Resolution No. 27/2018 of the Secretariat of Public Ethic, Transparency and Fight against Corruption, under the auspices of the Ministry of Justice and Human Rights, was published in the Official Gazette on October 4, 2018. The Resolution establishes the guidelines for the implementation of the Integrity Program, prescribed by Law 27,401 of Criminal Liability of Private Legal Entities.

The Integrity Program is the "set of actions, mechanisms and internal procedures to promote integrity, supervision and control, aimed at preventing, detecting and correcting irregularities and unlawful acts". Even though it is not mandatory, the Law grants important legal benefits to the legal entities that implement an Integrity Program: (1) exemption from criminal liability (if appropriate, a spontaneous self-denounce is made, and the undue obtained benefit is returned); (2) attenuation of an eventual criminal sanction; (3) condition to access an effective collaboration agreement at a judicial stage; and (4) requirement to contract with the National State.

The Guidelines provide a technical guide of the parameters for the design, implementation and evaluation of a Program. For the Program to be considered "adequate" it must take into account the following aspects:

  • The company's "own" risks in relation to the potential occurrence of any of the criminal conducts provided by the Law.
  • The company's dimension, taking into account the complexity of its internal organization, the number of employees, its dispersion in branches, etc.
  • Its economic capacity.
  • Moreover, three mandatory elements have been set out as the baseline that the Program shall include:
  • A code of ethics or policies and integrity proceedings applicable to all levels of the company. This document shall be subject to constant update.
  • Specific rules and procedures to prevent unlawful acts within bidding processes, in the execution of administrative agreements or in any other interaction with the public sector.
  • Implementation of regular training in all levels of the organization.

Notwithstanding the aforementioned aspects, there are other elements which adoption is convenient, such as the implementation of procedures that verify the integrity and track record of third parties or business partners, the existence of internal reporting and investigation channels that ensure the protection of the whistle blowers and the rights of those being investigated, the imposition of effective sanctions, the appointment of an internal responsible and continuous monitoring.

Finally, the regulation highlights that the explicit and unequivocal support from the senior management to the Program through the definition of the company's values, the effective demonstration of their commitment and its zero tolerance towards breach, is essential.

The Resolution includes corroboration questionnaires that each legal entity can implement to evaluate the programs that it already has or implements. The answers to these questionnaires can be useful to justify that a Program is "adequate".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.