Criminal compliance in the hospitality industry
What is criminal compliance in hospitality?
Until relatively recently, criminal compliance was mainly associated with highly regulated sectors. However, companies across a growing range of industries are adopting compliance programmes as part of their social responsibility, good governance, and commitment to transparency. Criminal compliance in hospitality businesses — such as hotels and restaurants — involves a set of rules, procedures, and best practices aimed at ensuring compliance with applicable legislation and internal policies. These typically cover:
Food safety
Data protection
Occupational health and safety
Consumer protection
Prevention of criminal offences
Corporate criminal liability
Under the Spanish Criminal Code, a company can be held criminally liable in two ways:
For offences committed in its name, on its behalf, and for its (direct or indirect) benefit — by legal representatives or those with decision-making authority.
For offences committed by employees under the authority of managers or directors, when the latter fail to properly fulfil their duties of supervision and control.
Economic crimes in the hospitality sector
Within the hospitality industry, several types of economic crime are particularly relevant from a criminal law perspective, including:
Offences against the tax authorities
Fraudulent insolvency
Offences against industrial or intellectual property
Requirements to exempt the company from liability
If an offence is committed by a legal representative or someone with decision-making power, the company may be exempt from liability if it meets the following requirements:
Prior adoption of a criminal compliance programme, including appropriate monitoring and control measures.
Supervision of the compliance programme by a body within the company that enjoys functional autonomy.
Fraudulent circumvention of the compliance system by the offender.
No failure by the company to fulfil its duty of supervision and control.
Supreme Court case law on criminal compliance
The Spanish Supreme Court has affirmed the importance of corporate compliance programmes. In its judgment of 29 February 2016, it held a company criminally liable for the absence of a preventive control system, where the offence had been committed by its own executives or employees.
Similarly, in the judgment of 28 June 2018 concerning a tax offence and misappropriation, the Court stated that “had there been an internal compliance programme in place, the commission of the offences would have been more difficult, as the company itself would likely have detected and prevented them in time”.
Benefits of implementing a criminal compliance programme
Having a criminal compliance programme in place not only allows a company to seek exemption from or mitigation of criminal penalties, but also serves as a preventive tool. These programmes help to identify and respond to improper conduct by employees or executives, thereby reducing legal risk.
Directors’ liability for lack of compliance
Criminal compliance is becoming increasingly important in the field of corporate governance. In some cases, company directors may be held personally liable for damage caused to the company if they have failed to implement a compliance programme — based on the duty of care established under the Spanish Companies Act (Ley de Sociedades de Capital).
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