{"id":21842,"date":"2016-01-07T01:08:43","date_gmt":"2016-01-07T00:08:43","guid":{"rendered":"https:\/\/www.in-diem.com\/criminal-liability-of-companies-and-organizations-risks-and-compliance\/"},"modified":"2026-08-13T13:51:58","modified_gmt":"2026-08-13T11:51:58","slug":"criminal-liability-of-companies-and-organizations-risks-and-compliance","status":"publish","type":"post","link":"https:\/\/www.in-diem.com\/en\/criminal-liability-of-companies-and-organizations-risks-and-compliance\/","title":{"rendered":"Criminal Liability of Companies and Organizations: Risks and Compliance"},"content":{"rendered":"
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IMPORTANT:<\/strong> This article analyzes the criminal liability of companies and organizations in accordance with the regulatory and interpretive framework applicable at the time of its publication. Currently, any matter relating to the criminal liability of legal entities, criminal compliance, corporate investigations, crime prevention models, or corporate criminal defense<\/strong> must be reviewed on a case-by-case basis, in accordance with Article 31-bis of the Penal Code<\/strong><\/a>, and Articles 31 ter through 31 quinquies of the Penal Code<\/strong><\/a>, and Circular 1\/2016 of the Office of the Attorney General<\/strong><\/a>, current case law, and the regulations applicable to each sector of activity. <\/p>\n<\/div>\n\n

The knowledge that a company<\/strong> is under investigation for the possible commission of a crime\u2014whether due to the actions of the board of directors, legal representatives, officers, executives, or employees\u2014raises immediate concerns about the potential harm that may result. Such damage can affect financial costs, reputation, market position, relationships with third parties, and business continuity. <\/p>\n\n

It also often comes as a surprise when it becomes apparent that the organization did not have sufficient prevention, detection, or control mechanisms in place that would have made it possible to prevent\u2014or at least reduce\u2014the risk of unlawful conduct within the corporate structure.<\/p>\n\n

Often, when executives or managers are informed about the criminal and civil liabilities that companies may face following the reforms to the Penal Code, there is an initial sense that the risk is distant. Many companies believe that, since they have not been investigated in the past, this situation of apparent normality will continue into the future. <\/p>\n\n

However, that conclusion is based on a past reality and a regulatory framework that has been largely superseded. The new criminal and procedural landscape requires us to acknowledge that companies and organizations are now particularly vulnerable to the risks of investigation, indictment, sanctions, and reputational damage. <\/p>\n\n

New Legal, Criminal, and Business Landscape<\/h2>\n\n

We are facing a legal, criminal, procedural, social, and competitive landscape in which corporate compliance<\/strong> has become one of the main pillars of enterprise risk management.<\/p>\n\n

There are several reasons for this trend: the expansion of criminal liability for legal entities, the broadening of the scope of punishable conduct, the strengthening of investigative mechanisms, and the increasing use of potential regulatory violations in internal and external disputes.<\/p>\n\n

1. Principle of Corporate and Business Liability<\/h3>\n\n

The regulatory framework applicable to companies, particularly in criminal matters, has been significantly strengthened.<\/p>\n\n

For a long time, the principle of individual liability and sanctions focused primarily on the natural person. However, Spanish criminal law has evolved toward a new concept in which an individual\u2019s actions can be attributed to the organization within which they occur, especially when the company derives or stands to derive a direct or indirect benefit. <\/p>\n\n

This new stance taken by companies effectively shifts the focus of criminal enforcement toward the legal entity, which may become directly liable for criminal offenses alongside the individual who participated in the acts.<\/p>\n\n

2. Expansion of Punishable Conducts<\/h3>\n\n

Not only has the scope of those subject to criminal liability been expanded\u2014from individuals to organizations or companies\u2014but the scope of liability has also been broadened through the inclusion of new crimes and circumstances in which a company may be held criminally liable. <\/p>\n\n

This means that business risk is higher, because a company\u2019s day-to-day operations may be linked to criminal, regulatory, economic, tax, environmental, labor, technological, or consumer issues.<\/p>\n\n

3. New Research Mechanisms<\/h3>\n\n

Investigative mechanisms involving organizations and companies have also evolved. The procedural reform introduced by Law 41\/2015<\/strong>, which took effect on December 6, 2015, marked a significant advance in the areas of technological, police, and judicial investigations. <\/p>\n\n

This reform introduced more modern tools for criminal investigations, adapting the Code of Criminal Procedure to new technological realities and more complex forms of crime.<\/p>\n\n

For companies, this means that investigations may cover communications, computer systems, internal documentation, financial transactions, technological devices, relationships with third parties, and activities carried out within the organization.<\/p>\n\n

4. Internal and External Conflicts: Extension to Compliance Areas<\/h3>\n\n

Internal conflicts\u2014such as those that may arise among executives, employees, managers, or partners\u2014and external conflicts\u2014with customers, suppliers, competitors, or government agencies\u2014may also be affected by information regarding potential regulatory violations.<\/p>\n\n

In certain contexts, parties involved in a conflict may use data or evidence of noncompliance as a means of exerting pressure, making accusations, negotiating, or destabilizing the situation.<\/p>\n\n

As a result, criminal and regulatory risks are no longer treated as an isolated issue but become an integral part of the organization\u2019s business, procedural, and reputational strategy.<\/p>\n\n

The Evolution of the Criminal Legal System<\/h2>\n\n

The legal system has evolved in three main directions:<\/p>\n\n

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  1. Extend criminal liability<\/strong> to organizations and companies.<\/li>\n\n\n\n
  2. Increase the number of violations<\/strong> that are subject to penalties.<\/li>\n\n\n\n
  3. Establish<\/strong> broader and more sophisticated investigative mechanisms<\/strong>.<\/li>\n<\/ol>\n\n

    All of this is part of an evolution in criminal law within the European Union, where the various legal systems have gradually incorporated principles of corporate criminal liability, prevention, investigation, and regulatory compliance.<\/p>\n\n

    Notable Cases of Vulnerabilities at Large Companies<\/h2>\n\n

    Among the high-profile or well-known cases that illustrate the criminal vulnerability of large organizations, the following can be cited.<\/p>\n\n

    The Barcelona\/Neymar Case<\/h3>\n\n

    Court:<\/strong> Barcelona Investigating Court No. 22.<\/p>\n\n

    Case:<\/strong> Preliminary Proceedings 1957\/2015.<\/p>\n\n

    Subject:<\/strong> F\u00fatbol Club Barcelona was investigated for alleged tax crimes related to the acquisition of soccer player Neymar\u2019s rights, as part of an investigation into possible contractual fraud and payments linked to the transaction.<\/p>\n\n

    The Bankia Case<\/h3>\n\n

    Court:<\/strong> Central Investigating Court No. 4 of the National High Court.<\/p>\n\n

    Case:<\/strong> Preliminary Proceedings 59\/2012.<\/p>\n\n

    Subject:<\/strong> Bankia was investigated for matters related to investor fraud, corporate crimes, and breach of fiduciary duty, with possible consequences regarding compensation for those who suffered losses.<\/p>\n\n

    The Volkswagen Case<\/h3>\n\n

    Court:<\/strong> Central Investigating Court No. 2 of the National High Court.<\/p>\n\n

    Case:<\/strong> Preliminary Proceedings 91\/2015.<\/p>\n\n

    Subject:<\/strong> Volkswagen was accused of acts related to fraud, crimes against consumers, environmental crimes, catastrophic risk, public health, document forgery, misleading advertising, and crimes against the Treasury.<\/p>\n\n

    Volkswagen itself set aside a large global contingency reserve related to this matter, which illustrates how a technical, regulatory, and reputational risk can turn into a global legal problem for a company.<\/p>\n\n

    A Counterbalance to Vulnerability: Compliance<\/h2>\n\n

    In light of these regulatory developments and the increased risk of criminal liability for the business sector, the legal system has established incentives for companies to implement crime prevention systems or corporate compliance<\/strong> programs.<\/p>\n\n

    These systems can have significant effects in criminal matters, both in terms of preventing crimes and in mitigating or, in certain cases, excluding the criminal liability of a legal entity, provided that the legal requirements are met.<\/p>\n\n

    The message to companies is clear: business owners are free to decide whether or not to implement a crime prevention system, but the absence of controls can significantly increase the organization\u2019s criminal, financial, and reputational exposure.<\/p>\n\n

    The government has also strengthened its investigative mechanisms, equipping law enforcement and judicial authorities with more modern and sophisticated tools to investigate criminal conduct in the business sector.<\/p>\n\n

    At the same time, the law provides for significant criminal law benefits for companies that demonstrate the existence of effective organizational, preventive, monitoring, and control measures.<\/p>\n\n

    Even when a company is already under investigation, taking steps to cooperate, remedy the situation, conduct an internal review, and ensure compliance can influence the assessment of its liability and potentially mitigate criminal consequences.<\/p>\n\n

    IN DIEM Abogados<\/strong> offers services to develop and implement effective regulatory compliance systems and corporate compliance<\/strong> programs tailored to the needs of each company, in order to counter the rising trend of criminal vulnerability among companies and organizations.<\/p>\n\n

    Criminal Liability, Compliance, and Business Risk Prevention<\/h2>\n\n

    The criminal liability of legal entities requires companies to review their internal organization, decision-making processes, financial controls, communication channels, and crime prevention mechanisms.<\/p>\n\n

    Corporate criminal liability is not limited to large companies. It can also affect medium-sized companies, small and medium-sized enterprises (SMEs), family-owned businesses, professional organizations, associations, foundations, and organizations that engage in activities subject to legal, regulatory, or internal control requirements. <\/p>\n\n

    Therefore, prevention should not be viewed as a purely administrative measure, but rather as a practical business management tool designed to identify risks, reduce contingencies, detect noncompliance, and respond appropriately.<\/p>\n\n

    The Importance of Crime Prevention Models<\/h2>\n\n

    Criminal compliance<\/strong> models make it possible to organize a company\u2019s operations from a preventive perspective. Their effectiveness depends on whether they are tailored to the size, activities, structure, and actual risks of each organization. <\/p>\n\n

    A compliance program must be well-known, implemented, monitored, and reviewed periodically. It is not enough to simply adopt internal codes or generic protocols if there is no genuine corporate culture of compliance. <\/p>\n\n

    Common elements of a criminal prevention model include a risk assessment, action protocols, a reporting channel, a disciplinary system, internal training, financial controls, and the body responsible for overseeing the model\u2019s operation.<\/p>\n\n

    Corporate Criminal Defense and Internal Investigations<\/h2>\n\n

    When a company is involved in a criminal investigation, it is essential to act quickly, preserve documentation, analyze the scope of the facts, and assess the appropriate litigation strategy.<\/p>\n\n

    Internal investigations can be useful for reconstructing what happened, identifying potential liabilities, taking corrective action, and demonstrating the organization\u2019s due diligence.<\/p>\n\n

    Early action helps protect the company, its directors, executives, and employees, and reduces reputational, financial, and legal risks.<\/p>\n\n

    Criminal Liability of Legal Entities and a Culture of Compliance<\/h2>\n\n

    The existence of a compliance program should not be viewed as merely an internal document or as an automatic guarantee of exemption from liability. In order for it to have a meaningful impact, it must be a genuine, effective, up-to-date model tailored to the company\u2019s specific risks. <\/p>\n\n

    A culture of compliance requires senior management involvement, clear internal communication, regular training, adequate controls, and the ability to respond to violations.<\/p>\n\n

    In this regard, criminal compliance not only serves a defensive purpose in the event of legal proceedings, but also plays a preventive and organizational role within the company.<\/p>\n\n