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Enforcement agencies and corporate liability

Government agencies

What government agencies are principally responsible for the enforcement of civil and criminal laws and regulations applicable to businesses?

In Colombia, compliance matters are subject to the surveillance of different regulators, depending on the topic. In the case of anti-bribery enforcement, the General Prosecutor’s Office (GPO) is in charge of criminal investigations against individuals and the Superintendence of Companies is in charge of investigations against legal entities. Money laundering is also under the responsibility of the GPO. The Unit for Economic and Financial Intelligence is responsible for regulating and surveilling matters related to money laundering and the financing of illegal activities (eg, terrorism). The Superintendence of Industry and Commerce (SIC) is responsible for the administrative prosecution of cartels, and can impose significant fines against individuals and legal entities.

Scope of agency authority

What is the scope of each agency’s enforcement authority? Can the agencies pursue actions against corporate employees as well as the company itself? Do they typically do this?

Agencies such as the SIC can impose sanctions against individuals and legal entities for the violation of cartel enforcement laws and bid rigging. The SIC cooperates with the GPO in bid-rigging cases related to public funds, as the GPO is in charge of criminal prosecution against individuals. The GPO has become a very active agency, and despite some recent scandals related to its anti-corruption head it is expected that it will continue to actively prosecute corruption cases.

Other agencies, such as the Superintendence of Companies, can investigate and impose significant sanctions against companies for transnational bribery, which can include fines and debarment. This agency also cooperates with the GPO in bid cases. Criminal judges can also terminate legal entities when it is proven that they are involved wholly or partially in criminal activities, such as corruption.

In Colombia, there is no criminal responsibility for legal entities; therefore, the GPO can only pursue actions against corporate employees or managers. However, severe sanctions may be imposed on companies through administrative procedures of the Superintendence of Companies and the SIC.

Simultaneous investigations

Can multiple government entities simultaneously investigate the same target business? Must they coordinate their investigations? May they share information obtained from the target and on what terms?

Yes, different authorities can investigate different aspects of the same target business. In doing so, the authorities can coordinate their investigations and have started to do so. The GPO, the Superintendence of Companies, the Comptroller General and the SIC announced some time ago their intention to cooperate to facilitate the investigation of collusion in public bids. Recently, the Superintendence of Companies imposed a fine for transnational corruption in a case related to Inassa for corrupt practices in Ecuador. The fine is equivalent to approximately US$ 1.7 million.

Civil fora

In what fora can civil charges be brought? In what fora can criminal charges be brought?

The GPO is the entity in charge of investigating the commission of crimes and prosecuting individuals before the competent criminal courts.

Other agencies, such as the Superintendence of Companies and the SIC, are in charge of imposing administrative sanctions against companies for transnational bribery, money laundering, bid rigging, etc.

Corporate criminal liability

Is there a legal concept of corporate criminal liability? How does the government prove that a corporation is criminally liable for the acts of its officers, directors or employees?

There is no criminal responsibility for legal entities, as criminal responsibility is reserved only for individuals. However, there are civil and administrative consequences for companies found to be in breach of anti-corruption, antitrust, fiscal or compliance obligations, and they may be subject to paying large fines and compensation for damage if one of their corporate employees or managers is convicted of committing a crime related to the activity of the company. Likewise, legal entities can be sanctioned by criminal judges to the extent of terminating their activities if they have been found to have been established for the purpose, at least in part, of committing acts of corruption.

The fines that can be imposed by the Superintendence of Companies can be as high as the equivalent of 200,000 minimum legal monthly salaries (approximately US$55 million).

Legal entities and individuals seeking state contracts can also be debarred from public procurement contracting if the companies or individuals have committed crimes against the public administration (ie, bribery or other corrupt actions or omissions), or have been sentenced for crimes related to promoting, financing and affiliating with illegal groups, crimes against humanity, drug trafficking in Colombia or abroad, and transnational bribery. This debarment applies not only to those companies that have committed the aforementioned crimes, but also to their parent companies and subsidiaries, with the exception of open stock corporations. The duration of the term of debarment was increased in 2011 from five years to 20 years.

Bringing charges

Must the government evaluate any particular factors in deciding whether to bring criminal charges against a corporation?

Criminal proceedings in Colombia are brought against individuals, who may be corporate employees or managers who have used their position at a company to commit crimes. In these cases, the GPO may study certain factors to determine the level of participation of a company and whether other corporate employees or managers were involved in the commission of crimes such as bribery, corruption, money laundering and drug trafficking. Regarding legal entities, criminal judges must terminate the legal entity if it is demonstrated beyond reasonable doubt that it was involved wholly or partially in committing corruption.

The Superintendence of Companies can adopt lenient treatment against companies in breach of compliance obligations if they have incorporated sound compliance programmes, and may even grant full immunity if the company self-discloses a breach before a formal investigation is opened.

Initiation of an investigation

Investigation requirements

What requirements must be met before a government entity can commence a civil or criminal investigation?

The GPO is obliged to carry out the investigation of facts related to crimes, ex officio, or through a criminal complaint or special request. Therefore, the only requirement that exists for the GPO to initiate an investigation is the existence of facts that have the characteristics of a crime.

On the other hand, administrative procedures before the Superintendence of Companies for the investigation of transnational bribery, and administrative procedures before the SIC for the investigation of bid rigging, may also be initiated ex officio or at the request of any person.

Triggering events

What events commonly trigger a government investigation? Do different enforcement entities have different triggering events?

The state, through the GPO, is obliged to investigate any event that has the characteristics of a crime. However, money laundering, corruption, bribery, transnational bribery, drug trafficking and crimes against humanity in particular attract the attention of the government.

The Superintendence of Companies specialises in administrative investigations into companies for transnational bribery and the SIC specialises in administrative investigations into individuals and companies for cartels and bid rigging.

Whistleblowers

What protections are whistle-blowers entitled to?

The GPO has a constitutional obligation to take the necessary measures for the protection of victims, witnesses and other participants in criminal proceedings. Therefore, the GPO has created the Victim and Witness Protection Programme (Decree 1737, 2010 GPO).

This programme establishes general, collective and individual protection measures. The most important individual protection measures established in this protection programme are:

  • police surveillance;
  • supervision and monitoring;
  • bulletproof vests;
  • bodyguards; and
  • relocation.

In the case of administrative proceedings, the Superintendence of Companies and the SIC may grant full immunity to companies (and individuals in the case of the SIC) that self-disclose cases of corruption. The level of leniency will depend on the type of disclosure, the opportunity the company had to disclose the information and the cooperation shown.

Investigation publicity

At what stage will a government entity typically publicly acknowledge an investigation? How may a business under investigation seek anonymity or otherwise protect its reputation?

It is usually during the hearing within the criminal process that the prosecutor communicates to an individual that he or she is being formally investigated for the commission of crimes. At that hearing, the prosecutor is obliged to communicate the facts and crimes under investigation.

The initial hearing is public, which means that there is free access for the mass media and the community in general (ie, anyone can attend, even the media).

Evidence gathering and investigative techniques

Covert phase

Is there a covert phase of the investigation, before the target business is approached by the government? Approximately how long does that phase last?

The criminal process consists of the following stages:

  • preliminary research;
  • investigation; and
  • judgment.

The prosecutor is only obliged to disclose to the defendants the evidence that has been discovered just before the judgment phase within the proceedings. However, it is common for the prosecutor to contact the company during the preliminary research and investigation stages in order to collect evidence.

In the case of administrative proceedings, the SIC and the Superintendence of Companies can undertake preliminary research before formally opening the investigation. The duration of the preliminary investigation will depend on the findings.

What investigative techniques are used during the covert phase?

During the preliminary research and investigation stages, the prosecutor may use any of the investigative techniques endorsed by the Criminal Procedure Code that are considered relevant for the development of the investigation, such as judicial inspections of the company, interception of communications, interviews and dawn raids. A similar approach has to be taken by the Superintendence of Companies and by the SIC in administrative investigations. These investigative actions must be made in accordance with the guidelines and provisions of the law. For some time, the SIC has also applied algorithmic analysis to the bids to try to establish if a given market is affected by rigging.

Investigation notification

After a target business becomes aware of the government’s investigation, what steps should it take to develop its own understanding of the facts?

After a target business becomes aware of the government’s investigation, an internal investigation should be undertaken as soon as possible. For this purpose, it is advisable to review the privacy policy and determine whether adequate consent has been obtained from employees to proceed with the investigation, determine whether a forensic review will be required, and secure the hardware and network resources to make sure that the information is not lost.

Evidence and materials

Must the target business preserve documents, recorded communications and any other materials in connection with a government investigation? At what stage of the investigation does that duty arise?

Yes, the company is obliged to preserve all elements that may serve as evidence in the investigation or trial; otherwise it could be involved in the commission of the crime of ‘concealment, alteration or destruction of evidence’ (article 454B of the Colombian Criminal Code). This obligation applies from the moment the company realises that a crime has been committed.

Providing evidence

During the course of an investigation, what materials - for example, documents, records, recorded communications - can the government entity require the target business to provide? What limitations do data protection and privacy laws impose and how are those limitations addressed?

Authorities may require the company to provide all information or evidence that they consider necessary for the investigation. However, a request for confidential information from the GPO requires prior authorisation from a judge. Data protection and privacy laws, as well as procedural rules, impose limits related to the type of data that authorities can request (all data must be relevant for the investigation). Consent from individuals is not necessary for the disclosure to Colombian authorities of personal information.

On what legal grounds can the target business oppose the government’s demand for materials? Can corporate documents be privileged? Can advice from an in-house attorney be privileged?

A company may refuse to provide confidential information when the request made by the prosecutor is not accompanied by the authorisation granted by a judge.

Similarly, there are documents and information that do not have to be delivered to the authorities because of constitutional protection, such as documents and conversations between a lawyer and his or her client. Communications between the party and the in-house lawyers are also privileged.

 

Employee testimony

May the government compel testimony of employees of the target business? What rights against incrimination, if any, do employees have? If testimony cannot be compelled, what other means does the government typically use to obtain information from corporate employees?

In Colombia, every individual is obliged to give testimony when requested by a judge. However, no one may be compelled to self-incriminate or testify against his or her spouse or close relatives (as defined by law). There are also other exceptions to the duty to declare, such as lawyer-client privilege and public accountant-client privilege.

Under what circumstances should employees obtain their own legal counsel? Under what circumstances can they be represented by counsel for the target business?

This depends on the case and the facts under investigation, because if the investigation relates to the functions and duties of the employee, it may be possible to have joint representation of the company and the employee. When the investigation is not related to the employee’s job, he or she must obtain his or her own legal counsel.

Sharing information

Where the government is investigating multiple target businesses, may the targets share information to assist in their defence? Can shared materials remain privileged? What are the potential negative consequences of sharing information?

Where the government is investigating multiple targets, they can share information with the authorities. However, sharing information among targets entails a number of risks, including loss of privilege.

Investor notification

At what stage must the target notify investors about the investigation? What should be considered in developing the content of those disclosures?

The administration (ie, the management) and the statutory auditor have a legal duty to inform investors as soon as they become aware of the formal opening of an investigation against the target.

Cooperation

Notification before investigation

Is there a mechanism by which a target business can cooperate with the investigation? Can a target notify the government of potential wrongdoing before a government investigation has started?

Yes, there are leniency programmes established by the GPO, the SIC (for bid rigging and cartels) and the Superintendence of Companies (for transnational corruption). Cooperation should be accounted for when the authority imposes the sanction, and in certain cases - if the cooperation is part of a leniency programme and all conditions are met - the company and the individuals may qualify for full immunity in administrative investigations.

Voluntary disclosure programmes

Do the principal government enforcement entities have formal voluntary disclosure programmes that can qualify a business for amnesty or reduced sanctions?

If a company cooperates it can be granted full immunity, in certain cases, from fines of up to US$40 million (at current rates) that the Superintendence of Companies can impose for crimes of corruption. This lenient treatment is different from the cooperation of employees or managers who are being directly investigated for the commission of crimes, as these individuals can negotiate personal benefits with the authorities to try to reduce the criminal sanctions applicable to them. The negotiation will depend on the value of the information provided for the prosecution. At the SIC, the immunity of the company can also cover the employees or individuals who were responsible at the company, provided that they cooperate in the investigation.

Timing of cooperation

Can a target business commence cooperation at any stage of the investigation?

All persons, either individuals or corporate, have a duty to cooperate with the prosecutor in the conduct of an investigation. Such cooperation can take place at any stage of the investigation. For the cooperation to amount to a valid leniency application with the SIC or the Superintendence of Companies it must be submitted to the SIC prior to the conclusion of the forensic phase of the procedure; and to the Superintendence of Companies before the formal investigation starts.

Cooperation requirements

What is a target business generally required to do to fulfil its obligation to cooperate?

Companies should disclose all the information that they have available in their files and provide mechanisms that allow their employees to disclose relevant information to the authorities until the final stages of the procedure.

Employee requirements

When a target business is cooperating, what can it require of its employees? Can it pay attorneys’ fees for its employees? Can the government entity consider whether a business is paying employees’ (or former employees’) attorneys’ fees in evaluating a target’s cooperation?

The cooperation must be voluntary, but the company can facilitate such cooperation. The company could pay the attorneys’ fees for its employees - the authorities will evaluate the payment of these fees on a case-by-case basis.

Why cooperate?

What considerations are relevant to an individual employee’s decision whether to cooperate with a government investigation in this context? What legal protections, if any, does an employee have?

Employees who are found to be in breach of corporate compliance obligations may be subject to dismissal, provided that guarantees established in the internal procedures and the law are adopted.

Privileged communications

How does cooperation affect the target business’s ability to assert that certain documents and communications are privileged in other contexts, such as related civil litigation?

Cooperation with the prosecutor entails the risk of the documents shared as part of the cooperation process losing their privilege, and thus the risk exists that third parties (ie, those seeking remedies or compensation) may have access to such evidence.

Resolution

Resolution mechanisms

What mechanisms are available to resolve a government investigation?

As explained in questions 2 and 5, legal entities are not subject to criminal liability. However, employees or managers who are being investigated for committing a crime may use various mechanisms to achieve early termination of a criminal proceeding, such as the following:

  • a guilty plea to the prosecutor - in this case the defendants accept the commission of the crime, and their penalty is reduced to one-half or one-third of the legal penalty. Because of the guilty plea, convictions will be declared against them;
  • a settlement agreement with the victim - in this case there is no conviction, but a decision in which the principle of discretionary prosecution is approved; if the individuals persist in the crime, this benefit will not be granted and a conviction will proceed; or
  • a non-prosecution agreement.

Admission of wrongdoing

Is an admission of wrongdoing by the target business required? Can that admission be used against the target in other contexts, such as related civil litigation?

An admission of wrongdoing is not necessary to resolve the investigation.

However, given that civil and criminal liability are independent, the fact that an employee or manager of the company accepts the commission of a crime does not mean that the company will be immediately civilly responsible in a related civil proceeding.

Civil penalties

What civil penalties can be imposed on businesses?

Sanctions include monetary fines, which in the case of foreign bribery can be as high as US$55 million, or for local bribery up to US$650,000. In addition to this, the Superintendence of Companies can order debarment for up to 20 years against companies found to be guilty of crimes involving corruption. If the crime is also a restrictive practice (eg, bid rigging), the SIC can impose fines as high as US$24 million.

Criminal penalties

What criminal penalties can be imposed on businesses?

In Colombia, legal entities do not commit crimes; therefore, they cannot be subject to criminal penalties. However, in the event that one of their employees or managers is found criminally responsible, they may be required to pay compensation for the damage caused, as well as to pay significant fines.

In addition to the above, in the event that a legal representative or the administrators of a company domiciled in Colombia are convicted of crimes against the public administration, the Superintendence of Companies may impose fines on that company of up to 200,000 legal minimum monthly salaries (approximately US$55 million). Similarly, the Superintendence of Companies may also prohibit the receipt of any kind of incentive or subsidy from the government for a period of five years and the company may be prevented from taking up state contracts for up to 20 years.

Sentencing regime

What is the applicable sentencing regime for businesses?

The penalties and sanctions imposed are mandatory, both for the individual convicted of the crime and for the company that he or she works for, as long as the company has benefited from the commission of the crime.

In determining the type of sanction to impose, the Superintendence of Companies must take into account the following criteria:

  • the economic benefit obtained or intended by the infringer;
  • the economic robustness of the infringer;
  • recidivism;
  • the degree of cooperation in the investigation;
  • any attempts to hide or disguise the evidence during the investigation;
  • the acceptance of liability;
  • the implementation of a sound compliance programme;
  • the deployment of due diligence in the case of acquired businesses; and
  • the application for leniency after fulfilling the legal requirements.

Future participation

What does an admission of wrongdoing mean for the business’s future participation in particular ventures or industries?

Pleading guilty in a corruption procedure may trigger debarment, imposed by the Superintendence of Companies. The extent to which the agency can decide not to impose this sanction has yet to be tested. However, the regulation on leniency for cooperation with the Superintendence of Companies does not limit the benefits to avoidance of monetary fines, but refers to sanctions in general; hence the agency could decide not to impose debarment on a cooperator once its status has been recognised.