The Bolivian legislature is currently considering proposed reforms to the Penal Code of 1972, which for the first time would create criminal liability for corporate entities, among other changes.
Currently, corporate criminal liability is not recognized under Bolivian law, with one exception. The Law on the Fight against Corruption, Illicit Enrichment and the Investigation of Wealth (Law 004) (2010) establishes that corporate entities may be liable for the crime of illicit enrichment that affects State patrimony. Entities may be sanctioned with a fine equivalent to up to 25 percent of their corporate assets. In other cases, only the natural person legal representative of a corporate entity may be subject to criminal liability for crimes committed on the entity’s behalf.
Under the draft law, corporate entities may be liable for the following crimes: (1) human, organ and animal trafficking; (2) crimes against the environment; (3) tax crimes; (4) labor-related crimes (such as unlawful appropriation of pension contributions and unfair labor practices); (5) money laundering; (6) fraud; (7) execution of contracts against State interests; (8) financial crimes (such as unlicensed financial intermediation and improper use of influences for credit access ); (9) breach of state contracts; and (10) bribery of public officials.
Basis for liability
Corporate entities that “have received benefits or have been used as instruments to fulfill criminal misconduct” would be subject to criminal liability under the new law. Corporate executives with decision-making authority are considered to act on the entity’s behalf. Moreover, acts of subordinate staff may also create corporate liability if such acts are later ratified by the company, including implicitly.
Separation of corporate and individual liability
The draft law establishes that corporate criminal liability will be separate from individual liability. It provides that a company may be held liable regardless of: (1) failure to prosecute the natural person corporate employee or agent; (2) expiration of the statute of limitations for the natural person offender; (3) the State’s failure to establish the responsible individual’s participation in the illegal acts; (4) mitigating factors in favor of the natural person offender; (5) changes in corporate organization or structure (i.e., mergers, acquisitions); or (6) dissolution of the corporate entity. The corporate entity will not be responsible for a natural person’s acts if the acts did not benefit the company.
Proposed sanctions include monetary fines, restitution, suspension of corporate activities, and permanent dissolution of the entity. The severity of the sanction applied will take into account the entity’s internal rules and procedures, as well as its willingness to mitigate or repair the damage caused and to cooperate. Additional mitigating factors include the entity’s establishment of internal mechanisms for the prevention of improper activities and early discovery of misconduct.