The latest reform of the Spanish Penal Code has introduced significant changes in areas such as finance, corporate and intellectual property. This article focuses on three aspects of the reform: the criminal liability of companies, money laundering crimes and corruption in international business transactions. In particular, this article considers the duty of active surveillance by companies to avoid being charged for crimes committed by their employees and lawyers who have assets derived from money laundering offences being unable to claim attorney-client privilege.
Criminal liability of legal entities
The new Code introduces the possibility of a company being found guilty, provided that the offence is committed for the benefit of the company and on its behalf and by a manager or agent or person under the authority of the director or representative.
It should be stressed that the crime is committed by the absence of organization, i.e. as preventive measures required to prevent such crime were not duly taken.
A company can only be held guilty when it commits any of the offences specifically listed in the Criminal Code, which include fraud, punishable insolvency, intellectual property crime and money laundering.
One of the most important aspects of a company becoming liable is in relation with a lack of proper control over the conduct of an employee. There is no defined criterion in the Criminal Code regarding a crime prevention standard to be met by the company. The Code merely states that control has to be considered on a case by case basis. This implies a special duty of care by the company. And it is doubtful that a plan to establish crime prevention surveillance measures is sufficient to avoid a conviction against the company. It should be determine on a case by case basis. For example, in the event of a crime of money laundering, the company must not only have a manual on prevention, but also adopt effective surveillance measures regarding the people most likely to be exposed to the committing of that crime.
The reform introduces the specific crime of money laundering and punishes not only those who acquire or convey property derived from illegal activities, but also those who merely possess or use it. This has resulted in great controversy, led by the General Council of the Judiciary that expressed serious doubts in its report on the reform that the possession of property derived from money laundering may constitute criminal activity.
The truth is that reform punishes the mere possession of goods if it is known that the goods are of criminal origin.
It should be noted that lawyers can be incriminated but they may not invoke attorney-client privilege.
Therefore, a lawyer who knows that his or her assets were obtained from a crime of money laundering may be indicted as the perpetrator of a crime of money laundering. As they can not invoke the privilege, they must give evidence in court should they be charged.
The crime of corruption in international business transactions
The reform introduced this new offence in Spain which consists of obtaining and retaining an irregular contract when conducting international economic transactions.
The Code establishes that companies can be charged with these crimes. Therefore, businesses operating in several countries have to be particularly careful to avoid conduct that can lead to these crimes. As mentioned above, it is not sufficient to develop a plan to prevent corruption, but active surveillance measures should be adopted for those individuals most exposed to the scope of this crime. Thus, the OECD Convention to Combat Corruption deems corruption in a public tender offer to be bribery. Therefore, those companies bidding on international tenders must give particular emphasis to monitoring their employees involved in such activities.