04 January 2023
The Notebooks case is the highest-profile continuing investigation for bribery-related crimes. It was initiated in early 2018 and involves numerous high-ranking current or former public officials and numerous businessmen, whose oral trial is expected to begin soon. This case has also triggered other parallel investigations, including an investigation into cartelisation by the Antitrust Commission.
In addition, different convictions in bribery-related cases, including illegal enrichment of public officials, were ruled during 2022. Moreover, a current notorious trial against a high-profile and high-ranking public official is in its final stage. Conviction or acquittal may be ruled at any moment and may have a relevant impact on public works conducted during former administrations.
Furthermore, in September 2022, the first corporate collaboration agreement under Law No. 27,401 (on corporate criminal liability for bribery-related crimes) was announced by the public prosecutor involved in the criminal investigation.
There are several statutes that establish criminal sanctions for corporations in Argentina, most notably Law No. 27,401 (on corporate criminal liability for bribery-related crimes), which entered into force in March 2018. Corporations can also incur liability, for example, for economic crimes as prescribed in section XIII of the Federal Criminal Code (e.g., money laundering and terrorism financing), or by virtue of a breach of any of the following statutes:
Corporations are regulated by the relevant public registry of commerce as well as other government agencies, such as the Argentine tax authority.
Furthermore, depending on the industry, additional regulatory agencies or entities may issue regulations that govern corporations’ activities, such as the Argentine Securities Commission for corporations that trade securities, and the Argentine Central Bank for corporations that provide certain financial services or products.
Jurisdiction between the authorities based on their subject matter and competence is allocated by territory.
There are no specific policies or protocols relating to the prosecution of corporations.
In some instances, the law broadly indicates the degree of suspicion to initiate or defer an investigation to another agency. For example, the Anti-Money Laundering Law No. 25,246 establishes that the Argentine financial intelligence unit shall notify the public prosecutor when there are ‘sufficient elements of conviction’ to determine that an operation under review may indicate a case of money laundering or terrorism financing.
As regards criminal investigation, the mere affirmation of the possible existence of a crime is enough to initiate an investigation. The evidentiary standards for opening a criminal investigation in Argentina are low. In this sense, the initial prosecutorial screening requires only an evaluation of whether the alleged facts could amount to a crime as a matter of law. In addition, public authorities have the duty to report and, in some cases, investigate all facts that come to their knowledge and that can constitute a crime under their jurisdiction.
A notice or subpoena may be challenged through a procedural remedy requesting it to be declared null. It may be admissible when the notice or subpoena contains a serious irregularity that prevents the party from promptly complying with the obligations that stem from it.
The most common irregularities that give grounds for challenging a notice or subpoena include that the notice does not contain the court details, the court details are wrong or service of the complaint was carried out in a domicile other than that of the defendant.
If the notice or subpoena is issued by an administrative authority, it must first be challenged before the administrative authority to allow questioning before the courts.
Argentine law allows individuals suspected of participating in certain crimes set forth in Law No. 27,304 to enter into collaboration agreements with the prosecution. Under this regime, suspects and defendants who provide relevant information may obtain a penalty reduction in exchange for their assistance. Once signed, the collaboration agreement must be submitted to the court for approval. This tool has been used by defendants in many ongoing criminal investigations.
The authorities have not made any formal statements that include corporate enforcement actions as one of their priorities.
There are certain laws and regulations that establish that corporate compliance programmes will be considered for graduating applicable penalties to legal entities. For example, these provisions are established under Articles 304 and 313 of the Federal Criminal Code (penalising money laundering and other crimes against economic and financial order), Law No. 27,430 (establishing the tax criminal regime) and Law No. 27,401 (penalising bribery-related crimes). In particular, the latter establishes that corporate compliance programmes may also be considered when entities seek exemption from or reductions in penalties under Law No. 27,401.
The Argentine Anti-Corruption Office has issued a set of guidelines to help legal entities comply with the provisions of Law No. 27,401 regarding anti-corruption compliance programmes, which shall be appropriate to the risks, size and economic capacity of the legal entity. Specific guidelines for implementation of compliance programmes in enterprises with government stock participation was released in 2022. Also, the Anti-Corruption Office is launching a non-mandatory integrity and transparency register (RITE) for companies to disclose information about their compliance programme to make it accessible to third parties and exchange best practices in this field.
In addition, the financial intelligence unit has issued several regulations establishing specific requirements for anti-money laundering compliance programmes, which are mandatory for certain entities and individuals subject to the provisions of Anti-Money Laundering Law No. 25,246.
Argentina lacks a comprehensive legal framework addressing cybersecurity issues. However, there are certain resolutions ruling cybersecurity issues that are applicable to the public sector. Technological Standards for the Federal Public Administration were approved by Regulation No. 5/2019 of the Office of the President’s Chief of Staff.
Moreover, Regulation No. 1523/2019 of the Secretariat of Modernisation (1) approved the definitions of critical infrastructure and critical information infrastructure and the criteria for identification, (2) determined those sectors subject to the Regulation, and (3) included a cybersecurity glossary. In this connection, Regulation No. 829/2019 of the Secretariat of Modernisation approved the National Cybersecurity Strategy applicable to critical infrastructures and created the Cybersecurity Committee.
In the framework of the Federal Cybersecurity Strategy, the Office of the President’s Chief of Staff established an Advisory Committee for the Development and Implementation of Secure Applications for the purpose of advising on security principles and best practices in the development, procurement and implementation of all application software used by federal agencies in Argentina.
The Argentine Data Protection Authority (ADPA) has issued Resolution No. 47/2018, which establishes two sets of recommended security measures for the processing and conservation of personal data with the aim of ensuring the continuous improvement of the administration, planning and control of information security.
Resolution No. 47/2018 entails a change in the approach towards personal data security that follows the principle of accountability, introduced by ADPA in other recent regulations and in line with the European Union’s General Data Protection Regulation. Note in particular that, among these recommended measures, Resolution No. 47/2018 lists that security incidents should be notified to ADPA.
In this regard, the Recommendations for the Use of Geolocation Apps, issued by ADPA in April 2020, state that data controllers should adopt the security measures recommended in Resolution No. 47/2018. Likewise, ADPA approved a set of guidelines governing personal data inspection proceedings that mandates inspectors to verify whether data controllers comply with some recommended measures in Resolution No. 47/2018.
Furthermore, in 2021, the National Information Security Incident Response Centre, a specialist government organisation, was created to respond to security incidents. In this connection, public sector entities and jurisdictions, and suppliers that enter into contracts with them, are required to report security incidents within 48 hours of becoming aware of the occurrence or potential occurrence.
In the same year, the Office of the President’s Chief of Staff issued Decision No. 641/2021, approving the minimum information security standards to which the entities of the national public sector and suppliers contracting with these entities must adhere. These entities must develop an information security policy that is compatible with their primary responsibility and actions, based on an assessment of the risks that could affect them. The terms of this policy should be consistent with the guidelines in the annex of the resolution, which include recommendations regarding access control, human resources information security and use of cryptographic tools, among other things. This policy will be reported to the National Cybersecurity Directorate once approved.
Moreover, the Office of the President’s Chief of Staff issued Resolution No. 7/2021, by which it established the obligation for entities of the national public sector to report security incidents within 48 hours of becoming aware of their occurrence or potential occurrence, as well as to report significant escalations when applicable, especially incidents that involve personal data. The Secretariat of Modernisation published the ‘Introductory Guide to Security for the Development of Web Applications’ through Resolution No. 8/2021. The Guide contains principles and good security practices for all stages of web application development.
The Ministry of Security updated the ‘Federal Plan for the Prevention of Informatic Crimes and Cybercrimes (2021–2024)’. It also created the ‘Program for Strengthening Cyber Security and Cybercrime Investigation (Forcic)’, the aim of which is to coordinate, assist and provide advice on digital infrastructure security techniques and investigation techniques in cybercrime and crimes involving technology and the use of technologies. In this context, through Resolution No. 139/2021, the Ministry created the High-Tech Cybercrime Research Centre (CICAT), whose mission is the analysis, investigation and prevention of high-tech cybercrime.
Through Resolution No. 1/2022, the National Cybersecurity Authority approved a security policy template following the provisions of and applicable to those entities and jurisdictions affected by Administrative Decision 641/2021. The security policy’s objective is to define the purpose, direction, principles, basic rules and communication mechanisms for the protection of the information, as well as the resources, used in its processing.
Finally, certain industries have their own cybersecurity regulations and standards (e.g., financial institutions are required to report security incidents to the Argentine Central Bank).
On 22 November 2017, the Argentine Congress signed the Convention on Cybercrime of the Council of Europe (ETS No. 185) adopted in Budapest, Hungary, on 23 November 2001 (the Budapest Convention).
In 2008, Argentina passed Cybercrime Law No. 26,338 and amended its Criminal Code to include several cybercrimes, modelling them on those contained in the Budapest Convention. Consequently, the new aspects relate to procedural law and international co-operation. Argentina still uses these rules for securing physical evidence for searches in computer systems, which is inefficient from a digital evidence standpoint.
Regarding the approach by law enforcement authorities, various federal and local authorities (including prosecutors and police) have created specialist cybercrime units.
Overall, Argentine criminal law is applicable to acts committed in its territory and places under its jurisdiction (e.g., national aircraft and embassies).
The application of local criminal law is extended to acts committed abroad if the effects of those acts are deemed to be produced in the territory of Argentina or places under its jurisdiction.
Likewise, Argentine criminal law applies to offences committed abroad by agents or employees in the exercise of their public functions on behalf of Argentina. Moreover, criminal law applies to bribery of foreign officials committed abroad by Argentine citizens and legal entities domiciled in Argentina.
Argentina has also ratified several treaties that establish universal jurisdiction over serious crimes, such as genocide and torture.
There are many legal, operative, strategic, technological, communicational and accounting challenges in cross-border investigations that arise in the initial stage and continue throughout the investigatory process. Some of the most important challenges are the protection of the attorney–client privilege and compliance with data privacy and data protection regulation, especially across jurisdictions that have different legal standards of compliance. Thus, valid evidence gathering is one of the key challenges that cross-border investigations face.
Argentine law protects against double jeopardy, that is to say a person who has been convicted or acquitted of an offence cannot be prosecuted again for the same offence.
The principle of double jeopardy (also known as ne bis in idem) is established in the Federal Criminal Code, the Federal Constitution and certain human rights treaties that have constitutional hierarchy in Argentina. The law does not distinguish between federal and foreign jurisdictions when it prohibits double jeopardy. Depending on the jurisdictions involved, there may be co-operation treaties establishing rules to resolve a potential double jeopardy conflict.
The fact that a corporation has entered into a deferred prosecution agreement (DPA) in another country is unlikely to prevent prosecution in Argentina, unless a treaty prescribes otherwise or the DPA is viewed as being equivalent to an acquittal, a conviction or any other decision that puts an end to the criminal proceeding.
There is nothing analogous to the ‘anti-piling on’ policy in the United States between Argentinian law enforcement authorities.
There are no relevant ‘global’ settlements in place involving Argentina as yet, although Argentine enforcement authorities co-operate with foreign authorities, and vice versa.
Decisions made by foreign authorities may attract the attention of Argentine authorities and be the catalyst for local investigations.
Argentina has not implemented a specific autonomous trade sanctions system. However, Argentina complies with the sanctions established in resolutions by the United Nations Security Council (UNSC). Compliance with these sanctions is mandatory for Argentina and for Argentine individuals and legal entities, provided that the Ministry of Foreign Affairs has published the UNSC’s resolutions in the Argentine Official Gazette.
Argentina has not conducted any relevant enforcement activity.
Argentina has not conducted any relevant enforcement activity.
Law No. 24,871 regulates the extent of the application of foreign regulations. In particular, it sets forth that any foreign laws establishing extraterritorial sanctions intended to trigger, for example, negative consequences on a third country would be deemed null and inapplicable in Argentina.
Any individual or legal entity shall invoke rights, execute or claim the execution of acts or be compelled to comply with measures, orders, instructions or indications that are a consequence of the extraterritorial application of foreign regulations to the extent stipulated in Law No. 24,871.
Furthermore, Law No. 24,871 establishes additional provisions regarding, for example, the enforcement of foreign rulings under the aforementioned foreign regulations, or the exchange of information between Argentine authorities and the authorities of the foreign country issuing sanctions.
In our experience, most allegations of wrongdoing within companies in Argentina have been made through whistleblower hotlines. Also, as practitioners in this field, we have noticed that local companies are increasing their awareness of and attention to corporate internal investigations.
Personal data protection is governed by Personal Data Protection Law No. 25,326 (PDPL), of which the main purposes are guaranteeing (1) the complete protection of the data contained in files, records, databases or other technical means, whether public or private, and (2) the rights to reputation, privacy and access to information. Any information relating to individuals or companies, whether identified or identifiable, is considered personal data and subject to the terms of the PDPL.
The PDPL is enforced by the Argentina Data Protection Authority and the judicial courts. Depending on the type of behaviour, failure to comply with the PDPL could be considered a minor, serious or very serious infringement. At the same time, data subjects could file court action seeking the cessation of processing of their data and compensation for damage caused, including the possibility of filing class actions.
As a general rule, valid data processing requires the free, express, informed and written (or similar) consent of the data subject (i.e., the relevant individual or legal entity). Data subjects are free to revoke their consent, although this will only have effect for the future (not retrospectively). They also have the right to have access to, rectify and delete their personal data. Treatment of data that is limited to the data subject’s name, identification number, tax identification number, occupation, date of birth and domicile does not require consent.
Moreover, the PDPL determines restrictions to cross-border transfers of data.
From a privacy perspective, it is highly important to provide employees with prior notice and an explanation of the way in which the company processes data (generally through corporate information technology or privacy policies).
From a labour law perspective, there are no specific regulations in force regarding the access, monitoring and surveillance of electronic communications and devices in the workplace. Although there is case law on this issue, it is not uniform.
It is of key importance to analyse any internal policy (duly notified to the employees) relating to the monitoring of corporate emails and, upon default thereof, implement an internal policy for the monitoring of emails, other electronic communications and devices, and the use of working tools and to notify employees in advance that (1) electronic communications and devices are work tools and, thus, they shall be used only for work purposes, and (2) they should have no expectation of privacy in connection with their use (even if a personal password has been created). Further, a company should have in place further provisions for monitoring employees’ activity and, ultimately, to prove misconduct.
According to the Argentine Criminal Procedural Code, if there is reason to presume that in a certain place there are things of relevance to the investigation of a crime, or the suspicion of a criminal offence, a judge may issue a search warrant. Further, a judge may order the seizure of objects and documentation that (1) may be relevant to the investigation, (2) may be subject to confiscation or (3) can serve as evidence.
Besides the formal requirements, search warrants must indicate the crime under investigation, the exact place where the search will be conducted and its purpose. If any of these requirements are not fulfilled, the search – and any evidence collected during the search – can be challenged in court.
The Argentine Criminal Procedural Code protects letters and documents sent to or received by a defendant’s counsel from being seized, as long as they are connected to a criminal investigation (similar provisions are set forth in the new Federal Criminal Procedural Code that has been implemented gradually in the whole Argentine territory).
Moreover, a judge may request the testimony of witnesses and third parties and the submission of documents in their possession. However, this order shall not be addressed to persons exempted from testifying as witnesses by reason of family or professional links, or state secrecy.
Judges can request the testimony of any person who may have relevant information relating to a criminal investigation. The request is mandatory and the person summoned to render testimony must appear before the judge and state the truth of what they know, unless an exception applies. Failure to do so may be construed as contempt of court or harbouring, and may trigger raids to seize the information. According to Argentine law, these offences are only attributable to individuals.
Argentine law protects the right against self-incrimination. For instance, when a representative of a legal entity is called to provide information relating to a criminal investigation, the representative may refuse to give testimony on the basis of the constitutional right against self-incrimination.
Additionally, the Argentine Criminal Procedural Code establishes that those who must keep the secrecy of whatever they learn by virtue of their service, profession or official capacity must abstain from rendering testimony of facts and issues covered by that secrecy. This expressly applies to lawyers, notaries, doctors, nurses, military personnel and public officials, among others. However, they cannot refuse to give testimony when released from their secrecy duty by the interested party.
Law No. 27,319 regulates special techniques that can be used in the investigation of certain complex crimes, such as those relating to drugs, smuggling, terrorism and economic matters.
Under this framework, persons who provide useful and relevant information to initiate or guide an investigation concerning the crimes set forth in Law No. 27,319 will be entitled to receive financial compensation. The identity of whistleblowers will be withheld and, if necessary, other adequate measures may be ordered to protect the life and integrity of the whistleblower and his or her family.
Additionally, Emergency Decree 62/2019 establishes a financial reward for those persons – whose identity is preserved – that provide useful information within civil asset forfeiture procedures triggered by certain crimes (e.g., corruption-related crimes).
Depending on the circumstances, other regimes may apply. For instance, a permanent rewards fund for whistleblowers was used to offer monetary rewards in exchange for useful information to trace and recover assets in the Notebooks case.
There is no specific labour regulation regarding investigations or a specific procedure for internal investigations. Nevertheless, labour and civil rights are fully applicable to all employees. Thus, any kind of discrimination or adverse effect on employees’ dignity or right of defence could be challenged within the context of an investigation.
Investigations should be carried out as quickly as possible, so that disciplinary action, if any, can be decided as soon as possible after discovery of the behaviour under investigation.
If the personnel involved are board members or authorised signatories of a company, measures regarding removal of control and replacement to ensure the normal operation of the company should be analysed jointly.
Furthermore, since each case will be different on its merits, there could be different practical matters to consider within the context of a labour investigation; thus, it is important to duly liaise with the appropriate legal adviser.
Different courses of action and different sanctions could be implemented, depending on the seriousness of the misconduct, the extent to which it affects an employer’s activity or business, the level of responsibility of the relevant employee and previous performance, among other things. These aspects should be considered in each particular case.
Damage caused by the misconduct could also be considered, although this is not essential since the misconduct itself could be subject to disciplinary measures. Possible sanctions could involve a first warning, suspension from duty without payment of salary or even dismissal with just cause, subject to full analysis of the case in question.
Prior to implementing any course of action or disciplinary sanction, it is important to consider that (1) there are both specific requirements applicable to disciplinary sanctions and practical legal recommendations, and (2) dismissal with just cause is interpreted narrowly in Argentina.
Employees are entitled to refuse to participate in an internal investigation, without their refusal construing a just cause for termination of the employment contract.
Before commencing an internal investigation, it is useful for companies to draft a flexible investigation plan, which may lead the investigation process and determine, among other things, its scope, time limits and main objectives.
There is currently no legal requirement for an investigation plan. Therefore, in practice, implementing such a plan depends on each company, the complexity of the subject under investigation and the regulations involved.
Law No. 27,401 (on corporate criminal liability for bribery-related crimes) addresses the concept of internal investigations and sets forth that each legal entity, depending on the risks to its activities, may implement an internal investigation system.
In general, there is no particular legal obligation to comply when misconduct is discovered during an internal investigation. However, certain industry-specific regulations may establish additional provisions regarding internal investigations, which companies should consider.
If a company receives a notice seeking the production of documentation or a subpoena requiring its testimony to clarify the facts or allegations under investigation, the company shall comply within the terms specified, unless it is subject to any exception provided in the applicable regulation.
There is no specific regulation setting forth mandatory steps for companies to comply with such notices or subpoenas. Therefore, the measures implemented may depend on the company’s policies and procedures, the facts and persons under investigation, and so on.
A public company in Argentina is not obliged to disclose the existence of an internal investigation until the investigation results in verification of the existence of an event that, in all likelihood, could have a substantial effect on the company’s trading value (except when an investigation was commenced following verification of the existence of an event having such effects, which must be disclosed). Likewise, there is no obligation to disclose any contact by a law enforcement authority until the company is served with notice of the commencement of formal proceedings (except where the circumstances are made public or disclosure is required by a law enforcement authority).
Provided that the rights of employees are respected, internal investigations are tolerated. Investigations of wrongdoings and crimes in Argentina are usually conducted by law enforcement authorities; therefore, as yet, acceptance among local agencies is not widespread.
Law No. 27,401 (on corporate criminal liability for bribery-related crimes) encourages companies to implement an internal investigation system that respects the rights of investigated persons and allows the imposition of sanctions on those who breach a company’s policies.
In this sense, an internal investigation may be useful to show the authorities that the company acted diligently and in good faith to try to identify and remedy potential misconduct or wrongdoing. So far, there are no precedents under Law No. 27,401 to establish how law enforcement agencies will assess the efforts taken by companies during an internal investigation.
The attorney–client privilege stems from the constitutional right to defence during trial. The Federal Criminal Code and certain procedure codes prohibit disclosure of protected confidential information when obtained or produced by attorneys, unless certain specific exceptions apply. Also, there are laws and regulations governing the exercise of legal practice that provide that the attorney–client privilege is both a right and a duty that attorneys must observe, other than in specific circumstances (e.g., their personal defence).
There are few precedents on the matter and Argentine legislation on this subject is not as detailed as that of Anglo-Saxon countries. Thus, to protect the privilege of an internal investigation, it is recommended that international best practices are followed (e.g., marking documents as confidential and protected by the attorney–client privilege).
The aim of the attorney–client privilege is to protect communications and information exchanged in private between an attorney and a client (legal entity or individual) for the purpose of the attorney providing legal advice. In any case, the client may waive the privilege since it is the holder of the privilege. The attorney has the duty and the right to protect the privileged information.
The applicable regulations do not make a distinction between in-house and external counsel.
This is a scenario that is not regulated and, to our knowledge, has not been tested with the local courts yet.
There are no precedents that would allow us to consider waiver of the attorney–client privilege as a co-operative step. Privilege waiver is not mandatory or required.
The applicable regulations do not stipulate partial waivers.
This is a situation that, to our knowledge, has not been tested with the local courts yet.
This concept does not exist in Argentina nor has it been subject to judicial review.
This is a situation that, to our knowledge, has not been tested in the local courts yet.
Witness interviews as part of internal investigations in Argentina are not forbidden or specifically regulated.
Nonetheless, guidelines issued by the Argentine Anti-Corruption Office briefly address certain mechanisms for corporate investigations, including witness interviews. In particular, these guidelines emphasise that all the investigative mechanisms carried out by companies shall not put the rights of employees in jeopardy.
There is no law that particularly regulates the extent of the attorney–client privilege in internal investigations. In this context, a company may claim the attorney–client privilege over internal witness interviews or attorney reports, but the chances of success will depend on the factors relevant to the case.
There is neither Argentine regulation nor relevant judicial precedents setting forth legal or ethical requirements or guidance for conducting witness interviews, whether they involve employee or third parties (e.g., former employees or contractors).
We advise our clients to apply internationally accepted common practices, such as providing Upjohn warnings to interviewees, avoiding recording interviews, and preparing reports that merely include attorneys’ impressions of the topics addressed in interviews.
The timing, order and steps taken in each interview (e.g., putting documents to the witness) will vary from case to case.
We advise our clients to consider all factors and good practices when carrying out interviews, such as providing Upjohn warnings to interviewees, avoiding recording interviews, and preparing reports that merely include attorneys’ impressions of the topics addressed. Some case precedents acknowledged, for example, the right of witnesses to be informed about the scope and nature of an interview, and to be accompanied at the interview by their own lawyer.
Under Argentine law, there is no general obligation for individuals or entities in the private sector to report misconduct to law enforcement authorities. However, depending on the industry, some laws and regulations may mandate disclosure of misconduct to the authorities.
Nonetheless, Argentine public officials (a broad definition that may include directors and managers of state-owned companies, etc.) have a duty to report offences of which they become aware in the exercise of their office.
In general, a company self-reports if it is likely to receive significant leniency from the authorities. For example, Law No. 27,401 (on corporate criminal liability for bribery-related crimes) provides a regime under which companies may seek exemption from criminal and administrative liability arising from self-reporting.
Notwithstanding, self-reporting in Argentina is still unusual. Whether this is a convenient course of action will depend on the specifics of the case (i.e., the facts, regulations and jurisdictions involved).
Companies may obtain an exemption from criminal and administrative liability under Law No. 27,401 if they (1) spontaneously self-report a breach of the Law to the authorities as a result of an internal investigation, (2) had implemented a compliance programme before the breach occurred and the wrongdoers had to make material efforts to evade controls under the programme, and (3) forfeit the undue benefit arising from the illegal conduct. Practical steps will vary, depending on the specifics of the case, to comply with the requirements of the regulation.
A company must respond to a judicial notice or subpoena through judicial channels within the relevant legal terms laid down under the Argentine Criminal Procedural Code.
It is possible to enter into dialogue with the authorities to establish the position of the defendants. However, official challenges, requests and decisions must be made through judicial or administrative channels, according to the relevant procedural rules.
Any decision issued by the centralised or decentralised federal administration is deemed legitimate, but could be challenged before the courts if the requirements set forth in the applicable administrative procedural regulations are fulfilled.
Since Argentina is a federal country, depending on the territorial competence of the relevant authorities, local regulations may be applicable, and the particular requirements established therein shall be considered.
There is no general statute covering this matter. The approach will have to be assessed for each case, taking into account any applicable laws and international treaties.
A company must comply with the requirement for production of material relating to a particular matter that crosses borders. However, according to the Federal Civil and Commercial Procedural Code, it is necessary to establish whether the company in question is a party to the proceeding.
In the case of companies acting as plaintiffs or defendants, they must produce the required material (documents or information) that is in their possession, even when the documents or information are outside the country.
If a company is a third party to the proceeding in which the requirement is made, it is also obliged to produce the documents or provide the required information. However, the requested party may challenge the request if the material required is its exclusive property and its disclosure may cause damage.
A company that intends to produce material that is abroad will face certain difficulties that could delay the proceeding. For instance, the company must comply with the requirements imposed by international treaties to verify the authenticity of foreign documents (e.g., through the Hague Apostille or authentication through diplomatic channels as well as translations, among other things). Further, the attendant costs could be significantly higher.
The frequency of co-operation and challenges to co-operation vary according to the law enforcement authorities involved.
On the one hand, in respect of judges and prosecutors, cross-border co-operation and exchanges of information usually proceed after a long time because of the many difficulties that can arise. For instance, according to press articles, Argentine authorities were provided with certain information, leniency agreements and evidence produced in the Operation Car Wash bribery investigations in Brazil four years after its initial request.
On the other hand, certain law enforcement authorities most often share information within the federal administration. For example, the Argentine financial intelligence unit – being a member of the Egmont Group of Financial Intelligence Units – shares information with other units across the world, and the Argentine tax authority shares information in accordance with the Common Reporting Standard, among other methods.
Furthermore, international treaties (whether multinational or bilateral) may govern cross-border co-operation.
Overall, law enforcement authorities are bound to maintain confidentiality with respect to information obtained during investigations. They shall not share or disclose information or documents unless the conduct falls within one of the exceptions set forth in their statutes or applicable laws.
In some cases, the law allows the transfer of information between law enforcement agencies. For instance, the Argentine tax authority may share certain information with revenue agencies from the provinces, or foreign tax agencies, in accordance with applicable co-operation agreements.
In the course of a criminal investigation, the secrecy of the proceedings shall be respected. In particular, under Law No. 27,401 (on corporate criminal liability for bribery-related crimes), when corporations enter into negotiations with the prosecution with the aim of concluding a collaboration agreement, the information shared during the negotiation will be kept confidential.
In these circumstances, companies should claim an exemption and inform the relevant law enforcement authority that they cannot reasonably comply with the request without violating the laws of another country.
In addition, foreign legal advice should be obtained as to the company’s exposure to liability if it produces the requested information.
Certain statutes and regulations set forth secrecy obligations, including those relating to banking (Law No. 21,526), tax (Law No. 11,683), certain professions (e.g., attorneys, physicians) and confidential commercial information (Law No. 24,766). These statutes and certain regulations (e.g., Anti-Money Laundering Law No. 25,246) establish certain circumstances when secrecy does not prevail and compliance with a notice or subpoena becomes mandatory.
The rules applicable in a certain jurisdiction and the type of proceeding initiated against a company will determine the applicable rules of evidence. Nonetheless, Argentina does not regulate discovery rules. Thus, production is compelled by law enforcement authorities and interested parties can occasionally produce complementary evidence (e.g., expert witnesses).
Production of evidence within civil procedures is usually available to the parties and any other stakeholder, unless confidentiality is expressly imposed, which may be the case, for instance, in procedures where family issues are in question or when minors are involved.
Production of evidence within criminal procedures is often confidential and withheld from the parties (including private prosecutors) during the investigative stage. However, during the trial stage, production of evidence is, in general, not subject to confidentiality and is accessible by the general public.
Companies may be subject to the following penalties:
Directors, officers and employees are subject to the penalties prescribed for the specific crime in the relevant statutes. Penalties for individuals include imprisonment, fines and debarment. Additionally, defendants may be subject to forfeiture of assets that have been obtained illegally.
Depending on the circumstances (such as the existence of a criminal investigation or whether precautionary measures were issued against the company), there might be restrictions on relocating assets sited or registered in Argentina to another country.
In a criminal trial, judges must refer to the penalty scale for the crimes and take into account aggravating and mitigating circumstances, whenever applicable. Additionally, they will consider, among other things:
Moreover, in respect of economic and financial crimes committed with intervention, on behalf, or for the benefit, of a legal entity, judges will also consider:
Finally, in respect of publicly traded companies, penalties shall be prescribed having in mind the protection of shareholders to whom no liability is attributable.
Since the enactment of Law No. 27,401 (on corporate criminal liability for bribery-related crimes), corporations can enter into ‘effective collaboration agreements’ with the prosecution to obtain a reduction of applicable penalties. To this end, companies must disclose precise and verifiable information that is useful for the investigation. The agreement is subject to court approval to enter into effect. So far, only one corporate collaboration agreement has been announced but it has not yet been made public.
In respect of effective collaboration agreements under Law No. 27,401 (on corporate criminal liability for bribery-related crimes), all negotiations are deemed to be strictly confidential until the conclusion of an agreement with the public prosecutor.
Law No. 27,401 makes no reference to the confidentiality of the information after the agreement is concluded and approved by the criminal judge. Therefore, there are no provisions that determine reporting restrictions or anonymity until the conclusion of the criminal proceedings. In a particular case, specific consideration may be given to confidentiality depending on the potential risks that may affect a fair resolution of proceedings. There are no precedents yet on this matter in Argentina.
When considering entering into an agreement with any Argentine enforcement authority, a company should conduct a thorough analysis of the alleged facts and the possible legal violations that may be triggered, either in Argentina or abroad. The company should also consider whether entering into a collaboration agreement would allow the authorities to gather information to prosecute other crimes.
Corporate compliance monitors are not regulated as an enforcement tool in Argentine law.
When criminal conduct gives rise to civil liability, Argentine law allows both civil and criminal actions to be pursued simultaneously. Both proceedings are independent of each other; however, the civil judge is foreclosed from reaching a decision until a judgment is passed on the criminal case. Therefore, plaintiffs usually do not incur effort and expenses until a decision is reached by the criminal court. This general rule is not applicable to civil forfeiture of assets ruled in connection with crimes relating to bribery and corruption, which, according to Emergency Decree 62/2019, does not require a conviction from criminal courts to proceed.
In criminal cases, the Argentine Criminal Procedure Code recognises victims’ right to offer and control evidence. It prescribes that the case docket is public to the parties, which includes the private prosecutor but not the civil petitioner, whose participation is limited to claiming compensation, restitution or other civil remedies. Despite this general principle, during a criminal investigation, judges may be reluctant to grant private prosecutors full access to some confidential information for reasons of security or privacy. During the trial, the private prosecutor has access to all files and evidence that will be used in court.
In criminal investigations governed by the Argentine Criminal Procedure Code, the docket file is withheld until the first appearance of the defendant before the judge (the investigative statement), where the defendant is put on notice about the investigation and informed of his or her rights.
However, third parties (e.g., the defendant, the victim and state authorities) may request information if they justify having a ‘legitimate interest’. After this stage, the docket file can be accessed by the parties, including the defendant, the public prosecutor and the private prosecutor, if any. Notwithstanding the foregoing, judges may order the secrecy of some information when disclosure would jeopardise the investigation. Only acts that cannot be reproduced at a subsequent stage shall not be kept confidential. The docket file will continue to be withheld from third parties during the investigation.
Once the case is at trial, hearings are public unless the court decides, as an exception, to limit access by some or all public parties (e.g., relevant witnesses who have not yet given their testimony).
In our experience, companies have used both their in-house public communications department and external firms. Larger companies are more likely to retain the services of public relations companies when there is a risk of negative publicity.
First, it should be assessed whether there are any disclosure restrictions. Then, public communications, whether involving an external public relations company or not, should be vetted by the company’s legal adviser and the team in charge of litigation to ensure that there is nothing that could compromise the company’s position in the proceedings.
Settlements made within a criminal action must be disclosed upon service of process. Disclosure of settlements is forbidden until endorsement by the criminal court, and breach of confidentiality obligations is subject to sanctions under the Federal Criminal Code.
ESG matters are not specifically regulated by Argentina but local authorities have been acknowledging their importance, mainly as a result of the recent demand and treatment of this topic at international and business levels. In mid-2021, for instance, the Argentine Securities Commission issued Resolution 896/2021, approving three sets of guidelines that are relevant for socially responsible investment (namely, ‘Guidelines for Socially Responsible Investment in the Argentine Capital Market’, ‘Guidelines for the Issuance of Social, Green and Sustainable Bonds in Argentina’ and ‘Guidelines for External Reviews of Social, Green and Sustainable Bonds’). Although adherence to these guides is not mandatory, they are considered a good toolkit to start placing ESG matters on the agenda of the Argentine business community and government authorities. In addition, in 2021, the Argentine Securities Commission approved the first three public investment funds that were aimed at placing significant investment in sustainable projects.
Awareness of ESG matters is rapidly increasing owing to pressure from the market. Even though this is not the current main priority of Argentine authorities, most of the initiatives in this field are expected to be driven by the Argentine Securities Commission.
We are not aware of specific enforcement actions triggered by ESG matters. However, judicial cases may be triggered when conduct that breaches ESG guidelines also involves violation of an applicable law.
Currently, the Anti-Corruption Office has been working on a new bill to amend Federal Public Ethics Law 25,188. Besides changes to the scope of the law and the definition of ‘public official’, the aim of this bill is to adjust the conflict of interest regime to include debarment sanctions for private sector entities and individuals that contract or employ former public officials in violation of cooling-off periods, among other provisions.
The Anti-Corruption Office has also recently launched a new Monitoring System on the Exercise of Public Functions, which should increase awareness of the activities performed by public officials both prior to exercising office and for a specific time after leaving a public position. The goal of the Anti-Corruption Office is to closely monitor conflicts of interest that may exist and initiate investigations and criminal actions whenever appropriate.
In addition, in May 2022, the Executive Branch submitted to the Congress a bill to reform the applicable legal framework to combat money laundering and terrorist financing, including changes to the Criminal Code and the description of the penalised types of conduct, changes in the compliance obligations of persons who are considered reporting subjects (sujetos obligados) and the set-up of a registry of ultimate beneficiary owners of legal entities and structures.
Furthermore, certain bills that address corporate misconduct, asset recovery and corruption-related crimes have been introduced to the Argentine Congress in the last few years, including a new bill to reform the Criminal Code. However, there has not been much progress lately as the government is currently placing more emphasis on preventive measures rather than enforcement actions for misconduct.
[1] Gustavo Morales Oliver and María Lorena Schiariti are partners and María Agustina Testa is an associate at Marval O’Farrell Mairal.
Author | Partner
Author | Partner
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