In this episode, I visit with Matt Ellis, a partner at Miller & Chevalier. Ellis has recently published his first book The FCPA in Latin America. Ellis’ discusses why he wrote the book, some of the key issues around FCPA compliance in Latin America and debunks the myth that Latin Americans desire bribery and corruption in their business dealing.

When I received my copy, my first thought was that, finally, it’s about time for this book to come out. Then I read it and realized I was glad he put so much time into it. I am referring to Matt Ellis’ new book The FCPA in Latin America, which was published by Corporate Compliance Insights (CCI) last fall.  If your company gets into Foreign Corrupt Practices Act (FCPA) hot water in Latin America, I tell folks that Matt Ellis is the guy to call. Not only is he fluent in both Spanish and Portuguese; he has extensive work experience in Latin America, performing investigations for the World Bank. Now a partner at Miller & Chevalier, he is a member of the firm’s top notch FCPA team. Fortunately for the rest of us, Ellis published his book. It combines key FCPA enforcement actions with practical advice on how to handle compliance work in Latin America.

With the Petrobras scandal still ongoing, the recent FCPA guilty pleas from individuals involved with the Venezuelan state oil company Petróleos de Venezuela SA (PDVSA) and the recent FCPA and greater global enforcement action involving the Brazilian construction giant Odebrecht, we are seeing an uptick in focus on bribery and corruption in Latin America. If your company does business in or you are representing clients doing business in that part of the world, you need to read this book.

In chapters 2 & 3, Ellis details some of the reasons bribery and corruption risks can be so paramount in Latin America. He details not only the structural reasons for corruption but some specific corruption risks which may not be immediately apparent to a US-centric compliance practitioner. He also discusses the always delicate subject of conveying US based compliance solutions to a Latin American business audience and suggests explaining some specific provisions of the FCPA for a Latin America based company.

He goes through a number of risks a company doing business in Latin America could well face. It includes regulatory risks and associated risks in public procure; risks for being shaken-down at the border by customs officials and other law enforcement corruption risks and the ever touchy issue of facilitation payments. He also speaks to specific risks from family owned businesses and monopolies unique to the region. Additional conversations include describing the FCPA’s accounting provisions and criminal bribery provisions; explaining the declination process and how compliance with the FCPA is actually good for the bottom line.

In Chapters 5 & 6 Ellis discusses some tailored compliance strategies for both Latin American based entities and US companies doing business in Latin America. Beginning with risk based compliance programs, Ellis moves to unique training scenarios, ongoing monitoring and auditing as key tools to upgrading your compliance regime and the always difficult problem of sham contracts and phantom vendors which can be problematic in the region.

He also relates how cultural norms in Latin American can lead to companies and their employees embracing compliance. He then relates how to build off of this enthusiasm and use it as momentum to move forward. He starts with the “Circle of Trust” and uses that discussion to focus on the inherent cultural values. He concludes with a piece on the cultural nuances regarding internal reporting in the area.

He devotes an entire chapter to managing third party risks in Latin America, which is always a significant risk. He lays out some common red flags to look for, how to conduct effective due diligence and (where the rubber meets the road) managing third party relationships and how to manage third party relationships with the government officials you will inevitably interact with going forward. He concludes this chapter with some timely words on how to respond to third party corruption.

His text concludes with a chapter about what a Latin American company should do if it comes under FCPA suspicion, investigation or is simply required to respond to the inquiries from a US contractor. He talks about retention and use of counsel, what to expect in the investigation process and the importance of the discussion around the decision to disclose to the Department of Justice (DOJ), Securities and Exchange Commission (SEC) or the appropriate local authorities.

All of these facets would be worth the price of admission alone. However, I have saved what I feel is the best for last. Ellis opens his book with a firm debunking of the US-centric myth that corruption is endemic to Latin America, which many Americans believe to be the only way to do business in region and in fact is what Latin Americans want to do in the first place. He exposes these myths and the final one that the FCPA is bad for business for what they are: stereotypical blatherings from people who simply do not know the region. Every compliance practitioner should read Chapter 1 and be thoroughly familiar with these points.

For the Latin American company looking to do business in the US or attract US investment, having an effective compliance program is a mandatory requirement. This book lays out for entities and business people what will be expected of them. As Ellis is publishing his book in Spanish and Portuguese as well, this book could become the standard text for business folks in Latin America.

Matt Ellis has set the standard for anyone who   wants to understand FCPA compliance in Latin America. More than simply a recitation of the rules, The FCPA in Latin America speaks closer to my heart because it is about actually doing compliance. If you are doing business in Latin America or even considering it, you need to read this book.

You can check out a copy of The FCPA in Latin America on Amazon.com by clicking here.

Show Notes for Episode 31, week ending December 2, 2016-the Government Speaks edition

  1. Justice Department Assistant Attorney General Sally Yates remarks at 33rd annual ACI National FCPA Conference;
  2. Head of SEC Enforcement Andrew Ceresny remarks at 33rd annual ACI National FCPA Conference;
  3. Richard Bistrong interview of Barry Vitou on the future of the SFO, on the FCPA Blog;
  4. Release of new eBook on Trump and Compliance by the Everything Compliance podcast gang, published by Corporate Compliance Sights;
  5. Matt Ellis releases new book on The FCPA in Latin America;
  6. With help from US, Dutch enter the global fight against terrorism in a big way, see article by Geert Vermeulen, on the FCPA Blog;
  7. Bloomberg News is reporting a potential settlement by Brazilian & US authorities with Odebrecht for $2.5bn over corruption allegations unearthed in Operation Car Wash;
  8. Reflections on the First FCPA Mock Trial Institute;
  9. New DOJ site on Individual Accountability; and
  10. How ‘bout them 11-1 Cowboys and the impact of Gronk’s injury on the Patriots.

Show Notes for Episode 27, week ending October 21, 2016-the Walla Walla Edition:

  1. Lennox Industries self-reports a $425 bribe- as reported on the FCPA Blog;
  2. Another guilty plea in FIFA corruption scandal-as reported on the FCPA Blog;
  3. Public Citizen letter to DOJ/SEC re: Wal-Mart FCPA investigation, to read the letter click here;
  4. Miller & Chevalier Autumn 2016 FCPA Report released, for a copy click here;
  5. First FCPA Mock Trial Institute-for information and registration, click here;
  6. FCPA Blog NYC Conference-for information and registration click, here. Best of all, for listens of this podcast you are entitled to a 20% discount off the regular price. You can access the discount by clicking here.
  7. The Jay Rosen Weekend Report