James Tillen, Matteson Ellis and Saskia Zandieh* commented on recent anti-corruption efforts by Latin American countries and corporations, following Miller & Chevalier's recently released 2016 Latin America Corruption Survey. Although 77 percent of survey respondents said the laws in their respective countries are ineffective, there is hope for improvement as Brazil has made progress in fighting corruption, with belief that Mexico will be next. "The effect of the current prosecutions on the way business is done in Brazil is real and significant," Ellis said. Although Brazil experienced several corruption scandals recently, 93% of Brazilian survey respondents have seen more prosecution of companies, individuals or government officials for bribery charges. "A sense of impunity has for so long been the norm in Brazil, but that sense appears to be changing," Ellis said. "Now Brazilians are watching business and political leaders from the highest levels go to jail. This makes people think twice about engaging in corrupt acts to further their business or personal interests."

Mexico recently approved a package of anti-corruption bills in light of concerns raised for years by the Organization for Economic Co-Operation and Development (OECD). "The key provisions regarding public corruption, found in the General Law of Administrative Responsibilities, only come into force in July 2017, so the effects could take some time," Ellis said. "Even then, the new laws will have little impact if they are not enforced consistently and effectively." Regarding Mexico's new policies, "Not only does the law create fines of up to about US$6 million for companies, more importantly there is the potential for their disqualification from public contracting, indemnification for losses to the public treasury, and (even more striking) corporate dissolution." Ellis said. "The law also specifically recognizes corporate compliance programs, for example, as mitigating factors in penalty calculation. In other Latin American countries, codifying credit for compliance has helped generate local interest among companies in embracing international corporate compliance standards. It will be interesting to see if the same effect occurs in Mexico."

Multinational and regional corporations have increased their management of corruption risks in third-party relationships, which is one of the highest areas of bribery risk under the FCPA and similar anti-corruption laws. "While many of the responses in this year's survey suggest enduring risks and ossified attitudes in Latin America, we also see signs of regionwide improvement in some areas," Tillen said. "For example, we are observing significant growth in anti-corruption compliance efforts in a number of key markets, as well as a greater number of companies that are aware of the relevant anti-corruption legislation that pertains to them, which is a good sign for the region overall." Zandieh agreed. "Despite continued pessimism in the region about the effectiveness of local anti-corruption laws, we expect recent headline-catching corruption investigations of individuals -- such as the former president of Guatemala, the daughter-in-law of Chile's president and numerous high-ranking officials in Brazil -- to begin to shift opinions about the enforcement of corruption laws over the next several years," she said. "In addition, the recent adoption of new anti-corruption legislation in many countries -- such as Brazil, Mexico and Colombia -- and continued FCPA enforcement relating to Latin America could also shift opinion."

*Former Miller & Chevalier attorney