Anti-Corruption in Argentina

By Vanina Caniza* and Fernando Goldaracena * (Baker McKenzie Argentina)

1. Domestic bribery (private to public)

1.1       Legal framework

The Argentine Criminal Code applies to any public officer and to any individual who engages in corrupt practices with public officers. The Argentine Criminal Code defines the offenses of domestic bribery (active, passive and improper lobbying), corruption and transnational bribery (other local laws to consider are Public Employment Law, the Ethics on Public Office Law, and the Code of Ethics of Public Office).

1.2       Definition of bribery

Bribery can be committed by both public officials and private individuals.

The Argentine Criminal Code prohibits government officials from receiving or accepting money or other benefits/gifts in order to do or not to do something related to their duties (active bribery); and further prohibits any individual from personally, or through an intermediary, giving or offering any gift to a public officer (passive bribery).

1.3       Definition of public official

rticle 77 of the Argentine Criminal Code defines “Public/Government Official” broadly, and includes those who are temporarily or permanently involved in the exercise of public functions either by election or by appointment of a competent authority, including: individuals (elected or appointed) who hold legislative, administrative, military or judicial positions of any kind; senior managers, officers and government appointees of any government-owned or government-controlled commercial enterprise; employees of any governmental regulatory agency, exchange or listing authority; and individuals who exercise a public function for or on behalf of any national, local or municipal public agency (e.g., public health agencies).

1.4       Consequences of bribery

(a) For the individuals involved

Depending on the type of criminal offense (described), sanctions imposed by the Argentine Criminal Code are imprisonment from one to six to 12 years, including, if applicable, special disqualification for life.

(b) For the company/legal entity

The Argentine Criminal Code does not provide for corporate liability for bribery acts. However, certain bills with amendments to the Argentine Criminal Code are currently being discussed in Congress. In their current content, they include criminal liability for companies for acts of corruption, the possibility of self disclosure and that compliance programs will mitigate exposure to penalties (fines, suspension of activities, suspension of the use of patents and trademarks, and suspension of benefits, among others).

1.5       Political contributions

Section 16 of the Political Party Financing Law No. 26,215 (the “Law”) provides that political parties may receive contributions/donations that shall not exceed 1% of the permitted expenses when the contribution/donation is performed by an entity, and 2% of the permitted expenses when the contribution/donation is performed by an individual. To calculate such amounts, other legal limits should be considered.

Section 15 of the Law expressly prohibits donations performed by individuals or legal entities that do not have an established domicile in Argentina. If this provision is not complied with, a fine could be imposed. Additionally, the Law provides certain specific restrictions on the financing of electoral campaign. The Law further expressly prohibits private entities (but not individuals) from giving donations or contributions during electoral campaigns.

1.6       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

Argentine laws do not offer direct guidance when it comes to gifts, benefits or meals and other invitations to public officers. However, and as a general rule, no gifts (except those of nominal value) should be offered to public officers. Considering the above legal provisions, the mere giving of something of value to a public officer could qualify as a crime under Argentine law, even if nothing is requested or offered in return.

2. Domestic bribery (private to private)

2.1       Legal framework

The Argentine Criminal Code does not provide for a comprehensive description of conducts to sanction acts of corruption in the private sector, as it does not specifically regulate private corruption. However, there are certain specific conducts that may be considered similar to domestic private corruption, such as fraud, concealment, embezzlement and wrongful administration carried out by individuals.

Further examples include punishment provided under Section 173, paragraph 7 of the Argentine Criminal Code, which provides sanctions of imprisonment for any person who, vested with the management, administration or care of goods or pecuniary interests belonging to another person and, with the purpose of obtaining an unlawful gain for himself or a third party, damages such interests or makes excessive expenses to the detriment of the represented person.

2.2       Definition of private bribery

See Section 2.1.

2.3       Consequences of private bribery

(a) For the individuals involved

See Section 2.1.

(b) For the company/legal entity

See Section 2.1.

2.4       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

Argentine laws do not offer direct guidance when it comes to gifts, benefits or meals and other invitations to public officers. However, and as a general rule, no gifts (except those of nominal value) should be offered to public officers. Considering the above legal provisions, the mere giving of something of value to a public officer could qualify as a crime under Argentine law, even if nothing is requested or offered in return.

3. Corruption of foreign public officials

3.1       Legal framework

The Argentine Criminal Code applies to any public officer and to any individual who engages in corrupt practices with foreign public officers.

3.2       Definition of corruption of foreign public officials

Section 258 “b” of the Argentine Criminal Code was incorporated in 2003 and was extracted from Article VIII of the United Nations Convention Against Corruption. It provides that any person who offers or gives a public officer from a foreign state or from an international public organization money or other benefits for the purpose of having such officer do or refrain from doing an act related to his office or to use the influence derived from the office he holds in an economic, financial or commercial transaction, shall be punished.

3.3       Definition of foreign public official

The definition of public/government officer is the same as for the offenses mentioned above. The definition is broad and it covers those who are temporarily or permanently involved in the exercise of public functions either by election or by appointment of another state or who are part of an international public organization.

3.4       Consequences of corruption of foreign public officials

(a) For the individuals involved

Imprisonment of up to six years and special disqualification for life in respect of the exercise of any public office.

(b) For the legal entity

See 1.4 (b).

3.5       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

Argentine laws do not offer direct guidance when it comes to gifts, benefits or meals and other invitations to public officers. However, and as a general rule, no gifts (except those of nominal value) should be offered to public officers. Considering the above legal provisions, the mere giving of something of value to a public officer could qualify as a crime under Argentine law, even if nothing is requested or offered in return.

4. Facilitation payments

Facilitation payments are not permitted under Argentine law. Therefore, any such payments will be considered illegal and subject to the same provisions as the ones indicated in Section 1 (domestic bribery).

5. Compliance programs

5.1       Value of a compliance program to mitigate/eliminate criminal liability for companies


In spite of the fact that there are certain bills at the National Congress to include provisions related to this point, including a guideline for an “Integrity Program” (similar concept to the Compliance Program) for corporations in the Argentine Criminal Code, there is currently no criminal liability for corporations for corruption misconducts97 under the Argentine Criminal Code. Therefore, compliance programs do not have any influence regarding corporate criminal liability yet.

5.2       Absence of a compliance program as a criminal offense

See 5.1.

5.3       Elements of a compliance program

The elements of any compliance program should follow the structure of US/UK compliance programs.

6. Regulator with jurisdiction to prosecute corruption

While the Argentine Anti-corruption Office aims at developing and coordinating programs to combat corruption, the actual enforcement is in the hands of criminal federal courts.


97 There are certain sections of the Argentine Criminal Code that provide for corporations’ liability for money laundering and other related offenses.


Baker McKenzie SC
Avenida Leandro N. Alem 1110, Piso 13
C1001AAT Buenos Aires
Argentina

Vanina Caniza

Vanina Caniza advises clients on transactional, general commercial and compliance matters. She has conducted several compliance investigations and has trained Argentine subsidiaries of global companies in compliance matters. She focuses her practice on the life sciences and healthcare industry and has extensive experience on regulatory law and specialized knowledge of legal issues related to the pharmaceutical and healthcare industry.

vanina.caniza@bakermckenzie.com

Tel: +54 11 4310 2226

Baker McKenzie SC
Avenida Leandro N. Alem 1110, Piso 13
C1001AAT Buenos Aires
Argentina

Fernando Goldaracena

Fernando Goldaracena currently gives advice on corporate crimes, anti-corruption and compliance matters, antitrust law matters, criminal tax evasion, currency exchange regime, anti-money laundering law, and economic and financial criminal offenses (new white collar crimes). He is a former federal court clerk, currently a member of the Buenos.
Aires office’s Compliance Group, and has conducted several investigations as well as trainings of local subsidiaries of multinational companies.

fernando.goldaracena@bakermckenzie.com

Tel: +54 11 4310 2216