Anti-Corruption Compliance for Colombian Companies: Obligations and Best Practices

## Corporate liability

Before Law 1778 of 2016, only individuals could be sanctioned for transnational bribery in Colombia. Under this law, Colombian legal entities are also administratively liable when their employees, executives, or contractors bribe foreign public officials.

Sanctions include fines of up to 200,000 times the minimum monthly wage, a ban on contracting with the State for up to 20 years, and inclusion on the list of sanctioned companies.

Decree 1736 of 2020: compliance programs

Decree 1736 of 2020 sets the standards for Business Ethics and Compliance Programs. If a company has a robust, effective program, it can significantly reduce sanctions in the event of a violation.

Elements of an anti-corruption compliance program

1. Tone from the top Visible commitment from senior leadership to ethical conduct is the single most important factor. Without a CEO and board that lead by example, any program stays on paper.

2. Risk assessment Identifying where the company is most exposed to corruption risk: - Public tenders - Obtaining permits and licenses - Relationships with foreign public officials - Payments to third-party intermediaries

3. Code of ethics and conduct A clear document covering: - A zero-tolerance policy on bribery - What counts as permitted gifts and hospitality - A procedure for reporting irregularities - Protection for whistleblowers

4. Third-party due diligence Before contracting with a supplier, distributor, or representative: - Run background checks (sanctions lists, PEP screening) - Check for ties to public officials - Document the selection process

5. Financial controls - Segregation of duties over payments - Tiered approval levels based on amount - A ban on secret accounts or unregistered funds

6. Reporting channel A confidential mechanism (hotline, email) where employees and third parties can report irregularities without fear of retaliation.

7. Training An annual training program, tailored by role (sales, finance, operations). Attendance records kept.

8. Monitoring and updates The program should be reviewed annually and updated as the business and regulatory environment change.

SAGRILAFT vs. anti-corruption compliance

They're complementary but different: - SAGRILAFT: prevention of money laundering and terrorism financing (overseen by the Superintendence of Companies) - Anti-corruption compliance: prevention of bribery and corruption (Superintendence of Companies under Law 1778)

Companies required to have SAGRILAFT must integrate both systems.

Which companies face the most exposure?

• Exporters with contracts in countries perceived as high-corruption-risk
• Companies that frequently contract with State entities
• Pharmaceutical, construction, and mining companies
• Companies with partners or representatives abroad

Does your company need to implement or improve its compliance program? Our corporate law team can run a diagnostic and support you through implementation.

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