White Collar and Corporate Crime: 2018 Overview

In terms of congressional activity, it has been a year of critical legal developments with the potential to radically alter the dynamics of the practice. This includes substantive legislation, such as the new Law on Corporate Criminal Liability, and procedural modifications, especially the new Federal Code of Criminal Procedure.

On the judicial front, major investigations into allegations of corrupt practices in strategic industries have been a dominant theme throughout the year. As well as their media impact, these cases could have far-reaching implications, to the point of altering the way of doing business in Argentina.

Key Developments and Trends

• New law on Corporate Criminal Liability: introduces severe criminal penalties for corporations, when certain bribery-related acts are committed in their name or for their benefit. Corporate defenses are very limited, although the law contemplates benefits for self-reporting and the possibility of entering into leniency agreements with the case prosecutor.
• New Federal Code of Criminal Procedure: changes the nature of criminal proceedings in Argentina, with the Prosecutor assuming plenary authority over the investigation. It regulates new evidentiary methods, emphasizing the use of technology in criminal proceedings. It also reduces procedural formalities towards faster and more agile investigations.
• Speedier filing of tax fraud charges: following improvements in data collection and information sharing, national and local tax authorities are becoming more efficient in the filing of criminal charges. In cases of formal violations, failure to pay and filing of criminal charges have been practically simultaneous.
• New rules for pre-trial detention: the Federal Court of Criminal Appeals issued new guidelines for pre-trial detention in cases of alleged criminal wrongdoing by public officials, construing “residual power networks” as evidence of the defendant’s ability to affect the course of the investigation.
• Reliance on cooperating defendants: federal prosecutors have been increasingly relying on the use of cooperating defendants, both as a trigger for a criminal investigation as well as an advancement tool in ongoing actions. Some cases have seen a surprising number of spontaneous appearances by prospective cooperators, not originally targeted in the investigation.
• Aggressive approach towards asset recovery: in furtherance of relevant international treaties aimed at depriving criminals from ill-gotten gains, Argentine criminal courts have stepped up asset freezing and recovery efforts. This resulted in a greater use of precautionary measures during the investigation and a significant increase in the value of the average attachment.
• Statute of limitations dropped for corruption related crimes: Section IV of the Federal Court of Cassation ruled that the statute of limitations does not apply to corruption related cases, when the defendants obtained a significant profit at the expense of the state. This could be a key milestone, especially in a context where the vast majority of corruption related investigations normally run the clock on the statute of limitations.

2019 Perspective

• Expanded use of cooperating defendants: results seen during 2018 could encourage the use of cooperating defendants in federal authorities. If so, it will be important to define rules and conditions for information sharing between courts and prosecutors, when evidence volunteered by a defendant may be useful in more than one investigation.
• Customs and tax fraud investigations: Argentina has secured a number of bilateral and multilateral information sharing agreements, which could expedite pending customs and tax fraud investigations with cross-border elements.
• Draft National Criminal Code: the Argentine Executive presented a new Criminal Code for congressional approval, which could be debated during 2019. In very general terms, the new code broadens the scope of offenses for which a legal entity may be held criminally liable. It also introduces new criminal definitions such as negligent failure to prevent corruption and private-to-private bribery.
• Draft Asset Recovery bill: the House of Representatives must vote on a draft bill that could introduce non-conviction-based confiscations. If passed, it would further reinforce current asset freezing and seizure trends.