Province of Mendoza Approved its Own Anti-Corruption Law and Requested Compliance Programs

On August 11, 2020, Law No. 9,327 (“Law 9,237”) was published in the Official Gazette of the Province of Mendoza. The purpose of Law No. 9,237 is to adapt provincial legislation to the guidelines set by Argentine Anti-Corruption Law No. 27,401 (“Law 27,401”), which establishes legal entities’ criminal liability for bribery-related crimes. For further information, please refer to https://www.marval.com/publicacion/nueva-ley-sobre-responsabilidad-penal-de-personas-juridicas-y-programas-de-compliance-para-casos-de-corrupcion-13077&lang=en.

Within this framework, Law No. 9,237 adjusted some articles of the Criminal Procedure Code of the Province of Mendoza, so that legal entities have the same rights and obligations as individuals when charged in a criminal case.

Additionally, Law No 9,237 established that legal entities must implement anti-corruption compliance programs if they intended to enter into a contract with the Provincial Government (either of its Branches) and/or with provincial or municipal offices and/or agencies (whether centralized, decentralized or autocratic).

Law No. 9,237 establishes that anti-corruption compliance programs must be implemented under the provisions of articles 22 and 23 of Law 27,401. Therefore, such programs must be appropriate for the risks of the activities that the legal entity carries on, its size and economic capacity, in accordance with regulations to be enacted in such regard. In addition, programs must include at the very least an ethics code, policies and internal procedures aimed at preventing crimes when interacting with the public sector, and periodic trainings. Depending on the entity’s risks, it may be necessary for the legal entity to implement other elements of the program that may include, for example, the appointment of a compliance officer, third party due diligences, periodic risk analysis, an internal investigation system and a whistleblower channel.

Law 9,237 also establishes that, when applying for a registration or renewal at the corresponding registries, legal entities must always file a sworn affidavit stating that they are neither sanctioned nor involved in pending legal procedures for any crime penalized in Law 27,401. Furthermore, such legal entities must submit an updated report of the Federal Registry of Criminal Records.

In addition, Law 9,237 includes some articles in connection with the enforcement of sanctions if a conviction was ruled, and the judge established any of the penalties set forth in article 7 of Law 27,401. In such framework, Law 9,237 establishes that if the judge requested (i) total or partial suspension of activities carried out by the legal entity, (ii) suspension to participate in tenders or public bids of public works or services, or in any other activity related with the Government, or (iii) dissolution and termination of the legal entity, such request must be informed to the Public Registry of Commerce, the Office of Public Registry, the Public Registry of Associations and Cooperatives, among other departments that concern the enforcement of penalties, so that measures established in the conviction are adopted.

As set forth in Law 9,237, the corresponding agencies must also suspend or delete the inscription of legal entities convicted by law for the duration of the sentence. Likewise, the Administration may terminate public works contracts or contracts of concession of public works or services, and claim corresponding damages, if it emerges from the general conditions of the contract.

In sum, the enactment of Law 9,237 complies with article 28 of Law 27,401 that invited Argentine provinces and the City of Buenos Aires to adapt their legislation. Also, this law shows the commitment of Province of Mendoza to the fight against corruption by requiring corporate anti-corruption compliance programs to engage in certain contracts with the Provincial or Municipal Government.