New Criminal Offense Risk Prevention Plans for Companies in Spain

The reform of the Spanish Penal Code contains major changes ranging from the confiscation of property to insolvency, through the protection of the disabled and the events that will hinder a foreclosure. Another major change involves the criminal liability of legal entities and their managers. Currently, companies will be held criminally liable for the following crimes:

• environmental crimes
• divulging intellectual property secrets
• divulging confidential international industrial transactions
• fraud
• insolvency
• money laundering involving the National Treasury and Social Security
• crimes against illegal aliens
• crimes involving information technology

One of the main innovations of the reform of the Penal Code is that starting on 1 July 2015, companies will be required to create an organization, management and control plan to prevent crime and significantly reduce the risk of crime commission.

The criminal offense risk prevention plan should contain basic elements such as: the hiring of a compliance officer, a proper channel for complaints, a list of possible crimes and ways to detect and avoid the risk of committing said crimes, a list of possible sanctions a company could face, remedies, etc. In addition, this prevention plan must be constantly updated and adapted to the operations of the company.

Some of the most important requirements that a company’s prevention plan must comply with include:

• Identify activities that must be avoided because of the risk of crime they entail
• Provide managerial guidelines for the adequate appropriation of financial resources for the prevention of crime commission
• Make it mandatory to report all possible risks and breaches to the agent responsible for monitoring the implementation of the prevention plan
• Establish a disciplinary system that appropriately sanctions any breach of the measures established by the prevention plan
• Periodically monitor the prevention plan and make necessary modifications in case of newly relevant offenses and changes in the organization, structure  or activities of the company.

If a criminal offense was committed, the company could be exempt of any charges. This will depend on proof of compliance with a prevention plan. If there is compliance and the adequacy of the plan is established, the company in question will be exempt of any and all criminal liability. Partial compliance will serve as a mitigating factor to a possible penalty.

With the reform, a company will remain exempt from all criminal punishment, or will be granted an attenuated sentence for any crimes committed in its name or by the company itself, for its direct or indirect benefit by its directors, officers, employees, and partners, if the company can prove that an organization and management plan with monitoring and control measures exists.

Therefore, it is essential to establish a strategy for designing and implementing a Criminal Liability Risk Prevention Plan in a company since all entities, both commercial and social, with or without legal personality, must create a management plan adapted to the company’s activities and legal requirements.

This article is not considered as legal advice