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LIABILITY OF LEGAL ENTITIES FOR DOMESTIC BRIBERY, TRANSNATIONAL BRIBERY AND OTHER CRIMES
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Law 9699 effective as of June 10, 2019
[/vc_column_text][us_separator][vc_column_text]The initiation of the judicial process against important construction companies in the country involved in accusations of corruption, illicit enrichment and others, is emerging as the novel process of application of the Law of Criminal Responsibility of Legal Entities on domestic bribery, transnational bribery and other crimes in our legal system. At the request of the Public Ministry, the Criminal Judge has been asked to send to the Registry of Legal Entities a notice of the existence of the criminal process against these already accused legal entities and in this way the first criminal process for criminal liability against legal entities will begin in Costa Rica. On August 28, 2020, the Regulations of the Law to Title II of the Law on Criminal Liability of Legal Entities on domestic bribery, transnational bribery and other crimes of Law 9699 of June 10, 2019, were published and entered into force. With this, the aforementioned law came into force. Its promulgation constituted a requirement for Costa Rica's admission to the Organization for Economic Cooperation and Development (OECD). This new law establishes the criminal liability of legal entities for the crimes of domestic bribery, international bribery contemplated in Law No. 8422, Law against Corruption and Illicit Enrichment in Public Service, of October 6, 2004, in its articles 45, 47, 48, 49, 50, 51, 52, 55, 57 and 58 and the crimes contemplated in Law No. 4573, Penal Code and its reforms, of May 4, 1970, in its articles 347, 348, 349, 350, 351, 352, 352 bis, 353, 354, 355, 361, 363, 363 bis and 368 bis. The transcendental innovation of this legislation lies in the fact that, for the first time in the Costa Rican legal system, it allows for the attribution of criminal liability to legal entities other than natural persons, as has been the tradition in our criminal systems based solely on the idea of personal liability. This new conception stems from cutting-edge positions in contemporary criminal law, where the need to hold legal entities liable in specific matters such as corruption, the environment, the tax regime, public health, and other broad-based issues of social harm has been studied, where legal entities—meaning non-physical social legal entities—obtain significant economic benefits through harmful behavior to the detriment of the social conglomerate. This is a topic of great significance and discussion that has criminal doctrine in turmoil, but which we will not address here.
SCOPE OF APPLICABLE CRIMES ONLY:
[/vc_column_text][us_separator][vc_column_text]They will only be applied in the following crimes: From the Law against Corruption and Illicit Enrichment in the Public Function: illicit enrichment (45), Receiving, legalization or concealment (47), Legislation or administration for personal benefit (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 Public Treasury (57), and Fraud of law in the administrative function (58). From the Penal Code: 1.- Domestic bribery (347) or improper bribery (348), Aggravated corruption (349), Acceptance of gifts for an act performed (350), Corruption of judges (351), Penalty for the corruptor (352 and 352 bis), Illicit enrichment (353), Incompatible negotiations (354), Extortion (355), Embezzlement (361), Misappropriation (363), Embezzlement and misappropriation of private funds (363 bis) and Falsification of accounting records (368 bis).[/vc_column_text][us_separator][vc_column_text]
DETERMINATIONOF LEGAL ENTITIES:
[/vc_column_text][us_separator][vc_column_text]The scope of application of this new law is: a) Legal entities under Costa Rican private law – those incorporated and domiciled in the country, regardless of their capital of origin -. or foreign – those domiciled in Costa Rica are presumed to be foreign if they have an agency, subsidiary or branch in the country, or carry out some type of contract or business in the country, but only with respect to the acts or contracts entered into by them -, all domiciled, resident or with operations in the country. b) State and non-state public companies and autonomous institutions that are linked to international commercial relations and commit the crime of transnational bribery, as well as the crimes of receiving, legalizing or concealing assets, the product of transnational bribery. c.- This law shall also apply to legal or de facto persons operating through trusts, partnerships, corporations, or companies of any kind, foundations, and other non-commercial associations that have the capacity to act and assume legal responsibility for their actions. d.- Parent companies shall be liable when one of their subsidiaries, or a company under their direct or indirect control, engages in any of the conduct set forth in the law, when they obtain a direct or indirect benefit, or when acting on their behalf or as their representative. e.- Legal persons that commit the aforementioned conduct for the direct or indirect benefit of another legal person or act as its intermediaries shall also be liable under this law.The legal entities described in the preceding paragraphs have a legal duty to prevent the commission of the crimes described in Article 1 of this Law. Failure to do so will result in their criminal liability as established in Article 18 of Law No. 4573, Penal Code, of May 4, 1970.[/vc_column_text][us_separator][vc_column_text]
CRIMINAL PENALTIES FOR LEGAL ENTITIES:
[/vc_column_text][us_separator][vc_column_text]The following penalties are applicable to legal entities: 1.- MAIN: a) In all crimes applicable to this law, a fine of one thousand to ten thousand base salaries will always be imposed (1 current base salary is 431,000 colones), with the exception of the companies contemplated in article 10 of this law as small and medium-sized companies, which will be imposed a fine of thirty to two hundred base salaries. If the crime is related to an administrative contracting procedure, the responsible legal entity will be applied the previous fine or up to ten percent (10%) of the amount of its offer or the award, whichever is greater, and, in addition, disqualification from participating in public contracting procedures for ten years. b) Loss or suspension of state benefits or subsidies it enjoys, for a period of three to ten years. c) Disqualification from obtaining public subsidies and aid for contracting or participating in public tenders or competitions, or in any other activity linked to the State, for a period of three to ten years. This disqualification shall apply to legal entities controlled by the directly responsible legal entity, its parent companies, and its subsidiaries. d) Disqualification from enjoying tax or social security benefits or incentives for a period of three to ten years. This disqualification shall apply to legal entities controlled by the directly responsible legal entity, its parent companies, and its subsidiaries. e) Total or partial cancellation of the operating or functioning 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 solely for the purpose of committing the crime or if the commission of crimes constitutes its main activity. 2. ACCESSORY: Publication in the official gazette or other national circulation gazette of an extract of the judgment containing the operative part of the final conviction. The legal entity will bear the costs of publication.
Written by:
[/vc_column_text][us_person image=”7653″ name=”Jaime Garro” role=”Asociado” link=”url:http%3A%2F%2Flexincorp.com%2Fequipo_costarica%2Fjaime-garro%2F|title:Jaime%20Garro||” layout=”cards” img_size=”full”][/us_person][/vc_column][/vc_row]
