Growing FCPA Awareness in Latin America

This article was republished with permission from FCPAméricas Blog, for which Matteson Ellis is founder, editor and regular contributor.

In his keynote address at the 2016 ACI International Conference on the Foreign Corrupt Practices Act, the Director of the SEC’s Enforcement Division, Andrew Ceresney, said: “This is my fourth year here as Director of Enforcement, and a tremendous amount has happened in FCPA enforcement over the last four years … During this time, we have seen tremendous improvement in FCPA awareness and compliance both in the United States and abroad.”

Based on the results of the 2016 Latin America Corruption Survey, Mr. Ceresney’s assertions are true in Latin America. A growing number of respondents in the region say they are aware of the FCPA. The survey results are based on information provided by more than 630 respondents across 19 countries in the Americas.

In particular, almost three-quarters of respondents (72 percent) in the region are familiar with the FCPA, up from 65 percent in 2012. Not surprisingly, 95 percent of respondents from U.S. multinationals or companies publicly listed in the United States report that they are very familiar with the FCPA.

Perhaps more remarkable, of respondents who are apparently not subject to the FCPA (because they do not work in the United States, their companies are not publicly traded in the United States or they do not work for an affiliate of a U.S. multinational company), 23 percent indicate they are very familiar with the FCPA and 46 percent indicate they are somewhat familiar with the FCPA. In other words, almost three-quarters of these respondents have some familiarity with the FCPA, demonstrating the notable impact that the FCPA is having on business outside of its jurisdictional reach, specifically in Latin America.

Similarly, 58 percent of respondents from local/regional companies are somewhat or very familiar with the FCPA, up from 47 percent in 2012. Among non-U.S. multinational companies, 54 percent of respondents say they are very familiar, as opposed to somewhat familiar, with the FCPA, a slight increase from 2012, while only 15 percent (down from 24 percent) are not at all familiar with the law.

The countries with the least FCPA familiarity are Nicaragua (71 percent not at all familiar), Venezuela (50 percent), Paraguay (50 percent), Bolivia (47 percent), Chile (44 percent) and Guatemala (44 percent). Those most familiar, perhaps due in part to recent significant, highly publicized FCPA investigations involving these countries, are Peru (100 percent), Brazil (90 percent), Colombia (87 percent) and Mexico (87 percent).

The survey also tested awareness of the U.K. Bribery Act in Latin America. As in 2012, the FCPA remains more familiar to respondents than the UKBA. However, there has been a slight increase in familiarity with the UKBA over the past four years (from 41 percent in 2012 to 49 percent in 2016). Sixty-eight percent of respondents from public companies are at least somewhat familiar with the UKBA (up from 58 percent in 2012), and 62 percent of respondents from private companies are not at all familiar with the law (down from 70 percent in 2012).

Respondents from the United States and Brazil show strong familiarity with the UKBA (82 percent and 81 percent, respectively), while respondents from most other countries register low levels of familiarity. This might be due to the fact that UK investment in the United States and Brazil – and vice versa – has been much higher than across the other countries surveyed.

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