Corporate Criminal Liability, Compliance, and Anti-Corruption Efforts: Is There a Real Change in Latin America’s Legal Culture?

InLaw Alliance Spain - The rapid global expansion of compliance has made it an essential pillar in the fight against corruption in Europe and Latin America.
Compliance was born in the USA as a tool for defending organizations against that fearsome legal institution: the criminal liability of legal entities. Its essence consists of establishing internal mechanisms within organizations capable of preventing, detecting, and reacting to irregularities, whether bribery, fraud, or any other illicit practices, that could trigger the organization’s liability. Among them, or perhaps first and foremost, are acts of corruption, which gave rise to it and explain its rapid development, thanks to the US Foreign Corrupt Practices Act (FCPA), published in 1977, following the Watergate scandal and the discovery of corrupt bribery networks, which shamed American society.

The FCPA was a bold, unashamed, extremely powerful extraterritorial law designed to put an end to the malpractice of seeking preferential treatment from governments through bribery of their officials or politicians. A law suitable for application almost anywhere in the world, it marked the starting gun for a race that would turn the United States, for nearly five decades, into a kind of universal policeman against corruption.

Other countries, such as the United Kingdom, with its 2010 Bribery Act, or France, with its 2016 Sapin II Act, would follow suit years later, although without achieving the power of the North American law. International organizations such as the OECD, through its 1997 Convention, or the United Nations, with the 2003 Convention, promoted international regulatory frameworks, which have become true global standards of this same message.

In Europe, the Council of Europe’s Group of States Against Corruption (GRECO) sets guidelines for combating corruption and monitors the progress or laziness of states. Its criticisms leave no one indifferent, and rarely fail to translate into legislative changes or reforms to meet the standards set by the Group. However, Spain has long received poor marks from GRECO, like an indolent student unable to pass its subjects.

The important thing is that this arsenal of legal norms and oversight instruments has actually been put into practice. The United States, with its FCPA in hand, has struck exemplary blows in almost every area of ​​the world, protected by the enormous scope of its jurisdiction. Furthermore, it has urged offending organizations to impose rigorous internal self-laundering processes on themselves, forcing them to return to the path of the law.

In Europe, the Siemens (2005) and Volkswagen (2015) cases are true examples of the forcefulness of the long arm of the American justice system. No less significant has been its influence in Latin America, where some countries suffer from systemic corruption problems, aggravated by the lack of truly independent judiciaries. Both the US Department of Justice and the Security Exchange Commission have carried out spectacular punishments in the region. The Fujimori Montesinos case was paradigmatic, in which more than 1,600 people were bribed to control the media, judges, and congressment.