Law N° 20.393 - Prevention of Economic Crimes

Law N° 20.393, in effect since December 2, 2009, regulates the criminal liability of legal entities, establishing that companies can be criminally responsible if their directors, executives, or employees commit crimes for their benefit due to deficiencies in their supervision mechanisms. However, if the organization has implemented adequate prevention, administration, and control systems before the crime occurred, it will be considered to have fulfilled its obligations. Within this framework, Geocom has approved a Crime Prevention Model (CPM) to mitigate the risk of infringements, aligning with current regulations. This document aims to present the CPM components, establish mechanisms to prevent crimes, and define the responsibilities of the Crime Prevention Officer (CPO) in its implementation and supervision. Its application is mandatory for all individuals associated with Geocom, including employees, directors, contractors, and consultants, in addition to Geocom S.A. and Geocom Renta S.A.

Law 20.393 establishes that legal entities will be responsible for crimes of money laundering, financing of terrorism, and bribery of public officials, both national and foreign, provided that such crimes have been committed for the benefit of the institution. Responsibility falls on its owners, controllers, responsible parties, principal executives, representatives, or any person in charge of administration or supervision, when the commission of the crime derives from the non-fulfillment of their management duties. Likewise, the legal entity will also be criminally liable for crimes committed by natural persons under direct supervision. It will be understood that the institution has fulfilled its management and supervision duties if, prior to the commission of the crime, it has adopted and implemented a Crime Prevention System in accordance with the provisions of Law 20.393.

 

  • Audit in the company context: When the crime is committed by one of the owners, responsible parties, principal executives, representatives, or natural persons who are under the supervision of the former and act in their name or representation.
  • Benefit or interest for the company: The crime generates a direct or indirect benefit for the company.
  • Failure in control mechanisms: The company is responsible if the crime occurs due to a lack of implementation or supervision of an adequate and effective crime prevention model.

The sanctions established in Law 20.393 may include:

  • Fines: Payment of a determined amount of money based on the severity of the crime.
  • Prohibition from entering into contracts with the State: The company will not be able to participate in tenders or sign contracts with public bodies.
  • Loss of tax benefits or exemptions: Previously granted tax exemptions or incentives are revoked.
  • Dissolution of the legal entity: In serious cases, the company may be legally dissolved and liquidated.
  • Judicial intervention: An intervenor may be appointed to supervise the company's operations and ensure compliance with the law.

The main crimes for which criminal responsibility is established by certain specific crimes included in the law over time are:

  • Corruption Crimes: Bribery of public officials, national or foreign; kickbacks; incompatible negotiation; corruption between private parties; disloyal administration.
  • Money Laundering Crimes: Conversion, transfer, concealment, or hiding of assets of illicit origin.
  • Terrorism Financing Crimes: Provision, collection, or delivery of funds for the purpose of financing terrorist activities.
  • Receiving Stolen Goods Crimes: Acquisition, sale, transport, or commercialization of stolen or pilfered goods with knowledge of their illicit origin.
  • Computer Crimes: Illicit access to computer systems, data interception, computer fraud.
These crimes can result in sanctions for the company if they are committed by its directors, representatives, or employees for its benefit and due to failures in its prevention and control mechanisms.

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