FCPAméricas Blog
How Local Laws in Latin America Affect FCPA Compliance Programs
9.19.2012
Extending an anti-corruption compliance program to subsidiaries in Latin America might seem like a straightforward proposition. A U.S. company must simply export its program, right? But this is not necessarily the case.
To make a program effective locally, companies must consider local laws too, as highlighted in a recent webinar presented by Latin American law firms Cariola Diez Perez Cotapos (Chile), Berreta Godoy (Argentina), Rodrigo Elias y Medrano (Peru), and others. Here are examples of things that companies will want to address with local counsel when expanding FCPA compliance programs into Latin American.
Policy Validity. Companies should ensure that their programs are valid in the eyes of local authorities. This will be important in the event that a company must defend its policy-based decisions before a local court, for example, in an employment dispute. To help ensure validity, in some jurisdictions policies must explicitly link their relevance to the company’s purpose. Thus, policies should invoke the company’s Code of Conduct or ethics charter. In some countries, policy provisions will only be considered relevant if they are proportional to their importance.
Reporting Mechanisms. Several Latin American jurisdictions require companies to offer anonymous reporting mechanisms and anti-retaliation protections. Though such mechanisms have become standard features in international anti-corruption compliance programs, they must be explicit to conform to some local law.
Internal Investigations. In many jurisdictions, employees have specific privacy rights, sometimes Constitutional, that become relevant during a company’s internal investigations into potential FCPA or other anti-corruption violations. For example, if a company fails to consider local data privacy rules when collecting and reviewing emails and internet usage, it risks gathering information that is ultimately inadmissible in local courts. Even worse, it can potential expose itself to civil and even criminal penalties.
Having detailed policies in place can help avoid violations of privacy rights in many jurisdictions. Policies should specify that employees must use email for work purposes only. They can stipulate that all emails are subject to review by the company, putting the employee on notice that usage is not considered private communication. Even with such explicit written policies in place, companies still might not have the right to inspect incoming emails unless those emails correspond to ones that are non-private communication.
In some jurisdictions, it is advisable for companies to go a step further and request written authorization when seeking access to an employee’s emails. If a company plans to use monitoring software in the event of an investigation, it should disclose this fact in its written policies. In some jurisdictions, local attorneys advise companies to actually post the rules visibly in the office to ensure that employees are on notice. The more explicit a company is in recognizing the sphere of privacy of the employee, the more it will be able to exercise its rights in the non-private sphere.
Discipline. Depending on the jurisdiction, companies might need to take precautionary measures to ensure that disciplinary action for compliance failures is defensible in local courts. Some jurisdictions require that companies follow sliding-scale disciplinary codes that include, for example, verbal warnings, suspensions, and dismissals, depending on the severity of the violation. The amount of evidence that a company will need to justify termination will vary with the jurisdiction. In general, the more specific the policies governing the types of permissible activities, the greater the range of remedial actions available against employees who do not choose to comply. Companies should always keep proof that their employees have read and signed off on such policies.
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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© 2013 Matteson Ellis Law, PLLC
Post authored by Matteson Ellis, FCPAméricas Founder & Editor
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September 20th, 2012 at 9:28 pm
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