Since being elected in 2010, Colombian President Juan Manuel Santos has been trying to have Colombia become a member of the Organization for Economic Co-operation and Development (OECD). As part of this endeavor, in January 2011, Colombia formally applied to become a participant of the Working Group on Bribery in International Business Transactions (the “Working Group”) and accede to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the “Convention”).

Later that year, attempting to have Colombian Law comply with the requirements of the Convention, the Country passed Law 1474, which sought to amend the article of Colombia’s Penal Code that criminalized the bribing of foreign officials (Article 433), by purportedly adding liability for legal persons. Despite the passage of Law 1474, in December 2012, the Working Group in its Phase 1 Report, voiced reservations with regards to Colombia’s legal framework for liability of legal persons and listed other areas of Colombian Law on foreign bribery that could be strengthened. Even so, it found Colombia’s anti-bribery laws generally capable of conforming to the Convention, leading to Colombia officially becoming the 40th Party to the Convention in January 2013.

In its latest 2015 Phase 2 Report, the Working Group noted that while Colombia had made sincere attempts to implement the Convention, it still had not satisfactorily addressed some of the issues and recommendations from the Phase 1 Report. Among the main concerns was Colombia’s failure to properly address issues pertaining to corporate liability. The Working Group stated that the problem was even greater than it had originally thought, noting that under Colombian Law at the time of the Phase 2 Report, financial institutions and the nearly 90 companies listed on the Colombian Stock Exchange were not subject to financial sanctions for foreign bribery. The Phase 2 Report noted, however, that Bill 159, which was before the Colombian Congress at the time, if passed, could rectify most of the concerns raised and bring Colombia’s law more in line with the Convention. Bill 159, which underwent some changes after going through the Colombian Senate, ultimately became Law 1778.

Law 1778 passed on February 2, 2016 and is Colombia’s newest anti-bribery law. It attempts to correct the deficiencies and implement the recommendations of the Working Group. It represents the Country’s latest step in the fight against corruption and bribery and is one which President Santos hopes will result in Colombia being admitted to the Anti-bribery Commission, and eventually, becoming a full member of the OECD.

Law 1778, which shares many similarities with the US Foreign Corrupt Practices Act (FCPA) and other Anti-bribery laws, creates corporate liability for any Colombian company or any of its foreign subsidiaries, as well as for subsidiaries of foreign companies registered to do business in Colombia, when the company, through one or more of its (1) employees, contractors, directors or shareholders (2) gives, offers or promises (3) to a foreign public official (4) directly or indirectly (5) any sum of money, any object of pecuniary value, or any other benefit or gain (6) in exchange for the foreign public official performing, omitting or delaying (7) any act related to the exercise of the foreign public official’s functions and (8) that is related to international business or international transactions.

As recommended by the Working Group in its reports, Law 1778 attempts to address the issues of corporate liability. It also significantly increases the potential financial sanctions for violations. For example, in the 2012 Phase 1 Report, potential sanctions under Colombia’s prior laws was said to range between $157,500.00 and $630,000.00. Under Law 1778, as of 2016, potential sanctions can go all the way up to just over $45 million.

For a Country which, in spite all of the changes in the past few years, ranks 83rd in the 2015 Corruption Perceptions Index, Law 1778 clearly appears to be a step in the right direction and one that Colombian companies and foreign companies registered to do business in Colombia should take notice of.