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Colombia

Last Verified on Thursday 7th November 2019

    Laws

    • Colombia

      Bribery regarding government officials is a criminal offence pursuant to the Colombian Criminal Code. The act of bribery is sanctioned for both (i) offering, or effectively bribing a government official (article 407), and (ii) for receiving any such bribe (articles 405 and 406). This conduct is punishable by up to 18 years of imprisonment.

      Private corruption (ie, bribery to commercial counterparties) is also a felony under article 250-A of the Colombian Criminal Code, which sanctions both the offering and recipient parties with up to eight years of imprisonment.

      Transnational bribery is also a criminal offence, pursuant to article 433 of the Colombian Criminal Code.

      Furthermore, Law 1778 of 2016 established administrative (non-criminal) sanctions for companies incurring in foreign corrupt practices, and increased the fines for companies involved in domestic bribery; it also set forth a series of policies and controls that need to be implemented by companies that comply with certain requirements (foreign trade, balance sheet thresholds, among others). The enforcement of such policies has been assigned to the Superintendency of Companies, which in turn issued several executive orders regarding the implementation and enforcement of these regulations.  

      Last verified on Thursday 7th November 2019

    • Colombia

      Criminal liability for corporate entities does not exist in Colombia. Under criminal laws however, companies can be subject to the cancellation of their legal personality, or extinction of property rights and forfeiture of tainted assets, if certain requirements are complied with. On the other hand, the Superintendency of Companies may impose administrative fines and other penalties to legal entities domiciled in Colombia and to Colombian branches of foreign companies, of up to US$48 million approx., for acts of foreign or domestic corruption.  

      Last verified on Thursday 7th November 2019

    • Colombia

      In Colombia, criminal liability only applies to individuals; hence, criminal liability for corruption acts applies to all individuals that incur a corruption crime. Due to the territoriality principle, crimes such as transnational bribery (a foreign corruption practice) may be punishable in Colombia. Also, according to the extra-territoriality principle, corruption acts committed abroad against the interest of the Colombian state may be punishable in the Colombian jurisdiction.  

      Last verified on Thursday 7th November 2019

    • Colombia

      Under criminal law “foreign government officials” is understood as any person who has a legislative, administrative or judicial office in a state, its political subdivisions or local authorities, or a foreign jurisdiction, regardless of whether the individual had been appointed or elected. Also, it is considered a foreign government official any person who exercises a public function for a state, its political subdivisions or local authorities, or in a foreign jurisdiction, whether within a public body, or a state company or an entity whose decision-making power is subject to the will of the state, its political subdivisions or local authorities, or a foreign jurisdiction. It will also be considered as a foreign government official any official or agent of an international public organisation.  

      Under administrative transnational bribery laws (Law 1778 of 2016), “foreign governmental official” means any individual with a legislative, administrative or judicial position in a state, its political subdivisions and its local authorities, or in a foreign jurisdiction, regardless of whether the individual was appointed or elected. “Foreign governmental official” also means any individual who exercises a public function for a state, its political subdivisions and its local authorities, or in a foreign jurisdiction, whether within a public entity, a state-owned enterprise, or an entity whose decision making power is subject to the will of the state, or its political or local subdivisions. Any officer or agent of an international public organisation is also considered a “foreign governmental official”.

      Last verified on Thursday 7th November 2019

    • Colombia

      The Colombian Criminal Code requires wilful misconduct for the criminal act to be deemed as punishable. Generally, negligence is not punishable under Colombian criminal anti-corruption laws.

      Under administrative transnational bribery laws (Law 1778 of 2016), Colombian companies are liable for transnational bribery of their subordinates, whenever the act was committed with the tolerance or consent of the parent company.

      Last verified on Thursday 7th November 2019

    • Colombia

      No specific affirmative defence is available for corruption cases in particular. The defendant must prove the absence of intent, or to have acted under error, or to have acted under a justification cause, for the charges to be dismissed by a judge.

      Last verified on Thursday 7th November 2019

    • Colombia

      Aside from the criminal actions and imprisonment of individuals who commit corruption acts, the Superintendency of Companies may impose fines of up to 200,000 minimum monthly wages that are approximately equivalent to US$48 million.

      Last verified on Thursday 7th November 2019

    • Colombia

      There are no current bills being evaluated by the legislative branch. However, the Superintendency of Companies has been exercising stricter oversight regarding compliance of applicable corruption prevention laws.

      Last verified on Thursday 7th November 2019

  • Enforcement

    • Colombia

      Under Colombian law, individuals may be subject to criminal liability for corruption acts, whereas corporate entities may be subject to administrative and civil liability. However, although corporate entities are not subject to criminal liability in Colombia, the crimes committed by their directors may entail additional administrative measures against corporate entities. 

      Regarding the criminal liability, individuals who commit corruption acts may be prosecuted for criminal offences related to public or private corruption acts. The public prosecutor office is in charge of pleading, alleging and proving evidence of these crimes before the competent judge through a ruled procedure. Penalties for the aforementioned crimes include fines, forfeiture of governmental benefits, prohibition of contracting with governmental entities and prison.

      Regarding the administrative liability, corporate entities in which their shareholders, subsidiaries, directors, employees or contractors have committed corruption acts may be subject to an administrative sanction by the Superintendency of Companies. In transnational bribery cases this administrative procedure may be carried out irrespective of any criminal prosecution of the directors’ criminal offences. Conversely, in domestic corruption cases the administrative procedure against corporate entities only may be carried out once their legal representatives or directors are found criminally liable. Sanctions may include fines up to US$48 million, forfeiture of governmental benefits, mass media scrutiny and disclosure, and prohibition of contracting with governmental entities for up to 20 years.

      During criminal prosecution of individuals or as a result thereof, the competent judge may undertake or may require to the correspondent authority to undertake additional measures against corporate entities involved or used as an instrument in corruption acts, such as cancelation of its legal personality, and extinction of property rights and forfeiture of tainted assets.

      Both, legal entities and individuals may be civilly liable for the violation of criminal laws. 

      Last verified on Thursday 7th November 2019

    • Colombia

      The Public Prosecutor Office, which is headed by the Attorney General, is in charge of pleading, alleging, and proving evidence of the criminal offences before the competent judge. In Colombia this office is an autonomous entity separate from the executive branch of government or the judicial branch. 

      The Superintendency of Companies, which is headed by the Superintendent of Companies, is in charge of enforcing the administrative sanction procedure. The Superintendency of Companies is a governmental authority responsible for the supervision of corporations generally 

      There can be other governmental agencies that may undertake other additional or subsequent measures during or after the aforementioned procedures, such as Superintendency of Industry and Commerce, in those cases in which antitrust laws may be violated as a result of a corruption act, or the special division of the Public Prosecutor Office in charge of extinctions of property in cases that involve tainted assets from individuals or companies.

      Last verified on Thursday 7th November 2019

    • Colombia

      There are several multinational corporations and domestic subsidiaries currently been subject to enforcement actions in Colombia for foreign bribery violations. Only one case has concluded with the imposition of a fine to a local subsidiary of a multinational entity.

      Last verified on Thursday 7th November 2019

    • Colombia

      Yes. There have been several cases of arrests and judicial actions against local employees and directors of either (i) Colombian entities or (ii) multinational corporations with a presence in Colombia. Nevertheless, by application of the territoriality and extra-territoriality principle, no foreign individual or entity may be subject to criminal or administrative sanctions, so long as the effects of corruption acts do not have a domestic impact. 

      Colombia is doing important efforts to comply with all of the requirements to be part of the Organisation for Economic Co-operation and Development (OECD), the measures against corruption and its enforcement actions have increased significantly.

      Last verified on Thursday 7th November 2019

    • Colombia

      The short answer is no. Although Law 1778 of 2016 set forth a self-disclosure procedure that entails a reduction or even exoneration of sanctions, as of today, no self-disclosure procedures, settlement agreements, deferred prosecution, non-prosecution agreements or leniency agreements have been executed. 

      Nevertheless, there have been several cases of plea bargains with individuals and officers from domestic and foreign corporations for corruption crimes under the rules of criminal procedural law.  

      Last verified on Thursday 7th November 2019

    • Colombia

      Yes. Numerous cases of investigations related to anti-corruption laws have been contested with varied results (ie, convictions, guilty pleadings, acquittals, deferred prosecutions, and so forth). Since criminal prosecutions can only be directed towards individuals, and the corruption prevention law that may find administrative liability of companies is a fairly new provision, there is no public information of allegations been contested by companies as of today.

      Last verified on Thursday 7th November 2019

    • Colombia

      With the enactment of Law 1778 of 2016, companies that have knowledge about corruption acts that involve their shareholders, directors, employees, or contractors may report to, and collaborate with the respective authority, to be entitled to fine reductions or even total exoneration from liability. 

      The reduction will depend on the quality, usefulness and opportunity of the information that is provided in the self-report. To receive a complete exoneration of any sanction, the self-report requires to be done prior to the initiation of any investigation, as well as prior to the execution of any obligation or right regarding the contracts obtained or involved in bribes; otherwise, the reduction will only be of up to 50 per cent of the fines.

      Last verified on Thursday 7th November 2019

    • Colombia

      The level of cooperation with the authority and strength of compliance anti-corruption programmes are taken into account by the authority in order to appraise sanctions. Conversely, the reluctance to provide the information to the authority may be sanctioned with fines up to US$48 million, which is the same amount of the administrative sanction that may be imposed to companies that commit corruption acts.

      Regarding the level of cooperation, the reduction will depend on the quality, usefulness and opportunity of the information that is provided in the self-report and may be up to 50 per cent of the fine amounts.

      Regarding compliance programmes, the Superintendency of Companies has issued regulations that determine basic standards that must be complied with for a programme to be considered effective in preventing corruption. The extent to which the compliance programme complies with the minimal basic standards, and whether or not it has been implemented correctly, will be considered by the authority when assessing penalties.

      Last verified on Thursday 7th November 2019

    • Colombia

      Under Colombian law, aside from the possibility of negotiation a plea agreement in criminal cases with the prosecution, there are no other incentives for individuals to report known or suspected corruption acts. That said, Colombia has not yet issued any regulation regarding whistle-blowers, and /or their incentives.

      Last verified on Thursday 7th November 2019

    • Colombia

      The only monetary penalty that has been imposed in Colombia for corruption acts against a corporate entity, under administrative regulations, was in the amount of US$1.5 million approximately, imposed on a public utilities company. On appeal, the sanction was reduced to US$1.15 million approximately.

      Last verified on Thursday 7th November 2019

    • Colombia

      Yes. Colombian law has provided additional measures that can be used to prosecute conducts related to corruption. First, as the crimes against public administration (ie, bribery) under Colombian law constitute an underlying crime for money laundering, it has become usual to file charges not only for bribery but also for money laundering regarding corruption acts. Second, the Public Prosecutor Office is entitled to initiate procedures aimed at extinction of property and forfeiture of tainted assets of any illicit activity, which may entail corruption acts. Finally, there are other subsequent measures that may be taken against companies that are responsible for corruption acts, such as additional sanctions due to infringement of antitrust law with, the prohibition of contracting with governmental entities, as well as the forfeiture of governmental benefits. The extinction of property related to criminal acts has proved a very effective tool in fighting corruption and crime in general.

      Last verified on Thursday 7th November 2019

  • International cooperation

    • Colombia

      Yes. The Superintendency of Companies has issued (i) a guidance to understand the anti-corruption laws, and (ii) a guidance to implement a complete and efficient compliance anti-corruption programme. The documents in Spanish versions (English version is not available) may be accessed in the following URLs:

      https://www.supersociedades.gov.co/delegatura_aec/informes_publicaciones/Documents/IA-G-001%20GuiaEntenderLuchaSobornoInternacional.pdf.

      https://www.supersociedades.gov.co/delegatura_aec/Documents/Circular_Externa_100-000003_del_26_de_julio_de_2016.pdf.

      Last verified on Thursday 7th November 2019

    • Colombia

      Colombia is a member of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Under this convention the Colombia government has committed itself to providing prompt and effective legal assistance to other countries in criminal investigations and proceedings related to corruption. The Colombian Public Prosecutor Office has signed agreements with the United States for bilateral cooperation and information exchange, the most recent of which was executed on March 2019. Also, several extradition treaties are in force and can be activated in cases of corruption crimes.

      Last verified on Thursday 7th November 2019

    • Colombia

      Yes, as described, Colombia is a member of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Under the Convention the Colombia government has committed itself to provide prompt and effective legal assistance to other countries for the purpose of criminal investigations and proceedings related to corruption. Additionally, Colombia has signed numerous collaboration and information exchange agreements with the US and its agencies.

      Last verified on Thursday 7th November 2019

  • Investigations

    • Colombia

      Yes. Colombia has been made aware of different corruption acts linked to drug trafficking and money laundering as part of inter-agency agreements (eg, DEA and Colombian national police), most of which have been prosecuted.

      Last verified on Thursday 7th November 2019

    • Colombia

      Colombia has currently in force several international conventions and extradition treaties that do acknowledge a double jeopardy principle. If criminal convictions or acquittals are issued by foreign courts, the Colombian Criminal Procedure Code expressly prohibits the person who was convicted or acquitted from facing new criminal prosecutions by Colombian courts for the same offences, with the caveat that certain criminal offences that are defined as such by the Colombian Criminal Code might be more extensive than foreign provisions, therefore allowing for prosecution on the specific criminal acts that were not tried.

      In addition, under the transnational bribery law, the Superintendency of Corporations can investigate and prosecute acts of foreign bribery of corporations, regardless of whether or not an investigation for the same facts is being conducted by authorities in another jurisdiction.  

      Last verified on Thursday 7th November 2019

  • Risk areas

    • Colombia

      Extradition in Colombia operates by way of treaties signed with specific foreign countries or by way of the general rules of the Colombian Criminal Procedure Code. Such procedure is enforceable to both foreign or national individuals who have been requested by foreign authorities to be extradited, and found by the Colombian Supreme Court and by the President of Colombia to be of sufficient merit for the procedure to advance.

      Last verified on Thursday 7th November 2019

    • Colombia

      Companies that trade publicly are mandated by law to disclose truly, correctly and promptly any material or essential information about, their business, or the securities they offer. For these purposes, material information is such that a person of good judgment would consider of relevance when evaluating an investment option.

      In that sense, any investigation that may adversely affect the company’s reputation, or its management, should be considered to be relevant enough as to be disclosed to the market. Moreover, if the expected result of any such investigation may significantly put at risk the company’s assets or share value, needs to be disclosed unless such investigation is subject to confidentiality according to law.  

      Last verified on Thursday 7th November 2019

  • Compliance best practices

    • Colombia

      Yes. Colombian companies have publicly disclosed investigations relating to bribery. In addition, a company with operations in Colombia, listed in a foreign stock exchange, has recently disclosed a series of potential bribery events.

      Last verified on Thursday 7th November 2019

    • Colombia

      The Superintendency of Companies has identified the following business sectors as requiring a higher degree of oversight:

      • pharmaceuticals;
      • infrastructure and construction;
      • manufacturing;
      • mining-energy; and
      • information and communications tech companies.

      Last verified on Thursday 7th November 2019

  • Other

    • Colombia

      The Colombian government has enacted regulations associated with two specific sectors of compliance: (i) AML/TF (policies addressing money laundering and finance of terrorism) and (ii) Ethic Codes (cross border anti-bribery programme) – both are compliant with the highest applicable international standards and recommendations. The Superintendency of Companies has determined thresholds and activities to define which companies have to implement either or both of the compliance policies. Therefore, for those companies that are mandated by law to incorporate such policies, it is not only usual but also compulsory to have internal hotlines and in general confidential channels that receive anonymous reports of suspected corruption acts in the company. Those hotlines shall comply with the minimal international standard guarantees: confidentiality and non-retaliation. 

      Last verified on Thursday 7th November 2019

    • Colombia

      Companies that are required by law to implement AML/TF and anti-corruption policies, need to meet a minimum set of standards regarding their due diligence procedures with third parties, which entails: (i) advisory and assessment from an external specialist on compliance matters, (ii) request of certain minimum corporate documents (certificate of existence, tax identification certificate, financial statements, bank account information, etc), (iii) filling out of forms with representations about the legal nature of the third parties’ activities and funds, (iv) research of third parties on restrictive lists, (v) including in contracts with third parties certain provisions that allow the company to terminate the contract unilaterally in case corruption allegations against the counterparty, (vi) accounting scrutiny and (vii) revision of risk events and measurement of those risks.

      Last verified on Thursday 7th November 2019

    • Colombia

      For those companies that are required by law to implement AML/TF and anti-corruption policies, it is not only usual but also compulsory to have internal procedures that take place in M&A transactions. For non-obliged entities, compliance due diligence in the context of M&A transactions is becoming increasingly important, provided that Colombian regulations impose successor liability for acts of corruption in the context of an acquisition.

      Last verified on Thursday 7th November 2019

    • Colombia

      In recent years, Colombia has gone through considerable changes to the enforcement of anti-corruption regulation, particularly since it started its candidacy to become a member of the OECD. The most relevant regulatory development was the enactment of Law 1778 of 2016, which created the administrative liability of corporations involved in national and transnational corruption acts. Before the enactment of this regulation Colombian authorities had inefficient tools and procedures to prosecute corruption acts carried out by companies. Before its enactment, companies found that the risk for being sanctioned was not material enough to outweigh the benefits that corrupt practices provided. That is no longer the case. 

      Additionally, with the issuance of Law 1778 of 2016, and its assignment to the Superintendency of Companies of its enforcement, a deep cultural transformation process began in terms of anti-corruption policies. The 2016 regulation addressed the most needed enforcement on the implementation by companies of compliance programmes, and provided authorities with the tools to prosecute corruption acts. Furthermore, it created an incentive-based route-map that allowed for whistle-blowers, while also establishing fines in the case of reluctance to provide information. In other words, Law 1778 paved the way to creating an integral system against corporate corruption in Colombia.

      Last verified on Thursday 7th November 2019

    • Colombia

      Although compliance regulations have been in place since many years ago, it is only in recent times that they have gained a place in centre stage. A continuously growing relevance has taken over past misconceptions that saw compliance policies as barriers to growth and market expansion.

      But despite this exponential growth, cultural issues are still faced by directors and companies that are willing to safeguard their reputation. Clients and suppliers that want to be incorporated into the companies’ business on fast-track applications, and the lack of knowledge that surrounds compliance law in Colombia are the two main reasons of why its implementation on a greater scope is still unlikely. Moreover, with few exceptions, neither universities nor educational institutes have developed postgraduate courses to spread the corresponding necessary knowledge to deal with this relevant topic, therefore rendering it unimportant.

      Finally, the three main regulatory challenges in Colombia are:

      • the reframing of high standards of compliance policies that should become suitable for domestic small to medium-size companies that may not see due diligence procedures as safeguards, but rather as hurdles. Lawmakers and authorities should issue regulations that can be useful for different types and sizes of companies;
      • There is uncertainty regarding the personal liability of compliance officers in Colombia. There is no clarity as to the criminal, administrative and/or civil liability of said officers when they fail to comply with their duties. Legislation should determine minimum fiduciary duties from compliance officers, and determine enforceable measures that require higher standards of conduct from them;
      • Colombia requires better incentives for self-disclosure. Whistle-blowing should be recognised as a tool of private enforcement of public policies and permit new administrations to disclose corrupt practices of former, in a manner that allows for higher degrees of transparency. Incentive-based regulation should result in fewer public costs as private oversight of compliance laws result in benefits to those who disclose market-restricting and ethically reproachable acts.

      Last verified on Thursday 7th November 2019

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