Colombia: Constitutional Court declares articles 66, 67 and 68 of Law No 2195/2022 unconstitutional

This text highlights the effects of the Court’s ruling:

What changes were introduced by Law N^o 2195/2022?

Law N^o 2195/2022 adopted measures in matters related to transparency, prevention, and the fight against corruption. This Law implemented two significant changes to the competition regime in Colombia:

• It strengthened Colombia’s Leniency program in antitrust matters.
• Increased the existing limit on sanctions.

Leniency program

Article 66 of Law N^o 2195/2022, modified article 14 of Law N^o 1340/2009. In essence, Law N^o 2195/2022 incorporated rules on confidentiality, looking to incentivize the collaboration of the eventual beneficiary with Colombia’s competition authority. The confidentiality rules allowed:

• The whistleblower to protect his identity.
• The whistleblower the possibility to recover the evidence handed in (under given circumstances) in case the leniency process failed.
• Protected the confidentiality of the negotiation process.

Limit on sanctions

Article 67 of Law N^o 2195/2022 modified article 25 of Law N^o 1340/2009, which had established a limit of approximately $25.000 USD on sanctions imposed by the Colombian competition authority. Article 67 of said law implemented a new method for the appraisal of fines, it brought three main changes to the preestablished limit on sanctions:

• It started to consider the operational income of the offender, the fiscal year before the sanction, to determine the amount to be fined. In that sense, it limited the sanction to 20% of the offender’s annual operational income.
• It started to consider as a criterion for sanctioning, the offender’s net worth during the year before the sanction, establishing a sanctions limit of 20% of said net worth.
• It created the possibility to sanction an offender with fines as high as 300% of the profits gained through the sanctioned conduct.

Additionally, article 68 of Law N^o 2195/2022, which modified article 26 of Law N^o 1340/2009, reduced the number of criteria to appraise sanctions imposed to “facilitators”.

Constitutional Court’s Ruling

Decision

Declared the unconstitutionality of articles 66, 67 and 68 of Law N^o 2195/2022.

Claims

The plaintiff claimed the articles where contrary to the principles of single-subject rule (Article 158 of Colombia’s Constitution), consecutiveness and flexible identity that should inform the procedure of the legislative process of laws (Articles 157 and 160 of Colombia’s Constitution).

The Court’s Arguments

The Court found that the single-subject rule was not disregarded, considering that articles 66, 67 and 68, have a thematic relation with the core of Law N^o 2195/2022. Nevertheless, the Court declared the unconstitutionality of the norms because of vices in their procedure. Since, during the process of approval of Law N^o 2195/2022, the principles of consecutiveness and flexible identity were neglected.

According to the Court’s jurisprudence, the principle of consecutiveness must be interpreted jointly with the principle of flexible identity (Constitutional Court, C-084/19). In that sense, said principles demand that a bill’s core stays the same during the legislative process. In consequence, if the bill undergoes modifications or additions, they must be about issues related to the topics discussed and voted in the bills first debate of the legislative process.

In the present case, the Court found that, by the Bill’s authors own volition, the accused norms were excluded from the debates held by Congress’s “First Commision” and by the Plenary of the Senate. In that sense, as the accused norms were not presented, debated, or approved in the first debate of the legislative process, the norms do not fulfill the principles of consecutiveness and flexible identity.

Effects

The Court clarifies that the unconstitutionality ruling leads to the reincorporation of the articles modified by Law N^o 2195/2022. Therefore, to avoid a legislative void, articles 14, 25 and 26 of Law N^o 1340 of 2009 are reinstated in Colombia’s regulation.

Hence, the changes introduced by Law N^o 2195/2022, related to Colombia’s leniency program and the new sanctioning regime, are left without effect.