FCPAméricas Blog

Boom Times in Brazil, Part 1 (Five corruption issues to look out for in a high-opportunity / high-risk environment)

Author: Matteson Ellis

This blog post is the first of a four-part series. Part 1 (below) outlines corruption issues to look out for when operating in Brazil’s high-opportunity / high-risk environment. Part 2 gives guidance to companies that are expanding operations into Brazil on ways to manage the country’s unique risk. Part 3 gives guidance (in Portuguese) to Brazilian companies expanding internationally on the basic prohibitions and jurisdictional elements of the FCPA. Part 4 discusses developments in Brazil that may signal a sea change in corruption reform.

Brazilians are taking to the streets. Fed-up citizens are marching in the city squares of Rio de Janeiro with 594 brooms held-high, demanding a corruption clean-up, wit... Read more

Colombia and Panama FTAs Could Be Good for Compliance

Author: Matteson Ellis

Free trade agreements (FTAs) are more important for anti-corruption compliance in Latin America than one might think.

Take the U.S.-Colombia and U.S.-Panama FTAs, just passed by the U.S. Congress last week after years of negotiation and lobbying to lawmakers. When implemented, the agreements will eliminate trade barriers between the United States and two of its most important Latin American partners.

Colombia is the third largest trade partner in South America. Panama is one of the fastest growing economies in the region.

The resulting boost in opportunity for U.S. companies would normally mean increased corruption risk. The more business activity a company has in a place where risk is high, the more opportunities for that company to run afoul of international anti-corruption laws, namely the U.S. Foreign Corrupt Practices Act (FCPA).

But the FTAs are designed to help reduce corruption risk too.

Enhanced Regulatory Transparency

The FTAs require enhanced regulatory transparency in key areas of government decision-making. ... Read more

Cost Effective Internal Investigations – a “How To”

Author: Matteson Ellis

Internal corruption investigations are expensive. Case in point: a Deutsche Telekom subsidiary in Hungary has paid more than $3 million so far this year on a U.S. Foreign Corrupt Practices Act (FCPA) internal probe. This is before the company has even reached a settlement with the U.S. Department of Justice (DOJ) (a settlement with the U.S. Securities and Exchange Commission has reportedly been reached already). How much more might expenses climb after the German authorities get involved, or the Hungarian authorities (Hungary is a signatory to the OECD Anti-Bribery Convention)? What if the company gets a monitor?

Maybe Avon Products can offer lessons learned on managing internal investigations. Avon has reportedly spent over $150 million on its own internal probes and compliance efforts over the last three years. Some predict this amount will eventually climb to $250 million. Avon has not yet settled its issues with the government.

Given the high stakes of internal investigations, companies have built-in motivations to pay whatever is needed to get it right. Not only can a faulty investigation leave a company exposed, it can also lead to additional penalties. See Alcatel-Lucent, where the DOJ noted that the i... Read more


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