Compliance & Investigations

Argentine Anti-Corruption Law N°27.401

Legal entities shall be held criminally liable if they engage in any of the following five offenses: (a) public officers’ bribery or influence peddling (applicable to local and foreign public officers); (b) transactions prohibited for public officials; (c) illegal levies (d) illegal enrichment of public officials and employees; and (e) books and records related crimes.

Legal entities shall be held criminally liable if the crimes described above are committed, directly or indirectly on their behalf, interest or benefit. To avoid being held liable, legal entities must show that the individual who committed the crime acted on his or her exclusive benefit and that the company did not benefit from such act.

In case of mergers, acquisitions and corporate restructurings, the successor is liable for the corrupt acts committed by the legal entity.

The statute of limitations is of six (6) years as from the date of the crime.

The legal entity may be condemned even if the individual who committed the offense has not been identified or subject to process, if there is evidence that the crime could not have been committed without the allowance of the companies’ authorities.

The following sanctions may be imposed to the legal entities found guilty of these offenses: (a) fines between two (2) and five (5) times the amounts illegally obtained or that the company may have obtained as a consequence of the crime; (b) suspension of its activities for up to ten (10) years; (c) inability to participate in public bids or any other activity related to the government for up to ten (10) years; (d) cancelation of the legal entities’ capacity, applicable only when the company was created with the only purpose of committing the above referred crimes or when the commission of those crimes was the company’s main activity; (e) loss or suspension of state benefits; and (f) publication of the judgment at its cost.

When applying the above referred sanctions, courts shall take into account: (a) the company’s compliance with its internal rules and procedures; (b) the number and seniority of the executives, collaborators or employees involved in the wrongdoing; (c) the omission to duly control the wrongdoers’ activities; (d) the damaged caused, the monies involved, the size, nature and economic capacity of the company; (e) self-reporting and collaboration with the official investigation; (f) the company’s willingness to mitigate or to repair the damage caused and recidivism (the existence of recidivism is given by the commission of a second crime within three (3) years of a prior judgment). Payment of economic sanctions may be fractionated in as much as five (5) years if needed to allow the continuity of the company and the protection of the source of work.

The legal entity shall not be subject to any sanction or administrative liability when all the following circumstances are present: (a) self-reporting as a consequence of an internal investigation; (b) existence of an adequate compliance program in place prior to the occurrence of the offense; and (c) refunding of the monies illegally obtained.

The legal entity and the Public Prosecutor are entitled to execute a Cooperation Agreement in which the company obliges itself to provide useful information, identify the wrongdoers, and allow the reimbursement of the monies illegally obtained. Cooperation Agreements may be executed until the date in which the summons to trial is issued. The negotiations between the legal entity and the Public Prosecutor shall be confidential and subject to court approval and supervision.

Cooperation Agreements shall identify the information to be provided by the company as well as: (a) the payment of a fine equivalent to the amounts illegally obtained as a consequence of the illegal activity; (b) reimbursement of the amounts illegally obtained; and (c) delivery of the assets that would have presumably been confiscated if a judgment was issued. Cooperation Agreements may also include: (d) remediation actions; (e) community services; (f) disciplinary measures against individuals involved in the wrongdoing; and (g) implementation of an adequate compliance program.

Legal entities must have an adequate compliance program in place, in accordance with the legal entity’s specific corruptions risks, size and economic capacity. The compliance program shall be appropriate to prevent, detect, and correct any corruption offense.

The compliance program shall have, at least, the following elements: (a) a code of conduct or policies and procedures applicable to directors, administrators and employees; (b) specific policies and procedures issued to prevent illegal acts related to public tender and bids, administrative contracts or any other relationship with the public sector; (c) periodic training programs addressed to directors, administrators, employees, third parties and business partners. Compliance programs may as well have the following elements: (d) periodic analysis of corruption risks to adapt the compliance program accordingly; (e) evidence of the senior management’s support to the compliance program; (f) internal hot-lines to receive complaints available to third parties too; (g) a non-retaliation program to protect whistleblowers; (h) an adequate internal investigation system which imposes effective sanctions in cases of deviation from the code of conduct’s policies; (i) due diligence procedures in place to confirm the integrity and reputation of third parties and business partners, both prior and also during the commercial relationship; (j) periodic monitoring and evaluation of the compliance program; and (k) the appointment of a compliance officer to develop, coordinate and review the compliance program.

The existence of an adequate compliance program shall be mandatory for companies that execute certain agreements with the federal government.

The law shall be in force on March 1st, 2018.
A&B Compliance Departament - Maipú 1300 – Piso 10 - C1006ACT - Buenos Aires, Argentina
Contact: David Gurfinkel- or Andrés Tarakdjian– Tel: 54-11 4318-9901 -

For further information on this topic please contact David Gurfinkel