Law 9699 in force as of June 10th, 2019
The beginning of the judicial process related to important construction companies in the country involved in corruption accusations, illicit enrichment, and others, is shaping up as the new process of application of the Law of Criminal Responsibility of Legal Entities on domestic bribery, transnational bribery, and other crimes in our legal system. The Public Prosecutor’s Office has requested the Criminal Judge to issue a note addressed to the Register of Legal Entities noting the existence of criminal proceedings against these legal entities already accused and, in this way, initiate in Costa Rica the first criminal proceeding for criminal liability against legal entities.
On August 28th, 2020, the Regulation of the Law on Criminal Liability of Legal Entities for domestic bribery, transnational bribery and other crimes, Law 9699, was published and entered into force. Its promulgation constituted a requirement for the admission of Costa Rica to the Organization for Economic Cooperation and Development (OECD).
This new Law regulates the criminal liability of legal entities for the crimes of domestic bribery and international bribery referred to in Law 8422, Law against Corruption and Illicit Enrichment in the Public Service of October 6th, 2004, in its articles 45, 47, 48, 49, 50, 51, 52, 55, 57 and 58; and the crimes referred to in Law 4573, the Criminal Code and its amendments of May 4th 1970, articles 347, 348, 349, 350, 351, 352, 352 bis, 353, 354, 355, 361, 363, 363 bis and 368 bis.
The important innovation of this legislation lies in the fact that, for the first time in the Costa Rican legal system, the imputation of criminal liability to legal entities other than natural persons is permitted, as has been the tradition in our criminal systems based on the idea of personal liability alone. This new development comes from vanguard positions in contemporary criminal law where the need to hold legal entities accountable in specific issues such as corruption, the environment, tax regime, public health and other broad-spectrum issues in social harm has been studied as moral entities – understood as non-physical social legal subjects – that obtain great economic advantages through harmful behaviors to the detriment of the society. It is an issue of great importance and discussion that has the criminal doctrine in effervescence.
SCOPE OF THE APPLICABLE CRIMES:
Law 9699 will only apply to the following crimes:
Law against Corruption and Illicit Enrichment in the Public Service: illicit enrichment (45), receiving, legalization, or concealment (47), legislation or administration for personal benefits (48), irregular overpricing (49), falsehood in the receipt of contracted goods and services (50), irregular payment of administrative contracts (51), influence peddling (52), transnational bribery (55), influence against the Tax Authorities (57), and fraud of law in the administrative function (58).
From the Penal Code: 1.- Proper domestic bribery (347) or improper (348), aggravated corruption (349), acceptance of handouts for an act performed (350), corruption of judges (351), penalty for corrupter (352 and 352 bis), illicit enrichment (353), incompatible negotiations (354), concussion (355), embezzlement (361), misappropriation (363), embezzlement and misappropriation of private funds (363 bis) and falsification of accounting records (368 bis).
DETERMINATION OF LEGAL ENTITIES:
This new law applies to:
(a) Legal entities under Costa Rican private law – such as those established and domiciled in the country, regardless of the capital of origin – or foreigners – those domiciled in Costa Rica with country agency, subsidiary, or branch, or that carried out some type of contract or business in the country, but only related to the acts or contracts agreed by them-, all domiciled, resident or with operations in the country.
(b) Public state and non-state-owned enterprises and autonomous institutions which are linked to international commercial relations, and which commit the crime of transnational bribery, as well as the crimes of receiving or concealing resulting from transnational bribery.
(c) This law will also be applicable to legal entities that operate through the figure of the trust, company, corporation or enterprise of any kind, foundations and other associations of a non-commercial nature, which have the capacity to act and assume legal liability for their actions.
(d) Parent companies will be liable when one of their subordinates, or a company under their direct or indirect control, engages in any of the conducts set forth in the law, when they obtain a direct or indirect benefit or act on their behalf or representation.
(e) Legal entities who commit the aforementioned conduct for the direct or indirect benefit of another legal entity or acts as its intermediaries shall also be liable in accordance with this law.
The legal entities described above have the legal duty to prevent the commission of the offences described in article 1 of this Act. In case of failure to do so, they shall be criminally liable as provided for in article 18 of Law No. 4573, Penal Code, of May 4th, 1970.
CRIMINAL PENALTIES AGAINST LEGAL ENTITIES:
The following penalties apply to legal entities:
1.- MAIN PENALTIES:
a) In all the crimes applicable to the present law it will always be imposed a fine penalty of one thousand up to ten thousand base salaries (1 current base salary is 431,000 colones), except for the companies referred to in article 10 of this law as small and medium-sized enterprises, to which a fine penalty of thirty to two hundred base salaries will be imposed. If the crime is related to an administrative contracting procedure, the legal entity responsible will be subject to the above fine or up to ten per cent (10%) of the amount of its offer or allocation, whichever proves to be greater and, in addition, disqualification from participating in public procurement procedures for ten years.
(b) Loss or suspension of state benefits or subsidies for a period of three to ten years.
(c) Disqualification from obtaining subsidies and public aid for contracting or participating in public tenders or in any other activity related to the State for a period of three to ten years. Disqualification shall apply to legal entities controlled by the legal entity directly responsible to their parents and to their subordinates.
(d) Disqualification from tax or social security benefits or incentives for a period of three to ten years. Disqualification shall apply to legal entities controlled by the legal entity directly responsible to their parents and to their subordinates.
(e) Total or partial cancellation of the operating permit, concessions or contracts obtained as a result of the crime.
(f) Dissolution of the legal entity. This sanction may only be applied if the legal entity was created for the sole purpose of the commission of the crime or if the commission of offences constitutes its main activity.
2.- OTHER PENALTIES:
Publication in the Official Diary or other diary of national circulation of an extract from the judgment containing the substantive part of the final conviction. The legal entity shall bear the costs of publication.