With hopes to combat recent corruption scandals and its current state of disruption, Peru has enacted a new criminal liability law, Law 30424, to kick off the new year. This new law introduces corporate criminal liability and recognizes the liability of a legal person conducting bribery both at the local and foreign level, including money laundering and terrorism financing. It will make persons and entities applicable to sanctions ranging from fines to the dissolution of the legal entity and also aligns with the U.S. standard that a party or corporate entity is responsible for the acts committed by its employees or agents while in the capacity of their employment agency, as long as the act involves the corporation.
Peru’s goal is to regulate and improve the system of liability of those who partake in bribery related offenses. This is, of course, a step in the right direction for Peru, especially in light of the country’s recent rise in corruption and bribery scandals involving politicians, government officials, well known private citizens and corporate executives. Including in recent news, President Kuczynski, who was removed from office at the end of 2017 following his admission to accepting bribes from Brazil’s construction giant, Odebrecht.
This new legislation introduces significant provisions such as 1) it applies to all legal entities, private and public, no matter their size, 2) it applies to both local and foreign bribery of public officials including money laundering, terrorism financing and other criminal activities, 3) it applies independently to the legal entity without requiring the act of a single employee to trigger the corporate criminal liability, 4) penalties and sanctions will be applied based on the annual income of the entity as well as the benefits they received from the bribery or other illicit act, 5) and mandatory intervention or supervision, including a stay of sanctions and fines for a period of up to two years can be imposed on legal entities in violation of the law.
Enacting new anti-money laundering (AML) and anti-bribery legislation is only Peru’s first step in their fight against corruption. Not only do the new laws need to be enforced but corporations and even small businesses should make it a priority to have an adequate compliance solution in place that will help them detect and deter suspicious activities that could be an indication of criminal activity. It is the responsibility for all persons and entities to practice proper due diligence and designating a securities regulator to determine whether or not a corporate compliance program is adequate will be Peru’s next step in its efforts to globalize anti-corruption.
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