of the United States. This led to the cessation of almost all of its activities. Thereafter, Arthur Andersen's companies in the different countries were dissolved and their professional teams merged or were absorbed by other companies in the sector.

For this reason, it is necessary to have an effective self-regulation plan in the companies.The company's prestige will be positively enhanced, since it will be considered part of the legal entities that have it, in order to avoid its criminal liability as a legal person, with the addition of positively improving the prestige of the commercial companies that have it, since they will be considered part of the legal entities. good corporate citizens of the world. 

Criminal compliance is the plan of measures and practices to be adopted by companies. to reduce the risk of being victims of criminal actions, or failing that, to know how to act in case they occur so that their criminal liability can be excluded provided that the system is effective.

Criminal compliance is defined as a series of preventive tools The purpose of which is to avoid criminal penalties that result in liability for a company. 

According to the World Compliance Association, criminal compliance is "a set of procedures and best practices adopted by organizations to identify and classify the operational and legal risks they face and to establish internal mechanisms to prevent, manage, control and react to them.".

Among the crimes in which a company may incur, we highlight crimes against public finances, punishable insolvency, corruption in business, money launderingcrimes against the market and consumers, among others. In view of the progress in the legal world, the specificity of regulations and the repercussions that the implications of these crimes have on the life of a company, criminal compliance has become an indispensable plan in business activity and not a voluntary option for certain companies.

Some of the risks to be prevented when creating the criminal compliance program include those that entail consequences such as reputational damage, the imposition of significant fines and penalties, business losses due to unenforceable contracts or exclusion from public tenders or subsidies, judgments that also decree the dissolution, transformation, absorption or spin-off or extinction of the company.

The main reasons why it is important to have this regulatory compliance system are:

  • Minimization of the legal and criminal liability of companies.
  • It is a detector to clearly identify bad practices of managers and employees.
  • Organizes activities, taking into account the relevant regulatory frameworks.
  • Generates confidence in investors, personnel and clients, due to compliance with international standards.
  • Increases the reputation, prestige and image of the company.
  • Criminal prevention offers a competitive advantage in public and international bidding.
  • Increases transparency and ethics in companies.
  • It is a cause for exclusion or attenuation of the criminal liability of the legal person, provided its system is effective.

That is why at Alan Aldana & Abogados, in addition to encouraging our clients to be considered good corporate citizens of the worldWe have the accredited specialists to implement the compliance programs in your company, perform the technical analysis to verify the execution and effectiveness, as well as to carry out the required periodic audits.

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