LATAM Anti-Corruption Update Cory LaBarge Chief Compliance Officer LATAM Grunenthal Group
Disclaimer The views and opinions expressed in this presentation are from the author and do not reflect the official policy or position of any company or government. Legal code comparisons shown within should not be considered or misconstrued as legal advice. Examples of analysis performed within this presentation are only examples. Assumptions made within the analysis are not reflective of the position of any company.
Transparency International Corruption Perceptions Index 2016 SOURCE: TRANSPARENCY INTERNATIONAL
LATAM Comparison of Legal Provisions Country Private to Public Bribery Defined Private to Private Bribery Defined Gifts and Hospitality Allowed? Corruption of Foreign Public Officials Defined Facilitation Payments? Compliance Programs Reduce Liability? Regulator/ Prosecutor ARG YES 8 NOT REGULATED 1 No Gifts As General Rule; No Specific Hosp. Limits YES NOT ALLOWED NO IMPACT ON LIABILITY CRIMINAL FEDERAL BRA YES NOT REGULATED Small free gifts may be Accepted; No Specific Hosp. Limits 2 YES NOT ALLOWED MAY MITIGATE SANCTIONS/ LIABILITY 3 MUNICIPAL, STATE, FEDERAL, CHI YES 8 NOT REGULATED 4 Official or courtesy gifts exempted 2 ; No specific Hosp. limits YES NOT ALLOWED 5 MAY MITIGATE SANCTIONS/ LIABILITY 3 ANY PUBLIC PROSECUTOR 6 COL YES 8 YES No Gifts As General Rule; No Specific Hosp. Limits YES NOT ALLOWED MAY MITIGATE SANCTIONS/ LIABILITY 3 CRIMINAL PROSECUTORS SOURCE: Adapted from data at https://globalcompliancenews.com/anti-corruption/anti-corruption-laws-around-the-world
LATAM Comparison of Legal Provisions Country Private to Public Bribery Defined Private to Private Bribery Defined Gifts and Hospitality Allowed? Corruption of Foreign Public Officials Defined Facilitation Payments? MX YES YES No Specific Hosp. Limits 7 YES NOT SPECIFIED IN LAW Compliance Programs Reduce Liability? MAY MITIGATE SANCTIONS/ LIABILITY 3 Regulator/ Prosecutor FEDERAL PE YES 8 NO No Gifts or Hospitality As General Rule VZ YES 8 YES No Gifts or Hospitality As General Rule YES YES NOT ACCEPTABLE NOT SPECIFIED IN LAW MAY MITIGATE SANCTIONS/ LIABILITY 3 NOT SPECIFIED IN LAW NATIONAL POLICE / AG FEDERAL NOTES TO COMPARISON CHARTS 1 Law prohibits fraud, concealment, embezzlement, wrongful administration 2 Code of conduct provides guidance for public officials on acceptable hospitality or gifts 3 Compliance program elements / minimum standard specified 4 Could be deemed as anti-competitive practices subject to prosecution 5 Not referenced in the Criminal Code 6 Specialized Anti-Corruption Unit that assesses public prosecutors in legal, financial and accounting areas 7 Limits assessed as potential bribery on a case by case basis 8 Differentiation between different types of bribery (examples: active and passive bribery, bid rigging, extortion, etc.)
Social Environment Investigations Legislation/Criminal Argentina Macri Election in 2015 Moderating Economic Policies Attempting to reverse populist policies of Kirchner govt. Kirchner: Investigation into alleged money laundering / embezzlement Public Works Manager Arrested holding weapons and bags of cash SEC Pan American Energy contracts (alleged $300 million payments) No Private sector corruption laws National Congress considering expanding corporate liability and civil forfeiture Awaiting implementation of 2014 Criminal Code only applies to BA courts Anti-corruption Task Force starting to monitor/report
Social Environment Investigations Legislation/Criminal Brazil Impeachment of Dilma Rousseff Successor Michel Temer s gov t under scrutiny in Odebrecht/ Petrobras bribes and election funding probes New Presidential elections 2018 Anti-corruption Minister resigned Former President Lula and multiple officials indicted for corruption Ongoing Brazil/US investigative cooperation Operation Lava Jato (Car Wash) continues 20 Companies and 50 individuals Numerous other operations looking into government fraud / corruption / improper payments Clean Companies Act of 2014 criminalizes public bid fraud, direct/indirect bribery of local & foreign officials and extends corporate and personal liability CGU Compliance guidelines 5 compliance program pillars CGU Pro Etica certification
Social Environment Investigations Legislation/Criminal Chile President Batchelet s son resigns from State Charity due to allegations of influence peddling; daughter in law charged with tax fraud New Presidential election in Nov 2017 Increasing public pressure / focus against corruption Ongoing Chile/US investigative cooperation Penta Group: tax evasion SQM: fraud and financing of pres. elections FNE investigation of pharma anticompetititve practices LAN:$22M settlement with SEC on money laundering Laws criminalize money laundering, facilitation payments, active/passive bribery of local & foreign officials Mandatory public official asset disclosures Chilecompra anonymous reporting Compliance program credits TI Corruption Prev.
Social Environment Investigations Legislation/Criminal Colombia 2 nd Term of President Juan Manuel Santos ends in 2018 2016 Cease fire and peace agreement with FARC after 40 years of civil war Peace negotiations begun in 2017 with ELN Economic conditions improving in the country Surge in investigations Merry Go Round $500M in gov t contract kickbacks Ex Agriculture Minister Arias embezzles $12M; flees to US PetroTiger CEO pleads guilty to $334k Ecopetrol bribes Corruption Early warning system Transnational Corruption Law (Ley 1778) - first foreign antibribery law Criminalizes direct/indirect bribery of foreign officials Penalties avoided by self-reporting before gov t investigation Credit - implement Compliance program
Social Environment Investigations Legislation/Criminal Mexico Pena Nieto family: Casa Blanca purchase scandal and alleged favoritism in gov t contracts ($76M) Economic and social turmoil over Trump election New Presidential elections 2018 Increasing public pressure / focus against corruption Walmart FCPA issues from 2011 (licensing and permits facilitation payments) SEC settles Key Energy investigation - consulting payments to PEMEX ($5M disgorgement) National Anti- Corruption system going into effect in April Institutes corporate and individual responsibility / liability with fines and imprisonment Whistleblower protection and credit for compliance program elements
Social Environment Investigations Legislation/Criminal Other Countries Peru, Nicaragua and Ecuador - new governments Cuba: Castro dies; rapprochement with US gov t Venezuela: Antigovernment demonstrations 2017 regional economic forecasts slight to moderate growth Panama: Panama Papers; Canal expansion cost overruns; ex SAP Dir. - 22 months jail for FCPA violations Peru: 10/25 governors investigated or appealing Venezuela: DAP bonds bribery CR: FIFA official Guatemala: gov t officials jailed Peru Corporate Corruption Act (in effect July 2017): Criminalizes bribery of local public officials; fines are 6x benefit obtained; safe harbor for adequate compliance program and due diligence Honduras: New anti-corruption body established
QUESTIONS?