Rafael Catalá, new minister of justice of the Spanish Government declared yesterday that his plan is to get the Spanish Congress to approve the reform of the Spanish Criminal Code by mid-March 2015. The first draft of the Criminal Code reform was approved by the Spanish Government in October 2013. This reform substantially impacts Spanish criminal liability of legal entities as specifically regulates the content of compliance programs and their effects. In accordance with the proposed reform, companies that adopt a compliance program that meets the requirements established by the Criminal Code will be able to exempt themselves from criminal liability. Since 2010 Spanish companies could be criminally liable for a limited number of crimes committed by their employees. The Criminal Code was unclear about the value of the compliance programs as an effective defense. The proposed reform of the Criminal Code clearly establishes as an effective defense for the companies criminal liability the existence of a compliance program adopted and approved by the companies governing body which includes at least the following elements:

  1. Risk analysis.
  2. Standards and controls to mitigate the identified risks.
  3. Specific standards and controls for the finances of the company.
  4. Obligation to report to the compliance body of the company on potential risks and breaches of the standards and controls.
  5. Disciplinary system to properly sanction the individuals that violate the compliance program.

In addition, the company will need to have a compliance body with the responsibility to supervise the effective application of the compliance program. Finally, and based on amendment proposals filed by the two Spanish majority parties, the reform to be approved will not include the proposal of a new crime that can be committed by the company directors if they failed to adopt the necessary resolution to implement a compliance program. We will closely follow the approval process and we will keep all of you updated.

Previous articleSingapore and the US Sign the Foreign Account Tax Compliance Act Model 1 Intergovernmental Agreement
Next articleHong Kong Anti-Corruption Briefing