Viernes 22 de Septiembre 2023
In In
GETTING AWAY WITH BRIBES Survey results reflect a growing pessimism among participants when it comes to the likelihood of offenders being prosecuted. (Photo: Eugene Pivovarov)
Multinational and publicly traded companies continue to outpace their local/regional and private counterparts with implementing top compliance practices, the 2020 Latin America Corruption Survey shows.
Thursday, July 9, 2020

Survey: All-Time High Latin America Corruption Risk

Nearly half say their company has lost business due to competitors making illicit payments.


Perceived corruption risk in Latin America is at an all-time high, according to a new survey among U.S. and Latin American companies from Miller & Chevalier and 14 Latin American partner firms spanning 18 countries.

The survey -- the fourth since 2008 relating to local perceptions of corruption risk, knowledge of anti-corruption laws, and compliance program practices – polled almost 1,000 representatives of local/regional companies, multinational corporations, and private and publicly traded companies.

Here is an excerpt from the report:

Latin America serves as an epicenter of the global anti-corruption movement, with blockbuster cases over the last decade involving Petróleo Brasileiro S.A. (Petrobras), Petróleos de Venezuela, S.A. (PDVSA), Fédération Internationale de Football Association (FIFA), the food processing sector, the Argentine notebooks scheme, Guatemala's La Línea scandal, and others. In recent years, the region has experienced enhancements to local anti-corruption laws, homegrown anti-corruption compliance solutions in critical jurisdictions, and growing investigation and enforcement efforts from the region, at times in collaboration with U.S. authorities enforcing the Foreign Corrupt Practices Act (FCPA). More high-powered politicians and business leaders than ever are under investigation, awaiting trial, behind bars, or wanted in exile.

At the same time, and perhaps paradoxically, many businesspeople working in the region perceive growing levels of corruption risk and exhibit greater skepticism toward the effectiveness of local enforcement efforts. In some parts of Latin America, anti-corruption advancements have generated a backlash – from allegations of political bias in local enforcement efforts in countries like Brazil and Mexico, to the dismantling of multilateral investigative efforts like the U.N. International Commission against Impunity in Guatemala (CICIG), to the embracing of new leaders in some countries who display strong authoritarian impulses undercutting the independence of investigators and the judiciary enforcing anti-corruption laws.


Survey responses suggest that corruption risk is more prevalent now than in all prior survey years: 54 percent of survey respondents say corruption is a significant obstacle to doing business, up 10 percent since 2012; only 45 percent of respondents believe offenders are likely to be prosecuted, down from 66 percent in 2008; the vast majority of respondents think their anti-corruption laws are "not effective" or only "effective to a small extent."

These results might be surprising in light of increased enforcement efforts and a stream of high-profile investigations in recent years. One explanation may be a "two steps forward, one step back" effect – the sustainability of anti-corruption efforts often experiences setbacks when entrenched power among elites is disrupted and local enforcement efforts are challenged. Another factor could be that some respondents are beginning to view local enforcement efforts as politicized in nature rather than impartial efforts to root out corruption, and weak judicial systems as unfit to provide the necessary protections and assurances. Perhaps more enforcement activity also generates increased awareness of the prevalence of corruption.

Enhancements to local anti-corruption laws generating optimism. In the past 10 years, numerous jurisdictions, including Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, and Peru, have modified their anti-corruption laws to facilitate prosecution of corporations and establish requirements or mitigation credit for companies' anti-corruption compliance programs. This development might explain why, when asked if they think anti-corruption laws are having an impact, respondents from these countries show greater optimism than the regional average of 50 percent: Argentina (72 percent), Brazil (74 percent), Chile (59 percent), Colombia (55 percent), Costa Rica (52 percent), Mexico (68 percent), and Peru (63 percent).

Steady compliance program improvement for multinationals. More large companies throughout the region are embracing a wide range of anti-corruption compliance program elements, including those that go beyond basic policies and training. Multinationals in particular register jumps in anti-corruption training (64 percent in 2008, 76 percent in 2012, 85 percent in 2016, 84 percent in 2020), anti-corruption policies (88 percent in 2012, 92 percent in 2016, 85 percent in 2020), gifts/travel/entertainment procedures (81 percent in 2012, 85 percent in 2016, 86 percent in 2020), anonymous reporting mechanisms (65 percent in 2012, 66 percent in 2016, 78 percent in 2020), and full-time compliance personnel (56 percent in 2012, 63 percent in 2016, 70 percent in 2020). Increased enforcement and government expectations for compliance programs are likely driving this continued focus on compliance by multinationals, in addition to growing commercial pressures from business partners, investors, external auditors, lenders, and other stakeholders to meet common compliance standards.


Brazil consolidates its position as an enforcement leader. Despite scandals calling into question the sustainability of the anti-corruption push in Brazil, Brazilians remain upbeat about the future of local enforcement:

– Nearly 80 percent of survey respondents think their government will continue to lead the way enforcing anti-corruption laws in the region.

– Almost 30 percent say that the prosecution services/investigators in the country have minimal to no corruption, compared to 12 percent regionwide.

– Seventy-five percent say the government took action when they reported knowledge of bribery, compared to 33 percent regionwide.

Notably, respondents expressed these views prior to the recent resignation of Justice Minister Sergio Moro, who had been a leading voice in the country's anti-corruption efforts. It is possible that his resignation may have dimmed this optimism.


Survey results reflect a growing pessimism among participants when it comes to the likelihood of offenders being prosecuted. Only 45 percent of respondents – down from 66 percent in 2008 – believe that an offender would be prosecuted in the country in which they work. Over the last 12 years, those saying "yes" has steadily trended downward, with 64 percent in 2012 and 59 percent in 2016.

The percentage of respondents who believe their company has lost business due to competitors making illicit payments – 47 percent -- remains remarkably consistent with survey responses in 2012 and 2016.

Respondents from multinational companies are just as likely as local/regional companies to think they have lost business to corrupt competitors – a shift from 2012 and 2016, when local/regional companies perceived more lost business due to corruption.

This change could be attributed to various factors, including more press, headline cases, and internal training sessions calling corruption risks to the attention of employees of multinationals; more industries (e.g., food services and production, retail, technology) involving larger companies subject to enforcement efforts and revealing new types of bribery red flags; more "buy local" efforts that have created new local competitors for multinationals; and increased participation of foreign companies from jurisdictions with weaker anti-corruption compliance standards.

Consistent with the low level of public confidence in the likely prosecution of offenders, 88 percent of respondents who answered "yes" to [whether their company has lost business due to competitors making illicit payments] state that they did not report their concerns to the authorities – a finding that has remained markedly consistent since 2012.

Of the 12 percent of respondents who state they did report their concerns to the authorities, only a third say that the government investigated the matter, again generally consistent with 2016.

Respondents say their top reasons for not reporting corruption concerns to government authorities are:

n  Lack of trust in the judicial branch (56 percent)

n  This lack of trust is most prominent in Argentina (87 percent), Bolivia (85 percent), El Salvador (80 percent), and Nicaragua (88 percent).

n  Lack of trust in prosecution service or investigators (52 percent)

n  This lack of trust is most prominent in Colombia (71 percent), where the attorney general incidentally resigned in 2019 in the wake of a scandal tying him to Odebrecht-related misconduct, and the Dominican Republic (70 percent).


Thirty percent of respondents view anti-corruption laws in their countries as effective "to a significant or moderate extent." On one hand, this percentage is notably low. On the other, it reflects an upward trend over prior years – almost double the percentage of respondents since 2008 (18 percent) and a small increase from 2016, when 23 percent of respondents said as much.

The highest levels of ineffectiveness are noted in Argentina (85 percent say not effective or effective to a small extent), Bolivia (93 percent), Ecuador (93 percent), Honduras (83 percent), and Nicaragua (97 percent). These responses are contrasted with those from the United States, where 75 percent of respondents view anti-corruption laws as at least moderately effective, and Uruguay, where 93 percent do so.

A higher percentage of participants from local/regional companies (75 percent) than participants from multinationals (52 percent) believe anti-corruption laws are not effective (or effective to a small extent) in the countries where they work. This result could be because local/regional companies are more reliant than multinationals on local laws to protect market integrity and therefore might feel the inadequacy of local laws more acutely.

The percentage of respondents who consider corruption a significant obstacle for their company to conduct business has increased to 54 percent, from 48 percent in 2016 and 44 percent in 2012. The countries with the highest percentages of respondents reporting corruption as an obstacle are Nicaragua (76 percent), Ecuador (75 percent), Bolivia (70 percent), and the Dominican Republic (61 percent). The countries with the lowest percentages are Chile (14 percent), Uruguay (14 percent), and Colombia (23 percent).

Unlike in 2012 and 2016, where local/regional company respondents saw corruption as a significant obstacle at a greater rate than did respondents from multinational companies, in 2020 respondents from both types of companies perceive corruption as an obstacle at the same rate. This change is consistent with the finding that there is no perceivable difference between company types when it comes to whether a company has lost business due to competitors making illicit payments.


The most common compliance elements implemented in the region continue to be anti-corruption policies, training, contract terms, and gifts, travel, and entertainment procedures. For each of these elements, participant responses remain mostly consistent with prior survey responses in both rank and percentage levels.

Multinational and publicly traded companies continue to outpace their local/regional and private counterparts with implementing these top compliance practices.

The rise in adoption of other more nuanced areas of compliance suggests that a meaningful portion of the enhancement trend is indeed substantive in nature, rather than superficial attempts by companies to show a veneer of compliance while ignoring the rigors of actual controls and procedures. For example:

n  Fifty-seven percent of respondents report that their companies have established full-time compliance personnel – up from 44 percent in 2012 and 48 percent in 2016. This upward trend holds true for both local/regional companies (21 percent in 2012; 26 percent in 2016; 38 percent in 2020) and multinationals (67 percent in 2012; 70 percent in 2016; 77 percent in 2020).

n  Sixty percent of respondents report that their companies conduct assessments and audits, an increase from 51 percent in 2012 and 56 percent in 2016. Increases are seen for both local/regional companies (32 percent in 2012; 38 percent in 2016; 46 percent in 2020) and multinationals (61 percent in 2012; 69 percent in 2016; 71 percent in 2020).

n  Companies continue to increase efforts in third-party management.

n  Due diligence policies for third parties continue to increase (49 percent in 2012 to 59 percent in 2016 to 64 percent in 2020). Here again, the upward trend applies to both multinationals (60 percent in 2012 to 66 percent in 2016 and a jump to 81 percent in 2020) and local/regional companies (32 percent in 2012 to 49 percent in 2016 to 49 percent in 2020).

n  Monitoring of third parties was not tested in 2012, but the activity has increased from 34 percent in 2016 to 43 percent in 2020. In 2020, more than half (54 percent) of multinationals and 31 percent of local/regional companies conduct third-party monitoring. This particular increase could be in response to the heightened focus that FCPA enforcement officials have given to this compliance element, encouraging companies to use data analytics to more effectively, efficiently, and reliably monitor third party transactions.

Other compliance steps taken by companies have remained steady since 2016 and include anonymous reporting mechanisms (53 percent), political contributions procedures (46 percent), M&A due diligence (43 percent), and facilitating payments procedures (40 percent).


From January 20 through February 25, 2020, Miller & Chevalier joined with 14 Latin American partner firms spanning 18 countries to distribute a survey via email to individuals working at a broad cross section of U.S. and Latin American companies.

The survey, available in English, Spanish, and Portuguese, was completed by 946 respondents. Participating law firms were BLP (Costa Rica), Brigard & Urrutia Abogados (Colombia), Carey y Cía (Chile), Beccar Varela (Argentina), Demarest Advogados (Brazil), FERRERE Abogados (Bolivia, Ecuador, Paraguay, and Uruguay), García & Bodán (El Salvador, Costa Rica, Honduras, and Nicaragua), Headrick Rizik Alvarez & Fernández (Dominican Republic), Hoet Pelaez Castillo & Duque (Venezuela), LOVILL (Panama), Miller & Chevalier (United States), Orihuela Abogados (Peru), Paz Horowitz Abogados (Ecuador), QIL+4 Abogados (Guatemala), and Von Wobeser y Sierra (Mexico).

Twenty percent of respondents identified themselves as a Lawyer, 20 percent as a Senior Executive, 17 percent as a Director, and 9 percent as a Compliance Officer.

Fifty-two percent of respondents work at a local/regional company and 47 percent at a multinational corporation. Twenty-six percent of respondents work at a business that is publicly listed in the United States.

Responses were received from individuals working throughout the Americas in a broad range of industry sectors, including agriculture, banking, construction, consumer products, energy, food and beverages, manufacturing, and pharmaceuticals/medical devices.



More Corruption Coverage

More Legal Coverage


  Other articles in : Perspectives
Back to Perspectives