Criminal Liability of Legal Entities


Welcome to #FreshStartMonday! 

"Have faith in law, as the best instrument for human coexistence; in justice, as the normal destiny of law; in peace, as a kindly substitute for justice. And, above all, have faith in freedom, without which there is no law, no justice and no peace." Taken from Eduardo Couture's Decalogue of the Lawyer.

In the past, Criminal Law considered the natural person as the only responsible subject to be criminally liable. However, the evolution of societies and criminality, made the States consider that legal entities could also be criminally liable. Our Criminal Code was amended in 2012 modifying the criminal liability of legal entities:

ARTICLE 38. Criminal liability of legal entities. Regarding legal entities, the directors, managers, executives, representatives, administrators, officers, or employees of them, who have intervened in the act and without whose participation it would not have been carried out, will be held responsible for the respective crimes, and will be punished with the same penalties indicated in this Code for individuals.

In all cases in which, with their authorization or consent, their directors, managers, executives, representatives, administrators, officers, or employees participate; in addition, when any of the following circumstances occur:

(a) When the criminal act is committed due to the omission of control or supervision and the results are favorable to it.
b) When the criminal act is committed by decision of the decision-making body. In all crimes where legal entities are responsible and no penalty has been established, a fine from ten thousand Dollars (US$10,000.00) to six hundred twenty five thousand United States Dollars (US$625,000.00), or its equivalent in national currency, shall be imposed.

The fine shall be determined according to the economic capacity of the legal entity and shall be fixed considering the circumstances in which the offense was committed.

In case of recidivism, the definitive cancellation of the legal entity will be ordered.
**What is marked in gray constitutes the amendment to the Criminal Code.

Other criminal laws also directly include the liability of legal entities, such as: 

  • Decree 48-92 Law Against Drug Trafficking[1];
  • Decree 67-2001, Law Against the Laundering of Money or other assets[2];
  • Decree 58-2005, Law to prevent and repress the financing of terrorism[3];
  • Decree 19-2002, Law on Banks and Financial Groups[4].

Thus, the text of the amendment to the Criminal Code directly determines the possibility of the liability of the legal entity, being able to be charged with the commission of a crime.

Elements to consider in the criminal liability of legal entities
For legal entities to be personally liable, the acts must be carried out by their administrators, representatives, and/or their subordinates.

Within the first group of persons are the legal representatives and directors. They are those persons who direct and control the juridical person, those who represent the "directive mind and will of the corporation". These persons are understood to have the position of guarantor with respect to the corporation.

The second group includes the subordinates of the first group, i.e., personnel or contractors of the legal entity who act with decision-making capacity, but who have not been duly supervised or controlled by those who hold a position of guarantor. This includes acts committed by lower-level employees, against whom the managers did not exercise the due duty of control over them.[5]

The objective element (criminal doctrine) establishes that for the legal entity to be criminally liable, the person must have acted on behalf of the legal entity and for its benefit.

Scholar Eduardo González Cauhapé-Cazaux, points out the following:
"The first requirement is that the conduct is carried out in the name or on behalf of the legal entity. In other words, the act is formally committed by the legal entity because one of the natural persons referred to in the previous paragraph has committed a crime in the name or on behalf of the legal entity.

"The second requirement is that the action is for the benefit of the legal entity. There would be no criminal liability of the legal entity if, for example, a director, acting on behalf of the legal entity, defrauds it. However, this benefit need not be limited to a direct increase in the company's assets.

" In short, for an act to be attributed to a legal entity it will be necessary that the conduct is carried out by the managers, or at the initiative of subordinates, when there has not been adequate control. In addition, the act must have been committed in the name or on behalf of the legal entity and for its benefit".[6].

Guatemala recognizes an open catalog of crimes, which is understood to be for any type of criminal offense. In addition, in these cases, the circumstances in which the liability of legal entity may arise and its relationship with the possible liability of the directors of the companies and their officers are determined.

Enjoy your coffee! 

[1] Ley contra la Narcoactividad ARTICULO 10.- Autoría -personas jurídicas

[2] Ley contra el lavado de dinero u otros activos. ARTICULO 5. Personas jurídicas.

[3] Ley para prevenir y reprimir el financiamiento del terrorismo. Artículo 7. Responsabilidad penal de personas jurídicas.

[4] Ley de Bancos y Grupos Financieros. decreto 19-2002. ARTICULO 96. Delito de intermediación financiera.

[5] Apuntes de Derecho Penal Guatemalteco, Tercera edición revisada y actualizada. Eduardo González Cauhapé-Cazaux, Myra R. Jones Aguilar. Pág. 208.

[6] Ídem. Pág. 209 y 210.