6 LATIN AMERICAN BRIEFINGS JULY/AUGUST 2017 © Association of Corporate Counsel
KEY CONSIDERATIONS FOR US COMPANIES CONDUCTING INTERNATIONAL TRADE AND CROSS-BORDER TRANSACTIONS IN LATIN AMERICA
The matrix is based on four key factors within
each individual country:
• Business interaction with government agencies;
• Anti-bribery laws and enforcement mechanisms;
• Government and civil service transparency; and,
• Capacity for civil society oversight.
Each country is ranked, with one being the
“most safe” and 199 being the “most corrupt.”
The most problematic jurisdictions for FCPA issues within Latin America are Venezuela (ranked
187); Brazil (ranked 167); and Argentina (ranked
141). The best fairing Latin American countries
are Chile (ranked 27) and Colombia (ranked 58).
Some of the counties in the top 10 are Sweden,
New Zealand, Hong Kong, Ireland, the Netherlands, Singapore, and Denmark, each representing an overall low risk of corruption, bribery, and
FCPA violations. The United States, likewise, is a
safe jurisdiction, ranking in at number 20.
Companies seeking to conduct business
affairs in Latin America need to focus compliance efforts and due diligence on FCPA
issues. For example, regular training for sales
staff, vendors, and business partners operating
within Latin America should be mandatory and
FCPA should be a robust topic of discussion.
Any local consultants that are hired to advise
on local issues within Latin America need to
compile detailed reports of what services they
provide in exchange for any compensation they
have received. General references to “
consulting,” “marketing,” or “independent research”
are common red flags used by US regulators in
FCPA investigations. Any substantial payments
made to any local businesses and/or officials
in Latin America need to be scrutinized by
in-house counsel and reported internally for
compliance and auditing purposes. LAB
1 US Securities & Exchange Commission, SEC
Enforcement Actions: FCPA Cases.
are currently with the special unit of the SEC: 1
• Orthofix International — This Texas-based
medical device company agreed to pay more
than US$6 million to settle charges that its subsidiary in Brazil used improper payments and
high discounts to induce doctors under government employment to use Orthofix products.
• SQM — This Chilean-based subsidiary of a
chemical and mining company agreed to pay
more than US$30 million relating to alleged
violations of the FCPA by making improper
payments to Chilean political figures.
• Biomet — This Indiana-based company and
medical device manufacturer agreed to pay
more than US$30 million to resolve DOJ and
SEC investigations of FCPA violations relating to anti-bribery in Brazil and Mexico.
• Braskem S.A. and Embraer — A Brazilian
petrochemical manufacturer and an aircraft
manufacturer, respectively, each agreed
to pay US$957 million and US$205 million in global settlements relating to FCPA
violations, including alleged illicit bribes to
Brazilian government officials.
• LAN Airlines — This South American airline agreed to pay more than US$22 million
to settle cases relating to improper payments
to union members in Argentina.
One of the reasons that FCPA is such a hot
button issue for business dealings in Latin
America is due to readily available information
regarding corruption and bribery risks there.
There are corruption perception indexes put
out by several American think tanks that rank
the likelihood of corruption in jurisdictions
around the world. While some Latin American jurisdictions rank well and are considered
low risk, a multitude of other Latin American
jurisdictions rank high on the risk scale and
present strong likelihood of corruption on the
For example, the Transparency International
Corruption Perception Index (TRACE Matrix),
most recently available for the year 2016,
measures the global business bribery risk and
FCPA risk in 199 countries around the world. 2