Reform of the Criminal Code in 2019: compliance and the market
On 13 March 2019, the Reform of the Criminal Code comes into force; this reform stems from the obligation to transpose European directives dealing with criminal matters. These are set out in European Union directives in the financial and counter-terrorism fields, which address issues of an international nature. It was approved by Organic Law 1/2019 of 20 February, amending Organic Law 10/1995 of 23 November on the Criminal Code.
With these amendments, the legislator is choosing to tighten the criminal liability regime for legal persons and, therefore, it is important for companies to establish preventive criminal compliance programmes with the aim of preventing breaches of criminal law and avoiding potential sanctions that could result in liability for the company, its directors, senior management or employees.
The most important factors for companies to consider are as follows:
MARKET ABUSE
In addition to the offences of price manipulation and insider dealing (sections 284 and 285 of the Criminal Code), there is also the offence of unlawful disclosure of inside information where this jeopardises market integrity or investor confidence (section 285a of the Criminal Code).
Furthermore, in relation to the offence of price manipulation, the scope of protection has been broadened to include spot contracts on commodities and benchmark indices, and the means of commission have been extended to include the use of deception and information technology.
Finally, penalties are increased, and specific aggravating circumstances apply if the perpetrator is a worker or employee of an investment firm, a credit institution, a supervisory or regulatory authority, or a governing body of regulated markets or trading venues.
The offence of insider dealing now includes new forms of commission; it sets out the circumstances in which a person is legally deemed to have restricted access to inside information; and it introduces the same specific aggravating circumstance for the perpetrator as in the previous offence.
THE FIGHT AGAINST TERRORISM
Directive 2017/541/EU is transposed by amending Articles 572 and 573 of the Criminal Code, and the offences of document forgery and travelling for terrorist purposes are included as terrorist offences. Criminal liability is also extended to legal persons in respect of the commission of any type of terrorism-related offence (terrorism offences, indoctrination, glorification, incitement to terrorism, etc.).
COMBATING FRAUD
The articles relating to the amount defrauded in the event of a criminal offence against the European Union’s public finances have been amended, and the liabilities of civil servants in relation to offences of embezzlement and bribery are now regulated in greater detail. Criminal liability is also extended to legal persons in respect of offences of embezzlement (dishonest administration or misappropriation of public assets).
THE OFFENCE OF COUNTERFEITING CURRENCY
The range of penalties that may be imposed on legal persons where they are criminally liable for offences of counterfeiting currency has been broadened, and the offence of importing counterfeit currency has been extended to cover cases where the currency is destined for any Member State of the European Union.
Would you like to to prevent breaches of criminal law and avoid any potential penalties that would result in the company being held liable? Find out more here with us, with no obligation.
Elisabet Gratti
elisabet@aurisadvocats.com
Specialties:
Civil
Personal, family and inheritance law
Procurement and negotiation