Argentina Complies with OECD Anti-Bribery Laws

On November 8, 2017, the Argentine congress enacted legislation to allow the prosecution of legal persons (i.e., corporations and other legal entities) for crimes involving illegal payments and other forms of corruption involving government officials.[1]  The new law complies with most of Argentina’s international commitments assumed 16 years ago under the OECD Anti-Bribery Convention[2] to combat corrupt business practices within Argentina.  The new law takes the step of allowing criminal prosecution of private companies for acts of foreign and domestic bribery and of giving false financial information.  Until now, criminal liability under Argentine law, with the exception of environmental crimes, applied only to individuals.

The anti-bribery law specifies several sentencing options for guilty corporate defendants.  These include monetary fines ranging from two to five times the unlawfully obtained benefit, the revocation, for up to ten years, of any license to conduct business activity, a ban on government contracting for up to ten years, and mandatory dissolution.

The new law will impact government contractors and the private sector in general.  Companies currently contracting with (or aspiring to contract with) the federal government must have a comprehensive anti-corruption/anti-bribery compliance program.  This program must include conventional features known throughout much of the world such as an ethics manual, specific procedures for government contracting, a whistleblower hotline and periodic training of personnel.  For all other private sector companies, having an anti-corruption/anti-bribery compliance program will affect the type and severity of any punishment meted out because of a criminal investigation.

The anti-bribery law specifically creates an incentive for management to report corrupt acts, as it exculpates a company that (i) self-reports a corrupt act, (ii) demonstrates the existence of a meaningful compliance program and (iii) disgorges any ill-gotten benefits.

The new law is part of the government’s overall strategy to offer a more transparent playing field for international business.  The government has undertaken a concerted effort to attract infrastructure investment and knows that transparency is a key to enabling investors from the developed world to invest in the country.  The new law will also allow the government another basis to prosecute illegal payments to public officials beyond the context of government contracting (e.g., bribes for licenses, permits or for other acts or omissions of a public official).

[1]  At the time of this release, the law had not yet been published in the Official Gazette.

[1] Officially known as the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.  See http://www.oecd.org/corruption/oecdantibriberyconvention.htm for the full text of the Convention.