Criminal Compliance in the field of hydrocarbons
We must begin by explaining what Criminal Compliance is and then limit it to the field of hydrocarbons and, finally, highlight the importance of the Compliance Officer (without which Criminal Compliance is ineffective).
Origin of Criminal Compliance
Criminal compliance (or crime prevention manual in the business environment) is a relatively recent measure, since it was born in the United States in the 1980s as a result of the Watergate scandal that occurred in that country.
We could say that Watergate was the starting point, the event that led to the subsequent appearance of Criminal Compliance until 1985, when the Committee of Sponsoring Organizations of the Treadway Commission (COSO) was born, whose objective was to be a reference as a forum for professionals to develop frameworks and provide guidance on corporate governance, internal control and fraud deterrence, whose committee members are representatives of the industry, public accounting and the New York Stock Exchange.
Little by little this American practice has spread to the most developed countries in our environment.
So what is Criminal Compliance?
It is a manual containing a set of preventive tools aimed at avoiding any criminal offense (mainly money laundering, tax evasion, fraud, influence peddling, punishable insolvency, misappropriation, crimes against data security, social security, intellectual property, public finances, etc. and any other crime) and avoiding possible penalties.
What are the consequences for a company of not having Criminal Compliance?
The company that does not have a Criminal Compliance will be criminally liable in the event of a crime within the company and may face the following penalties:
- High fines.
- Loss of tax incentives.
- Loss of subsidies and other Social Security benefits.
- Closure of premises or establishments.
- Suspension of activities.
- Dissolution of the legal entity
The hydrocarbon sector is a sector characterized today by a high criminal risk, especially in tax matters (crimes against the Public Treasury) which, together with the idiosyncrasy of the sector itself, makes it more than advisable to have a good Criminal Compliance that exonerates the company from any liability and avoids the imposition of the aforementioned penalties.
JLCASAJUANA ABOGADOS is the only law firm that prepares its Criminal Compliance for the hydrocarbons sector, protecting your company from any criminal liability for your company and avoiding possible sanctions in case of lack of a good Criminal Compliance.
We cannot finish without referring to the figure of the COMPLIANCE OFFICER, i.e. the person responsible for recurrently evaluating that the processes of control and execution of Criminal Compliance are carried out and complied with.
If this is not the case, Criminal Compliance is ineffective.
This Compliance Officer can be an internal person of the company or, as many companies do, this service can be outsourced to a lawyer or lawyers who are in charge of monitoring the execution of the Criminal Compliance.
You may be interested in: “Department specializing in excise duties on hydrocarbons“
Carlos Babot
Expert in excise taxes on hydrocarbons
24/04/2023
