Special Focus: White Collar Crime
Protection and compliance: Lawyers’
dual role
The criminalisation of fraudulent corporate conduct will oblige companies to seek legal
advice regarding the implementation of preventative measures
In the wake of large-scale accountancy
fraud, modifications are planned to Spain’s
Criminal Code on the regulation of corporate
accountancy. These are aimed at stemming
financial crimes and tax fraud, explains
Carlos Saiz Díaz, Head of Criminal at
Gómez-Acebo & Pombo, and creating a new
role for law firms as advisers regarding the
implementation of preventive and protective
measures. The reform also foments corporate
transparency and good management
practices in the companies.
“This is good news for Spain’s law firms,
and also for the health and reputation
of the country’s businesses and macro
economy, as it obliges companies to seek
legal advice regarding the creation of
internal preventative procedures,” he says.
“The new regulations, and the existence of
such procedures, will subsequently instil
confidence in both shareholders and foreign
investors.”
While law firms have traditionally advised
on litigation concerning companies accused
of financial manipulation, lawyers are now
also advising firms at the preventative
stage, counselling on best practices and
participating in the design of procedures
allowing companies to achieve transparency
and, ultimately, a void a squandering of
resources and possible penalisation, which
will now include lengthy prison sentences in
addition to fines.
With companies obliged to comply with
the new anti-corruption and transparency
laws, Spain’s law firms are now extending
their advisory services beyond the private
to the public sector, explains Saiz Díaz, to
assist in the creation of so-called ‘corporate
defence’ programmes, designed to shield
them from any kind of fraudulent practices.
With the modifications to the Code including
penalisation that goes beyond mere
administrative punishment, prevention will
become a company’s priority in the light of
an application of criminal processes against
alleged perpetrators of financial fraud.
“As well as toughening penalisation, this
creates a culture of dissuasion, incentivising
transparency and fomenting a clean-up
of the economy that will generate greater
performance,” Saiz Díaz concludes.
Carlos Saiz Díaz
The key function of information
In terms of tackling white collar crime,
a key preventative risk measure in our
work as lawyers is providing relevant
information, says Francisco Proença
de Carvalho, Litigation Partner at Uría
Menéndez - Proença de Carvalho.
“Although white collar crime is
increasingly fashionable, it is a difficult
subject to understand, especially for
those financial institutions subject to so
many risks from consumers and their
clients.”
And with risks also facing companies
within different fields, in terms of the
decisions they make in relation to public
authorities, supervisory authorities,
tax and crime risk, lawyers such as
Proença de Carvalho are increasingly
being required to give information that’s
not just from a litigation and corporate
perspective but a white collar one too.
“As we don’t have a specific
department in relation to prevention,
www.iberianlawyer.com
while my main activity continues to be
litigation, I’m now dealing in both parts as
clients need more information in order to
understand and be aware of the criminal
implications of the many rules,” he
explains.
However, in terms of risk prevention,
taking into account unknown future factors
(such as the economical environment),
information can only go so far. “You can’t
necessarily anticipate what might arise in
five years time, and in what context,” says
Proença de Carvalho, “so our clients have
to be aware of that”.
The pressure is therefore on for Portuguese
lawyers to keep on top of developments to
embrace the complexity, in order to anticipate
potential issues; “You must remember that
white collar crime is a complex arena for
both lawyers and clients alike,” he concludes.
“For us, it continues to be a learning journey,
and that’s why information all round for risk
prevention is key.”
Francisco Proença de Carvalho
January / February 2014 • IBERIAN LAWYER • 55