FCPAméricas Blog

Latin America’s Top Anti-Corruption Stories of 2013

Author: Matthew Fowler

Santa[Editor’s Note: FCPAméricas previously highlighted 2013’s top FCPA stories here.]

It is the time of year when FCPA practitioners reflect on the year just past and work to filter the signal from the noise. FCPAméricas covered many different Latin American anti-corruption stories over the last twelve months. In my estimation, the following stories are those most likely to have a lasting impact into 2014 and beyond.

Brazil’s Protests. As reported by FCPAméricas, sustained protests erupted in 2013 in Brazil. These protests were triggered by a hike in bus fares in São Paulo, but grew to include various complaints against the government. One common thread in these protests – in which over one million people in over one hundred cities participated – was frustration with corruption.

The mass protests marked a significant turning point for Brazil. Their repudiation of political corruption challenged the status quo, and triggered action by the government. These actions included the arrest of a legislator convicted of corruption  (a very rare occurrence in Brazil), and the passage of a new anticorruption law.  (FCPAméricas has reported extensively on the Brazil’s new law.)

The degree to which these frustrations have cooled will be a bellwether issue in 2014. During June and July, Brazil hosts the World Cup, which has the potential to be a focal point for ongoing protests. And in October, general elections will provide another opportunity to express popular discontent.

Regional Movement To Penalize Corporations for Corruption. As mentioned above, Brazil passed a new anti-corruption law in 2013. A central aspect of the law was to create strong penalties for legal entities involved in corrupt acts. This is significant in a region where governments generally have a limited ability to sanction legal entities. Brazil now joins Chile and Colombia as jurisdictions with strong measures to address corporate liability.

Brazil’s approach is likely to be an important model for other Latin American governments, namely because its new sanctions establish civil and administrative rather than criminal liability for corporations. As reported by FCPAméricas, corporate criminal liability is a concept that is difficult to integrate into many Latin American legal systems. Treaty obligations will require other Latin American countries – including Argentina and Mexico – to grapple with corporate liability issues in the near future. The Chilean and Brazilian examples suggest ways forward, and indicate a shift toward greater penalties for corporations that engage in corruption in Latin America.

Wal-Mart Shoe Does Not Drop. One of the biggest FCPA stories of 2012 was the New York Times report on pervasive corruption by Wal-Mart de Mexico – coverage that earned the Times a Pulitzer Prize. The next chapter of the Wal-Mart story was a shoe that did not drop in 2013. But it seems likely that when the dust does settle, this will be a story with far-reaching consequences in the region.

Wal-Mart has reported that its investigative costs have exceeded $300 million, and the scope of its internal review has expanded beyond Mexico –inquiries and investigations into potential FCPA violations are ongoing in other foreign markets including Brazil, China, and India. Wal-Mart is also under investigation by a number of federal and local authorities in Mexico.

Wal-Mart is the largest private sector employer in Latin America. Any compliance improvements it makes in response to these investigations have the potential to move markets throughout the region. FCPAméricas previously suggested that Wal-Mart should go big on compliance. It will be worth watching the outcome of these various investigations closely to see if they do.

[Editor’s Note: Another story that might be added is the one below.

FCPAméricas Goes Global. FCPAméricas has grown since it was established in 2011, and now averages over 10,000 hits per month. Our blog took significant steps to build on this momentum in 2013 including the following:

  1. Two new writers – Matthew Fowler and Carlos Ayres are contributing to FCPAméricas. Both are experienced anti-corruption attorneys with deep experience in Latin America.
  2. Translations into Spanish and Portuguese are now provided for all new posts and some older posts with the assistance of Merrill Brink International.
  3. An “FCPA Basics” section – in English, Spanish and Portuguese – to help newcomers to the FCPA.
  4. Advertising Partnerships – FCPAméricas is partnering with trusted companies that work on compliance issues in Latin America, like Click4Compliance and the Mintz Group.]

The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.

© 2014 FCPAméricas, LLC

Matthew Fowler

Post authored by Matthew Fowler, FCPAméricas Contributor

Categories: Argentina, Brazil, Chile, Colombia, Enforcement, English, FCPA, Mexico, Peru

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