Means to avoid corporate criminal liability in Spain

The new Spanish Criminal Code requires companies to adopt measures to monitor and control their workers given that the new Criminal Code of 2015 introduces severe penalties for companies that fail to diligently prevent fraud.

The reform attributes criminal liability to a company for crimes committed in the name or on its behalf and for its benefit, by its legal representatives and administrators of fact or law. A company will be criminally liable if persons subordinate to its representatives or administrators commit an offence because of a lack of exercised control over them under specific circumstances. The liability subsists even if it is impossible to identify the person who committed the crime.

Corporate criminal liability can be found in the case of

• Environmental crime
• Revelation of secrets concerning intellectual and industrial property rights
• International transactions
• Fraud
• Criminal bankruptcy
• Money laundering
• Actions against the Treasury and Social Security
• Actions against the rights of foreign citizens
• Damage to computer systems, etc.

Companies and entrepreneurs must adopt security measures to prevent the exercise of their corporate activities from the commission of crimes. Punishments (including prison) can be imposed in case of serious omission of obligations such as supervision, vigilance or control of the business activity.

What measures should be taken to avoid criminal liability?

The reform of the Criminal Code recognizes the possibility of relieving or reducing a person’s liability, if there is an effective crime prevention plan in place.

A crime prevention plan must include certain basic elements:

• A compliance officer or Director of Compliance
• A channel for complaints
• A risk map
• A sanctions code
• Repair measures, etc.

The plan should be regularly updated and adapted to the functioning of the company.

What are the consequences to a company declared criminally liable?

The direct consequence is the imposition of a criminal sanction, not only monetary but also possible dissolution, temporary suspension of activities, temporary closure of premises, prohibition of certain activities within the company’s corporate purpose or disqualification from obtaining subsidies and public aid and judicial intervention.

Other consequences for companies that may be equally serious and detrimental to their business are

• The negative effect on clients and sellers
• Denial of credit or financing from financial entities
• Consequences on the share price of listed companies
• Disregard in the media

It is highly recommended that all companies scrupulously comply with the prevention measures to avoid criminal liability and loss of business prestige by consulting a specialized law firm.

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