Criminal liability of legal entities

The Criminal Liability of the Legal Entities is a topic of deep theoretical significance, which has been widely discussed in Colombia for several years. It refers to the possibility of convicting a legal entity, of any nature, for the commission of a crime through a criminal procedure, regardless of whether a conviction is achieved against the individual employees or administrators. Historically, this has been understood to be a legal impossibility, since the actual will to commit a crime cannot be differentiated from the individual wills of the partners. However, by virtue of the incorporation into national legislation of criminal regimes derived from international treaties and agreements, and the influence of American and British legal systems, this possibility has been accepted and has become a reality in countries such as Spain and Italy.

Colombian legislation has been reluctant to incorporate this figure, partly because of opposition from the academic sector and partly because of the difficulties of a systematic reform of this magnitude. Therefore, it remains relevant to question the need for this type of liability.

The Colombian Congress is currently discussing two bills that refer to the criminal responsibility of legal entities. Nonetheless, the scope of this responsibility is mostly limited to economic crimes or crimes against public administration –excluding environmental crimes, for example–. 

The first bill, 149 of 2020, provides that the sanctions for legal persons are: a fine; the immediate removal of administrators, directors, and legal representatives; the prohibition to exercise certain economic activity or to engage in certain types of legal acts or business; the prohibition to enter into acts and contracts with State entities or where the State has an interest; the partial or total loss of tax benefits or the absolute prohibition to receive them for a certain period; the cancellation of the legal personality and its immediate registration.

However, the criminal liability of legal entities is autonomous from the administrative liability and from the liability of natural persons. In addition, this project brings as a cause of absence of liability the adoption and implementation before the commission of the crime a program of business ethics, for the prevention and management of criminal risks. A necessary addition, which had been omitted in previous and failed projects, and which is shared by the second bill, 178 of 2020.

On the other hand, this second bill contemplates very similar sanctions, but does not allow the removal of the administrators. For its part, it adds that the fines will be between five (5%) and twenty (20%) percent of the gross annual income of the entity, sets as a maximum term the dissolution of the legal entity for twenty (20) years and the inability to hire is four (4) years. This inability and its relationship with other inabilities derived from other regulations will have to be deeply and specifically analyzed if this project becomes a law of the Republic. Additionally, it contemplates as sanctions the closure of its premises and establishments for a period that may not exceed eight (8) years and the judicial intervention to protect, repair and remedy the rights of the workers and/or creditors, which may not exceed eight (8) years.

These projects are two of several that have been attempted in recent years to create this form of liability. They do not resolve the substance of the questioning regarding the need for the measure, an element that is highly questioned, for example, by the Superintendence of Industry and Commerce, which can already impose these sanctions in some cases without having to resort to the criminal justice system. Both are projects that imply a substantial change in the conception of criminal law and that would generate a variation in the way of preventing risks on the part of business people. It is clear that in these bills there is a marked trend aimed at making it mandatory for legal entities to adopt a risk management and business compliance system in criminal matters as well as ethical conduct manuals for risk prevention, and this trend, whether by this route or an alternative, will continue on the legislator's agenda. Now, we must wait for the result of the legislative process to understand how the incorporation of these elements to the legal system will work.