The Latin American Lawyer
Corruption and bribery remain major worries for
clients in Latin America
Local regulations regarding corruption, bribery and money laundering in the region fall short of
international standards, with more companies needing to implement compliance programmes
Corruption, bribery and money
laundering problems remain the
key concerns of clients operating in
Latin America, according to a new
survey.
Research conducted by The Latin
American Lawyer found that 53
per cent of lawyers in the region
highlighted corruption and bribery
as the biggest compliance-related
risk clients face. Meanwhile, 15 per
cent of respondents said money
laundering was the primary
concern.
Juan Carlos Tristan, an associate
at BLP in Costa Rica, said local
laws related to such issues are –
in some countries – yet to reach
international standards. For
economies highly dependent on
the US market, it is critical to
understand and comply with US
anti-corruption and anti-bribery
regulations, he added. Tristan
also highlighted the importance
of implementing anti-corruption
compliance programmes and
incorporating anti-corruption
clauses into contracts with third
parties.
A number of countries have
implemented or are in the process
of implementing anti-corruption
laws. In the summer of 2016,
Mexico passed sweeping anticorruption reforms that involved
changing constitutional articles
and drafting new laws. Guadalupe
Hernández, Mexico-based general
counsel for Latin America at
pharmaceutical multinational
Perrigo-Gelcaps, believes the
reforms will represent a massive
challenge for Mexican companies
that have not yet been subject to
international regulations such
as the Foreign Corrupt Practices
Act (FCPA). Hernandez says this
will also be an opportunity for
law firms that can advise on the
implementation of new laws. For
clients, creating a compliance
department and having solid
compliance policies in place will
help with them avoid penalties,
Hernandez added.
White-collar crime
In Brazil, where several bribery
schemes – which have had a
huge political impact – have
been uncovered during recent
years, combating corruption has
become critical. According to
Marcos Ludwig, senior counsel at
Veirano Advogados, anti-bribery
and anti-corruption has become
a “key feature of most legal due
diligence reviews in both national
and especially cross-border M&A”.
He added that there is a growing
demand for legal advice related to
internal investigations and whitecollar criminal defence.
Colombia has also stepped up
anti-corruption efforts and, earlier
this year, the country enacted its
first foreign bribery law, known
Businesses must include lawyers on boards to
ensure compliance
Lawyers on a board have a responsibility to protect a company and its shareholders by promoting
and enforcing good governance
Company boards should include
lawyers in order to ensure
that compliance policies are
implemented, as well as offer
protection to shareholders, the
board itself and the company,
attendees at an event organised
by The Latin American Lawyer in
Bogota, Colombia heard.
While it was acknowledged
that there is a distinction
between multinationals and local
companies (often family-owned),
the consensus among event
participants was that lawyers on
a board have responsibilities to
assist in promoting and enforcing
good governance principles.
Speakers at the event – which
was held in partnership with
Diligent – also said that board
12 • IBERIAN LAWYER • November / December 2016
members’ roles should be
professionalised, which should
involve training, in order for them
to understand the concept of duty
of care, as well as their position
in relation to conflicts of interest
and their social and personal
responsibilities.
Shareholder activism
There should also be a clear
distinction drawn between the role
of the lawyer acting as a board
member and the role of lawyers
acting as external advisors to the
board, attendees at the event –
hosted by Philippi Prietocarrizosa
Ferrero DU & Uría – were told.
That said, participants noted
that it is not common for
boards in Colombia to instruct
external counsel.
Meanwhile, it was also
highlighted that shareholder
activism is also growing in
Colombia and that it can be
a catalyst for change when
it comes to implementing
good governance principles
and adopting technology to
manage risk. Procedures for
protecting privacy and data
when communicating at board
level should be engrained
in the company culture,
participants said.
For more information about this event, visit www.iberianlawyer.com/latin-america
www.iberianlawyer.com
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