Criminal precautionary measures for legal persons

May 17, 2021 | Lagares News

Organic Law 5/2010 of June 22, reforming the Penal Code, which came into force on December 23, 2010, later completed and adapted by Organic Law 1/2015, introduced amongst other notable new features the abolition of the old Roman aphorism societas delinquere non potest according to which a legal person could not commit crimes.

Since its entry into force, legal entities as well as other assets are now liable to be prosecuted for the commission of crimes outside of the natural persons who represent them or act in their interest and, therefore, to be sanctioned with a list of seven penalties specially provided for such entities in section 7 of article 33 of the Penal Code, which we briefly cite: a) the fine for quotas or proportional; dissolution of the legal entity; b) suspension of activities; c) the closure of its premises and establishments; d) the definite or temporary prohibition to carry out certain activities in the future; e) the disqualification from obtaining subsidies and public aid; f) to contract with the public sector and to enjoy tax benefits or Social Security; and g) judicial intervention.


Precautionary measures and legal persons

Without a doubt it would be interesting to deal with each of these penalties, but this short text, as its title announces, is not going to deal with them but with the precautionary measures that can be adopted during the procedure on legal persons. These are of high importance, especially when some of the precautionary measures are in turn in the catalogue of the penalties with which the entities can be sanctioned, something that, on the other hand, is not new in criminal law, or else, think about the limiting identity of freedom of the precautionary measure of preventive detention and the prison sentence in the case of natural persons.

Precautionary measures are not conceptually penalties, but they clearly represent authentic restrictions on the rights of the entities that must bear them. They also hold the capacity to significantly tax the freedom of movement of companies and negatively affect its assets on their own, which in turn affects their value and the expectations that partners, workers and creditors have placed on them.

Article 544 of the Penal Code foresees the application to groups endowed with legal personality as well as some entities that do not have it, of three specific precautionary measures, which are those of art. 33.1.7 c, d and g of the same code: a) suspension of activity; b) the closure of its premises or establishments and c) judicial intervention.


Suspension of Activities

The purpose of this measure is intended to prevent activities from continue developing during the procedural period that may be considered illicit in advance, favouring or protecting them.

In order to avoid the damages that the total suspension of the activity may cause, the judicial body may limit the suspension order to certain activities, branches of activity or production units that appear related to the facts under investigation and, likewise, suspend them for the determined and convenient time so that the cease of the illegal activity can be achieved.


Temporary closure of premises and establishments

This shares with the previous one the purpose of avoiding that during the procedural matter the activities that may be considered illicit in advance, can continue to be carried out and also allow to preserve the sources of evidence.

As in the previous measure, in order to avoid unnecessary damage to the protected entity, the deciding judge may limit, if there are several establishments on which the entity is based, the closure of the specific establishments or buildings that appear related to the investigated facts. Likewise, for the convenient time for the cease of the activity to be avoided or to facilitate the investigation work.

For this reason, exclusively the premises or establishments related to the criminal act and that conjure the risk of criminal repetition must be closed, which is especially necessary in the cases of companies with a large number of establishments (offices, headquarters, etc.).


Judicial intervention

The rule clearly states “Judicial intervention to safeguard the rights of workers or creditors for the time deemed necessary, which may not exceed five years “.

It is a measure of a clear conservative nature since it is intended to avoid the de-patrimonialization of the entity due to voluntary or non-voluntary acts of the administrators of the company.

The measure is intended to control the regularity of payments as well as acts and contracts that may affect the assets of the protected party.

The purpose of the measure is explicitly stated in the precept, to safeguard the rights of the workers and creditors of the legal entity, that is, apart from the partners or owners of the group, it is about protecting the interested parties in which the contracts are met and their credits are satisfied, and not for purposes other than those addressed in the measures discussed above.


Ernesto Falcón
Partner. Director of the Litigation Department