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Criminal liability of legal entities in Rieusset

Today we are going to tell you about the system of criminal liability of legal entities established by the Organic Law (Ley Orgánica) 1/2015 of the Spanish Penal Code and which has made all companies establish a new and stricter control system than what we had had previously.

For starters, some data which will make us understand the reason behind this legal reform.

According to the CIS (Center for Sociological Research), corruption and fraud is the second problem existing in Spain with 18,9% after unemployment with 46,7% (CIS Barometer March 2017).

Did you know that?

You surely remember cases such as Bankia and the subject of preferred shares, its flotation (entry to the stock market), or the case of the “black cards”, the case of the Osasuna soccer team and the unknown destiny of 3.7 million Euros, the GOWEX case and their “cooking the books”, the fraud with the Employment Regulation Plan (ERES) which amounted to more than 1,400 million Euros, the Volkswagen emissions scandal, the case of Nueva Rumasa and the deception of its investors regarding the destiny of their money, the ex-general director of the CAM who wanted to earn a lifelong income of 370,000 Euros, the illegal financing of the political party PP Balear, the bribes paid by Alcoa, the massive fraud of the training courses in Andalucía, the Petrobras corruption scandal, the awarding of the 2022 FIFA World Cup to Qatar or Neymar’s contracts. These are known cases.

In a world-wide survey about economic crime carried out by PwC in 2014 it was found that:

  • 50% of the organizations surveyed in Spain affirmed having suffered some type of economic crime in the past 24 months, and
  • 32.5% affirmed having suffered between 11-100 economic crimes in the same period.

Impressed?

The same survey stated that the main crimes committed in Spain were:

  • Misappropriation
  • Accounting manipulation
  • Bribery and corruption

responsabilidad penal etica rieusset

Furthermore, 75% of Spanish organizations stated that the main perpetrator was internal.

 

In fact, the study asked which they thought was the factor that motivated the fraudster to commit the crime, and 3 out of 4 responded that it was opportunity. Do you recall the old saying “Opportunity makes a thief?” Exactly.

 

 

Law 1/2015

The reform of the Penal Code of 2015 modifies Law 5/2010 to clarify aspects that were not sufficiently precise so that, in summary, it now establishes that:

  • The legal entity responds – increasing the crimes for which it can be punished.
  • The legal entity can be charged but may be exempt from criminal liability if it adopts a model for the prevention of crimes.

 

Crimes that can be committed by a legal entity

responsabilidad penal delitos rieusset

 

  • Contraband
  • llegal organ trafficking
  • Human trafficking
  • Prostitution, sexual exploitation and corruption of minors
  • Discovery and revelation of secrets
  • Scams
  • Obstructing the enforcement process
  • Insolvency offences
  • Damages related to intellectual property
  • Damages related to industrial property
  • Damages related to the market and the consumers
  • Corruption damages in business
  • Reception and money laundering
  • Damages due to ilegal financing of political parties
  • Damages against Public Finance and against Social Security
  • Damages against the rights of workers
  • Damages against the rights of foreign citizens
  • Damages against Spatial Planning and Urban Development
  • Damages to natural resources and the environment
  • Damages regarding nuclear energy and ionizing radiation
  • Damages of the risk caused by explosives and other agents
  • Damages against Public Health
  • Currency counterfeiting and securities fraud
  • Counterfeiting of credit and debit cards and traveler’s checks
  • Bribery
  • Influence peddling
  • Damages caused during the exercise of fundamental rights and of public liberties guaranteed by the Constitution
  • Crimes of terrorism

 

 

And who can commit these crimes?

We can ALL commit them!

From the administrator of the company to any company employee, including the managers.

 

Punishment

responsabilidad penal penas rieusset

The punishment foreseen for legal entities convicted of having committed any of the crimes specified in the above table can be the following:

Obligatory: these are applied necessarily for each type
Fines
Interdictive: Power of the judge according to the circumstances
Dissolution of the company
Suspension of the activities (maximum 5 years) [Cautionary Measure]
Closing down of establishments or premises (maximum 5 years) [Cautionary Measure]
Prohibition to obtain subsidies and public aid (maximum 15 years)
Disqualification from contracting with the public service (maximum 15 years)
Appointment of a controller / liquidator (maximum 5 years) [Cautionary Measure]

 

Can you imagine Barça not playing in the national league or in the Champions League for two years because of Neymar’s contracts? With the new law this is exactly what could happen.

 

Liability exclusions

Article 31a of the Penal Code establishes certain liability exclusions when:

  • The board of directors has adopted and efficiently executed, before the commitment of the crime, models of organization and management that include the appropriate measures of supervision and control for preventing crimes of the same nature
  • The supervision of the functioning and compliance with the implemented model of prevention has been entrusted to a body of the legal entity with autonomous competences of initiative and control
  • The individual perpetrators have committed the crime by fraudulently evading the models of organization and prevention
  • No omission or insufficient exercise of their supervisory and control functions has occurred on the part of the supervisory body

 

Rieusset

In Rieusset, in order to avoid not only the halting of our activity, with the subsequent problem that this would imply for our customers, shareholders and suppliers, but also in order to avoid the crimes themselves, we have decided to implement a model of crime prevention. A model which, as we have said before, aims to eliminate the opportunity to commit crimes.

In collaboration with Bufete Escura we have already carried out the first steps and we expect to be able to finish the work in the coming months so as not only to comply with what is established by law but also in order to integrate a truly ethical company culture in which, among others,

  • The Ethics Code of the Gerosa group is known and complied with
  • The policies of Quality, Food Safety, the Environment and Occupational Health and Safety of Rieusset are known and complied with
  • The internal processes of Rieusset are known and complied with

and where there is commitment on the part of High Management as well as by each and every one of the employees of Rieusset.

Therefore: customers, suppliers and shareholders – you can all rest assured, since we take care of our health in order to continue being brothers in arms.

If you would like any additional explanations, feel free to contact us.

 

Jordi Lopez
jordi.lopez@gerosagroup.com