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Domestic bribery: legal framework

i Domestic bribery laws and their elements

The Constitution and the Criminal Code are the primary pieces of legislation criminalising corruption-related crimes. Thus, the Constitution sets forth prohibition and liability warnings to public officials when performing their duties, as well as when handling public goods and resources. The aim is to prevent them from being involved in bribery, extortion, influence peddling, embezzlement and unlawful enrichment. In turn, the Criminal Code thoroughly details the provisions for bribery-related crimes, crimes against the public administration, liable subjects, criminal behaviours and aggravating factors. Other laws such as the Organic Law on Public Service, the Public Procurement Law, the Organic Law on the Transparency and Social Control Branch and the Organic Law on the Council for Citizen Participation and Social Control also contribute anti-bribery elements.

ii Prohibitions on payment and reception

Bribery elements include the delivery, transfer, offer or promise of an undue payment, benefit, donation, gift or anything of value with the intent of provoking a positive result, omission, facilitation, conditioning or delay of an official action. In other words, a bribe induces, or intends to induce, an alteration of the normal course of administrative or public diligences and processes, or rewards improper performance. Facilitating payments are not allowed. A third party may perform or ease the illicit or improper benefit. Sanctions may be imposed on either the accepting party (public official) or the offering party (individual).

Pursuant to Ecuadorian criminal law (Comprehensive Organic Criminal Code), corporate liability does not apply to bribery-related crimes. Therefore, liability is strictly applicable to natural persons and does not apply to domestic or foreign companies. There are many debates about whether or not to include corporate liability in the Ecuadorian criminal law, but for now, there is no formal project on this matter.

iii Other corruption-related crimes

The key element of extortion is the abuse of power of a public official or individuals acting under state authority on behalf of a public institution. The crime consists of ordering or demanding the delivery of rights, quotas, contributions, income, interests, salaries or gratification in their favour. A third party or private individual may carry out the extortion, and when it involves violence or threats the penalty is higher.

Regarding trafficking of influence, also known as influence peddling, this crime happens when a public official or individuals acting under state authority on behalf of a public institution influence other public officials to achieve a favourable result, either for their own benefit or in favour of a third party. An aggravation circumstance takes place when the ultimate intention is to favour private individuals to illegally obtain a public contract award or another kind of business with a state entity. The mere offer of performing trafficking of influence is already deemed a crime. Any individual can be liable for such conduct; that is to say, a third party may act on behalf of or inappropriately using the name of people acting under state authority.

Embezzlement consists of a public official or individuals acting under state authority on behalf of a public institution, who for their own benefit or on behalf of third parties appropriate, abuse or arbitrarily use public property. This includes real estate, money, securities or any other goods or documents under their control.

Illicit enrichment for public officials or individuals acting under state authority on behalf of a public institution applies to those who have an unjustified increase in assets. The benefit could be under their name or a third party. The enrichment may not only consist of increased assets, but also payment or extinction of debts.

iv Definition of public official

Public officials are defined at the constitutional level as 'all persons that, in any way or under any form of work, provide services or hold a position, post or office in the public sector'. The Organic Law on Public Service, which was enacted two years after the Constitution, has the same definition for a public official, but clarifies that public service workers are regulated under the Labour Code.

In general, all people related to the public sector are considered public officials, including elected officials, the President, mayors, etc. Thus, the public sector encompasses the executive, legislative, judicial, electoral, transparency and social control branches, municipalities, and entities created by the Constitution, law or municipalities to exercise state powers or the provision of public services.

With regard to employees of state-owned companies or public companies, Article 3 of the Organic Law on Public Service, in accordance with Article 18 of the Organic Law on Public Companies, also defines them as public officials; the same is true for employees of the public companies' subsidiaries.

v Public officials' participation in commercial activities

The general rule is that public officials are free to participate in commercial activities provided they are not related to their official functions, or if no specific legal ban exists. A public official may not maintain direct or indirect commercial, corporate or financial links with taxpayers or contractors if the public official has to deal with them as part of his or her normal duties.

In this sense, the Public Procurement Law provides a specific ban on bidding by a contracting entity when a public official participates in the bid or has direct influence over it. The ban applies to close relatives too, even by means of corporate structures. The public procurement rules strictly prohibit the president, vice president, ministers, members of congress, majors and other authorities (including their close relatives) from entering into any public contract.

Judiciary branch public officials, who are also lawyers, cannot practise law privately. No judiciary official can have a second job in the private or the non-judicial public sector.

vi Gifts and gratuities, travel, meals and entertainment restrictions

Specific regulations on gifts and hospitality are vague. Public officials are not allowed to request, accept or receive any gifts, money, rewards or privileges. The basis for whether a public official receives an administrative sanction or whether they are subject to being charged for criminalised bribery is the intention behind the gift request or acceptance. In other words, if a gift delivery takes place without the objective of getting a specific benefit or reward in exchange, then it could only lead the public official to an administrative sanction, holding the private individual harmless. On the contrary, a bribery-focused gift delivery may lead to criminal liability for all individuals involved.

The only parameter regarding the valuation of a gift is established for gifts received from public authorities during official events in Ecuador or overseas. If the value of the good exceeds the value of a monthly minimum wage, this gift must become part of the inventory of the public institution to which the public official belongs.

vii Political contributions

Private sector contributions permitted to political campaigns are limited to Ecuadorian citizens and foreigners residing in the country. Private sector contributions must be delivered within the legal limits established for the specific election season.

viii Private commercial bribery

Civil law protects abusive relationships between private parties, which could include fiduciary or trust breaches, as well as commercial civil collusion. These wrongdoings are subject to legal claims before civil courts. Compensation may include damages, provided the action is not considered a crime, such as commercial or civil fraud.

The Companies Law, which regulates corporations and other legal entities, forbids them to act against the law, public policy and good behaviour. This means that, ultimately, corporations should meet constitutional standards with regards to anti-corruption.

The Labour Code regulates employees in the private sector. It establishes that an employer is prohibited from demanding or requesting any money or benefit from a worker or employee in exchange for obtaining a position or for any other reason.

ix Penalties

Having referenced the specific penalties, it is worth noting that because of the severity of the offence, the bribery, embezzlement, extortion and illicit enrichment of a public official does not have a statute of limitations. This is because it is considered a crime against the state. The absence of a statute of limitations applies to both the indictment and the handing down of the sentence. Finally, it is provided that a trial may take place without the accused party being present.

Pursuant to the Criminal Code, corruption-related crimes are subject to the following prison sentences:

  1. bribery: between one and five years, and if the bribery was to lead to another crime, up to seven years;
  2. extortion: from three to five years, and if it involves violence or threats, up to seven years;
  3. trafficking of influences or influence peddling: three to five years, and if it was committed for illegally obtaining business with a public entity, up to five years;
  4. embezzlement: 10 to 13 years; and
  5. illicit enrichment of a public official: this depends on the enrichment value, calculated based on the monthly minimum wage. Up to 200 – from three to five years; between 200 and 400 – five to seven years; and over 400 – up to 10 years.

The Organic Law on Public Service clearly establishes a prohibition on acting as a public official for those who have been convicted of embezzlement, bribery, extortion or illicit enrichment, and, in general, for those who, acting under state authority, have been convicted of a crime related to their services. This Law also establishes that getting convicted of the above-mentioned crimes is cause for being removed from office.

Accordingly, Article 77 of the Organic Code of the Judiciary Branch bans individuals convicted of corruption-related crimes from holding a position in the judiciary branch. Moreover, Article 57 states that for someone to apply for a position within the judiciary branch, they must issue a sworn statement declaring that they have not been convicted of a corruption-related crime.

Finally, there is another penalty established in Article 113 of the Constitution, which bans those who have been convicted of bribery, illicit enrichment or embezzlement from running as a candidate for public office.

Foreign bribery: legal framework

Ecuador has not enacted specific provisions with regards to foreign bribery; nevertheless, the Criminal Code establishes that crimes committed overseas may be subject to Ecuadorian law if the crime causes consequences in Ecuador, if the crime is committed by a public official while on duty and the crime has not been prosecuted in the other jurisdiction, or if the crime affected international conventions, provided that no prosecution has started in the other jurisdiction.