On 8 March we woke to two pieces of news which, although apparently unrelated, have something in common, the bringing of criminal charges against a corporation and what a corporation is obliged to do to achieve exoneration from criminal liability.

Thus on the one hand there is the headline "Villar and the Spanish Football Association, charged with abuse of public office, misappropriation and misuse of public funds of 1·2 million" of public money, which was apparently granted by way of a subsidy in 2010 from the Sports Council, despite the subsidy having been returned before the complaint was processed by the courts, and on the other the "White Paper on Compliance".

As regards the latter it should be stressed that, although it is not a law, it is expected to be followed in its clarification of basic points of what is known as compliance. Its aim, according to the introduction, is that of identifying the essential aspects defining compliance and setting out the powers of those who carry it out, with reference to key points of compliance standards widely used abroad.

Following Fundamental Law 5/2010 of 22 June on the introduction of criminal liability for corporations there is now a total of five judgments of the Supreme Court finding corporations guilty of criminal offences, the result of both the continuous process of international harmonisation of criminal law and the perceived need for a more effective response to the advance of corporate crime, basically in the field of financial offences, according to the National Prosecutor's Office.

Since the time it was introduced in 2010 the system of criminal liability for corporations, as the National Prosecutor's Office said, had been criticised by many legal commentators for being incomplete and confused in many essential respects.

Perhaps for that reason barely five years later Fundamental Law 1/2015 of 30 March made technical improvements to the regulations on criminal liability of corporations in order to define their content and resolve the doubts concerning interpretation raised by the previous legislation. The most novel aspect of this reform was sections 2, 3, 4 and 5 of art. 31 bis on compliance guides, organisation and management models which make it possible to extinguish or mitigate the criminal liability of corporations.

This legal reform was supplemented by Circular 1/2006 of 22 January of the National Prosecutor's Office which included the requirements to be met by crime prevention programmes in order for corporations involved in criminal proceedings to be exonerated of criminal liability.

In light of these rules, in which there can be no doubt as to the utility of compliance, we have learned through a press release of the Spanish Football Association that it has carried out an internal investigation to clarify the facts of the controversy. This investigation is obviously part of a crime prevention programme which will surely not take long to be seen in the courts.

The recent publication of the White Paper on compliance as the first document to systematise the essential tasks of compliance, and the imminent publication of UNE 19601 "Criminal compliance management systems. Requirements and guidance on use", which will make it possible to standardise crime prevention models in Spain, confirm the usefulness of regulatory compliance programmes for giving corporations grounds of exoneration or mitigation.

And it is not to be thought that these changes to criminal law only affect corporations, as failure by directors to introduce regulatory compliance programmes could be viewed as breach of their general duty of diligence under the Companies Act, and lead to corporate liability actions against the directors for compensation for damage caused to the company by actions contrary to the Act or carried out without proper care.                    

Hence either company directors begin to believe in corporate ethics and to introduce compliance programmes, or they will end up compromising the viability of the companies they run, and even their personal assets.      

For any further information, please contact:

Claudio Aguiló Casanova

Andersen Tax & Legal

claudio.aguilo@AndersenTaxLegal.es