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Superintendence of Industry and Commerce issues guidelines for the Implementation of Competition Compliance Programs

In brief

Compliance in Competition Law

The Superintendence of Industry and Commerce (SIC), the sole authority for competition protection in Colombia, issued a Guide to Provide Orientation in the Implementation of Competition Compliance Programs (“Guide“). 

Although the Guide has a doctrinal scope and does not impose obligations, its publication allows the market to understand the vision that the SIC has on the relevance of these types of programs, the benefits of implementing them, and the key elements that they should contain and develop. In this way, the SIC highlights the value of these programs as a mechanism for the prevention and early detection of anticompetitive conduct.


Contents

  1. Benefits of a competition compliance program
  2. General recommendations for the implementation of a competition compliance program
  3. Essential considerations for risk management in competition matters

Benefits of a competition compliance program

The SIC establishes in the Guide that an effective compliance program is not only one that permits a company to identify risks and prevent violations of competition laws. Through the Guide, the authority also provides active measures for the organization when early detection of a conduct that could violate these laws arises.

The SIC identifies the benefits of a compliance program as follows:

  • Prevents fines, sanctions, officer/director disqualifications, criminal investigations and/or civil lawsuits for damages
  • Strengthens the market and increases economic efficiency
  • Improves talent management and contributes to the viability of the company
  • Reputational benefits, which go hand in hand with promoting a culture of compliance

General recommendations for the implementation of a competition compliance program

The SIC defined certain elements as pillars of an effective competition compliance program (the program). 

The SIC’s Guide recommends certain elements that it considers essential for this type of program to be effective. Among these elements, the following are highlighted:

  • The commitment of company managers as a key element in the culture of compliance. The SIC emphasizes that the tone of compliance must come from the company’s executives  (tone from the top), who must express their commitment to the protection of competition in such a way that the importance of the culture of compliance is conveyed to the entire organization.
  • Adequate risk management. Adequate measures are proposed for identification, analysis, measurement and control of risks.
  • The allocation of sufficient and adequate resources for the program. According to the SIC, the allocation of resources is important for the implementation, evaluation and continuous improvement of the program. The resources will be considered adequate according to the characteristics of each company.
  • Appointment of a compliance officer. The SIC suggests that the choice of the most effective model to achieve the objective outlined in the program must be done on a case-by-case basis. Thus, the compliance officer may be an internal collaborator of the company, an academic compliance body, or even an external consultant. Whatever the profile chosen, the decision-making capacity and autonomy of the person in charge of the program must be prioritized.
  • Complaint channels that are known by all collaborators and interest groups. The SIC maintains that it is essential to implement complaint channels that guarantee the confidentiality and anonymity of the complainants. These instruments must facilitate the effective participation of the recipients of the program. Among the channels that the company can enable are emails, telephone hot lines and technological tools.
  • Training programs on compliance with regulations and best practices in competition matters. The Guide recommends implementing a training processes to send a clear and consistent message about the purposes and benefits of the program, as well as the compliance responsibilities of each individual in the company.
  • The implementation of incentives and disciplinary actions. According to the SIC, an incentive system can positively affect compliance with the program, the confidence of employees in the reporting channels, and the institutional mechanisms of the program. The Guide also recommends establishing internal protocols that make it possible to carry out inquiries and investigations, as well as penalize agents who infringe competition laws. The Guide highlights the importance of due process and the right to a defense, in accordance with current labor legislation.
  • Due diligence on suppliers and third-party partners. The Guide suggests including verification mechanisms on the integrity of suppliers or third-party partners, especially in relation to their compliance with the competition laws in the course of their business.

Essential considerations for risk management in competition matters

Risk management: To reach this objective, each entity must carry out a particular analysis of its activity and market context to identify its risks, and adopt sufficient and proportional measures to mitigate them. The elements suggested by the SIC must be oriented toward the following:

  • Identify, recognize and describe the situations that may create violations of the national competition laws to understand the nature and characteristics of the challenges that the company faces.
  • Establish the level of probability or occurrence of each one of the identified risks, and detail the risk-generating factors as well as the incidence of each one to generate the associated risk.
    1. Risk assessment: This consists of establishing the impact that each risk can have within the organization. This will allow the company to determine the need, priority and alternatives for risk management and mitigation. 
    2. Risk treatment: According to the SIC, this last aspect of the program consists of implementing mechanisms that allow analysis of the effectiveness of each mitigation activity as well as the benefits expected from its implementation. Before concluding the process, the implementation of improvement actions based on the information collected is suggested.

The Guide can be found here.

Author

Carolina Pardo joined Baker McKenzie in 1994 and is a Partner of the Firm since 2008. She is currently a member of the Global Steering Committee for the Firm’s TMT industry group and of the Global Steering Committee for the Firm’s Investigation, Compliance and Ethics Group. She was a member of the Global Steering Committee for the Firm’s Global Antitrust and Competition from 2016 and until 2020 and is currently a member of the Latam's Antitrust Steering Committee.
She graduated as a lawyer and a specialist in International Contracts Law from Universidad de los Andes in Bogotá. She obtained a LL.M. with emphasis in International Private Law and Competition Law from the London School of Economics and Political Science.
Over 25 years, she has advised major national and international clients on matters related to compliance with data protection, competition and consumer law rules. She has represented clients in investigations and submissions related to data protection and competition matters in Colombia and has successfully coordinated and prepared white paper proposals to national authorities on behalf of major industrial groups in Colombia.
In 2016 Global Competition Review selected her as one of the 100 most influential women in antitrust. The last two Superintendents of Industry and Commerce have selected Carolina as a Non-Governmental Advisor to the Colombian Antitrust Regulator.

Author

Carlos Ignacio Arboleda is a Lawyer graduated from Pontificia Universidad Javeriana in Bogota. He holds a post-graduate course in Competition Law and Free Trade from the same University and earned an LL.M. degree from the University of Chicago.
Carlos has 10 years' professional experience as external counsel to national and international companies in antitrust and competition matters.

Author

Luis Alberto Castell is a Lawyer from the Pontificia Universidad Javeriana in Bogotá, with a specialization in Competition and Free Trade Law from the same university and a Master of Laws (LLM) in International Business from Queen Mary University of London.
Luis has more than 10 years of experience. He began his professional practice in the financial sector and has been specializing in the fields of competition law and corporate compliance. He was an advisor to the Superintendent of Industry and Commerce on matters related to antitrust and mergers and was part of the specialized group for the protection of competition in public procurement processes (Bid Rigging) of said entity. He was also part of Shop IV on Mergers of the Federal Trade Commission (FTC) of the United States of America as an International Fellow.
For more than three years he has been part of the Corporate Compliance team at Baker McKenzie, handling matters related to personal data protection, corporate compliance (prevention of corruption and prevention of money laundering and terrorist financing) and competition.

Author

Angelica Navarro is a partner in Baker McKenzie's Bogota office. She served as an advisor to the superintendent of Industry and Commerce on antitrust and merger control. Prior to that, she was an adviser to the director of the National Protection Unit, where she was in charge of the formulation and execution on protection and human rights programs. Previously, she worked as an associate at a legal services firm and an in-house attorney from the Mexichem Colombia company. She was selected by Global Competition Review, along with clients and colleagues to be included in the 2017, 2018, 2019, 2020, 2021 and 2022 Who's Who Legal: Competition – Future Leaders publication as one of the most outstanding lawyers in the right of free competition under 45 years of age. Angelica was also recognized by Legal 500 in 2017, 2018, 2019, 2020 and in 2021 as a "Next Generation lawyer" in competition law.

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