The Biden administration’s efforts have led to an increased focus on Latin America.
The United States enacted the Foreign Corrupt Practices Act (FCPA) in 1977 to criminalize the bribery of foreign government officials in exchange for new business or maintaining old business. The risk to Latin American companies is that the FCPA is applicable to not only U.S. citizens and companies, but also to foreign persons residing in the United States and foreign companies listed on U.S. exchanges. Moreover, the FCPA also applies to foreign firms and persons who have substantial contacts in the United States. Importantly, enforcement officials may hold U.S. companies liable for the actions of their foreign subsidiaries in cases where the subsidiary acts as an agent of the parent company.
In the United States, enforcement of the FCPA falls primarily to the Department of Justice (criminal and civil authority) and the Securities and Exchange Commission (civil authority only). In recent years, the DOJ has increased its criminal enforcement actions on entities operating in Latin American jurisdictions.
According to Law360, from 2017 to 2019, Latin American-related matters accounted for around half of all FCPA enforcement actions. However, 2020 saw an uptick in Latin American enforcement matters, taking the region to 58 percent of all enforcement actions. Coincidentally, in 2021, the Biden administration promised to “vigorously” enforce the FCPA, organizing a first-ever Latin American Anticorruption Task Force focused on Central America and releasing the “United States Strategy on Countering Corruption,” which details governmentwide initiatives to investigate and prosecute international corruption.
The Biden administration’s efforts have led to an increased focus on Latin America. Our analysis of data published by the DOJ suggested that from 2021 to 2022, approximately 66 percent of the DOJ’s enforcement actions were related to Latin America.
Although 2023 data is not yet available, recent comments from Assistant Attorney General Kenneth A. Polite Jr. suggest that the DOJ will maintain or increase its FCPA enforcement efforts. Speaking at the Georgetown University Law Center in January 2023, Polite touted the success of the DOJ’s Criminal Division, boasting that the division’s Fraud Section secured convictions of over 250 individuals, including more than 50 who were convicted at trial, and entered into seven criminal resolutions with corporations. In a stark warning to the international corporate community, he further promised that “there will be more in 2023.” The assistant attorney general noted the DOJ’s revised FCPA Corporate Enforcement Program now offers increased incentives for companies to cooperate and self-report potential FCPA issues. At the same time, Polite warned that “failing to take these steps, a company runs the risk of increasing its criminal exposure and monetary penalties.”
As the U.S. government continues to ramp up efforts to enforce the FCPA, the time is now―not later―for businesses that fall under the law’s purview to put measures into place to ensure compliance.
About Duane Morris
Duane Morris LLP’s diverse White-Collar Criminal Defense and Corporate Investigation attorneys have extensive experience defending FCPA claims and enacting anti-bribery compliance programs for organizations operating in Latin America and throughout the world. They work with clients adjusting to FCPA regulatory developments and can discuss any potential FCPA matters in confidence.
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If you have any questions about this Alert, please contact Mauro M. Wolfe, Robert C. Carrillo, any of the attorneys in our White-Collar Criminal Defense, Corporate Investigations and Regulatory Compliance Group, any of the attorneys in our Latin America Business Group or the attorney in the firm with whom you are regularly in contact.
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