Only seven South American countries have criminal liability laws

In South America, Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, and Peru all impose criminal liability on organizations. In 2009, Chile became the first South American nation to pass a corporate criminal liability law.^[3] Since then, it has been amended on several occasions, refining its elements, adding more crimes to its embodiment, and effectively tailoring it into a more mature resource against corruption.^[4] In contrast, Colombia’s law against corruption only came into effect in January 2022. Though there was already a law on the criminal liability of legal persons, the new law broadened its application.

The laws of these seven countries (Table 1) require businesses to implement control measures (policies, procedures, whistleblower channels, training, risk assessments, and others) to prevent, detect, and report criminal offenses within their organizational structures. At the same time, these laws delegate the traditional function of investigating punishable acts to the organization itself. In case of noncompliance with this obligation, the entity will be exposed to criminal consequences based on the acts committed by its employees and executives. The consequences are severe and may even lead to the organization’s dissolution.^[5]

A common factor shared by these countries’ legal structures lies in certain requirements for triggering the criminal liability of companies: (1) the crime or crimes being committed are in the interest or for the benefit of the company, and (2) the offenses have been committed by persons with the capacity to represent the company or by persons dependent on them.^[6][7][8] Other similarities lie in the possibility of adopting criminal compliance programs. Although each country has its own way of naming them (for example, in Chile, they are “offense prevention models,” and in Argentina, they are “integrity programs”), the laws of each country list the minimum content of the programs. It is no coincidence that, on this point, the countries share elements such as identifying and evaluating risky processes, establishing policies and procedures, and disseminating and communicating tools (whistleblowing channels). The sources for those particular laws’ integrations are the considerations of the guidelines provided by North American agencies, such as the U.S. Department of Justice (DOJ), or legislation, such as in the United Kingdom.

Corporate liability laws in these countries also have important differences. Ecuador is the only country that applies the whole criminal code to companies. In contrast, Argentina, Bolivia, Peru, Chile, and Colombia use closed catalogs of offenses. Notably, in Chile, a bill on economic crimes is currently being processed, which expands the current catalog of offenses (22 offenses) to such a vast number that companies must manage their risks according to the scope of their business. It is also important to be aware of these regulations since penalties can greatly impact businesses. Corporations are called to implement and execute compliance programs or be subject to sanctions that can range from fines of up to US$20 million, loss of tax benefits, prohibition of a contract with the state, to the loss of legal personality; however, amounts and years may vary from country to country.

One of the greatest complexities in the countries in question is the lack of judicial rulings that allow courts of law to apply the law. For example, in Chile, while legislation is advancing, the resolution of cases has not been able to do so at the same speed. Law No. 20,393 has been in force for more than 10 years.^[9] In the last round of amendments,^[10] modifications to existing offenses, as well as new violations were introduced. With this, prosecuting authorities have had to advance rapidly to conduct investigations in accordance with the cases. The first sentence for criminal liability of an organization in Chile was obtained only recently, and the number of cases in which sanctions have been applied directly to corporations remains low. The company, Corpesca SA, was convicted of paying bribes to a congressman. The court considered that the compliance officer did not have the independence to exercise his position, in addition to having deficient controls for the outflow and registration of money, in breach of the company’s compliance program.^[11]

While these countries create a heightened compliance environment for foreign entities, enacting general corporate liability laws has proved difficult for the remaining South American nations. Brazil’s legislature, for example, has yet to pass a 2012 bill to amend its Criminal Code to include omnibus provisions on corporate criminal liability.^[12] Nevertheless, the Brazilian Federal Constitution makes two mentions referring to the possibility of liability of collective entities. In its articles 173, §5º and 225, §3º, it states that the law will establish punishments compatible with the nature of legal entities in crimes against the economic and financial order and the popular economy. Legal entities may also be punished by the law in environmental crimes, and natural and juridical persons will be held criminally and administratively responsible independent of their civil liability.^[13] Further, corporations may be brought to trial for criminal and administrative liability for environmental crimes, independently of their civil liability.^[14]