Agenda. Increasing Focus on Latin America. Latin America's Davids and Goliaths: Lessons Learned Fighting Corruption in the Region

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Latin America's Davids and Goliaths: Lessons Learned Fighting Corruption in the Region Alexina Guiomar Jackson, The AES Corporation Saskia Zandieh, Miller & Chevalier SCCE - 16th Annual Compliance &

Practices for Companies Operating in the Region Miller & Chevalier Chartered 2 Increasing Focus on Latin America October 2016: Expect an increase in FCPA actions in the Latin America, as the SEC has

1 Latin America's Davids and Goliaths: Lessons Learned Fighting Corruption in the Region Alexina Guiomar Jackson, The AES Corporation Saskia Zandieh, Miller & Chevalier SCCE - 16th Annual Compliance & Ethics Institute October 17, 2017 Agenda Anti-Corruption in Latin America Key Global Anti-corruption Instruments Local Developments Among the Goliaths Applying Lessons Learned to the Davids Best Practices for Companies Operating in the Region Miller & Chevalier Chartered 2 Increasing Focus on Latin America October 2016: Expect an increase in FCPA actions in the Latin America, as the SEC has several cases in the pipeline. Seven FCPA Resolutions involving Latin America since October 2016: Embraer Odebrecht and Braskem Teva Pharmaceuticals Rolls-Royce Zimmer Biomet SQM Orthofix Miller & Chevalier Chartered 3 1

2 Perspectives about Corruption in Latin America 77% of respondents believe that the anti-corruption laws in their country are not effective 48% view corruption as a significant obstacle to doing business 92% associate corruption with political parties 93% associate corruption with stateowned entities Mature Compliance Environments: Brazil, Colombia, Mexico, United States Developing Compliance Environments: Argentina, Chile, Costa Rica, Ecuador, Peru, Uruguay Least Mature Compliance Environments: Bolivia, Guatemala, Dominican Republic, El Salvador, Honduras, Nicaragua, Panama, Paraguay, Venezuela Miller & Chevalier Chartered 4 Key Global Anti-Corruption Instruments US Foreign Corrupt Practices Act Multilateral Agreements Miller & Chevalier Chartered 5 FCPA - Elements Anti-Bribery Provisions No issuer, domestic concern, person with a U.S. nexus (including any officer, director, employee, or agent) May corruptly Take any action in furtherance of payment or a promise, offer, or authorization of payment Of a bribe or anything of value Directly or indirectly To a foreign official To obtain or retain business or improper advantage Accounting Provisions Requires issuers to maintain: Books and records: accurate, detailed Internal controls: adequate to ensure accountability for assets Miller & Chevalier Chartered 6 2

3 FCPA - Broad Jurisdictional Coverage Anti-Bribery Provisions Issuers (including foreign companies, listed on U.S. exchanges) Domestic Concerns (U.S. organizations, citizens, resident aliens acting anywhere) And their agents/co-conspirators (could be anyone, anywhere) Foreign organizations and individuals with sufficient nexus to U.S. (e.g., operating in the U.S.; acting in the U.S. to further the improper payment) Accounting Provisions Issuers Miller & Chevalier Chartered 7 Multilateral Agreements Organization of American States: Inter-American Convention Against Corruption Organization for Economic Cooperation and Development: OECD Anti- Bribery Convention United Nations: UN Convention Against Corruption Miller & Chevalier Chartered 8 Local Developments Among the Goliaths Brazil Mexico Colombia Argentina Costa Rica El Salvador Guatemala Miller & Chevalier Chartered 9 3

4 Brazil Enforcement leader in Latin America Clean Companies Act in force since January 2014 Operation Car Wash Stringent Law Dedicated Prosecutors Independent Judiciary and Press Public Support International Coordination Investigation Fatigue Political Turmoil Negative Economic Consequences Miller & Chevalier Chartered 10 Mexico National Anti-Corruption System signed into law on July 18, 2016 General Law of Administrative Accountability took effect on July 19, 2017 Corruption scandal involving Mexican President Signifiant new legislation Public support for anti-corruption measures Few Cases Inadequate application of local laws Miller & Chevalier Chartered 11 Colombia Transnational Corruption Act enacted in February 2016 Increased Cooperation with US Authorities June 2017 Arrest of Colombia s lead anti-corruption prosecutor, Luis Gustavo Moreno Rivera Autonomy from US Successful Prosecutions of Individuals Few Cases Against Companies Focus on Compliance Programs Moreno s Arrest Risks Shaking US Confidence Miller & Chevalier Chartered 12 4

Argentina Legislative efforts: The Corporate Criminal Liability for Bribery under review by Congress and the Law on Repentance enacted in October 2016 OECD expressed concerns about the

Attempting to catch up at warp speed Cases sometimes appear politically Journalists deeply involved motivated Miller & Chevalier Chartered 13 Applying Lessons Learned to the Davids Brazil

on desire to join OECD New anti-corruption legislation in the pipeline July 2016 amendment prohibits promising of bribes El Sa

5 Argentina Legislative efforts: The Corporate Criminal Liability for Bribery under review by Congress and the Law on Repentance enacted in October 2016 OECD expressed concerns about the Attorney General s Office s independence Increase in corruption charges against high-profile targets, including former President Cristina Fernández de Kirchner Outdated legislation Attempting to catch up at warp speed Cases sometimes appear politically Journalists deeply involved motivated Miller & Chevalier Chartered 13 Applying Lessons Learned to the Davids Brazil Mexico Colombia Argentina Costa Rica El Salvador Guatemala Miller & Chevalier Chartered 14 Emerging Markets: Costa Rica, El Salvador, Guatemala Costa Rica More advanced environment based on desire to join OECD New anti-corruption legislation in the pipeline July 2016 amendment prohibits promising of bribes El Salvador Largely AML-focused U.S. financed pilot program to help fight corruption President Saca charged Guatemala La Línea customs bribery ring transformed market; led to arrest of sitting President & other high-ranking officials Miller & Chevalier Chartered 15 5

6 Lessons Learned From Larger Economies Need comprehensive legislation Judicial and prosecutorial independence are critical Importance of public support of anti-corruption Necessity of a free press to facilitate anti-corruption efforts International coordination can be a powerful tool Beware of too many, too few, and not the right cases Potential for political and economic turmoil Miller & Chevalier Chartered 16 Agenda Anti-Corruption in Latin America Key Global Anti-corruption Instruments Local Developments Among the Goliaths Applying Lessons Learned to the Davids Best Practices for Companies Operating in the Region Miller & Chevalier Chartered 17 Best Practices for Companies Operating in the Region No one size fits all option compliance approach must be country/culture/company specific The large number of state-owned entities throughout the region raises risk profile, requires heightened awareness Be aware of third party risks Tailored and periodic compliance checks necessary to meet the needs of constantly evolving business environments Expect that international authorities are coordinating Miller & Chevalier Chartered 18 6

Contact Information Saskia Zandieh Counsel Miller & Chevalier (202) 626-5560 szandieh@milchev.

7 Contact Information Saskia Zandieh Counsel Miller & Chevalier (202) Miller & Chevalier Chartered 19 Alexina Guiomar Jackson Director & Senior Counsel, Ethics and Compliance The AES Corporation (703)

EMERGING TRENDS IN LATIN AMERICA

EMERGING TRENDS IN LATIN AMERICA 17 th Annual Pharmaceutical & Medical Device Compliance Congress Colleen Conry Michael Casey Partner, Ropes & Gray LLP Counsel, Ropes & Gray LLP 1 1 October 13, 2016 AGENDA