Special Focus: White Collar Crime
José Carlos Soares Machado, a Litigation
& Arbitration Partner at SRS Advogados,
Lisbon. “What this new law has changed is
the possibility of that suspension, which in the
past wouldn’t apply to most tax crimes because
they were punished with less than three years
of prison, but now will be applicable only to
crimes punished with less than two years,
which will include most tax crimes.”
“
This very important legal change is
going to deeply affect the way our
companies face the prevention of crimes
committed by their administrators or
by their employees on behalf or for the
benefit of the company.
Bernardo del Rosal, Clifford Chance
Changing the code
The Spanish Ministry of Justice has made
public the project for a new Code of Criminal
Procedure, followed by proposed amendments
to the Anti-Money Laundering Law. However, i t is the
Government’s approval of the Spanish Criminal Code reform
affecting corporate criminal liability and tax fraud that is
the focus of law firms and businesses alike. “It will be a key
issue for 2014 and the next years,” Jesús-María Silva, Head of
the Madrid office of criminal law firm Molins & Silva, that is
recenctly in collaboration with Roca Junyent. “And the draft
has important implications for fraud and insolvency crimes.”
It will be a complete change of some essential aspects of
the traditional criminal legal system, according to Enrique
Luzon, Senior Associate from Gómez-Acebo & Pombo
in Madrid. In the coming months, companies (with the
exception of state-owned entities) will be held criminally
liable for certain crimes committed by their directors or
employees, as well as for failing to adopt the due control
necessary to avoid them or effectively implements a crime
prevention or compliance programme.
“This very important legal change is going to deeply
affect the way our companies face the prevention of crimes
committed by their administrators or by their employees on
behalf or for the benefit of the company,” explains del Rosal
at Clifford Chance.
Incorporating compliance into statutory law is not only
significantly changing the way companies do business across
Spain, but significantly widened the scope of liability. “In the
financial world the proceedings within the grounds of white
collar crimes have been focused on the financial entities and
their managers or ex-directors,” according to Florentino Orti,
a Criminal Law Partner at Garrigues, Madrid. “The FROB,
a public fund run by the Bank of Spain, has filed several
criminal complaints. Currently, within the judicial sphere,
there are ongoing criminal discussions on saving banks,
preferred stocks or shares, intervention of banks, acquisition
of saving banks, retirements of members of the board of
directors before a merger. And within several criminal cases
the position of the auditor is being discussed.”
And while the financial sector has always had compliance
issues regarding the rules of anti-money laundering and
anti-bribery practices, lawyers are now seeing other business
sectors that previously only took interest from a regulatory
perspective, now criminally liable too. This means that
investigations that were initially focused on financial
institutions are now being focused on other sectors such as
pharmaceuticals and construction.
www.iberianlawyer.com
”
Furthermore, having the shift in focus now extending
to managers and directors is setting the tone at the top, so
that they are fully aware of what a deviation of any rules
and regulations would imply. But now where there is entity
liability, there is also personal liability, and with authorities
pursuing both, this is creating a problem for lawyers – and
the role of the arbitrator too – where any connection can
prove to be a conflict of interest. As a result, Iberian lawyers
are seeing this issue as something of an increasing challenge
in an international market place.
Preventative action
Such significant legislative change in Iberia has also added a
new dimension to the provision of services in this area – that
of prevention. “As a result of these changes, clients have new
needs, meaning unique challenges for law firms concerning
corporate compliance,” says Luis Jordana de Pozas, Head of
Criminal at Cuatrecasas, Gonçalves Pereira, Madrid.
In Portugal, the shift in work as a result of such
legislation has been increasingly noticeable. “In 2006, the
work in our practice area was mainly taken up by criminal
cases,” says de Sá e Cunha at Cuatrecasas, Gonçalves
Pereira, Lisbon, “but now there’s almost a 50/50 split
between these cases and regulatory offences – and this is
increasing year-on-year.”
More importantly, lawyers are being asked for
comprehensive advice about the compliance risks, with
an increasing number of clients needing external advisers
for their committees of professional conduct and ethics (or
similar), who have the power to review their corporate
compliance policies for their ordinary activities.
Adriana de Buerba, Head of White Collar Crime at
Pérez-Llorca, Madrid, believes that the role of the lawyer
has changed. “Clients want their externals to act as
business partners, understanding the company’s core
business, anticipating its needs and providing multidisciplinary advice.”
The same can be said in Portugal. “A lawyer specialised
in white collar crime is no longer a ‘stranger’ in the business
world, and is increasingly involved in corporate decision
making,” explains Francisco Proença de Carvalho, a Partner
at Uría Menendez – Proença de Carvalho. “We have ceased
to be mere criminal lawyers and must now be much
more aware of business and financial matters and their
implications.”
January / February 2014 • IBERIAN LAWYER • 53