Warning about "penalization" of the corporate activity

The Venezuelan government is making use of regulations in order to consolidate the "Socialism of the XXI Century." New regulations have made it possible to boost the institutional nature of the economic framework fostered by President Hugo Chávez.

Carmen Alguíndigue, a professor at the Metropolitan University (Unimet), warns that both the design of a new economic order and the legal framework developed in the past few years have led to "penalization" on the corporate activity.

"Criminal law is becoming more expansive and that principle of minimal intervention that any criminal law should possess - which follows a government model for a democratic, social and fair Rule of Law- is obviously not being materialized."

That is one of the conclusions reached by an investigation carried out by Alguíndigue and other law professors, and which was presented last week at the VIII Congress for Investigation and Intellectual Creation at Unimet.

Indepabis Law, the Law on Fair Costs and Prices or the recently enacted Labor Organic Law (Lottt) were some of the texts analyzed by the experts.

"We cannot understand how in these laws appear crime penalizations similar to, or even greater than, the murder penalizations contemplated in the crime code," Alguíndigue maintained.

Professor Alguíndique asserted that this regulatory scheme has "fragmented" the criminal law in more than 100 laws, many of them associated to the economic activity. Additionally, "more than one thousand types of crime penalizations have been created" besides the ones contemplated in the criminal code.

She is certain that such practice violates the principles of lawfulness and proportionality. "In most of these laws, the principle of lawfulness is violated because these laws  contemplate crime penalizations and are not enacted by a formal law as required by the principle of legal reserve; instead, they are enacted by an enabling act. We are facing a divorce between what has to be the implementation of a general principle and what is contemplated in the regulation."

Permanent threat

To Alguíndigue's mind, business people have to face many challenges if they are to operate under the current regulatory framework.

"It threatens business activity. Now, they not only need to comply with a regulation which may cause them an administrative penalty but in many cases it may cause a criminal punishment, even prison for executive directors."

She also added that in light of the restrictions in the judiciary regarding settlement of cases; these instruments may be used in a discretionary way and therefore become sort of court "terrorism." "There is a problem of legal security. This is breaking news for business people, and not even corporate legal counsels are prepared to address the laws that right now are threatening them."

Although she admitted that in foreign countries, legal entities are sanctioned because of certain types of offences; the professor highlighted that it does not occur in a generalized way as it is currently happening in Venezuela. "The tendency does not involve the whole corporate regulation in crime regulations."

Translated by Adrián Valera Villani