Category Archives: Latin America

Risks of Cross Border Operations: Chiquita Brands International Found Liable for Financing Terrorism

by Timothy Harkness, Peter Linken, Scott Eisman, and Maylin Meisenheimer

photos of the authors

From left to right: Timothy Harkness, Peter Linken, Scott Eisman and Maylin Meisenheimer (Photos courtesy of Freshfields Bruckhaus Deringer LLP)

Doing business in conflict zones has always been complicated. Increased litigation has compounded those risks in recent years. A June 2024 federal jury verdict against Chiquita Brands International illustrates the changing legal landscape. The jury in Florida found Chiquita liable for financing Autodefensas Unidas de Colombia (“AUC”), a Colombian paramilitary group, and awarded a bellwether group of plaintiffs $38.3 million in damages. A second bellwether trial against Chiquita is scheduled for later this year, and thousands of related claims against Chiquita remain pending. Although the Chiquita litigation has spanned almost two decades, this jury verdict represents the first liability determination and paves the way for the second bellwether trial and eventual resolution of all pending claims. As each plaintiff was awarded around $2 million, Chiquita could be facing hundreds of millions of dollars in damages as the broader litigation includes vastly more victims.

The Chiquita verdict is a signal to corporations that U.S. courts may be more willing to find them liable for actions that occurred abroad and that plaintiffs may increasingly choose to file these claims in U.S. courts. In Chiquita, the alleged actions took place in Colombia and the claims at issue were brought under Colombian law, but this is just one example among many. In Kaplan v. Lebanese Canadian Bank, for example, the Second Circuit held that the plaintiffs plausibly pleaded that Lebanese Canadian Bank had aided and abetted acts of international terrorism under the Antiterrorism Act (“ATA”) by alleging that the bank had processed transactions in Lebanon for individuals closely affiliated with Hezbollah. As companies weigh the risks of doing business abroad and how best to structure their operations, this verdict should be at the forefront of their minds.

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WilmerHale Global Anti-Bribery Year-in-Review: 2023 Developments and Predictions for 2024

by Kimberly Parker, Jay Holtmeier, Erin Sloane, Christopher Cestaro, Sandra Redivo, Matthew Girgenti, Elliot Shackelford, and Keun Young Bae

Top left to right: Kimberly Parker, Jay Holtmeier, Erin Sloane, and Christopher Cestaro.
Bottom left to right: Sandra Redivo, Matthew Girgenti, Elliot Shackelford, and Keun Young Bae. (Photos courtesy of Wilmer Cutler Pickering Hale and Dorr LLP).

Although publicly announced Foreign Corrupt Practices Act (FCPA) enforcement activity remains lower than the levels reached a few years ago, 2023 saw a modest increase in the overall number of FCPA enforcement actions (26 in 2022 vs. 27 in 2023).  This was seen especially in the number of corporate resolutions (12 in 2022 vs. 15 in 2023).  The combined total of monetary penalties decreased, from $1.56 billion in 2022 to $776 million in 2023.  Nonetheless, senior officials at the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) again signaled, through policy changes and public announcements, that anti-corruption enforcement is a priority and that there will be significant and growing enforcement efforts going forward.  Below are the key takeaways regarding FCPA enforcement in 2023 and trends to keep in mind as we look ahead to 2024.

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U.S. District Court Tosses FIFA Bribery Convictions, Finding Honest Services Statute Does Not Reach Foreign Commercial Bribery

 by Victor L. Hou, Joon H. Kim, Jonathan S. Kolodner, Rahul Mukhi, Hannah Rogge, Lisa Vicens, David A. Last, Matthew C. Solomon, and Jennifer Kennedy Park.

Photos of the authors

Top left to right: Victor L. Hou, Joon H. Kim, Jonathan S. Kolodner, Rahul Mukhi, and Hannah Rogge.
Bottom left to right: Lisa Vicens, David A. Last, Matthew C. Solomon, and Jennifer Kennedy Park.
(Photos courtesy of Cleary Gottlieb Steen & Hamilton LLP).

On September 1, 2023, U.S. District Judge Pamela K. Chen of the Eastern District of New York granted a judgment of acquittal in the latest FIFA bribery prosecution, holding that the federal honest services statute, 18 U.S.C. § 1346, does not cover foreign commercial bribery in light of recent Supreme Court precedent.

The decision comes after a jury convicted two defendants of honest services wire fraud and money laundering arising from the U.S. Department of Justice (“DOJ”)’s multi-year pursuit of alleged corruption in FIFA and the international soccer media industry.  Judge Chen based her ruling on the Supreme Court’s recent decisions in Ciminelli v. United States and Percoco v. United States, which cabined the reach of honest services mail and wire fraud in domestic corruption prosecutions.  Applying the principles articulated by these two decisions—which were issued by the Supreme Court two months after the verdict in the latest FIFA trial—Judge Chen held that honest services did not cover the foreign commercial bribery that was the object of the charged conspiracy.  The DOJ may appeal, and U.S. prosecutors may still reach similar conduct under different federal statutes, like the Foreign Corrupt Practices Act (“FCPA”), the federal programs bribery statute, anti-money laundering laws, and the Travel Act, albeit with some limitations.  However, the decision continues a trend of U.S. courts rejecting an overly broad reading of federal fraud and corruption statutes. 

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Overview of Global AI Regulatory Developments and Some Tips to Reduce Risk

by Avi Gesser, Matt Kelly, Anna Gressel, Corey Goldstein, Samuel Allaman, Michael Pizzi, Jackie Dorward, Lex Gaillard, and Ned Terrace

Photos of the authors

Top row from left to right: Avi Gesser, Matt Kelly, Anna Gressel, Corey Goldstein, and Samuel Allaman
Bottom row from left to right: Michael Pizzi, Jackie Dorward, Lex Gaillard, and Ned Terrace (photos courtesy of Debevoise & Plimpton LLP)

With last week’s political deal in European Parliament to advance the European Union’s groundbreaking AI Act (the “EU AI Act”), Europe is one step closer to enacting the world’s first comprehensive AI regulatory framework. Yet while the EU is poised to become the first jurisdiction to take this step, other countries are not far behind. In recent months, the U.S., Canada, Brazil, and China have all introduced measures that illustrate their respective goals and approaches to regulating AI, with the AI regimes in Canada and Brazil appearing to be modeled substantially on the EU AI Act.

In this blog post, we provide an overview of these legislative developments, highlighting key similarities, differences and trends between each country’s approach as well as providing a few considerations for companies deploying significant AI systems.

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Global Anti-Bribery Year-in-Review: 2022 Developments and Predictions for 2023

by Jay Holtmeier, Kimberly A. Parker, Erin G.H. Sloane, Christopher Cestaro, Meghan E. Kaler, and Caroline R. Geist-Benitez

Author photographs

From left to right: Jay Holtmeier, Kimberly A. Parker, Erin G.H. Sloane, Christopher Cestaro, Meghan E. Kaler, and Caroline R. Geist-Benitez. (Photos courtesy of Wilmer, Cutler, Pickering, Hale & Dorr LLP)

While Foreign Corrupt Practices Act (FCPA) enforcement activity has not come close to returning to the heights seen a few years ago, 2022 reflected significant increases from the prior year in both the number of cases against corporate defendants (eight vs. four) and the combined total of monetary penalties levied ($1.56 billion[1] vs. $459 million). Consistent with this upward trend of enforcement activity, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) continue to signal that anti-corruption enforcement is a priority and to provide further detail and clarification regarding their approach to corporate enforcement. Below are the key takeaways regarding FCPA enforcement in 2022 and trends to keep in mind as we look ahead to 2023.

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FATF “Gray Lists” Turkey, Citing Concerns with Turkey’s Banking and Real Estate Sectors and Potential Terrorism Financing

by H. Christopher Boehning, Jessica Carey, Christopher Frey, Michael Gertzman, Roberto Gonzalez, Brad Karp, Richard Elliott, Rachel Fiorill, and Jacobus Schutte 

In a significant move, the Financial Action Task Force (“FATF”), the international anti-money laundering body tasked with developing policies to combat money laundering and terrorism financing, has added Turkey to its list of jurisdictions subject to increased monitoring (also known as the FATF “Gray List”).[1]  With the addition of Turkey (as well as, through separate actions, Jordan and Mali), the FATF Gray List now includes 23 countries that FATF has determined to have “strategic deficiencies” in their anti-money laundering (“AML”) and counter-terrorism financing (“CFT”) laws and regulations compared to international best practices and the standards maintained by FATF. [2]  Turkey is the largest economy to be included on the Gray List.

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With Lava Jato Closing Up Shop, What Comes Next?

by Sean Hecker, Marshall Miller, and Ana Frischtak

The largest criminal investigation in Brazil’s history – and perhaps this century’s most important anti-corruption investigation worldwide – came to a close last week.  Operation “Lava Jato” (“Car Wash,” in English) was launched by the Curitiba[1] branch of the Brazilian Federal Police in 2014, (later known as the Curitiba Task Force).[2]  The Operation, which drew its name from a car wash in Brasília where one of the targeted criminal organizations laundered illicit funds, uncovered a widespread, complex, and unprecedented web of corruption implicating Brazil’s giant state-owned oil company, Petrobrás, public officials, and Brazil’s largest construction companies in a sweeping contracts-for-kickbacks scheme. Operation Lava Jato ultimately expanded to expose bribery and graft in numerous other industries, involving dozens of politicians and government officials, and an almost countless number of companies, both Brazilian and multinational.

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Brazil Announces New Anti-Corruption Cooperation Framework; MPF’s 5th Chamber Opposes It

by Kara Brockmeyer, Andrew Levine, Karolos Seeger, Bruce Yannett, Daniel Aun, and Fabricio Archanjo 

On August 6, 2020, Brazilian enforcement authorities announced a technical cooperation agreement focused on leniency agreements under the country’s
Anti-Corruption Law (the “TCA”).[1] The Comptroller-General’s Office (the “CGU”), Attorney-General’s Office (the “AGU”), Ministry of Justice and Public Security (the “MJSP”), and Federal Court of Accounts (the “TCU”) already have executed the TCA, which the Supreme Court (the “STF”) mediated. The Federal Prosecution Service (the “MPF”) is listed also as a signatory and discussed in various provisions, but has not yet executed the TCA. Four days later, the Permanent Advisory Commission on Leniency and Collaboration Agreements of the MPF’s 5th Chamber of Coordination and Revision (the “5th Chamber”)—which focuses on anti-corruption efforts—issued a detailed Technical Note advising the head of the MPF against doing so.[2]

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FCPA Risks for Renewable Energy in Latin America

by John F. Walsh, Alejandro N. Mayorkas, Kimberly A. Parker, Jay Holtmeier, Michael Connor, Lillian Howard Potter, Heidi K. Ruckriegle, and Noah Guiney 

The renewable energy market[1] in Latin America is booming, and the region’s natural resources make it one of the most attractive areas in the world for investment. Latin American countries, including Brazil, Mexico and Chile, have been recognized as some of the top global renewable energy markets. Between 2010 and 2015, $80 billion was invested in green energy in Latin America, excluding large-scale hydropower.[2] Further regulatory and policy developments, such as the deregulation of national energy markets and the desire to meet the goals of the Paris Climate Accord, have only increased this trend.[3] Prior to the onset of the COVID-19 pandemic, 2020 had been a banner year for renewable energy development in Latin America. Experts predict that in 2020, Mexico will see 11 new wind farms begin operation, representing a $1.6 billion investment.[4] In Brazil, approximately 3.2 GW of unsubsidized solar projects have been permitted and are currently in development.[5] Not to be outdone, Colombia recently announced that there are 9.47 GW of solar projects currently underway.[6] While the COVID-19 pandemic has upended the global economy—including the renewable energy market globally[7] and in Latin America—the region’s economic, political and geographic characteristics suggest that wind and other renewable power sources will have an increasingly important role to play in its energy mix.

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Anti-Corruption Enforcement in Mexico:  A Possible Turning Point?

by Andrew M. Levine, Kara Brockmeyer, and Marisa R. Taney

In recent years, anti-corruption enforcement has become increasingly globalized.  New anti-corruption laws have proliferated, along with deepening commitments to enforcing such laws.  Sometimes, like in Brazil, active enforcement has followed promptly after the adoption of new laws.  Other times, as in the case of Mexico, the journey from enactment to enforcement has proven more challenging. 

Amidst much fanfare, Mexico adopted its new National Anti-Corruption System in mid-2016.  Many hoped Mexico would seize the opportunity and shortly thereafter pursue significant anti-corruption enforcement.  But key posts within the anti-corruption system remained unfilled, and no significant enforcement ensued. Continue reading →