Growing Awareness of Anti-Corruption Laws in Latin America (The FCPA compliance officer’s job might be getting a bit easier)
There is a growing awareness in Latin America of bribery laws and prosecutions. This was one of the key findings of the 2012 Latin America Corruption Survey, published last month by Miller & Chevalier, Matteson Ellis Law, and twelve law firms throughout the region.
The Findings. The survey polled more than 400 executives throughout the region. Responses were compared to those of a similar survey in 2008.
Seventy-five percent (75%) of respondents said they were aware of an offender being prosecuted in the country in which they work for making or receiving illicit payments, up from 69% in 2008.
Sixty-four percent (64%) of respondents said they were somewhat or very familiar with the FCPA. Knowledge was especially prevalent among businesspeople who work for publicly-listed companies or affiliates of U.S. multinational companies. Just 3% of those respondents thought their company was not subject to the FCPA and 19% “don’t know.” This was a significant change since 2008. That year, 30% of respondents whose companies were clearly subject to the FCPA did not recognize that their companies were covered by the law.
Even the UK Bribery Act, which just went into effect last year, is on people’s minds. Forty-percent (40%) of respondents were either somewhat familiar or very familiar with it.
Why the Trend? Based on my own experiences in the region, these results make sense. There certainly seems to be a growing awareness in the region of international anti-corruption standards, compliance expectations, and bribery prosecutions.
For example, prosecutions in various countries appear to be on the rise, driving awareness. Honduran authorities initiated investigations into bribery by telecommunications company Latin Node Inc. after its executives were prosecuted in the United States under the FCPA. The matter has been in the Central American press. U.S. officials reportedly have supported the Honduran authorities with evidence through mutual assistance agreements. Similar coordination is occurring between United States and Mexican officials as well, and maybe other countries.
In Colombia, since the change of government 18 months ago, there has been a wave of corruption prosecutions. In Costa Rica, there are now more than seven public bodies with authority to play a role in corruption investigations, working to increase the prevalence of prosecutions there. Whether or not anyone is ultimately convicted locally in these cases throughout the region, the fact is that investigations are now more common.
Technology seems to be driving awareness too. Both traditional and new media are having an effect. On a recent trip to Panama, I found that practically every lawyer with whom I interacted was on an iPad. Brazil just passed India to become Facebook’s second biggest country. Such technology has the power to quickly publicize the high-profile investigations now common in countries like Argentina, Brazil, and Mexico. Even if enforcement of corruption laws in many Latin American countries has not significantly changed, the media’s coverage of it has.
Globalization also plays a role. By driving more cross-border business, globalization has exposed more local and regional companies to anti-corruption standards. They are more often subject to third-party due diligence, acquisition due diligence, trainings, certifications, and other compliance initiatives. When a deal falls apart because of a corruption concern, the word spreads in tight-knit regional markets. I just shared a panel at a conference with the Chair of the Brazilian Federation of Federal Judges and Brazil’s Assistant Attorney General. Both were well aware of the upcoming 2014 peer review by the OECD Anti-Bribery Convention’s working group.
Implications for Compliance Officers. If this is all true, the jobs of FCPA compliance officers might be getting easier. When more businesspeople at local, regional, and multinational companies are aware of anti-corruption standards and know that violations can have consequences, it is much easier to obtain their buy-in. Such buy-in can be crucial to successful compliance procedures like third party vetting, accurate and detailed recordkeeping, and adherence to gifts and entertainment policies. Local companies push back less when asked to fill out a compliance questionnaire. Regional companies are more prepared to respond to due diligence requests in acquisitions.
This is a trend that is only likely to continue.
The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com.
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@2012 Matteson Ellis Law, PLLC
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