NEW SPANISH LEGISLATION EXTENDS CRIMINAL RESPONSIBILITY TO COMPANIES AND OTHER LEGAL ENTITIES.

 

This is quite a dramatic move and sets the scene for numerous conflicts to arise. The objective of the law is to get businesses to cooperate in the prevention and discovery of financial crimes. What’s more the law establishes substantial reductions in the eventual fines and penalties if the company in question cooperates with the investigation and discovery of the potential crimes. Thus giving rise to potential conflicts of interests between directors and employees.

Criminal responsibility will arise in either of the following situations:

• When the supposed crimes have been committed on behalf of the entity in question, and for its betterment, by its legal representatives or individuals supposedly acting on its behalf.

• When the entity in question has not carried out the appropriate supervision and control of its employees or agents (direct or otherwise) who may have committed a crime within the entity itself. 
  Criminal responsibility can be attached to the legal entity irrespective of whether the individuals involved can be equally imputed in the related crimes. Equally proof will be required that the alleged crime is expressly classified as such.

In practical terms the vast majority of proven cases will end up with fines rather than anything more serious, however the courts will have power to intervene companies, wind them up, etc. Needless to say were directors have been involved in the supposed misdoings they will be disqualified from acting as such in the future.

Business clients who need further advise please contact us, we will be happy to clarify any doubts.

Asec Group

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