On February 8, 2024, the Board of the LXV Legislature of the Chamber of Deputies, turned to the Constitutional Commission the initiative presented by the President of the Republic containing the Decree for the reform of the second paragraph of Article 19 of the Constitution regarding preventive imprisonment.
This initiative seeks to increase the list of crimes for which the Courts must order ex officio the preventive detention of persons who are subject to an investigation by the Public Prosecutor's Office. Among the crimes that stand out for their implications in the business environment are:
The proposal is based on a reasoning that equates these crimes, in terms of social dangerousness, with high impact crimes such as extortion, drug dealing, illegal production, preparation, sale, acquisition, import, export, transportation, storage and distribution of synthetic drugs, such as fentanyl and its derivatives.
Arguments contrary to the criteria of the Supreme Court of Justice.
The arguments that support the reform in criminal tax matters break the rationale of the regime that governs Article 19 of the Constitution. The principle of presumption of innocence for purposes of criminal prosecution contained in this article require that preventive detentions should apply only in exceptional cases.
With this reform, the Federal Executive Branch intends to overcome the criterion of the Supreme Court of Justice, issued on November 8, 2019, which considered invalid certain amendments to the law to apply the preventive imprisonment to tax crimes, as well as to consider smuggling, tax fraud and the use of false invoices as crimes against national security. On that occasion, Justice Arturo Zaldívar argued that this figure constituted an advance of criminal penalties of a nature that contravenes human rights.
In contrast to the Court's criteria, the initiative openly states its purpose by specifying that “considering tax fraud and smuggling within the constitutional catalog of conducts that merit preventive imprisonment contributes to guaranteeing tax collection (...)”. This tax collection purpose represents a setback to the general principles of the Accusatory Criminal System that was promoted by the constitutional reform of 2008.
The legislative Agreement to process this reform was submitted on March 14 of this year to the Constitutional Commission, whose draft ruling discards 14 initiatives presented since 2022 by legislators of different political parties that sought to limit or eliminate the figure of preventive imprisonment.
Given the composition of MORENA party legislators in the Chamber of Deputies, it is foreseeable that the presidential proposal will be approved in its terms.
Corporate preventive actions and the protection of the Board of Directors.
The reform represents a risk in the corporate sphere, since tax fraud and smuggling are listed in Article 11 BIS of the Federal Criminal Code as crimes attributable to legal entities.
For this reason, the members of the Board of a company subject to investigation for the crimes contained in the constitutional reform, who are accused of failing to implement organizational controls to prevent such offenses, can be exposed to preventive imprisonment for the duration of the criminal proceedings and sentencing.
In the scenario of a possible legislative approval, it is essential that companies implement the organizational control and compliance actions required by Article 421 of the National Code of Criminal Procedures. These preventive strategies will allow mitigating the risk and eventually exclude the criminal liability of the company and its Board of Directives.
Crime prevention models can be developed under principles of corporate criminology, following the standards recognized by the United Nations Office on Drugs and Crime, and the elements of control environment and risk mitigation contained in the ISO 31022 and 37301, and UNE 19601 and 19602 standards for legal risk management systems and general, criminal and tax compliance. These models should provide for the creation of the necessary procedural evidence for corporate criminal defense.
The Tax Law and Corporate Criminal Liability and Compliance Practices of our Firm have the capabilities to represent our clients in complex corporate criminal litigation and advise them on tax and criminal compliance matters necessary to prevent criminal liability of legal entities.
Our team of experts has extensive experience in the development of criminal and criminal tax risk analysis, and in the design, implementation and operation of Organizational Management and Control Systems in tax and corporate criminal matters.
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