Anti-Corruption Policies: Practical Aspects Of Its Implementation In Latin America

Due to the extraterritorial application of anti-corruption legislation now in force in many countries, multinational companies need to implement policies in all of the jurisdictions that they operate to minimise the risk of non-compliance. Due to unique labour laws in many Latin American countries, implementation needs to be tailored specifically to each jurisdiction. This article analyses the effects of the Foreign Corrupt Practices Act (FCPA) on multinational companies operating in Argentina, Brazil, Chile, Colombia and Peru, with specific focus on its practical consequences from a labour perspective.

Availability of FCPAs affirmative defences in Latin America and key aspects to take into account in lobbying and promotional activities

In short, the FCPA makes it unlawful, either directly or through its representatives, agents or employees, to corruptly make an offer, payment promise or actual payment in favour of a foreign official, foreign political party, foreign political party officer or candidate. It is not just direct payments or offers to corruptly pay public officials companies need to be mindful of. They also need to ensure that promotional or lobbying payments are not a front for such payments.

Companies need to be particularly careful with lobbying and paying promotional expenses to government officials in the states considered. In Argentina, for instance, the payment of promotional expenses for government officials, as well as travel and entertainment, is prohibited. Moreover, donations to politicians or political parties must be done by Argentine residents. Foreign companies could only therefore make political contributions through local subsidiaries. An action is corrupt if it is done with the intent of inducing the recipient to misuse their official position to direct business wrongfully to the payer or any other person. A person charged with a violation of the FCPA's anti-bribery provisions may assert as a defence that the action was lawful under the written laws of the foreign country or that it was a reasonable and bona fide expenditure, such as travel and lodging expenses, as part of demonstrating a product or performing a contractual obligation with a foreign government or agency.

The second affirmative defence, concerning bona fide expenditure, would be applied objectively and there should not be differences between jurisdictions. However, the legality of prohibited conduct in each jurisdiction varies. This is perhaps the key point for multinationals with operations in Latin America.

For all intents and purposes, all of the prohibited conducts set out in the FCPA, as it would be applied in the respective local jurisdictions, are crimes under Argentine, Colombian and Peruvian law. Accordingly, the first affirmative defence could not apply in relation to actions occurring in those jurisdictions.

A slight distinction needs to be drawn with Chile. Although the prohibited offences are all crimes, the company's responsibility for the acts of an employee may be diminished or eliminated if it has in place a corruption prevention policy and this policy was not adhered to by the employee.

The situation in Brazil is more complicated. Anti-corruption legislation is directed towards public servants and not the private corrupt agent. Although there is criminal liability for the agent, this cannot be attributed to the person or company that asked the agent to perform the corrupt act.

Implementing an effective anti-corruption policy: domestic legal matters to be aware of

Overwhelmingly, it is apparent that affirmative...