Anti-Corruption 2019 Comparisons

Last Updated December 14, 2018

Law and Practice

Authors



Payet, Rey, Cauvi, Pérez Abogados' white-collar criminal law department is comprised of attorneys with extensive experience in defending and advising companies and their shareholders, managers and executives in relation to corporate actions that may have criminal implications. The firm also has a criminal litigation team with proven experience before Peruvian institutions such as the National Police, the Public Ministry, the Judiciary, the Constitutional Court, the Congress of the Republic, and the regulatory agencies. The criminal compliance team offers implementation and follow-up services regarding corrective measures to address or mitigate deficiencies and identified contingencies. It also advises on the implementation of preventative and reporting models required by national legislation and international standards, including the prevention of corruption, money laundering, labour offences generated by breach of work health and safety standards, and environmental crimes, among others.

The government of Peru has signed up to the following international conventions:

  • the Inter-American Convention against Corruption, signed in 1996;
  • the United Nations Convention against Corruption, signed in 2003;
  • the Andean Plan of the Andean Community of Nations against Corruption, signed in 2007; and
  • the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Convention) and the multilateral Convention on Mutual Administrative Assistance in Tax Matters, signed in 2018.

The main source regulating corruption offences is the Criminal Code of 1991, but the fight against corruption in the Peruvian jurisdiction has also been regulated through the following:

  • Law No. 30424, regulating the administrative responsibility of legal entities, which was approved on 21 April 2016 and entered into force on 1 January 2018, modified by Legislative Decree No. 1352 and Law No. 30835;
  • Legislative Decree No. 1385, which sanctions corruption in the private area and was approved on 4 September 2018;
  • the National Policy on Integrity and the Fight against Corruption, which was approved on 14 September 2017 through Supreme Decree No. 092-2017-PCM;
  • the National Integrity and Anti-Corruption Plan, which was approved on 26 April 2018 through Supreme Decree No. 044-2018-PCM; and
  • the Supreme Decree that establishes measures to strengthen public integrity and the fight against corruption, which was approved on 22 September 2018 through Supreme Decree No. 0422018-PCM.

Peruvian legislation does not document in a single text all the existing regulations regarding the fight against corruption: the regulations are scattered in different laws and decrees.

Peruvian legislators have not implemented any guidelines on the interpretation and enforcement of the national legislation. A clear example is Law No. 30424 regulating the administrative responsibility of legal persons, which is in force, but pending publication of its regulations.

In 2018, the following amendments were implemented in the fight against corruption: Legislative Decree No. 1385, which sanctions corruption between private parties and aims to amend the Criminal Code to penalise acts of corruption committed between private parties that affects the development of commercial relations and fair competition; and Law No. 30835, which modifies the law that regulates the administrative responsibility of legal persons to sanction also legal entities for the crimes of collusion and influence-peddling.

The Criminal Code regulates crimes committed by public officials regarding bribery as follows.

Passive Bribery

This crime is established by Article 393 of the Criminal Code as any action that consists of accepting or receiving a gift, promise or any other advantage or benefit to perform or omit an act in violation of a public official's obligations or accepts them as a result of having missed it. Passive bribery has as an active subject the official or public servant and the victim can be any individual of the private and/or public sector. It is sanctioned with imprisonment for no more than eight years and no less than five, and, thus, disqualification from the position.

Passive International Bribery

This conduct is distinguished from the above-mentioned in that the official or public servant accepts the gift to obtain or retain a business or other undue advantage in international economic activities. It is punishable with imprisonment for between five and eight years, plus 365 days of fine, and is regulated in Article 393-A of the Criminal Code.

Improper Passive Bribery

This crime, established in Article 394 of the Criminal Code, is committed whenever the official or public servant accepts or receives a benefit to carry out an act of his position or employment, without failing in his obligation, or as a consequence of one he already performed. It is punished with four to six years' imprisonment, with the respective disqualification.

Specific Passive Bribery

Article 395° of the Criminal Code provides for when the action of receiving or accepting a donation, promise or benefit is made by a magistrate, an arbitrator, a prosecutor, an expert, a member of an administrative tribunal or any other analogous figure who has knowledge that the act is performed to influence or decide on an issue subject to his knowledge or competence. This action is punishable with imprisonment of between six and 15 years, disqualification from the position the official or public servant holds and a fine.

Bribery Regarding Jurisdictional Assistants

This act contains the same assumptions as the above-mentioned section. However, they differ in that the active subject is a judicial secretary, rapporteur, specialist, court assistant or any other analogous figure. This conduct is punished with five to eight years' imprisonment and disqualification. The crime is provided for in Article 396° of the Criminal Code.

Generic Active Bribery

This crime, provided for in Article 397° of the Criminal Code, sanctions acts of corruption carried out by individuals, where a person offers or promises to an official or public servant any gift, promise, advantage or benefit to perform or omit acts in violation of his duties. It is punished with imprisonment for between four and six years, disqualification and a fine.

Transnational Active Bribery

This type of bribery regulates extra-territorial commission of a crime, sanctioning the actions of individuals who not only offer bribes to officials of their nationality and in their territory but to foreign officials. It sanctions an individual who offers, grants or promises directly or indirectly to an official or public servant of another state or official of an international public agency some type of donation, promise, advantage or unlawful benefit for the latter to perform or omit acts of his or her office or employment in violation of his or her obligations, or to obtain or withhold business or other undue advantage in the conduct of economic activities or international trade. It is sanctioned with five to eight years' imprisonment, disqualification and a fine. The crime is provided for in Article 397-A of the Criminal Code.

Active Bribery in the Scope of the Police Role

This crime regulates the acts of bribery driven by individuals, but this time in a more specific way to a member of the national police. Typical behaviours are those of offering, giving, promising a gift or any advantage or benefit to perform or omit acts in violation of their obligations arising from the police function. The sanction is imprisonment for between four and eight years. The second modality is when the individual offers, gives or promises a donation or any advantage or benefit for the member of the police to perform or omit acts in violation of their obligations arising from the police function. It is sanctioned with imprisonment for between three and six years. The crime is established in Article 398-A of the Criminal Code.

Incompatible Negotiation

This is a crime, established in Article 399° of the Criminal Code, in which a public official who is improperly interested directly or indirectly or by simulated act intervenes in a contract or transaction on account of their position. Such acts of corruption must be carried out for their own benefit or for a third party and are punished with four to six years' imprisonment, disqualification and a fine.

Unlawful Enrichment

This crime sanctions an official or public servant who, abusing his position, illicitly increases his property with respect to his legitimate income. It is punished with imprisonment for between five and ten years, disqualification and a fine. The conduct is provided for in Article 401° of the Criminal Code.

Definition of a Bribe

Bribery in this jurisdiction is defined as any act by which a donation, promise or any other advantage or benefit is offered or received to achieve a specific purpose. The criminal act has as personal elements the authority or public official that requests or accepts the goods or money to perform its/their functions in a certain way and the private third party that offers/gives the advantage/money to the authority or public official. Currently, bribery is also regulated between private parties.

Receiving a bribe is a crime, whether the recipient is a public official or individual. Bribery is regulated in the Peruvian Criminal Code from Article 393° to Article 398°.

The mere fact of proposing or accepting an unlawful advantage qualifies as the crime of bribery.

In Peruvian legislation, hospitality expenses such as travel expenses and meals, gifts and promotional expenses such as facilitation payments to a public official or between private parties are not regulated in a specific manner. However, these cannot be offered to obtain an advantage or benefit, otherwise a bribery offence would be committed.

A failed attempt to prevent a bribe is not an offence in Peru's legal system.

Public Officials

In accordance with Article 425° of the Peruvian Penal Code, the following are considered as public officials or servants.

  • Those who are part of the administrative career.
  • Those who hold political positions or positions of trust, even if they come from a popular election.
  • Anyone who, regardless of the labour regime in which they find themselves, has a labour or contractual relationship of any kind with State entities or bodies, including State enterprises or mixed economy companies included in the State's business activities, and by virtue of this, it exercises functions in said entities or bodies.
  • Administrators and depositaries of funds seized or deposited by a competent authority, even if they belong to individuals.
  • Members of the Armed Forces and national police.
  • Those designated, elected or proclaimed, by competent authority, to carry out activities or functions in the name or service of the State or its entities.
  • The others indicated by the political Constitution and the law.

Employees of public companies are also considered as public officials.

Article 397-A° of the Peruvian Criminal Code sanctions transnational active bribery and anyone who, in any way, offers, grants or promises directly or indirectly to a public servant or servant of another state or official of a public international donation organisation any promise, advantage or unlawful benefit in their own benefit or that of another person, so that said server or public official performs or omits acts specific to his position or employment in violation of his obligations or obtaining or retaining a business or other undue advantage in the conduct of international economic or commercial activities. The crime is punishable by imprisonment for between five and eight years, disqualification and a fine.

Bribery between private parties is regulated in Peruvian legislation. It was included in the country's legal system through Legislative Decree No. 385 on 4 September 2018 and sanctions bribery between individuals within a private company, NGOs, associations, foundations and committees, among others. The maximum penalty to be imposed is four years of imprisonment.

The crime of influence-peddling is regulated in Article 400° of the Criminal Code and sanctions anyone who, in exchange for a benefit, offers to intercede or influence, directly or indirectly, a public official who will know or knows a judicial or administrative case. If the agent is an official or public servant, the sanction will be even more serious.

It is sanctioned with imprisonment of four to six years, disqualification and a fine.

The Peruvian Criminal Code sanctions the crime of fraud within a legal entity in Article 198°, when someone performing the administration or representation duties of a legal entity acts to the detriment of it or carries out other acts such as providing false information with regard to the legal entity or concealment of balance sheets.

In addition, the Criminal Code regulates the crime of parallel accounting in Article 199°, which covers those who keep parallel accounts to those required by law to obtain undue advantage.

The crime of unlawful collection is regulated by Article 383° of the Peruvian Criminal Code and sanctions an official or public servant who demands, receives pay or delivers improper contributions exceeding the legal rate amount.

Article 399° of the Peruvian Criminal Code regulates the crime of incompatible negotiation (see 1.2.1 Bribery).

Article 389° of the Peruvian Criminal Code regulates the crime of embezzlement, through which an official or public servant gives a different destination to the money or goods relating to the service or function entrusted. It is sanctioned with imprisonment of between one and four years, disqualification and a fine.

Article 384° of the Peruvian Criminal Code regulates the crime of collusion, which concerns a public official or public servant who, directly or indirectly, arranges with the interested parties to defraud the State or entity or body of the State by reason of his or her position at any stage of the procurement process.

Article 397° of the Peruvian Criminal Code regulates the crime of bribery and sanctions anyone who, under any modality, offers, gives or promises to a civil servant or public servant a donation, promise, advantage or any benefit to perform or omit acts in violation of their obligation.

The geographical reach of Peru's applicable legislation is the Peruvian territory, as well as extra-territorial reach. Regarding the national scope, all the legislation affects or has legitimacy in all the Peruvian territory. However, the Criminal Code also regulates crimes that may be committed outside the Peruvian territory, such as international bribery, regulated in Article 393-A°, and transnational bribery, regulated in Article 397-A°.

Two laws and a legislative decree have been implemented in the Peruvian legal system that are framed in the criminal liability of a company for crimes committed by individuals, which are the following:

  • Law No. 30424, which regulates the administrative responsibility of legal entities, approved on 21 April 21 2016 and entered into force on 1 January 2018.
  • Legislative Decree No. 1352, which extends the liability of legal persons for the crimes of generic bribery (Article 397° of the Criminal Code); specific bribery (Article 398° of the Criminal Code); with Articles 1, 2, 3 and 4 of Legislative Decree No. 1106, the Legislative Decree of Effective Struggle against Money Laundering and Other Crimes Related to Illegal Mining and Organised Crime; and in Article 4-A° of Decree Law No. 25475, which establishes the penalty for the crime of terrorism and the procedures for investigation, instruction and trial, approved on 7 January 2017.
  • Law No. 30835, which modifies the law that regulates the administrative responsibility of legal persons and includes the crimes of collusion (Article 384° of the Criminal Code) and influence-peddling (Article 400° of the Criminal Code), approved on 2 August 2018.

The above legislation establishes that legal persons are administratively responsible (which is actually a criminal responsibility) for the aforementioned crimes when these have been committed on their behalf and for their benefit, directly or indirectly, by:

  • their partners, directors, de facto or legal administrators, legal representatives or attorneys-in-fact of the legal entity, or its subsidiaries or subsidiaries;
  • an individual who, being subject to the authority and control of the persons mentioned in the preceding paragraph, committed the offence under their orders or authorisation;
  • an individual indicated in the first point, when the commission of the crime was possible because the persons mentioned in that paragraph did not fulfil their duties of supervision, surveillance and control over the activity entrusted, in response to the specific situation of the case; and
  • legal entities that have the status of parent companies will be liable and sanctioned whenever the natural persons of their subsidiaries or subsidiaries, who commit any of the conducts indicated in the first paragraph, have acted under their orders, authorisation or with their consent.

The statute of limitations is the maximum of the penalty imposed for each crime, calculated from the commission thereof. However, if the criminal act is known and a criminal complaint is filed with the authorities, the limitation period will be equivalent to the sum of the maximum term of the penalty plus its half. However, the crimes of bribery, embezzlement, collusion, incompatible negotiation, influence-peddling and illicit enrichment do not reach the statute of limitations.

Law N° 30424 sets exemptions and mitigations for legal entities involved in the execution of the crimes referred to above.

Exemptions

The first exemption applies when the representatives or employees of the legal entity have committed the crimes for their own benefit or for a third party other than the legal entity.

The second is when any person representing the company or on their behalf commits a crime fraudulently evading a prevention model or compliance programme implemented previously by the company. To be exempted of criminal liability, the company must prove to the criminal authority that it had a prevention model to pre-empt the commission of crimes, but a worker acted unlawfully despite this.

Regarding the prevention model (compliance programme), this consists of implementing measures issued by the company to foresee, and control as required, the dangers of the commission of crimes that may arise from its activity. Therefore, if the company implements a compliance programme before any of their staff members or representatives commit one of the crimes that may cause the company’s responsibility, it will be exempted of criminal liability in connection with the listed crimes. According to the referred-to law, the compliance programme should be related to the company’s risks and needs, and it must have at least the following elements:

  • a person responsible for preventing risks of corruption and money laundering;
  • protocols to identify, assess and mitigate the risk of corruption and money laundering;
  • whistle-blowing;
  • regular training and scheduled dates to conduct the training; and
  • a system for evaluation and continuous monitoring of the prevention model.

For mergers of legal entities, the exemption of liability will be applied when the acquiring company demonstrates that it carried out appropriate due diligence actions prior to the merger.

Mitigations

There are two mitigating situations: first, if the legal entity adopts a compliance programme after the commission of the crime but before initiation of the oral trial and second, co-operation shall be considered if the entity collaborates with the attorney’s office of the prosecutor in clarifying the facts.

There are no exceptions to these defences.

There are no de minimis exceptions.

No sectors or industries are exempt from the above offences, because Law No. 30424 covers legal entities under private law constituted under any type of company regulated by the Peruvian Companies Act (closed, ordinary and open corporations, limited liability companies and individual limited liability companies), associations, foundations, unregistered committees, irregular companies, autonomous asset management entities, Peruvian state companies and mixed economy companies.

Law No. 30424 establishes as an extenuating and mitigating circumstance the implementation by the legal entity of a Compliance Programme in criminal matters prior to or after the crime committed, respectively.

In relation to individuals, the penalties to be imposed depend on each crime. In that sense, the penalty varies from disqualification of the function and fines, to imprisonment.

Regarding legal persons, Law No. 30424 implements a liability imputation system through which autonomous and direct penalties are imposed, such as administrative sanctions of (i) a fine of up to six times the benefit obtained or expected to be obtained with the commission of the crime and (ii) disability, in any of its modalities:

  • suspension of commercial activities for a period of no more than two years;
  • prohibition to carry out activities of the same kind as those in whose execution the crime was committed, favoured or covered up, which can be temporary (no longer than five years) or definitive;
  • contracting with the State;
  • cancellation of licences, concessions, rights and other administrative or municipal authorisations;
  • closure of establishments on a temporary basis (no longer than five years), or definitively; and
  • dissolution of the legal person.

There are guidelines applicable to the evaluation of the penalties that are used for all the offences established in the Criminal Code. In order to assess the appropriate penalties, the judge needs to take into consideration different aspects regarding the defendant’s characteristics, such as social deprivation or abuse of office, economic position, their culture, customs and the interests of the victim, family or persons that depend(s) on it.

There are no minimum sentences due to the increasing commission of acts of corruption in Peru, which led to the passing of Law No. 30304 in 2015, through which Article 57 of the Criminal Code was modified with the purpose of prohibiting the suspension of effective punishment of officials and public servants who commit crimes of corruption (collusion, embezzlement, passive bribery, incompatible negotiation and illicit enrichment).

There is no special rule that specifically regulates the recidivism of corruption crimes, which is why Article 46-B° of the Criminal Code will be applied in a general manner, so that if the convicted person commits a crime within five years of serving his or her sentence, he or she will be considered as a repeat offender; therefore, this condition is constituted as a qualified aggravating circumstance when the judge evaluates the application of the penalty.

National legislation establishes the duty to prevent corruption, an example of which is the administrative responsibility of the legal entity provided for and regulated in Law No. 30424, which expressly establishes that a legal entity involved in corruption offences shall be exempted of responsibility if, prior to committing the crime, it adopted and implemented in its organisation a prevention model appropriate to its nature, risks, needs and characteristics consisting of adequate surveillance and control measures to prevent or significantly reduce the risk of commission of the crime.

The prevention model must contain at least the following elements:

  • a prevention officer;
  • identification, evaluation and mitigation of risks to prevent the commission of the offences;
  • implementation of a whistle-blowing system;
  • dissemination and periodic training in the prevention model; and
  • evaluation and continuous monitoring of the prevention model.

The Capital Market Superintendence (SMV) is responsible for evaluating the correct implementation and operation of prevention models. In this sense, according to the SMV, individuals or companies will report violations of provisions against bribery and corruption when there is any attempt, suspicion or act of a crime, as well as any other act that determines the breach or weakness of the prevention model.

The Draft Regulation of Law No. 30424 dated 27 February 2018 establishes as a protection mechanism for a whistle-blower that the legal entity ensures that no staff will suffer retaliation, discrimination or any sanction for reports or complaints filed in good faith.

There are currently no incentives for whistle-blowers to report bribery or corruption. The Draft Regulation of Law No. 30424 states that the legal entity will adopt an incentive scheme to implement the complaint procedure that will reaffirm the importance of the prevention model, as well as to promote commitment and support to the same.

To date there is no regulation that establishes, specifies and develops the standard components and minimum requirements of the prevention model that legal entities can voluntarily implement in their organisation as provided in Article 17 of Law No. 30424. In that sense, on 27 February 2018, the Draft Regulation of the law published on the website of the Ministry of Justice and Human Rights was issued for citizens to become aware of the project and make suggestions, recommendations or comments on its improvement. The approval of the aforementioned regulation is pending.

Currently, Article 36° of the Peruvian Criminal Code establishes sanctions that are applied together with Law No. 30424, which sanctions the administrative responsibility of legal entities. These sanctions have as a consequence the deprivation of the function, position or commission exercised by the person who has been convicted by a firm ruling; that is to say, the person who has been linked to bribery offences will be removed from his or her position or function because he or she used this function to commit criminal offences.

The competent body to sanction the above-mentioned crimes is the Judicial Authority. Also, the Prosecution Office is the autonomous entity responsible for the prosecution of crime; in other words, the Prosecution Office is responsible for conducting the investigation and then deciding whether to request the Judicial Authority to start with the judicial stage due to the existence of reasonable indications of the commission of a crime. Finally, if there are elements of evidence of the commission of the crime, the Judicial Authority is in charge of sanctioning them.

Each public body has a public prosecutor's office, which is responsible for ascertaining the complaints filed or initiating an investigation ex officio. The prosecutor of each Ministry is in charge of requesting information from the institution’s internal control body.

If the prosecutor of the institution considers that the information he has collected merits a criminal sanction then he must report it to the prosecution office or inform the competent authority of the institution about the possibility of disciplinary action against the official who was reported.

The Judicial Authority has discretion for mitigation in enforcing its power and these factors are included in the Code of Criminal Procedure; one of them being a collaborating partner and for this benefit to be used, the defendant must accept one of the charges attributed to him; in addition, that information can be corroborated. Another benefit is early termination, which is made at the request of the interested party or the prosecutor and consists of accepting his guilt and thus speeding up the process, reaching an agreement with the prosecutor and seeing his penalty reduced.

Confession is also a benefit granted by the judge, which consists of a reduction of the penalty to be imposed and it works when the accused admits what crime he committed.

The diverse benefits that are regulated in Peru's Criminal Code have the purpose of accelerating the process.

The jurisdictional process has the public purpose of protecting and applying the rules. This purpose includes compliance with the law and the proper administration of justice.

Since a prestigious Brazilian company revealed having paid billions in bribes to obtain public bids in Peru, the Prosecution Office has initiated a series of criminal investigations against former presidents, judges and members of political parties who apparently had received money for their political campaigns and/or agreed to make public procurement with said company for money.

Currently, the judiciary has imposed precautionary measures on many of the people involved, as well as on former public officials of the Peruvian State.

The level of sanctions is very high; the people involved in the payments mentioned above have had the precautionary measure of preventative detention imposed on them. Also, officials involved in bribes have been dismissed from their position.

The Prosecution Office has requested the inclusion of legal entities as third liable parties in the process initiated against employers who have made improper payments to make contracts with the Peruvian State.

The OECD produced reports on integrity in Peru in 2014 and 2015, but the organisation has not recently conducted a detailed study on the new legislation regarding the fight against corruption in the country.

All legislation is subject to change and Peruvian legislation is no exception. Therefore, it is expected that soon there will be changes in the legislation applicable to the fight against corruption and bribery.

Clear examples of possible amendments to the applicable legislation are the following:

  • Draft Law 03374/2018-CR, proposed on 13 September 2018, which proposes to modify Articles 5, 47, 48, 50, 51, 56 and Subsection 65.3 of Law 29277, Law of the Judicial Career, referring to the entry system, sanctions and registration of sanctions in the judicial career, as well as the democratisation of the election of the Presidents of the Supreme Court and Superior Courts, and the call for vacancies of judges and provisional supreme judges and supernumeraries.
  • Draft Law 03412/2018-CR, proposed on 19 September 2018, which proposes to modify Articles 395, 396, 398 and 400 of the Criminal Code, increasing penal sanctions in corruption crimes committed by members of the National Council of the magistracy, magistrates, prosecutors and other analogous positions.
  • Draft Law 02836/2017-CR, proposed on 10 May 2018, which proposes to incorporate Article 316-B to Article 316 of the Criminal Code, to specify the crime of apology for corruption. This seeks to prevent, punish and eradicate all kinds of acts that exalt, justify or praise people who have been convicted by a final judgment.
  • Draft Law 02718/2017-CR, proposed on 18 April 2018, which proposes to modify Articles 5, Section b) of Article 6, Sections a) and f) of Article 9, Article 10, Article 14 and Article 18 of the Law on Political Organisations, which prohibits the affiliation to political organisations of persons convicted of terrorism crimes, apology for the crime of terrorism, embezzlement, collusion and corruption of public officials.
Payet, Rey, Cauvi, Pérez Abogados

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Law and Practice

Authors



Payet, Rey, Cauvi, Pérez Abogados' white-collar criminal law department is comprised of attorneys with extensive experience in defending and advising companies and their shareholders, managers and executives in relation to corporate actions that may have criminal implications. The firm also has a criminal litigation team with proven experience before Peruvian institutions such as the National Police, the Public Ministry, the Judiciary, the Constitutional Court, the Congress of the Republic, and the regulatory agencies. The criminal compliance team offers implementation and follow-up services regarding corrective measures to address or mitigate deficiencies and identified contingencies. It also advises on the implementation of preventative and reporting models required by national legislation and international standards, including the prevention of corruption, money laundering, labour offences generated by breach of work health and safety standards, and environmental crimes, among others.

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