ANTI-CORRUPTION COMPLIANCE IN HIGH RISK MARKETS
R&C: What are some of the key anti-corruption issues you are seeing within high-risk markets? To what extent are the related risks for companies intensifying?
Galvin: Local anti-corruption campaigns are changing the dynamics of compliance risk in many markets. Largely, this trend is positive. There have been a number of groundbreaking changes in many markets over the last three to five years that have made it easier to operate within those jurisdictions. The anti-corruption campaign in China, the ‘car wash’ operation in Brazil and the evolution of Guatemala are examples of regulatory action that has revolutionised the compliance landscape in those countries. Similarly, leaks such as the Panama Papers and the fallout from the Obebrecht and FIFA investigations have driven transparency into many more markets, generating further change. One could argue that that change has created a multitude of new legal risks, with the potential for investigations to be driven by a multiplicity of regulators, but it has also created opportunities for compliance. Training on anti-corruption, for example, has quickly become an exciting area in jurisdictions such as China and Brazil, and third-party service providers are less frequently surprised when asked for evidence of a compliance programme.
DiBianco: Corruption risks continue to be significant in countries with poorer governance structures or concentrated political power, particularly in industries that involve grants of natural resources rights, such as oil, gas and mining. Corruption also remains a significant risk in the healthcare and life sciences sectors in countries with public healthcare systems. As mechanisms for corruption, third-party intermediaries, consultants and sales agents continue to be a significant means through which payments are solicited.
Apr-Jun 2018 Issue
Skadden Arps Slate Meagher & Flom LLP
Zinser, Esponda y Gomez Mont, Abogados