Home / Publications / New measures adopted to strengthen the legal mechanisms...

New measures adopted to strengthen the legal mechanisms to fight against Transnational Bribery and Corruption in Colombia

The Government has recently introduced some important changes in Colombian regulation for strengthening the current legal mechanisms that aim to fight corruption and transnational bribery in the country. A brief summary of said measures is featured below.

1. Publicity of debarment to contracting with the State that arise from the commission of conducts related to transnational bribery, crimes against public administration and other crimes established in Law 1474 of 2011

On October the 16th , the Ministry of Justice and Law issued Decree 1358 of 2020 by which it established new measures for the publicity and registration of debarment to contracting with the State sanctions that arise from the commission of corruption and transnational bribery related conducts according to article 8 (num. 1°, lit. j) of Law 80 of 1993.

The debarment arises when:

  1. An individual that has been declared:  
  • Judicially responsible for the commission of any crimes against public administration; or 
  • Any of the crimes or faults included in Law 1474 of 2011; or
  • Any of the criminal conducts provided in any treaty or convention against corruption ratified by Colombia. 

ii. A legal entity (company) that has been declared with administrative responsibility for the conduct of transnational bribery. 

In relation to scenario (i) it is important to recall that this debarment to contracting with the State can be extended to companies to which individuals are part to as (a) officers or directors, (b) legal representatives, (c) members of the board of directors and (d) controlling shareholder. Moreover, it Will be extended to its parent company, subordinates, branches of foreign companies and the corporate group, the latter as long as the conduct has been part of a group policy.

Consequently, a new legal provision that regulated the above was necessary to provide clarity in relation to the materialization and publicity of the debarment, specially in those cases in which it was extended from individuals to legal entities. These new measures seek that during public procurement procedures no existing debarment is overlooked due to absence of information, something that may occur specially in relation to sanctions for corruption issued abroad or by sentences issued in first instance by lower Colombian criminal courts.  

Thus, by means of Decree 1358 the following measures were adopted:

(i) Procedure and publicity of decisions that contain criminal or administrative sanctions issued by foreign authorities

When the National Agency for the Legal Defence of the State (“ANDJE”) notices a possible debarment of a bidder for contracting with the State in the terms of the abovementioned provision, this entity must formally request the Ministry of Foreign Affairs (“MFA”) to demand, through the adequate diplomatic channel, the criminal or administrative decisions issued by a foreign authority that declared the responsibility of said bidders that presumedly fit within the factual situation of the conducts included in the provision. Once the decision is obtained, MFA must immediately forward it to ANDJE.

When it is about individuals: ANDJE will request the Chamber of Commerce to provide information of the companies and/or branches of foreign companies in which this convicted individual has been or currently holds the position of controlling shareholder, officer or director. Subsequently, the Chamber of Commerce will register in the related legal entities’ RUP[1] (as well as in its parent company’s and subordinated companies) an annotation of the debarment which will initiate on the date the decision against the individual was issued.

(ii) When it is about legal entities (companies): The ANDJE will request the Chamber of Commerce to register the debarment in the RUP of the company that has been declared administratively responsible, as well as its parent and subordinated companies.

(ii) Procedure and publicity of the decisions issued by Colombian criminal judges

The ANDJE will adopt the necessary measures to guarantee the integration of decisions issued in first instance by Colombian Criminal Judges against individuals convicted for the commission of crimes against public administrayion and those provided in Law 1474 of 2011, to the System of Management and Information of the Litigious Activity of the State. Once the decision is obtained, ANDJE will follow the same protocol established in Section (i)

In relation to Sections (i) and (ii) above, it is important to mention that, if the judicial or administrative decision is of first instance and is not yet final, this situation will be indicated in the RUP. Thus, if the decision is revoked, the ANDJE will request the elimination of the annotation of the debarment in the aforementioned registry following the procedure already detailed.

(iii) Term of the debarment of the companies condemned by the Superintendence of Companies for transnational bribery

The last provision of this Decree mentions that the term of the debarment of the legal entity in this case will be the one imposed by the aforementioned entity. Thus, it is clear that this debarment does nor arise immediately, but it has to be expressly imposed by the Superintendence of Companies as part of the sanction.

2. Modifications to the criteria established to determine which companies must implement corporate compliance programmes

The Superintendence of Companies issued Resolution 100-006261 of October 2, 2020 by which it modifies the criteria to determine which companies have the obligation to implement a Corporate Compliance Programme.

The Resolution will only enter into force as of January 1st, 2021 and repeals Resolutions 100-002657 of 2016 and 200-000558 of 2018.

Then, as of January 2021, the companies that fulfill all of the following requirements shall adopt a Corporate Compliance Programme:

  1. To be supervised by the Superintendence of Companies;
  2. In the last fiscal year, the company carried out international transactions on a regular basis, directly or by means of a branch, subordinated company or contractor, either with foreign individuals or legal entities, public or private, for a value equal or greater than (individually or jointly) 100 monthly minimum wages (aprox. USD $23,800);
  3. The company’s gross income or the value of its assets, in the last fiscal year, was equal or greater than 40.000 monthly minimum wages (aprox. USD$9.208.315). 

After reviewing the new criteria, it is evident that some of the requirements included in the previous regulations and repealed as of January 2021 were preserved, namely, being a supervised entity and having carried out international business or transactions.

Nonetheless, relevant changes were included. On the one hand, a minimum value was introduced for the aforementioned international businesses and transactions (100 monthly minimum wages). On the other hand, the income or asset requirements related to certain economic sectors were eliminated and a single criterion was adopted, without taking into account the company’s corporate purpose. This means that the new criteria adopted broadens the spectrum of companies that will have the obligation of implementing a Corporate Compliance Programme.

Lastly, it is important to mention that those companies who accomplish all the requirements mentioned above as of December 31st of the preceding year will have until the 30th of April to adopt said Programme. If as of this date the company does not implement it, this could bring as a consequence the initiation of administrative proceedings by the Superintendence of Companies and thus in the imposition of fines that may add up to 200 monthly minimum wages (aprox. USD$46,000).

The Firm’s Compliance team can asses if your company will have the obligation to implement a Corporate Compliance Company with the new criteria adopted and evaluate the specificities of your company to help you in implementing a robust and efficient program that complies with the best practices thereto.

[1] Bidder’s Registry

 

Authors

Daniel Rodríguez
Daniel Rodríguez, LL.M.
Partner
Bogotá
María Lucía Amador
María Lucía Amador, LL.M.
Senior Associate
Bogotá
Ana Maria Barrios
Paralegal
Bogotá