Why is compliance so important for companies?

The criminal liability of companies

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2015 was a key year for both Criminal Law and Criminal Procedural Law, as the Criminal Code and the Criminal Procedure Law underwent reforms during that year.

With the reform of the Criminal Code, the criminal liability of legal entities was introduced. This implies the possibility that the commission of certain criminal acts may be imputed not only to individuals who have committed them within a company (whether partners, directors, managers or employees), but also to the company itself as an entity.

This means that companies must assume the acts of the natural persons that make up their organization, being able to become passive subjects in the criminal process, and assuming the consequences of this, which may even include the closure of the company.

From this point of view, it is very important to control the actions of the individuals in the business environment (partners, directors, management body, even employees), in order to ensure that no legal rule is violated in their business activity.

To achieve this, companies must apply COMPLIANCE POLICIES:

a set of good practices adopted by organizations to identify and avoid legal risks, and the application of a method for monitoring compliance with these good practices.

The justification of the implementation of Compliance policies and their compliance, can be decisive when a company is or is not a passive subject in a criminal process, or if it is considered as investigated, indicted, prosecuted or finally the author of a crime.

The passive subject in criminal proceedings

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The 2015 reform of the Criminal Procedure Law, introduced a series of modifications regarding the way of naming the passive subject of the criminal process, who can be qualified as investigated, indicted or prosecuted throughout the stages of the criminal process, once it has been initiated with the complaint before the Judge of Instruction and until the sentence of the Criminal Judge.

When a person is investigated, indicted or prosecuted?

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The truth is that there is a tendency to confuse (often in the media itself) the meaning of these three terms, as they are often used interchangeably. However, the reality is that they refer to different stages of the criminal process.

To understand the differences between investigated, accused and prosecuted, we must distinguish between the three phases that make up the criminal process:

• Investigation phase. This is the investigation phase that begins when there is evidence of the existence of a crime and the investigation and identification of the alleged perpetrators are carried out. In this case, the competent court is the corresponding Court of Instruction. In this phase of the criminal procedure the passive subject (person who is accused of alleged criminal acts and who will be subject to judicial investigation is called investigated (before the reform of the Criminal Procedure Act he was called defendant).
• Intermediate phase. This phase is initiated by the same investigating Judge and consists of determining whether the facts that have been investigated are sufficiently important to be judged or not. Likewise, if it is considered that they should be judged, it is determined who is the body that should hear such facts.

If the examining magistrate (still competent at this stage), formally charges him with having participated in the commission of a specific criminal act, because there are elements in the previous investigation that relate him to the prosecuted act, the investigated person will become defendant..

In this part the intervention of the Public Prosecutor’s Office and the private prosecution is determinant.

• Prosecution or oral trial phase. It begins when the examining magistrate has transferred the case file to the competent criminal court so that it can proceed to judge the facts.

The accused will then proceed to be prosecuted:person against whom the ordinary summary proceeding is directed, from the moment when there is an indictment.

The fact that there are two judges in the proceedings establishes a guarantee, since the judge who issues a sentence will not be influenced by the acts issued in the investigation phase.

Specifically, in Spanish procedural law, the term used at any given time depends on the degree of incrimination of the subject allegedly responsible for the commission of some crime.

If you need help….

If you are concerned that your company may be involved in the commission of some type of crime, you want to implement measures to prevent it, or that it may be investigated, charged and prosecuted in criminal proceedings, you should contact a lawyer specializing in Compliance and Criminal Law. They will be able to tell you what legal obligations your company should comply with and what measures you could take to avoid possible breaches and penalties.

Lawyers at LAWYOU will help you.

In LAWYOU we have lawyers with many years of experience in different branches of law, including criminal law and criminal procedure.

Therefore, our lawyers can help you if you want to implement a compliance policy in your company, as well as with other issues related to criminal liability. If you have any doubt or legal problem, do not hesitate to contact us to tell us about your case through our email info@lawyoulegal.com or, if you prefer, you can also call us at 602 226 895.