February 7, 2017
In recent times, we have been "bombarded" with news about corporate criminal liability and the importance of compliance programs. But is it true that the axiom "societas delinquere non potest" was broken with the reform of the Penal Code (CP) enacted by Organic Law 5/2010, of June 22?
Well, I share the opinion of some scholars [1] who have always argued that corporate criminal liability was established with the entry into force of the CP in 1995, and not with the introduction of art. 31 bis into our CP in 2010, as is often claimed. Companies could already be criminally sanctioned for the actions of their managers and employees since 1995.
First of all, as is known, companies were already subsidiarily civilly liable ex art. 120.4º CP "for crimes - previously also offenses - committed by their employees or dependents, representatives or managers in the performance of their duties or services." Through this formula, in forensic practice, companies ended up being condemned as civilly liable, as well as their insurance companies as direct civilly liable ex art. 117 CP, ensuring victims received the corresponding compensation, which was often the sole aim in criminal proceedings.
Another measure introduced by the 1995 CP, and the most important for understanding the subsequent development, was the inclusion of art. 129, which provided for accessory consequences for companies ranging from closure, dissolution, suspension, or prohibition of activity, to judicial intervention, all measures now included in the new art. 33.7 CP as "penalties applicable to legal persons."
Moreover, art. 129 already provided in 1995 that the temporary closure of premises and the suspension of the company’s activities could be ordered by the Investigating Judge as precautionary measures, coinciding with the last paragraph of the current art. 33.7 CP.
Therefore, it is debatable whether the measures provided for in the aforementioned art. 129 CP were merely accessory consequences from the start, considering that all these consequences have been transposed to the current art. 33.7 CP.
In other words, if the accessory consequences of art. 129 introduced in 1995 have been included as penalties applicable to legal persons today, why can't we say that those accessory consequences were already genuine penalties, albeit "disguised" as accessory consequences in TITLE VI of the CP?
Another measure approved by the legislator in subsequent years as a preliminary step towards the explicit recognition of corporate criminal liability was the introduction of paragraph 2 of art. 31 CP through LO 15/2003, which stated regarding the liability of managers: "In these cases, if a fine is imposed on the perpetrator of the crime, the legal entity on whose behalf or account they acted will be directly and jointly responsible for paying the fine," i.e., the company was required to respond criminally for the fines received by de facto or de jure managers.
Similarly, another element foreshadowing the legislator's future intention was the amendment of art. 369 CP through LO 15/2003 related to public health crimes, introducing paragraph 2, whereby if the offender belonged to an organization or association for the purpose of drug trafficking, participated in other organized activities, or whose execution was facilitated by the commission of the crime, or if the acts were committed in public establishments by the responsible parties or employees, the penalties provided for in the referred article - fine - would be imposed on the organization, association, or entity, plus the possible imposition of measures such as the loss of the possibility of obtaining public subsidies or aid and the right to enjoy fiscal or Social Security benefits, as well as those provided in the aforementioned art. 129 CP.
It is evident that the legislator has been introducing corporate criminal liability since 1995. However, this author shares the view that with the approval of the 1995 CP, Spain already had such liability.
Consequently, do we need an explicit definition of a legal entity in the CP as much of the doctrine advocates?
As is known, the CP does not explicitly state what is meant by an imputable legal entity according to art. 31 bis, so it is necessary to refer to other articles or other legal systems to define the concept of a legal entity.
The first reference in the CP to what we might understand by a legal entity is found in art. 297 of "CHAPTER XIII On Corporate Crimes," stating that "for the purposes of this chapter, a company means any cooperative, savings bank, mutual society, financial or credit entity, foundation, commercial company, or any other entity of similar nature that permanently participates in the market to achieve its purposes."
However, this article does not provide an explicit definition of a legal entity and is intended for corporate crimes, so it is necessary to refer to other legal systems to define the concept.
Art. 35 CC states that legal entities are: "1. Corporations, associations, and foundations of public interest recognized by law. Their personality begins from the moment they are validly constituted according to law. 2. Associations of private interest, whether civil, commercial, or industrial, to which the law grants their own personality, independent of that of each of their members."
Similarly, art. 116 of the Commercial Code provides that "the company contract, by which two or more persons agree to contribute common assets, industry, or any of these things, to obtain profit, will be commercial, whatever its class, as long as it has been constituted according to the provisions of this Code.
Once the commercial company is constituted, it will have legal personality in all its acts and contracts."
Art. 1 of the Capital Companies Law regulates the possible capital companies, stating that they will be "the limited liability company, the public limited company, and the partnership limited by shares."
In conclusion, the CP refers to other sectors of the legal system to determine the concept of a legal entity, and it would be more in line with the principle of legality for the legislator to introduce an explicit definition of what is meant by a legal entity, as it does with companies in art. 297 CP.
However, in this author's opinion, an explicit definition of a legal entity in the CP would not be necessary, since, as explained above, entities without legal personality can already be sanctioned ex art. 129 CP with most of the penalties applicable to legal entities according to art. 33.7 CP, so why not consider merging arts. 31 bis and 129 CP into a single article?
In short, a possible lege ferenda solution could lead the legislator to introduce the scenarios of art. 129 CP - "organizations, groups, or any other type of entities or groups of people that, lacking legal personality, are not covered by art. 31 bis" - into the scope of the current art. 31 bis and 33.7 CP as another type of corporation or collective entity deserving of criminal reproach, following the thesis that advocates considering the accessory consequences of art. 129 CP as genuine penalties, a solution that would mean the full incorporation of collective entities without legal personality into criminal liability.
[1] One of the greatest proponents of this thesis is the professor of Criminal Law and lawyer Mr. Luis Rodríguez Ramos.
Ignacio Montoro Iturbe-Ormaeche | Specialist in Economic Criminal Law and professional civil liability
