Strengthened FCPA Enforcement under the Recent U.S. Memorandum on the Fight against Corruption Could Impact Latin America

On June 3, 2021, U.S. President Joseph R. Biden, Jr. issued a statement on the National Security Study Memorandum on the Fight Against Corruption.

In his statement, the President asserted that fighting corruption is “essential to the preservation” of American democracy and the future of the nation as corruption is a “risk” to U.S. “national security”.

With this Memorandum, the President is “directing departments and agencies to make recommendations that will significantly bolster the ability of the U.S. government to combat corruption.”

Further, the President added that “the United States will lead by example and in partnership with allies, civil society, and the private sector to fight the scourge of corruption.”

For its part, the National Security Study Memorandum establishes combating corruption as “a core national security interest of the United States” and directs a 200-day interagency review that will culminate in a report and recommendations on how the U.S. government and its partners can:

 

-              Modernize, coordinate, and resource efforts to better fight corruption.

-              Curb illicit finance.

-              Hold corrupt actors accountable.

-              Build international partnerships, and

-              Improve foreign assistance.”
 

The White House Fact Sheet on the Memorandum clarifies that the Memorandum “directs departments and agencies to identify and where appropriate establish new structures and staffing, improve intelligence collection and analysis, and increase resources aimed at confronting corruption at home and abroad.”

Moreover, the Memorandum “directs departments and agencies to work with like-minded international partners through the UN, G7, Financial Action Task Force (FATF), and similar bodies to counteract strategic corruption emanating from autocratic and kleptocratic governments, foreign state-owned or affiliated enterprises, and transnational criminal organizations. This work will include closing loopholes exploited by those actors in order to mask the proceeds of corruption or interfere in democratic processes.”

These are certainly strong and precise statements by the US Government to enhance the fight against corruption “at home and abroad”.

Enhanced enforcement of the US FCPA (Foreign Corrupt Practices Act) is possible and likely under the Memorandum.

Reviewing operations, corruption-related risks and efficiency of Compliance Programs could be most relevant for international companies operating in Latin America and, particularly, in Argentina.