Emerging Anticorruption Trends in Latin America

Joseph Mamounas and Marcelo Ovejero are attorneys in Holland & Knight's Miami office

Whether fair or not, Latin America historically has been regarded as a region where corruption is deep and pervasive.1

Between 2000 and 2001, various Latin American nations ratified the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Convention), adopted under the auspices of the Organization for Economic Cooperation and Development (OECD). The Anti-Bribery Convention requires its signatories to introduce significant anticorruption measures into their legal systems. In Latin America, however, the situation remained unchanged for many years, and it took almost ten years for significant anticorruption efforts to develop in the region.

The purpose of this article is to provide a brief overview of the most recent anticorruption trends in three Latin American countries that, due to their importance for international business, are—and should be—of great interest to practitioners in anticorruption and internal investigations.

Argentina: A New Anticorruption Law on the Horizon

Argentina is one of five Latin American signatories to the OECD's Anti-Bribery Convention.2 Generally, the Anti-Bribery Convention obliges Argentina to adopt measures to criminalize, investigate and sanction the bribery of foreign officials committed in its territory and abroad, when Argentine nationals are involved.3 Although it ratified the Anti-Bribery Convention in April 2001,4 Argentina remains noncompliant with its obligations.5

Efforts to change the current situation, though, began after President Mauricio Macri assumed office in December 2015. Indeed, the Macri administration recently submitted to the Argentine Congress a bill (Argentina Bill) intended to address Argentina's compliance with several articles of the Anti-Bribery Convention.6 Two aspects of the Argentina Bill are relevant for the purposes of this article.

First, the Argentina Bill creates a criminal liability regime for legal entities involved in foreign bribery,7 thereby fulfilling Argentina's obligation under the Anti-Bribery Convention to establish the liability of legal persons for the bribery of a foreign public official.8

The Argentina Bill holds a legal entity criminally liable for the acts of corruption—including the bribery of foreign officials—of its owners, controlling shareholders, directors, officers, agents and even independent contractors, provided that these acts (1) are directly or indirectly committed on the entity's behalf or to advance its interest; (2) have the potential to benefit the entity; and (3) result from the entity's "inadequate control and supervision," which means not having in place a compliance program prior to the commission of these acts.9 Under the Argentina Bill, a legal entity is subject to a wide array of sanctions that include fines ranging from 10% to 20% of its gross revenue for the fiscal year immediately preceding the commission of the corrupt acts; suspension of its activities, patents or trademarks; prohibition to receive government contracts or benefits; publication of the sentence; and compulsory dissolution.10

Perhaps the most salient feature of the Argentina Bill is that the legal entity's criminal liability does not derive from the act of corruption itself, but rather from the entity's failure to implement a compliance program designed to prevent the commission of such an act.11 Liability for the corrupt act pertains only to the individuals who committed it, and it is wholly independent from the legal entity's liability.12 This omission-based model is followed in other Anti-Bribery Convention countries (e.g., Chile), and notably differs from the commission-based model of the pioneering U.S. Foreign Corrupt Practices Act of 1977, where the legal entity is criminally liable for the act of corruption itself13 and the existence of a compliance program only impacts the applicable sanction.14

One potential issue that Argentina could face if it finally adopts this criminal liability regime is that the Argentina Bill is remarkably vague in its description of the elements a compliance program must contain to defeat the "inadequate control and supervision" standard. The Argentina Bill merely states that a compliance program is adequate when it is commensurate with the risks of the legal entity's activity, the entity's size and its economic capability.15 The Argentina Bill also lists various elements that a compliance program "may"...