The International Investigations Review: Argentina

Introduction

The main enforcement authorities empowered to investigate and prosecute corporate misconduct are the public prosecutors and investigative magistrates as regards the investigation stage of a criminal procedure, and the criminal courts with regard to adjudication. The police perform investigative measures, including dawn raids or searches, but only following magistrates' orders.

Argentina is a federal country. The federal government shares its responsibilities with 24 electoral districts, comprising 23 provinces and the autonomous city of Buenos Aires. By constitutional design, the provincial governments have authority over criminal procedure law, so the procedural model varies across the country. Federal offences (including corruption and money laundering) are subject to the federal jurisdiction, where the criminal investigation is still in charge of an investigative magistrate who has the power to delegate this task to the prosecutor – an inquisitorial-oriented procedural model.

A new Criminal Procedure Code establishing an adversarial model (in which prosecutors investigate under judges' control and adjudication) was approved by the National Congress on 6 December 2018. However, it is being implemented gradually and only a few provinces are already using it. In most provinces, adversarial procedures are already in force for non-federal offences. In this chapter, unless otherwise stated, we refer to federal criminal procedure law.

Although the judiciary and Public Prosecutor's Office (MPF) are independent constitutional powers, specialised literature has shown that both federal prosecutors and judges behave strategically, especially with regard to public corruption or politically sensitive cases.

Currently, corporate conduct can only be criminally prosecuted for some corruption offences (e.g., bribery, trading in influence, illicit enrichment) and economic offences (e.g., money laundering, terrorist financing, insider trading, tax offences, customs offences and foreign exchange offences).

For the prosecution of corruption and economic offences, the Prosecutor's Office for Economic Criminality and Money Laundering (PROCELAC), a specialised body within the MPF, may become involved. Further, although only empowered to investigate public officials – not corporate wrongdoing – the investigative capacities and participation in criminal proceedings of the Office of Administrative Investigations (PIA) within the MPF, and the Anti-Corruption Office (AO) within the Ministry of Justice and Human Rights, may have an impact in the investigation of corporate conduct. The Financial Intelligence Unit (FIU) may also act as a 'private prosecutor' in money laundering investigations.

There is no legal obligation for companies to cooperate with the enforcement authorities. The Argentine legal tradition is unfamiliar with public-private cooperation in criminal investigations, but this could change with Law No. 27,401 (the Corporate Criminal Liability Law), which entered into force in March 2018, establishing corporate criminal liability for specific corruption offences. The Corporate Criminal Liability Law acknowledges internal investigations as an element of compliance programmes and incentivises cooperation by allowing leniency agreements (similar to deferred prosecution agreements or non-prosecution agreements in the United States) and sanctions mitigation in exchange.

Conduct

i Self-reporting

Legal entities are not legally obliged to self-report when they discover internal wrongdoing, but recent legislation encourages corporations to self-report by providing immunity under certain conditions.

Under Section 9 of the Corporate Criminal Liability Law, corporations will be exempted from penalties and administrative liability when three conditions are met:

  1. the corporation self-reports the offence as a consequence of internal detection and investigation;
  2. a proper control and supervision system (i.e., a compliance programme requiring an active breach by wrongdoers) had been established before the facts under investigation occurred; and
  3. proceeds of crime are returned (disgorgement).

If the tribunal does not consider all three conditions fulfilled, self-reporting should be taken into account as a mitigating factor when assessing the penalty.2

Additionally, Law No. 27,442 (the Antitrust Law) provides that any legal entity or individual who has committed or is committing any of the offences listed in Section 2 of this Law may disclose and acknowledge this conduct before the Competition Tribunal in exchange for an exemption or reduction of the sanctions stipulated in the Antitrust Law. The Competition Tribunal (for which constitutive selection processes are ongoing) will establish a system to determine the order of priority of the applications to benefit from the leniency programme.3

To enjoy the benefits set out in the Antitrust Law, the person reporting the wrongful conduct must have performed or be currently performing the action prescribed by the law, and immediately cease to perform it, unless the antitrust authority requests the applicant to continue with the practice or disclosed wrongful conduct to preserve the investigation.

The availing of the exemption benefit or the reduction of the sanctions or fines, as appropriate, cannot be performed jointly by two or more of the parties engaged in the coordinated practice. However, if a legal entity is self-reporting wrongful conduct, the directors, managers, administrators, trustees or members of the supervisory board, agents or legal representatives of the legal entity who are involved may avail of the benefits.

Self-reporting must be filed before receipt of the notice established in Section 41 of the Antitrust Law (the indictment). This means that the interested party may be involved in a conduct investigation from the beginning (and will have filed its preliminary defence, such as relevant explanations) and will continue being investigated during the administrative proceeding stage. The applicant must fully, continuously and diligently cooperate with the antitrust authority at all times.

Pursuant to Section 60(d) of the Antitrust Law, the Competition Tribunal shall keep the applicant's identity confidential. Furthermore, the declarations, acknowledgements information or any other means of evidence that had been submitted to the Competition Tribunal cannot be disclosed.

Moreover, under the leniency programme set out in the Antitrust Law, those who have committed and self-reported any anticompetitive behaviour provided therein shall obtain a reduction or be exempted from penalties established in the Antitrust Law, and from the prison penalties that may be applicable to them in any case for having committed any of the offences set out in Sections 300 and 309 of the Argentine Criminal Code (ACC).

However, the Secretary of Domestic Trade (the current antitrust authority until the Competition Tribunal is in place and duly functioning) has not specified the operative details of its leniency programme. Therefore, at present there are no clear rules on how the applicant protection framework will be enforced.

In short, there is no legal obligation in Argentina to self-disclose internal wrongdoing. In corruption and antitrust matters, the new legal framework attempts to incentivise this way of cooperation by offering immunity or lenient treatment, depending on the conditions fulfilled, which will be assessed by the enforcement authorities.

Two exceptions to the lack of obligation to self-report should be taken into account:

  1. In application of the transparency regime of publicly traded corporations, according to Section 99a of the Capital Markets Law, companies that are publicly listed before the National Securities Commission (CNV) must disclose to the CNV any fact or situation that could substantially affect the placement of securities of the issuer, the course of the securities' trading or the development of the company's activities – including internal wrongdoing.
  2. Public servants have the duty to report offences that are known to them in the exercise of their public functions.4 This is particularly important for directors of state-owned enterprises or government-appointed directors in businesses in which the state is a minority shareholder, who have been considered by courts to be public officials.

ii Internal investigations

The Corporate Criminal Liability Law establishes that corporations may conduct internal investigations that respect the rights of the persons under investigation, and may impose effective sanctions in cases of violations of internal policies or applicable laws. This is the first legal recognition of internal investigations as a significant element of corporate compliance programmes in the Argentine legal system.

As stated in the AO Guidelines for the Implementation of Integrity Programmes,5 if a company decides to conduct an internal investigation, it is essential to achieve a balance between the right to investigate and the protection of privacy and personal dignity, and particularly to observe the limits arising from employees' rights,6 and that the information management complies with the rules on gathering and handling personal information.7

It is, therefore, important that internal investigation actions are conducted according to a written internal protocol previously approved by the board, and previously communicated and agreed upon in writing. This agreement must include a statement of the company's entitlement to access the resources and devices provided to employees to perform their work. Employees must be warned that information stored in these places is the property of the corporation and that no privacy can be expected if the resources or devices are used for personal or illicit purposes.

It is also advisable that the investigations protocol regulates areas such as the chain of custody of the gathered information, how electronic evidence should be handled and witness interviews, among other things.

When conducting witness interviews, the involved employee has the right to retain his or her own counsel, although this is uncommon, especially when the company has a robust investigation protocol.

The procurement of external counsel to conduct the investigation is advisable, especially when the allegations involve senior management, are particularly serious or may have severe reputational consequences. Retaining outside counsel contributes to strengthening the independence and the credibility of the investigation process and enhances attorney–client privilege.

Law No. 23,187, which regulates the requirements for lawyers to practise law in the City of Buenos Aires (each province of Argentina has its own Bar association with its own regulations, but they all have similar provisions), states that lawyers have the obligation to preserve the attorney–client privilege, unless it is waived by the client. Additionally, Section 7 of Law No. 23,187 establishes that lawyers have the right to the inviolability of the law firm, safeguarding the constitutional right of defence in court.

Further, according to Section 244 of the Criminal Procedure Code, lawyers are forbidden from testifying in court regarding any information received from the client.

To ensure attorney–client privilege, it is important to state in advance that a conversation or document is privileged and confidential; for example, labelling the documents with the attorney's name and establishing that the document is 'private and confidential'.

The privilege does not apply for accountants, so companies should bear in mind that to ensure confidentiality it is advisable to always retain an attorney.

As to the Antitrust Law, it is also advisable that the leniency application must be filed by the company. Once an internal investigation detects an antitrust violation, the company must aim to file for leniency before any other person (involved in the internal investigation) does so.

In any case, internal investigations are a new feature in Argentine domestic law. The current state of case law is weighted in favour of employees owing to Argentina's robust labour and data privacy protections, but, as a consequence of the entry into force of the Corporate Criminal Liability Law, it is expected that case law will grow in the coming years on issues related to privacy, legal privilege, the admissibility of evidence obtained in an internal investigation or disciplinary measures.

iii Whistle-blowers

Because the legal framework has not incentivised whistle-blower reports until very recently, this figure has been almost foreign to domestic investigations. This started to change in late 2016 with the entering into force of two pieces of legislation offering reductions in the threatened punishments to defendants and economic awards to witnesses.

On one hand, Law No. 27,304 on cooperators (the Repentance Law), foresees that persons investigated for corruption and other complex crimes (except high-ranking state officials) may obtain a reduction of their punishment and the avoidance of prison during the process in exchange for the disclosure of precise, useful and verifiable data relating to other participants in the offence occupying a higher hierarchical role in the criminal organisation.

Even though the Repentance Law has some limitations (the 'penitent' cannot receive immunity but only a reduction of the punishment, and the agreement on the reduced sentence must only be applied by a tribunal that did not take part in the negotiations following an oral trial, which is mandatory for the defendant), it has been applied, and provided great visibility to the anti-corruption agenda especially in the context of the Notebooks Scandal, where multiple businessmen and former public officials entered into cooperation agreements, boosting the investigations.

On the other hand, Law No. 27,319 allows for the application of special investigative techniques in complex crimes investigations, including the possibility of offering economic awards to whistle-blowers.

Anonymous reporting lines have been opened in recent years by the PROCELAC and the PIA, at the MPF, and by the AO for the executive. Moreover, different administrative agencies have opened anonymous reporting lines, such as the Tax Administration and the National Service for Agri-Food Health and Quality, SENASA.

Further, a National Witness Protection Programme has been in place in Argentina since 2003.8 Even though the programme's resources are limited, and protective measures have been considered weak, in recent years it has offered effective protection to several witnesses in grand corruption cases. The programme sets out several protection measures, including: (1) personal or domiciliary custody; (2) temporary secure accommodation; (3) change of address; (4) provision of economic means for lodging, transportation, food, communication, healthcare, moving, labour reintegration, security systems, and other essential expenses, inside or outside the country (although for no more than six months).

When it comes to corporate internal whistle-blowers, the Corporate Criminal Liability Law encourages companies to establish a procedure for internal reporting so that employees and third parties may file reports under confidentiality or anonymously and without fear of retaliation.

Resistance to whistle-blowing is still prevalent in Argentina, so legal and corporate incentives to come forward with information and cooperate need to be sustained over time, together with effective anti-retaliation measures, to overcome the cultural trait of corruption. Furthermore, relevant authorities of the current government (which took office in December 2019), including the head of the AO, have publicly discredited the Repentance Law and the practice of rewarding whistle-blowers, claiming that the prosecution of former officials of previous administrations could be characterised as the practice of a kind of legal warfare, or 'lawfare'.

Enforcement

i Corporate liability

Companies can be subject to criminal liability according to several provisions of the ACC and various additional laws. The main offences for which companies could be criminally liable for the conduct of its employees are:

  1. certain corruption offences (the Corporate Criminal Liability Law);
  2. money laundering (Sections 304 and 313, ACC);
  3. terrorist financing (Sections 306 and 313, ACC);
  4. insider trading (Sections 307–8 and 313, ACC);
  5. manipulation of financial markets and misleading offers (Section 309 and 313, ACC);
  6. other financial market offences (Sections 310–11 and 313, ACC);
  7. customs offences (Law No. 22,415, the Customs Criminal Law);
  8. offences against the foreign exchange regime (Law No. 19,359);
  9. tax offences (Law No. 27,430, the Criminal Tax Law);
  10. offences against the social security system (Law No. 24.241); and
  11. collusive conduct (corporate administrative liability is foreseen in the Antitrust Law, not criminal liability).

The above-mentioned laws establish vicarious corporate liability systems, whereby the corporate body is held liable for the illicit actions committed (in most offences by specifically designated persons such as legal representatives, directors or managers; in corruption offences by any person, including third parties) with the intervention of the entity or on its behalf, or in its interest or for its benefit.

Corporate or business fraud and other illicit behaviour can also give rise to civil liability for damages.

Generally, according to Section 1749 of the Civil and Commercial Code (CCC), those who breach an obligation and cause unjustified damage by action or omission are directly liable. Specifically concerning fraud, a company could be liable under Section 271 of the CCC for fraudulent misrepresentation if there is an untrue assertion or concealment of the truth or an artifice, cunning act or contrivance directed to these ends. Additionally, under Section 338 of the CCC, unsecured creditors have the right to revoke acts carried out by the debtor that infringe on their rights, where an act of corporate or business fraud results in insolvency proceedings. The following elements are necessary: (1) the debtor must be in a situation of insolvency (interruption of payments); (2) the damage caused to the creditor must have resulted from the act of the debtor or because of the situation of prior insolvency; and (3) the debt must have existed before the debtor's actions.

In addition, Emergency Decree 62/2019 sets out a Procedural Regime for Civil Action for non-conviction-based asset forfeiture. The Decree sets out a civil action in favour of the federal government, which applies to the goods or titles that are allegedly the result of certain crimes, including bribery. This civil proceeding is autonomous from any conviction issued by a criminal court. The final judgment will be res judicata regarding the goods or rights involved, regardless of the outcome of any other judicial action. However, a final criminal judgment of dismissal or acquittal based on the inexistence of the facts under investigation or the lawfulness of the charges obliges the federal government to restore the property or right to its previous owner (or, where this is not possible, an equivalent value in money).

Additionally, Section 59 of the Argentine General Companies Law9 established the duty of directors or managers to act with loyalty and with the diligence of a good businesspersons. Failure to comply with this duty can give rise to unlimited joint and several liability for damage caused to the company, the shareholders and other third parties (among others, any creditors) by their actions or omissions.

Most Argentine large corporations are family owned and the protection of employees through providing and paying for their counsel is well rooted in their business practices. However, in light of the incentives set out in the Corporate Criminal Liability Law, conflicts could arise between the interests of the company and those of employees under investigation for the same facts. The company could mitigate its responsibility by cooperating with the authorities and identifying the employees involved; and high-ranking executives might attempt to divert internal corporate investigations to hide their own individual responsibility. When the interests of the legal person and those of its employees may conflict, legal representation should not be exercised by the same counsel.

Pursuant to the Antitrust Law, whistle-blowers who have committed any of the offences provided for in Sections 300 and 309 of the ACC shall be exempted from the penalties established in the Law and from the prison penalties that may be applicable to them in any case for having engaged in any anticompetitive behaviour.

ii Penalties

Although each of the criminal offences mentioned in Section III.i carry their specific penalties, the catalogue of sanctions mainly comprises:

  1. fines up to 10 times the value of the goods that have been the object of the offence in money laundering, terrorist financing, insider trading and other financial markets offences, and between two and five times the amount of the illicit benefit in corruption offences;
  2. debarment from government contracting and disqualification from professional practice, or suspension of licence;
  3. partial or total suspension of activities for up to 10 years;
  4. suspension from participating in state tenders of public works or services, or in any other activity linked to the state for up to 10 years;
  5. dissolution and liquidation of the business when it has been created for the sole purpose of the commission of the offence, or when those acts constitute its main activity;
  6. loss or suspension of state benefits; and
  7. publication of an excerpt of the conviction decision.

Sanctions are only applied by courts under a final judgment. Nevertheless, courts may order precautionary measures against business defendants, including seizing and freezing of assets (embargo) to guarantee an eventual confiscation.

In addition, as described above, civil forfeiture sanctions may be imposed pursuant to Emergency Decree 62/2019 regardless the existence of a criminal conviction.

Pursuant to the Antitrust Law, residual fines10 applicable under the Law are updated on an annual basis and currently amount to 11,058 billion Argentine pesos for anticompetitive practices; 41,467,500 pesos per day for breaches of (1) the requirement to provide timely notification of a merger; (2) conditions settled by the competition authorities to cease or prevent certain practices; (3) promises to cease a certain practice; and (4) orders to cease anticompetitive practices.

iii Compliance programmes

Although legal entities are not required to implement a compliance programme under the Corporate Criminal Liability Law, having an effective programme in place may benefit the company.

As explained in Section IV.i, corporations will be exempted from penalty and administrative liability when three conditions are all met:

  1. the legal person self-reports the offence as a consequence of internal detection and investigation;
  2. before the facts under investigation occurred, an adequate control and supervision system had been established (i.e., a compliance programme); and
  3. any crime proceed is returned (disgorgement).

In addition, according to Section 8 of the Corporate Criminal Liability Law, courts will take into account the internal proceedings of the legal entity to graduate the penalty. Whether a company spontaneously reports irregularities revealed by an internal investigation will also be considered relevant.

On the other hand, a compliance programme is a requisite for contracting with the federal government in the following contracts:

  1. contracts that must be approved by a minister or other authority of equivalent standing because of the value of the contract (at the time of writing, 165 million or 104 million pesos, depending on the type of contract); and
  2. contracts included in Section 4 of Delegated Decree No. 1,023/01 (e.g., purchase, supply, services, leases, consultancy, rent with option to purchase, swaps, concessions on the use of goods that belong to the public and private domain of the nation state) or are governed by Laws Nos. 13,064 (on public works), 17,520 (on the concession of public works) and 27,328 (on public–private partnerships) and public utility concessions or licence contracts.

To be considered adequate under Sections 22 and 23 of the Corporate Criminal Liability Law, a compliance programme must:

  1. be appropriate to the specific risks, size and economic capacity of the legal entity;
  2. include a code of ethics and internal policies to prevent offences in any interactions with the public sector; and
  3. specify periodic compliance training for directors, administrators and employees.

Additionally, the programme may contain the following elements:

  1. periodic risk assessment and consequent adaptation of the programme;
  2. visible and unequivocal support from senior management ('tone at the top');
  3. internal channels to report irregularities, open to third parties and adequately publicised;
  4. a whistle-blower protection and anti-retaliation policy;
  5. an internal investigation system that respects the rights of those under investigation and imposes effective sanctions for breaches to the code of conduct;
  6. procedures that verify the integrity and track record of third parties or business partners, including suppliers, distributors, service providers, agents and intermediaries, upon contracting their services and during the commercial relationship;
  7. mergers and acquisitions due diligence;
  8. monitoring and continuous evaluation of the programme's effectiveness;
  9. an internal authority in charge of the programme's development, coordination and supervision; and
  10. compliance with the statutory specific requirements issued by the national, provincial, municipal or communal levels of government.

iv Prosecution of individuals

The Corporate Criminal Liability Law establishes that criminal responsibility of corporations is independent from that of individual offenders, and that businesses can be convicted even if no individual has been identified or charged, as long as it is found that the offence could not have been committed without the tolerance of the corporate body. This rule, and the incentives provided for cooperation, are designed to encourage both businesses and individuals to come forward and cooperate with the authorities in the identification and determination of criminal responsibilities. In this context a conflict may arise between the company and its employees (see Section III.i).

In the context of a business cooperation strategy, an internal investigation and the enforcement of disciplinary measures are advisable, as well as an internal reorganisation to avoid future repetition of the identified wrongdoing.

International

i Extraterritorial jurisdiction

Section 258 bis of the ACC criminalises the active bribery of foreign public officials. Additionally, the Corporate Criminal Liability Law foresees corporate criminally liability for this offence. The elements of the offence are as follows: offering or giving money or any object of pecuniary value, or other benefits such as gifts, favours, promises or benefits, to a foreign public official for his or her benefit or the benefit of a third party, in an economic, financial or commercial transaction. A foreign public official is defined under Argentine law as a public official of another state or territorial entity recognised by Argentina, including those appointed or elected to perform a public function in government or any class of body, agency or public company where that state exerts a direct or indirect influence.

The enforcement of this legislation is weak in Argentina. At the time of writing, only a few investigations into foreign bribery have been opened, and as yet no convictions have been made.

ii International cooperation

Argentina collaborates with foreign authorities in investigations as a member of bilateral, regional and multilateral treaties. For example, Law No. 26,004 on the Mutual Assistance Agreement in Criminal Matters of Mercosur, Bolivia and Chile, and Law No. 26,139 on the Inter-American Convention on Mutual Legal Assistance in Criminal Matters. For countries that do not share a treaty with Argentina, Law No. 24,767 on International Cooperation in Criminal Matters applies. This law also regulates the general provisions of extradition and other forms of assistance in the investigations of crimes. In addition, the FIU (as a member of the Egmont Group) and the Federal Administration of Public Revenues exchange data on a regular basis with their foreign counterparts.

iii Local law considerations

Conduct of an investigation could imply having access to and processing employees' 'personal data', as broadly defined by the Argentine Personal Data Protection Law (PDPL).11 Therefore certain aspects of the PDPL have to be considered.

The PDPL sets out a strict data protection system aimed at regulating the collection, storage and use of databases and personal data stored or processed – even on a temporary basis – in Argentina, to allow data subjects to monitor the use of their information and as a consequence it stipulates general guidelines for the legal usage and processing of personal information. The following are among the most important principles of the PDPL: (1) the purposes of the data processing must be limited and proportional; (2) the personal data must be destroyed after the purposes of the processing have been fulfilled; (3) data subjects are entitled to exercise their rights to access, rectify or erase their personal information; (4) the personal data's security and confidentiality must be ensured.

Under the PDPL, transfers of personal data to countries that do not provide adequate levels of data protection are prohibited in principle. However, transfers are permitted if: (1) data subjects give express consent to the transfer; (2) adequate levels of protection arise from contractual clauses, binding corporate rules or self-regulatory systems of the data assignor and data assignee; or (3) the data transfer is justified under an exception provided by law (i.e., judicial international cooperation; banking or capital markets transactions authorised by applicable law; and international transfers taking place in the framework of international treaties to which Argentina is a party).

Strictly from a labour law standpoint, the general principle is that employees may legitimately consider their emails (specifically those unrelated to their work) to be private and not to be read by any other person. Therefore, for companies to lawfully monitor and audit their employees' email accounts (as a tool provided by the employer), it would be necessary to obtain prior consent from the employees in relation to the company policy and method of monitoring. To ensure that the employer's monitoring rights and employees' privacy rights are balanced, companies shall make a cautious and properly articulated use of their rights and powers, which could be broadly defined in corporate guidelines or policies.

Therefore, it is usually understood that corporate policies on the matter should clearly establish that email accounts are of the exclusive and sole property of the company and can only be used for working purposes. Accordingly, their personal use should be considered a misconduct.

Lastly, there are no specific provisions as to the circumstances under which foreign protections for attorney–client communications are recognised in Argentina. However, by virtue of constitutional rights and public and private international law, foreign attorney–client privilege should be valid in Argentina to at least the same extent as local protections. Nevertheless, it is advisable to engage local counsel to secure these protections.

Year in review

Anti-corruption and anti-money laundering enforcement activity reached a peak in recent years, boosted by both legal and regulatory reforms and a changing political environment, at both national and regional levels. High-ranking officials of former administrations were prosecuted on corruption and money laundering charges, including former president Cristina Kirchner, who is currently Vice President (and who avoided preventative detention on the grounds of her legislative immunity as a national senator), the former vice president Amado Boudou (currently under house arrest), the former minister of federal planning Julio de Vido (currently forbidden to leave the country and required to wear an electronic tag), and former public works secretary José López (currently incarcerated). Furthermore, law enforcement reached not only former officials, but also private sector executives.

In October 2019, the former head of cabinet to Nestor and Cristina Kirchner's administrations, Alberto Fernandez, was elected President and former president Cristina Kirchner was elected Vice President. After the elections, several former authorities and businessmen who had been imprisoned in the context of corruption investigations were released from prison. The current administration has portrayed these corruption investigations as having been carried out under a government of a different political persuasion as acts of lawfare. These investigations are still open and some of them have been sent to be heard at trial.

The new head of the AO has publicly criticised both the Corporate Criminal Liability Law in relation to corruption offences and the Repentance Law. The former was described as being foreign to the Argentine criminal law tradition, while the latter was depicted as an extortive tool, used as a means of lawfare.

In spite of these allegations, in late February 2021, Lázaro Baez, a local businessman with strong ties to the Kirchner family, was sentenced to 12 years in prison for aggravated money laundering, along with another 21 defendants, who received sentences of between two and half and nine years in prison. Baez was convicted for having laundered assets derived from corruption in public contracting and tax fraud during the Kirchner presidencies (2003–2015). The court found that Baez laundered the proceeds of corruption in public procurement during the Kirchner presidencies, through what media outlets have referred to as the 'K (for Kirchner) Money Route', even though a criminal conviction has not yet been confirmed in that case. Fines exceeding US$4,300 million were imposed both on individuals and on legal persons, although the legal persons were not charged or subject to due process; one of the companies concerned was punished with revocation of its legal personality. Notably, one of the defendants received a reduced penalty for collaborating with the investigation, pursuant to the Repentance Law.

The Repentance Law also received an important boost in another high-profile corruption case, the 'Notebooks Scandal'. The Federal Chamber of Cassation upheld the investigation after hearing appeals challenging, among other things, the constitutionality of the Repentance Law and the validity of the collaborators declarations, which had not been registered by digital means and were allegedly obtained through coercion.

The Supreme Court has recently issued important decisions too. In one decision, the head of the judiciary confirmed former vice president Amado Boudou's sentence of five years and 10 months in prison for passive bribery and conducting negotiations incompatible with public office in the Ciccone case. In a separate ruling, the Supreme Court confirmed the convictions of more than 20 defendants, including both businesspersons and public officers (such as the above-mentioned former minister of federal planning Julio De Vido and former transportation secretary Juan Pablo Schiavi), in the criminal investigation into the 'Once Tragedy' – the 2012 Buenos Aires rail disaster that resulted in 52 deaths and hundreds injured, which came to be depicted as evidence of the impact of corruption in daily life.

Conclusions and outlook

Despite the gains made in recent years in anti-corruption and anti-money laundering enforcement, the new legal and regulatory frameworks in these areas and in antitrust matters have left multiple open questions that as yet remain unanswered by jurisprudence in practice. To date, there is no public information on any applications for leniency programmes having been filed in relation to antitrust matters, nor has any company been charged under the Corporate Criminal Liability Law.

In this context, a new administration took office in December 2019. The former head of the cabinet to Nestor and Cristina Kirchner's administrations, Alberto Fernandez, was elected President and former president Cristina Kirchner was elected Vice President. As noted in Section V, the current administration characterises the corruption investigations carried out by the previous government as acts of targeted lawfare.

Against this backdrop, the government has been trying to set its own agenda by promoting a number of bills, one of which aims to reorganise the federal criminal jurisdiction (where corruption offences are heard). The bill was passed by the mainly government-controlled Senate but has still not made progress in the lower house of the National Congress, the Chamber of Deputies, where political competition is much more pronounced. The main goal of this bill is to create new federal courts (thus promoting the actual power of federal judges) and implement an adversarial judicial system.

In addition, the government is proposing a reform of the organisational structure of the Federal Prosecutor's Office, including the selection of the Attorney General and the jury with powers to sanction and remove prosecutors, which were depicted by the Argentine Association of Prosecutors as the creation of a 'firing squad'.

In addition, the government has also announced that it will submit bills in relation to:

  1. the Supreme Court's appellate jurisdiction;
  2. the creation of a new intermediate court below the Supreme Court to review 'arbitrary decisions'; and
  3. a commission to oversee the judicial branch of government to cross-check the activity of the judiciary and prevent it from being used as a political weapon.

In conclusion, the changing political landscape has not brought anti-corruption enforcement activity to a standstill – as some political analysts had predicted. Nonetheless, both political drivers and legal reform may affect ongoing investigations, therefore enforcement developments are still plagued by uncertainty; however, criminal and compliance enforcement are likely to continue to feature significantly as aspects of the challenge facing Argentina in the investigative field in the immediate future.

Footnotes

1 Fernando Felipe Basch, Guillermo Jorge and Gabriel Lozano are partners at Bruchou, Fernández Madero & Lombardi.

2 Section 10 of the Corporate Criminal Liability Law.

3 A bill approved by the Senate on 4 February 2021 and currently pending discussion and approval by the lower house of the National Congress (the Chamber of Deputies) proposes to amend several sections of the Antitrust Law. One of the main amendments seeks to eliminate the leniency programme. At present, it is uncertain when this bill will be considered by the Chamber of Deputies.

4 Article 177 of the Criminal Procedure Code.

5 Anti-Corruption Office, Guidelines for the Implementation of Integrity Programmes (2018), p. 45. Available in Spanish at: www.argentina.gob.ar/sites/default/files/lineamientos_para_la_implementacion.pdf.

6 Sections 70 and 72 of the Employment Contract Law.

7 Section 43 of the Argentine Constitution and Law No. 25,236.

8 Law No. 25,764.

9 Law No. 19,550.

10 We refer to these as 'residual fines' because they will only apply if no other alternative from the Antitrust Law is applicable to the case.

11 Law No. 25,326.

1 Fernando Felipe Basch, Guillermo Jorge and Gabriel Lozano are partners at Bruchou, Fernández Madero & Lombardi.

2 Section 10 of the Corporate Criminal Liability Law.

3 A bill approved by the Senate on 4 February 2021 and currently pending discussion and approval by the lower house of the National Congress (the Chamber of Deputies) proposes to amend several sections of the Antitrust Law. One of the main amendments seeks to eliminate the leniency programme. At present, it is uncertain when this bill will be considered by the Chamber of Deputies.

4 Article 177 of the Criminal Procedure Code.

5 Anti-Corruption Office, Guidelines for the Implementation of Integrity Programmes (2018), p. 45. Available in Spanish at: www.argentina.gob.ar/sites/default/files/lineamientos_para_la_implementacion.pdf.

6 Sections 70 and 72 of the Employment Contract Law.

7 Section 43 of the Argentine Constitution and Law No. 25,236.

8 Law No. 25,764.

9 Law No. 19,550.

10 We refer to these as 'residual fines' because they will only apply if no other alternative from the Antitrust Law is applicable to the case.

11 Law No. 25,326.

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