In today’s article in Law In Cabo we will talk about Criminal Liability of Legal Entities. As of 2016, legal entities are susceptible to be found criminally liable in Mexico. This is so, because on June 17, 2016, a decree was published in the Official Gazette of the Federation (DOF) reforming, adding and repealing various provisions of the National Code of Criminal Procedure; the Federal Criminal Code; the General Law of the National Public Security System; the Federal Law for the Protection of Persons Involved in Criminal Proceedings; of the General Law to Prevent and Punish Kidnapping Crimes, Regulatory of section XXI of Article 73 of the Political Constitution of the United Mexican States, of the Amparo Law, Regulatory of Articles 103 and 107 of the Political Constitution of the United Mexican States, of the Organic Law of the Federal Judicial Power, of the Federal Law of Public Defense, of the Federal Tax Code and of the Law of Credit Institutions.
By means of this decree, the legislature modified the Mexican regulatory system to, among other things, include the criminal liability of legal entities. This liability was included in both the adjective and substantive criminal legislation, specifically in provisions 421 to 425 of the National Code of Criminal Procedures, as well as 11 Bis of the Federal Criminal Code.
The National Code of Criminal Procedures (CNPP) included the cases in which a legal person may be criminally liable, the consequences that may be applied to it and the process to be followed to judge the offenses that they are charged with. Meanwhile, the Federal Criminal Code (CPF) included the catalog of federal crimes that may be imputed to it. In the case of the states, the CNPP itself established that the states must include a catalog in their local criminal codes.
Thus, Article 421 of the CNPP provides that legal entities are criminally liable for crimes committed a) in their name b) on their behalf c) for their benefit or d) through the means they provide. This liability is actualized when there is also non-observance of due control in the organization.
The liability of legal entities must be imposed, in accordance with the provisions of the CNPP, independently of the criminal liability that may be incurred by their de facto or de jure administrators. That is to say, the Public Prosecutor’s Office may exercise criminal action against legal persons independently of that exercised against the natural persons involved in the crime.
This liability is not extinguished in those cases in which the legal persons are transformed, merged, absorbed or split; nor in those cases in which they are dissolved in an apparent manner, when the economic activity continues and the substance identity of their clients, suppliers, employees or of the most relevant part of them is maintained.
Likewise, the procedural legislation provides that a legal entity found responsible for any of the conducts listed in the catalog of the Federal Criminal Code or of the federal entities, will be subject to one or more of the following penalties:
In order to determine the sanction applicable to the legal entity, the court will take into account:
- The magnitude of the non-observance of due control in the organization and the enforceability of conducting itself in accordance with the norm.
- The amount of money involved (if any).
- The legal nature and annual turnover.
- The position occupied within the company structure by the persons involved.
- The degree of compliance with the rules.
- The public interest of the social and economic consequences or, as the case may be, the damage that could be caused to society by the imposition of the penalty.
- Thus, in order for companies to address, reduce or mitigate their risks, it becomes necessary to establish compliance programs within them. These programs, commonly known as criminal compliance, are instruments that allow legal entities to detect the areas of greatest vulnerability, taking into account the purpose of the company, its daily activities and its relationship in the line of business or sector to which it belongs as well as with its stakeholders or interest groups.
This is not about transferring the responsibility for the prosecution or investigation of crimes to legal or moral persons, but rather, it is about them becoming co-participants in the enforcement of the rule of law and understanding, as has been happening previously with initiatives such as the Global Compact, that companies have a very important role in the protection of people.
With the implementation of compliance programs, companies become safe spaces for the businesses themselves, as well as for the people who participate and interact with them.
In subsequent installments, we will go into more detail on this topic. However, in this first initial column on the subject, we are interested in conveying the regulatory basis at the federal level (with respect to the Federal Criminal Code), the provisions of the CNPP, as well as the importance of the compliance program that allows legal entities to get up to date in this important matter.
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