Currently, in Bolivia, there is a low percentage of companies with a dedicated compliance department or independent department for compliance within their system. Usually, it is the duty of the legal departments by means of their compliance analysts, who within their main responsibilities must perform the corresponding legal compliance monitoring, analyze regulations and the procedures established on the institution, and oversee newly enacted laws and their effects on the organization.On the other hand, we must mention the non-existence of a special regulation for Compliance in the country, however, it is important to indicate that in the year 2017, through the Criminal System Code, there was an attempt to enforce an upgrade and introduction to Compliance in Bolivia, by acknowledging the criminal liability of legal persons and/or their representatives and managers or administrators. Article 65 of the now abolished law mentioned:
Legal persons and those incorporating mixed companies, regardless of their organization or legal form are criminally liable when:1. The punishable act has already been committed in benefit or interest of the aforementioned;2. The legal person, acting outside of its purpose and legally declared an object, commits punishable acts; or3. The legal person has been used as an instrument for the execution of criminally punishable acts.
The liability of the legal person will proceed whenever the punishable acts have been committed by one of the following subjects:1. Their entities or representatives, individual or collective, authorized to act on behalf of the legal person and with the ability of direction, organization, management, administration, and control.2. A natural person lacking the authority to act on behalf of the legal person, whose act has been ratified by the entities or representatives, even in a tacitly; or3. A natural person, acting under the direction or supervision of any of the subjects mentioned in number 1 of this Paragraph.
Accordingly, the Article attempted to attribute Criminal Liability to the legal persons and their representatives or to those in charge of the management and control of a company, however, its validity was short.
Currently, there is no specific regulation for compliance enforcement in Bolivia, but there is regulation that signals what may become the precedent of regulation in the near future, this regulation can be found in the laws that rule over the liability of the companies and their legal representatives, in the Tax Code, the “Marcelo Quiroga Santa Cruz” Law of Fight Against Corruption, Illicit Enrichment and Wealth Investigation, Financial Services Law, among others. Said regulations, apply criminal, civil and administrative sanctions in non-compliance cases, which could transcend to the criminal law area for the representatives of the legal persons. Which means that the legal person itself, as an abstract entity, can effectively be liable in Bolivia. The administrative penalties for legal persons as abstract entities could range from the temporary suspension of the authorization to incorporate new offices, the temporary or definitive prohibition to perform certain activities, to the revocation of the business’ working license, among others.
In this regard, we must indicate that upon the noncompliance of the regulation from a company, it could be the subject of administrative and civil penalties. Nevertheless, it could not be subject to criminal penalties since these penalties cannot be enforced at the moment in Bolivia. However, it does not mean that, given the rude and reckless non-compliances of a company, there will be no criminal penalties for the partners, managers, and representatives in Bolivia. This is something that constantly arises in the practice, which is why it is important to carry out a constant oversight of internal and external regulation Compliance, through risk and crime prevention, not only to merely comply with the regulations but due to an element of entrepreneurial prestige.
As mentioned above, since the beginning, Rigoberto Paredes & Asociados has been one of the leading Law Firms in Bolivia providing Compliance services. In this regard, we count with a large proven experience in the prevention of existing risks and seeking the adequate policies to guarantee to appropriate compliance of the regulation, internal and external procedures as well as the investigation, assessment and measure an organization’s compliance with regulations in any of the sectors or important industries of the Plurinational State of Bolivia.