Gustavo Morales Oliver is the advisor and speaker at Corporate Parity’s upcoming 4th Annual Anti-Corruption and Compliance Summit. Gustavo is a partner at Marval, O’Farrell & Mairal and has been a member of the firm since 2006. He specializes in Compliance, Anti-corruption & Investigations. He has advised companies from several industries on anti-corruption compliance issues and investigations related to day-to-day company operations, M&A deals, compliance programs, complex contracts, and cases with the authorities.
He has published numerous articles and is also a frequent speaker at local and international conferences. Gustavo is co-director and co-author of the Tratado de Compliance book published by Thomson Reuters. He is a member of the Bar of Buenos Aires and of the New York State Bar, and has been recognized by Chambers Latin America as a leading practitioner in his field.
We spoke with Gustavo about the corruption and compliance matters in Latin America, and a number of other issues. Read the full interview below.
This is the result of a situation I was facing back in 2012 when teaching compliance courses at law school and discussing with compliance officers on their education on compliance matters. I realized that it was almost impossible to find a comprehensive book to educate a reader in compliance soft and regulatory matters. At that time I was recommending my students and colleagues to read different publications such as the FCPA guide by the DOJ and the SEC, the official guide on the UK Bribery Act, documents by United Nations, the OECD, Transparency International and other similar resources.
Then, having a conversation with Raul who is one of the leaders of Deloitte’s Forensics practice, we realized we were both facing the same situation. So we decided to take action by writing a book ourselves. At that time we were thinking about a short textbook, maybe 200 pages, covering the basics. However, when drafting the table of contents we realized that we knew a number of world-class experts who could produce outstanding chapters on several topics to produce an even more valuable result. So we decided to invite these people to join us by writing a chapter on their particular fields of expertise.
After over 4 years of hard work, we provided the final draft to Thomson Reuters for publication and the Compliance Treatise was released in late 2018. This 2-volume, 1900 pages book has been described as the most comprehensive and up to date compliance book in Spanish.
We are very glad to have around 60 experts from key jurisdictions, including the president of Transparency International, as well as former DOJs, former SFOs, top in-house practitioners and tier-1 outside counsel as well as academics and former public officials collaborating in the Treatise.
The book covers soft issues like how to conduct risk analysis, how to handle a crisis, the role and responsibility of compliance officers, and what compliance is (a basic question that is sometimes difficult to answer for many practitioners) and also key regulations such as the FCPA, the UK Bribery Act and the Brazilian Clean Companies Act.
What were the main discoveries during the research? The main challenges?
One of the main issues for me was realizing that even a book of this length and sophistication was not enough to cover everything we would like to convey to compliance practitioners. We would have loved to dig deeper into certain aspects of internal investigations –a topic to which we devoted a specific chapter– and further regulations such as GDPR, but even with over 1900 pages there was not not enough space to do so. This is a clear indication of how broad and challenging the compliance practice is.
Sometimes I think compliance is underestimated, as if it were just about following a few principles and “doing the right thing”. In practice, compliance is a field involving cases as complex as you can think of, covering a number of areas of the law, accounting, operational and behavioural issues to deal with both preventive actions and crises management.
Absolutely. There is a change in a number of countries. From Brazil, which is kind of leading the trend, to Peru, Argentina, and Mexico. These countries are in different stages of a transition towards a more serious fight against corruption. Brazil is maybe the most advanced one, Argentina is trying to catch up since a few years ago, and Peru has been doing real work for some time already. So there is a clear trend in Latin America and it seems difficult to go back to the previous scenario due to a number of factors.
First a number of regulations enacted in recent years make companies liable for bribery-related conducts on top of previously existing liability for money laundering. And some countries are even starting to think about penalizing legal entities for commercial bribery following the approach of the UK Bribery Act. Further, new regulations also emphasize the relevance of getting cooperation from defendants –often in exchange for penalty reductions.
Second, the never-ending expansion of technology is changing the way in which corruption investigations are conducted, making them much more effective. Investigations nowadays involve a large number of electronic evidence, and sometimes you are able to find the unthinkable.
The third major factor is collaboration among authorities from different countries. Nowadays, as everybody knows, corruption cases tend to be cross-border, because companies operate globally and there is an increasing number of regulations penalizing extra-territorial corruption, like the FCPA has done since the late seventies. So, a global company may engage in bribery in Argentina and face legal exposure not only in Argentina but also in the US under the FCPA, in the UK Bribery Act and in Brazil under the Clean Companies Act. And the list of countries with potential jurisdiction on the case may go on and on. And there could also be other statutes related to fraud, money laundering, tax evasion and more that could be relevant as well,depending on the structure of the facts of the case.
In the past, companies often had a team comprised of lawyers from the relevant jurisdictions arguing the case against each local authority. Now , the authorities also have a tendency to collaborate with each other and see cases with a cross-border approach. Nowadays prosecutors, judges and regulators talk to each other, share information and evidence, and even coordinate steps and strategies to follow in global cases. Additionally, they share experiences and learn from each other.
Therefore, the landscape continues to evolve every day and companies would be wise in making decisions looking towards the future, rather than upon old statistics.
In terms of enforcement, the Lava Jato case is proving to be a game changer for Latin America. This case originated in Brazil and it triggered repercussions in other jurisdictions in the region.
In 2018 Argentina triggered a major investigation upon the disclosure of a set of handwritten notebooks that, allegedly, described major corruption involving top companies and high-rank public officials. In less than a year, the Notebooks case has most likely become the largest and fastest anti-corruption investigation in Argentina. This case has also been a major opportunity for Argentina to test a regulation in force since 2016 that gives benefits to defendants who cooperate with investigation. This kind of plea agreement that has been used forever, in other jurisdictions like the US, is quite new in Argentina, and it’s a major game changer.
These are the major cases and there many others. Clearly, companies should follow both on the big cases and the actual enforcement trend.
For the authorities, the major challenges are related to resources. Their resources are limited and often not the best to deal with major cases.
I think that people in Latin America are slowly starting to realize that corruption is bad for the population and the society as a whole. In this regard, a major role has been played by investigative journalists who make available relevant information on a number of cases. If you look at corruption cases today, most likely the public is able to follow up on any developments in major newspapers, almost with the same level of detail as the attorneys involved in the case. Whatever happens today in terms of significant corruption cases, will show up tomorrow on the front page of the newspaper and TV news, not only in the chronicles of the relevant journalist but also in the disclosure of documents, videos, photographs, audios and other pieces of evidence that give first-hand knowledge to the reader. This makes corruption much more visible and, therefore, more relevant for the population and for governments, since the public reading those news are the voters who will elect the next government.
What do you look forward to discussing at the 4thAnti-Corruption and Compliance Summit? What is the desired outcome of the event for you?
Year after year, the main outcome of this event is getting to know key individuals in this broad and challenging practice. Learning from shared real-life experiences and being able to have future access to key contacts is the most valuable resource.
In terms of contents, it’s always about realizing what just happened in the past year and expected developments in this area to anticipate moves looking ahead.
It’s also about realizing what’s going on around the world. It’s important to acknowledge that even though the trend is clear, there are specific situations going on in different regions, different countries, different industries that are relevant at least as a proxy.
That’s a very good question! I truly enjoy music, rugby, travelling and family and friends.
Sure! After visiting a number of wonderful places in different regions of the world, I must confess my special connection to Japan. I very much enjoy Japan’s culture, history, geography and people. It’s truly fascinating to me.
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