Forensics Today

PwC perspectives on the newest risks drawing investigator scrutiny

Managing corruption risk in Latin America

  • Corruption in Latin America continues to proliferate despite stepped-up cooperation between US and local law enforcement. In recent years, corrupt tactics have shifted away from gifts and toward payments funneled through third parties (both real and fictitious).
  • Companies doing business or planning to do business in the region face potential legal exposure and reputational risk from these activities.
  • To manage this evolving risk, companies need robust compliance programs supported by technology that enables more timely and informed decisions, adding further value to their Latin America operations.

Corruption has persisted throughout Latin America (LATAM) for decades and has not abated despite recent reform efforts in the region. Defined as payments, offers or promises of “anything of value” to a foreign official for the purpose of securing an improper business advantage, corrupt practices in LATAM are evolving and shifting focus — moving away from gifts and toward bribes funneled through business partners and vendors (whether real or fictitious) — according to PwC’s analysis of corruption settlements with companies investigated for potential Foreign Corrupt Practices Act (FCPA) violations.

The Department of Justice (DOJ) has stepped up enforcement of FCPA violations in the region and has focused increasingly on holding individuals accountable for misconduct. This has been reflected in a number of important convictions and guilty pleas in LATAM since 2019, including 67 individual convictions.

With increased cross-border cooperation between US and local law enforcement, companies currently operating in LATAM or looking to relocate foreign facilities to this region should adopt measures to mitigate corruption risks immediately. They can start by adopting robust technology to strengthen their anti-corruption compliance monitoring and assessment of LATAM operations and their suppliers.

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Ryan Murphy

Partner, Global Investigations & Forensics Leader, PwC US


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