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Rodolfo Papa


Insight by Rodolfo Papa: VI Edition of the Marval Annual Summit on Compliance, Anti-Corruption and Investigations  

Last Thursday, June 8, the VI edition of the "Marval Annual Summit on Compliance, Anti-Corruption and Investigations" took place at Marval´s offices in Buenos Aires and virtually.
The landmark conference has been running continuously since 2018 by Marval O’Farrell Mairal, and due to its reputation, excellence of exhibitors, and state-of-the-art contents, it has become a leading event on the treatment of "compliance" in Latin America, where more than 30 local and international referents in the field shared their experiences and knowledge regarding challenges, developments and trends for this year on this subject.

The topics, which were discussed in 12 panels throughout the Summit, included, but were not limited to, the following:
anti-corruption enforcement; integrity programs; internal investigations; public procurement; "best practices" on how to react to cyber-attacks; artificial intelligence and technology with an impact on compliance; the use of e-mails, WhatsApp and access to other communication tools (and sources) in the framework of internal investigations; the impact of the scourge of corruption in everyday life; recovery of illicit funds through sanctions imposed for corrupt practices; an analysis of the sanctions regime imposed by multilateral development banks; how to return to the business world after having been involved in a corruption scandal (both from the point of view of the executives and the legal entities involved); how is the performance of a compliance officer in a leading Argentine company from a "gender equality" perspective; a current vision of compliance by leading lawyers from Argentina, Brazil, Mexico and Chile; and the growing importance of "compliance due diligence" in cross border M&A operations; among the most relevant ones.

The event took place between 9 a.m. and 6 p.m. (local time in Argentina), on June 8, in a "hybrid" format, both in person, in the auditorium of Marval O’Farrell Mairal’s offices, and remotely, through live streaming on Linkedin and Youtube, respectively.  
It is worth mentioning that the event was followed "live", through streaming, by more than 3,000 people from 70 countries throughout the day.

The agenda of this new edition of the conference included the participation of world-class experts representing leading law firms and corporations, multilateral development banks, NGOs, international forensic services consulting firms, universities, boutique consulting firms, and government regulatory agencies, among others.

The speakers shared their respective analysis and views, based on their experiences and professional work in Argentina, Germany, Brazil, the United States, Mexico, Colombia, Chile and the United Kingdom, among other jurisdictions.

The conference was led by partner Gustavo Morales Oliver, head of the Compliance, Anti-Corruption and Investigations department of Marval O’Farrell Mairal (Argentina).

LATIN COUNSEL, has participated as one of the international media sponsors of the event, and through its permanent correspondent in Argentina, the corporate lawyer, author, academic and director of the international training and professional education program (in remote format): "Structure of an M&A Deal", Rodolfo G. Papa, prepared the following report, result of the development of this international training event of excellence, whose main guidelines (in substance), we share below.

Opening remarks

The words of welcome and opening of the event, were in charge of Santiago Carregal, Chairman (Marval O’Farrell Mairal) (Argentina), who expressed -first of all- his gratitude to all the audience that, in hybrid form (both in person and remotely), registered to participate in the Summit, highlighting in -such sense-, that more than 2400 attendees had registered, representing 82 countries from 4 continents, as well as the 36 speakers of international prestige that would then star in the debate on the topics included in its agenda.

He also highlighted the international interest aroused by this sixth edition of the Marval Summit, taking into account the incorporation of a number of new topics in its program, such as, for example, the impact of artificial intelligence in the approach to compliance, and the analysis of the most appropriate procedures to respond to a cyber-attack.

In his introductory approach, Santiago Carregal stated that a fundamental aspect of compliance, crystallized through strict compliance with the rules of ethics and integrity, had been reflected in Marval’s Code of Conduct, and has been one of the pillars for the growth of the firm during its first 100 years of life, which is being commemorated during this year 2023.
Finally, he stated that the treatment of the various issues encompassed by compliance, both in Argentina and internationally, especially in Latin America, is currently assuming a leading role, which has been strengthened after the outbreak of the "pandemic", and in the face of certain geopolitical crises, which are currently facing the global agenda.  

Keynote address

Subsequently, the presentation of the thematic agenda of contents of the sixth edition of the Marval Summit, was in charge of Gustavo Morales Oliver, Partner of Compliance, Anticorruption and Investigations (Marval O’Farrell Mairal) (Argentina), who pointed out that one of the objectives of the event was to share which topics in compliance, anti-corruption and investigations, stood out as relevant in both local and international cases, and which had as protagonists companies representing different industries.

In his presentation, Gustavo Morales Oliver highlighted some fundamental issues that are observed in global compliance practice today, such as the changes that will come as a result of the application of "artificial intelligence" to compliance practices and procedures, and that -for example- could operate as a new tool for compliance officers to perform some tasks without external advice (for example: drafting and/or review of internal integrity policies).

According to his presentation, we would be facing a model of "artificial intelligence version 2023", which would be visualized through what is called "GPT chat", and that could help to perform other more complex compliance actions, such as the substantiation of internal investigations, especially for the benefit of external advisors, and would also help government authorities to investigate.

On the other hand, the leader of Marval’s Compliance, Anticorruption and Investigations Department has observed an evolution of what had traditionally been described as compliance, which today does not necessarily refer - exclusively - to the fight against corruption, but it would be appropriate to ask ourselves which area or matter of compliance we would be focusing on.

Thus, he cited as an example, the fact that in certain industries, "regulatory" is key to the practice of compliance, while in others, issues inherent to "antitrust" compliance prevail, or trade compliance, or even more recently, the emergence of ESG policies and procedures.

The real impact of corruption in the world

Subsequently, Gustavo Morales Oliver, Partner of Compliance, Anti-Corruption and Investigations (Marval O’Farrell Mairal) (Argentina), interviewed Delia Ferreira Rubio, Global Chair (Transparency International) (Germany).

Among the salient points resulting from this "conversation/interview", the following stand out.
When asked by Gustavo about his perception of the fight against corruption, compared to what it had been like 20 years ago, and whether the world was always facing the "same stone", Delia Ferreira Rubio, as part of her uninterrupted work at a global level in the fight against corruption, during the last 30 years, stated that, although much progress had been made in the fight against corruption, it had not been achieved.

Although much progress had been made, the ways in which corruption is materialized have changed rapidly, with more complex and sophisticated structures, and with new actors, which pose completely different scenarios today, all of which would lead to sustain -according to this analysis- the existence of "new forms of corruption".

In this regard, the interviewee pointed out that, although "petty corruption" was still present, when the phenomenon of globalization arose, what could be described as "grand corruption" appeared, led by companies with transnational operations, whose results no longer impacted "ordinary citizens", but rather the highest authorities of a country.

Delia Ferreira Rubio also argued that we are facing a scenario of "strategic corruption", or what could also be described as "geopolitical".
Under such a scenario, corruption would be used as a mechanism to capture the State, or more precisely, certain sectors of economic activity, in order to impose the rules by a "Kleptocratic State", through a plan that could co-opt certain sectors of its economy.    
Although he added that we would have the legal infrastructure we need, "the law is not enough", since, although it is necessary, it would not be enough to confront corruption, since "action is required".

He was then asked if he could elaborate on this idea that rules alone would not produce the desired results. In particular, with respect to how the application of these norms by those responsible could be improved.

In response, the interviewee argued that the application of anti-corruption regulations should focus on being implemented in a more transparent, fairer and, fundamentally, faster manner.
In this regard, she pointed out that, together with the International Law Association, she has promoted a strategic anti-corruption project at the global level, aimed at streamlining the mechanisms of international cooperation between States, based on mutual assistance, which date back to the 19th century.

On the other hand, and taking as an international experience the recent reform of Australia’s anti-corruption legislation, he emphasized the need to create an adequate local authority for the implementation of such legislation, through the meeting of 3 essential elements that such competent body should meet, such as: its independence, its resources, and its authority.

In other words, according to his vision, it should go far beyond the content of a "good law", and should necessarily be complemented with tools, human and technological resources (including artificial intelligence) required (and adequate) for its implementation.

On the other hand, and with regard to the mechanisms aimed at the possible detection of channels through which the money produced by corruption circulates globally, he argued that the countries typified with the color "yellow", within the global map of corruption disclosed annually by "Transparency International", and that qualifies (with an index) the degree of exposure to corruption on the part of the National States, at a global level, have -at present- a central responsibility, with respect to the facilitation of what he called the "circle of corruption" (which in English would include the following actions: to steal, to hide, and to emerge).

Precisely, these countries have a central responsibility in regulating the activities of the so-called "gate keepers" (banks and intermediaries, among others).

He concluded by pointing out that such a scenario is manifested in the transparency of information on the composition of the registers of beneficial owners.

In this regard, he emphasized that much progress should be made on this issue, since, in practice, it was very difficult to implement an investigation.

Sanctions of Multilateral Development Banks

This panel was moderated by Gustavo Morales Oliver, Partner of Compliance, Anticorruption and Investigations (Marval O’Farrell Mairal) (Argentina), with Robert Delonis, Litigation Manager (The World Bank) (United States), and, José Hernández Toro, Senior Corruption and Fraud Investigator, IDB Office of Institutional Integrity (IDB Inter-American Development Bank) (United States) participating as speakers.

Based on the experience and compliance practice of the speakers, the objective of this panel was to analyze a series of relevant and cutting-edge topics on transnational public procurement, by virtue of which multilateral development banks (specifically sharing their experiences, both from the World Bank and the Inter-American Development Bank, respectively) have granted financing for the development of infrastructure projects in favor of private sector borrowers.

Thus, the speakers analyzed the scenario whereby multilateral development banks, as lenders in this segment of financing operations, have been invested with powers of investigation, and even the power to impose sanctions, in the event that, as a result of their substantiation, possible "misappropriations" have been identified, through an inappropriate use of the funds disbursed to the borrowers, either through the commission of "fraud" or the payment of "bribes".

In this regard, they analyzed some of the particularities, with respect to the exercise (and scope) of the powers of investigation from the perspective of multilateral credit banks, which could (preliminarily) be framed within International Administrative Law.

In general terms, it could be argued -according to what was explained by the speakers- that the scope of the exercise of such investigative powers by multilateral development banks could be described as broad, and would include the request for relevant documentation and information on those entities subject to their jurisdiction (which, as they later explained, is also very broad), as well as access to their records and accounting statements ("books and records").

They also emphasized that the cooperation provided by the entities under investigation during the investigation was very important, and should be as efficient as possible, and as early as possible, given the risk that inconsistent behavior by those under investigation could be interpreted as an "obstruction charge".

It should be noted that, according to what was stated by the speakers, the legal consequences derived from the substantiation of investigations and imposition of sanctions by this type of entities, in principle, would not be limited by the application of the "Local Law", nor by the provisions set forth in International Cooperation Treaties (entered into between National States), whose execution (and exchange of information) would not necessarily mean that the investigation substantiated by a multilateral development bank could be terminated in advance.
In this regard, it should also be taken into account that each investigation conducted by these entities is different and subject to its own particularities.

As another relevant aspect commented by the speakers, it was argued that, in certain cases, the powers of investigation (derived from the jurisdiction with which certain multilateral development banks have been vested) could be extended -including- to companies that have voluntarily participated in an operation financed by such entities.

In other words, it would not be limited exclusively to companies that have been awarded a contract resulting from the implementation of a public procurement process.
Finally, with regard to the imposition of sanctions following an investigation by such entities, the speakers stated, as a general principle, although it could be objectionable, that they could not be appealed before the local courts.

Challenges and opportunities for Compliance Officers

Then, and under the conduction of María Lorena Schiariti, Administrative Law Partner (Marval O’Farrell Mairal) (Argentina), a "conversatorio" was held with the participation as speakers, Florencia Crespo, Head of Ethics & Compliance (Cervecería y Maltería Quilmes and Fábricas Nacionales de Cerveza FNC) (Argentina), and, María Archimbal, Chief Compliance Officer (YPF) (Argentina), respectively.

It is worth noting that the speakers are compliance officers in two leading companies in their respective areas of operations in Argentina.

As part of the dynamics of this Marval Summit panel, they analyzed (in general terms) the distinctive characteristics of what it means to assume a "compliance officer" position nowadays, from a "gender equality" perspective, and also, in such dissimilar activities, due to the businesses operated by the companies that are part of the exhibitors.

On the one hand, Florencia Crespo stated that, as a result of her professional experience in the performance of a "compliance officer" position, she had gone from working in a totally regulated sector -such as the financial sector- to currently working in a company whose main business is retail, which, in essence, is not regulated, and would thus offer -according to his vision-, the possibility for him to develop his "imprint", based on the needs that the company would have to fulfill in its compliance area, taking into account that its scope would cover 3 areas (Code of Conduct, anti-corruption policies, and anti-corruption policies); Anti-corruption policies; and internal investigations), although it would also include issues related to "antitrust" and data privacy treatment.

On the other hand, María Archimbal’s duties as Compliance Officer of YPF, according to her vision, would be adjusted to the following "macro" pillars, taking into account the particularities and characteristics of her company.

In this regard, she pointed out the distinctive corporate characteristics of YPF, which operates in a leading role in the oil & gas sector, and obviously, with a continuous level of interaction with public officials, and which, in addition, has a majority shareholding as a shareholder of the National State, and its shares are listed abroad.

She added that YPF is a company governed by private law, but is "public" under SEC regulations. 

Afterwards, Lorena asked the speakers about the challenges they had faced in the development of their professional careers, particularly in certain industries where male participation prevailed, such as, for example, in the oil sector.

Florencia replied that everything related to gender had come a long way, and it was not the same as it was 20 years ago in Argentina.

In this regard, when she took on research tasks, she pointed out that being a woman had helped her, especially when interacting and dealing with people potentially affected by internal complaints.

Finally, according to her vision, the constant challenge imposed on her in the exercise of her function, the treatment of the generational issue in the internal environment of the company, where coexisted, among others, the so-called baby boomers, the millennials, and also, representatives of "generation X", or "generation Y", among others.

On the other hand, María pointed out that YPF exhibited among its company values, that of "diversity" and "gender equality", which in turn was evidenced (internally) by the existence of a Diversity Committee. 

Lorena then asked the speakers, based on their current positions, if they noticed a change in the role of the internal compliance function, especially if, depending on each organization, it should participate in all its projects, as if there was no "ceiling" to its expansion.

In this regard, Maria said that, since she received the offer from the company’s board of directors in 2020 to take charge of her compliance area, her objective, in addition to effectively implementing her integrity program, with attributes of "robustness", was for her area to become a "business partner", and when she asked her team what objectives they wanted to develop to strengthen their sector, they came to the conclusion (unanimously) that they wanted to add value to the company.

Finally, the moderator asked the speakers about the importance of putting into practice some of the so-called "soft skills" in the exercise of their role as compliance officer.

In this regard, Florencia said that they are 100% useful for the exercise of certain compliance functions, such as, for example, knowing how to manage emotions as a result of the beginning of an internal investigation. She said that not all people take it in the same way when faced with such a stressful situation, for example, when faced with the possibility of being denounced internally.

On the other hand, a skill that, in her view, compliance officers in general should develop is "resilience".

On the other hand, Maria argued that in addition to being "resilient", the internal compliance function should generate "trust" so that members of other areas of the company approach them, and thus be able to accompany them in a preventive manner, as she pointed out above, as "partners of the business".

Certainly, this trust, according to his analysis, should be built with the other internal areas of the business operated by the company, taking into account that, undoubtedly, the first client of the compliance area is the company, as an "internal client".

Reacting to cyber-attacks

Subsequently, Gustavo Morales Oliver, Partner of Compliance, Anticorruption and Investigations (Marval O’Farrell Mairal) (Argentina), participated as moderator of a panel that analyzed another "last generation" topic at a global level, in the treatment of compliance, concentrated on how to adequately respond to a cyber-attack.

Other speakers on this panel were: Diego Fernández, Intellectual Property, IT and Privacy Partner (Marval, O’Farrell Mairal) (Argentina), Jeffrey Collins, Supervisory Special Agent (FBI Cyber Task Force) (United States), and Victoria Beckman, Associate General Counsel (Shopify) (United States), respectively. 

The speakers agreed that the approach to this structural compliance risk, which is increasingly growing and complex due to its evolution and the different ways in which it could be perpetrated, encompassed the study of a variety of aspects, among which they pointed out the following: how to conduct -appropriately- an internal investigation in order to determine responsibilities; which communication tactics should be efficiently implemented to mitigate the damages derived from a disruptive adverse event, as it is -at present- a cyber-attack, which also obviously impacted on the value of the "brand" and the reputation of a company that had been victim of such illicit action.

In this regard, in order to quantify the damage caused by this type of crime, last year, in the United States, losses totaling US$ 10 billion were reported.
The first issue addressed during this panel was how to react to a (hypothetical) scenario in which a company had suffered a cyber-attack.

In this regard, Victoria Beckman analyzed a series of practical aspects regarding what actions should (or should not) be taken initially, based on what the reaction in response to such an attack might be, and what mistakes or practices should be avoided.

In this regard, he argued that preparing for and anticipating the occurrence of this type of situation is of great importance today. It could be argued -according to his view- that the key to his performance lies in the preparation of how to react.

He also pointed out that, in such an instance, there was normally no knowledge of how to report such a cyber-attack, both internally and externally, for example, in the communication to be sent to clients.

Certainly, under U.S. standards of practice, a report of the attack to the FBI could be helpful in the event of a data breach, in order to address the search for its potential causes.  
Diego Fernandez preliminarily shared, as external counsel and leader of Marval’s IT Department, his vision of how it would impact and what actions should be taken immediately in the event of a cyber-attack scenario.

He went on to state that, in the immediate term, a situation is usually generated that could be described as "chaotic" at an internal level, where there is no specific knowledge of who the perpetrators would be, and neither - in such an instance - could it be determined whether the damage caused by such an attack should (or should not) be qualified under a standard of "materiality".

Certainly, he emphasized the need to have a "plan" to anticipate such contingencies, which is "everything" in terms of cyber-attacks, and, for obvious reasons, he added, its construction should be adapted to the characteristics of the organization, and should be reviewed every two years, and among its objectives, it should include adequate internal training on what should (or should not) be done upon detecting that a cyber-attack has been suffered.

He also added that communication is vital, both internally and externally, and a crisis resulting from a cyber-attack should be handled carefully, not relying solely on common sense.

The speakers agreed that it would also be important, as soon as possible, to start an "internal investigation", which could be carried out by an external counsel, and also by a forensic consultant.

In this regard, they argued that the attorney client privilege would also play an important role, with respect to the right not to (eventually) share the information resulting from such an investigation.

It was also pointed out that another practical aspect to be evaluated, derived from a cyber-attack, would be to establish whether it should be reported, and if so, to which authority, taking into account that many jurisdictions could be competent to be notified.

Also, as a circumstance of transcendence on the adoption (or not) of such a measure, there would still be no information available, considering that the internal investigation could still be open.

Artificial Intelligence (AI) and Compliance

Then, a panel focused on the analysis of what is the impact of artificial intelligence on compliance was held, moderated by Gustavo Morales Oliver, Partner of Compliance, Anticorruption and Investigations (Marval O’Farrell Mairal) (Argentina), and in which the following speakers participated: Diego Fernández, Intellectual Property, IT and Privacy Partner (Marval, O’Farrell Mairal) (Argentina), Agustín Huerta, SVP Studios & VP of Technology IoT Studio (Globant) (Argentina), and, Raúl Saccani, Professor and Director of the Governance and Transparency Center (IAE Business School)-Lead Partner Financial Crime (Deloitte) (Argentina), respectively. 

The following are some of the relevant issues addressed by the speakers:
When asked what we were talking about when we referred to artificial intelligence in the year 2023, the speakers pointed out that there would have been a significant change, whereby, for the first time, users would be talking directly to that intelligence (in fact, they would be talking to a "model").

Taking into account that the so-called "GPT chat" had been in development for a year.
Certainly, since the "GPT chat" is a technology under development, according to the explanation provided by the speakers, we would be facing certain barriers, such as the so-called "hallucinations" generated by this system, whereby certain knowledge generated by its use, would not be "true".

Thus, a recent real case was cited, in a litigation in New York, in which the lawyer of one of the parties had consulted -through GPT chat- the existence of jurisprudential precedents, which were effectively provided by such system, but later it was proved that such cases were not real. In other words, they had been created by the system itself.

Professor Saccani, representing the IAE, who is leading a research focused on the impact of artificial intelligence on compliance, argued that its use would offer us a "creative alternative", which could bring us much value, from a practical view of compliance.
Thus, for example, he argued that this technology could be used to ask it to write a conflict of interest policy for a specific industry, and it could probably generate 5 different alternatives of such policies.

In other words, the use of the "GPT chat" would serve as a source for improving them, which would certainly be different from "copy and pasting" their content.  

Regarding the question of whether artificial intelligence should be (or should not be) regulated, it was explained that there is a sort of "macro" bidding, essentially geopolitical, in which two currents would be in conflict, on the one hand, the one supported by the United States, which "watches and waits" first its development, avoiding its regulation, while the other, supported by the European Union, would try to regulate it at present, through a project.

Finally, Professor Saccani was asked whether, in his opinion, artificial intelligence would replace the work of compliance officers in the future.

In response, he said that it would not replace them, although there will be assumptions that will allow compliance officers to enhance their functions, enabling them to multiply their capacity.
In this sense, he argued that artificial intelligence could be a tool for the development of the "emotional intelligence" of a compliance officer, providing him with a "language" when the business under his charge has to solve a dilemma.

Compliance: trends and challenges of its application in the United States and Europe 

The first part of this new edition of the Marval Summit, held during the morning, concluded with a panel on international compliance enforcement, analyzed from different practice areas.

This panel was moderated by Daniel R. Alonso, White Collar and Litigation Partner (Orrick, Herrington & Sutcliffe) (United States), and participated as speakers: Kim Nemirow, Partner (Kirkland & Ellis) (United States), Richard Donoghue, Partner Corporate Investigations & White Collar Defense (Pillsbury Winthrop Shaw Pittman LLP) (United States), Lucas Loviscek, Partner (Quinn Emanuel Urquhart & Sullivan, LLP) (United States), and, Alison Geary, White Collar Crime & Investigations Partner (Mishcon de Reya LLP) (United States), respectively. 

As a result of the topics developed by the participants of this panel, especially focused on the treatment of compliance from an international practice perspective, each of the speakers analyzed current issues derived from their specialty and areas of expertise, without failing to mention that the main legislations that combat "corrupt practices" have an extraterritorial scope, or "long arm jurisdiction", taking as emblematic, the cases of the FCPA and the UK Bribery Act, respectively.

In this regard, current issues related to the application of the FCPA were analyzed, especially with respect to the actions of one of its regulatory authorities in the United States (the Department of Justice, "DOJ").

Another presentation highlighted the importance of implementing compliance due diligence in an international transaction, more specifically, in the conclusion of an M&A operation, given the (increasing) risk, especially from a Latin American perspective, that it could eventually be subject to the application of the FCPA.

The devastating impact that corruption could have on the enforcement of Bilateral Investment Treaties, and also, separately, on the enforcement of international commercial contracts, was also highlighted during this panel.

From the perspective of the application of the UK Bribery Act of 2010, another speaker pointed out certain relevant aspects in view of the increasingly common scenario in international compliance practice, whereby, as a result of an investigation in which both the FCPA and the UK Bribery Act could apply "in parallel", which aspects should be evaluated, given the overlapping participation of regulators from both jurisdictions.

Below, we highlight some preliminary conclusions developed by the members of this panel:
From the perspective of the DOJ’s handling of cases and investigations, the incentive resulting from the adoption of a "self-disclosure" practice by the parties under investigation or (potentially) affected by its extraterritorial FCPA enforcement activity, which could be materialized through their cooperation and redress, thus contributing to the clarification of the conduct under investigation, continues to be particularly relevant.

On the other hand, it was held that international transactions are increasingly exposed to a potential enforcement risk resulting from the extraterritorial application of the FCPA.
In this regard, and in order to mitigate such risk, the importance of implementing an adequate pre-closing due diligence compliance work was pointed out, especially in the case of acquiring a controlling interest in a target company incorporated in a Latin American jurisdiction.

In this regard, among a set of "best practices" that could be adopted by the implementation of a compliance due diligence work, the following were mentioned: Verifying that the target company had adopted adequate and effective internal compliance policies, through the design of an effective compliance program (that did not operate as "cosmetic"), and that, as part of its implementation, internal training and capacity building had been carried out, the existence of a compliance culture based on "tone from the top", adequate control over "intermediaries" had been verified, and sufficient resources had been allocated to its internal compliance area, among others. 

Finally, it was made clear that Bilateral Investment Treaties do not protect investments made through "corrupt practices", since such instruments of Public International Law only grant legal protection to investments made under the protection of the applicable legal and regulatory norms. This principle could be qualified as an "international public policy".

Surviving investigations by the authorities: the road to transformation

The first panel of this new edition of the Marval Summit, held during the afternoon, was moderated by Gustavo Morales Oliver, Partner of Compliance, Anti-Corruption and Investigations (Marval, O’Farrell Mairal) (Argentina), with the participation of Rafael Gomes, Chief Risk & Compliance Officer (Novonor & OEC) (Brazil), and Richard Bistrong, CEO (Front-Line Anti-Bribery LLC) (United States), respectively. 

The topics addressed by this panel focused, on the basis of two "real cases", respectively, by a human being (individually, as an executive of a company), and by a corporation, on an analysis of how to return to the business world after having been involved in an act of corruption.
In this regard, the speakers pointed out issues in common, as well as certain differences they faced (respectively) in such scenarios.

On the one hand, Richard Bistrong, who was convicted of corruption and, as a result of this event and its subsequent remediation, has now become one of the most prestigious global compliance consultants for companies and members of top corporate management, shared some of his experiences and affirmed that, through the adoption of a "transformational behavior", such a "return" can be possible.

In this regard, he stated that the first step to achieve this goal would be to provide all the necessary cooperation to regulators to remedy the damage caused.

From the point of view of an executive with a leadership position in a corporation, alluding to his participation in a criminal investigation promoted by the DOJ, he stated that the adoption of such decision to cooperate, had originated through an emotional impact, which materialized through the following stages: in a feeling of "shock", then of shame, and finally, of "regret", respectively.

He pointed out that cooperating with a government investigation was an emotional decision, in which initially there was a dilemma as to whether to cooperate or, on the other hand, to object to such an investigation.
Having faced a parallel investigation by the regulators of the United States and the United Kingdom, respectively, it was necessary (and also productive), according to his experience, to work with both authorities jointly in order to reach an agreement.
He emphasized, linked to what had been commented during the (morning) panel in which the compliance officers had participated, that the management of the so-called "soft emotions" was important, especially when facing an internal investigation. This could be summarized, according to her vision, in being patient in the action of cooperating, and thus being able to tell her story.

Finally, he explained how the process of his "reinvention" materialized, once the investigation in which he had participated was over.
In this regard, she began to evaluate that there was no model on how to face the experience she had been involved in, since no one was talking about this topic, specifically for the benefit of corporate executives who might go through her experience in the future.

Therefore, since he regained his civil rights (during 2017), he began to travel around the world, training corporate leaders, to help them avoid situations like the ones Richard had faced, since they were indeed "avoidable".

He added that compliance departments should, as a premise, add value to the business. In other words, they should not limit themselves to managing compliance issues.

On the other hand, from the corporate point of view, the return to the business world of the (now) "former Odebrecht", after having been involved in a global corruption case, was addressed as a "leading case", and in this regard, Rafael Gomes, its current compliance officer, shared some of the issues of this reconversion that the company had to go through in the management of its compliance policies and procedures.

In this regard, he stated that, during the last 7 years, the company cooperated with different regulatory authorities, belonging to several jurisdictions, in order to be able to develop its operations again, and to generate trust from its clients and suppliers.

Throughout this path taken by the company, it has been essential to collaborate and provide information to each of the regulatory authorities in charge of the investigations, taking into account that, before the outbreak of the corruption scandal it had been involved in, it operated in 23 countries.

During the course of these investigations (including a "parallel investigation" by the competent authorities of the United States and the United Kingdom, respectively), the company received sanctions from some multilateral development banks, its bank accounts in several countries were frozen, as well as the management and operation of its assets, and its business volume was significantly reduced. 

As part of its restructuring process, during the last 7 years the company developed a new compliance program, in which it invested US$ 100 million.

In addition, transactional agreements were negotiated with several regulatory authorities, which apply anti-corruption regulations with different levels of maturity, which has required (the former Odebrecht) the payment of million-dollar fines and the termination of several contracts.

This "return" to the business world also caused the company to lose 75 members of its key management, who, due to their experience, knew in detail the business that the company operated.

The compliance officer of (the now reconverted) Novonor & OEC, concluded that the most important difficulty that the company had to face during this process was to understand the need to maintain the culture of "compliance for ever".

Finally, and from the experience of Richard Bistrong, he pointed out that the process he faced (both personally and at work) could be defined as a "transformational journey".

Trends and challenges for Forensics experts

This panel included the participation of the following speakers: Karyl Van Tassel, Senior Managing Director, N.A. Global Investigations Practice Lead (J.S. Held LLC) (United States); Amanda Rigby, Vice President (Charles River Associates) (United States); Drew Costello, Partner (Forensic Risk Alliance) (United States); Michael Cullen, Head of Global Risk and Investigations Latin America (FTI Consulting) (Colombia); and, Geert Aalbers, Chief Strategy Officer (CSO) (Control Risks) (Brazil), respectively.

Administrative Law, Criminal Law and Compliance

This panel was moderated by María Lorena Schiariti, Partner of Administrative Law (Marval O’Farrell Mairal) (Argentina), and speakers included: Christopher Yukins, Law Professor (George Washington University) Of Counsel (Arnold & Porter LLP) (United States); Andrés O’Farrell, Partner of Corporate Criminal Law (Marval O’Farrell Mairal) (Argentina); and, Fabyola En Rodrígues, Head of White-Collar Crime and Defensive Investigation Area (Demarest Advogados) (Brazil), respectively.

During the panel, the speakers analyzed current issues related to public procurement and its interaction with compliance issues, and the application of criminal or administrative infringement law, as the case may be, in the event of the possible commission of unlawful acts during the selection process of a contractor with the public sector.

It was preliminarily concluded that, at present, Argentina would have a level of appropriate regulations on public procurement, in which companies under investigation (not convicted) would be excluded from these contracting procedures, although, in any case, there would not yet be an adequate level of maturity in terms of enforcement.
From the perspective of the United States legislation, a summary was made of its historical evolution up to the present, including certain issues of "public procurement", which have been incorporated in the FCPA Resource Guide prepared jointly by the DOJ and the SEC, taking into account that, in matters of public procurement, the federal government shares the reputational risk with the contractors.

It was also pointed out that under U.S. law, there is an obligation for companies to report the commission of "corrupt practices".

Finally, a comparative analysis of certain "hot topics" related to public procurement was made between the legal systems of Argentina and Brazil, pointing out the scope of a series of substantive issues in both jurisdictions.

Thus, an analysis was made of how an investigation is conducted (whether administrative or criminal) into the possible commission of unlawful acts during a public procurement process, specifically considering who could be charged (analyzing the cases of managers, public officials and the situation of the ideal entities themselves, as the case may be), and what crimes could be defined as a result of the conduct that competitors may have adopted during its substantiation.

The Argentine Anticorruption Office   

In this panel, Gustavo Morales Oliver, Partner of Compliance, Anticorruption and Investigations (Marval, O’Farrell Mairal) (Argentina), starred in a "conversatorio/interview", together with the head of Argentina’s Anticorruption Office, Verónica María Gómez.

It is important to note that the Anti-Corruption Office of Argentina has participated in all previous editions of the Marval Summit.

As a result of this dialogue, the institutional role of the Anticorruption Office was analyzed and described in detail.

The first question asked to the official focused on the actions and initiatives implemented by such governmental authority, and explored which of such actions she considered could have generated a greater impact in the fight against corruption.

Among these actions, we could highlight a number of projects, programs, activities and initiatives such as the cases of the submission of sworn statements by public officials, not only in terms of assets, but also in terms of "conflicts of interest"; the recent creation of RITE (voluntary registry of integrity programs), an anti-corruption plan, and the draft law on public ethics, among others.

In this regard, the head of the Anticorruption Office stated that it was difficult to measure the impact of each of such initiatives separately, since they should be put under the logic of a "comprehensive policy", focusing on prevention, and thus establish different measures aimed at mitigating the risks generated by corruption.

She added that such actions could be encompassed within a "national integrity strategy", which could be synthesized as a systemic proposal that would allow the different government sectors, agencies and companies with state participation, to put into practice a series of basic guidelines, and apply them in a concrete way.

Regarding the implementation of the RITE, she said that it was a tool to promote and improve integrity programs, both for companies and organizations in general.

On the other hand, and with regards to the question that (a posteriori) was asked about the actions taken by the Anticorruption Office regarding the use of artificial intelligence and its impact on compliance, the official stated that an agreement was being carried out. The objective would be to develop a model of mapping and interconnecting data currently produced and stored by state agencies which is, at present, scattered in different databases. However, she pointed out that the execution of this agreement was still in its embryonic stage.

She was also asked about the performance of the Anticorruption Office before international organizations, including its interaction with other offices around the world.

The official stated that such interaction was constant, and was manifested through different actions carried out by the Anticorruption Office.

In addition, this provides collaboration to the Foreign Ministry in the application of some international anti-corruption treaties, to which Argentina is a party.

In this regard, she added that the Anticorruption Office accredits the level or degree of compliance with the commitments assumed by the Argentine State before the international community, including the situation of the Provinces and Municipalities, and the other Branches of the State.

In fact, they would soon be receiving an "in situ" visit by representatives of the United Nations.

Likewise, according to the Official, her Team analyzed all the time specific recommendations made to them, and the standards set by international organizations at a global level.

Compliance in M&A transactions

The next panel was led by María Laura Bolatti Cristofaro, Corporate/M&A Partner (Marval, O’Farrell Mairal) (Argentina), Howard Kleinman, Partner (Dechert LLP) (United States), and, María Macarena García Mirri, Corporate/M&A Partner (Marval, O’Farrell Mairal) (Argentina), and was focused on addressing another "state-of-the-art" issue. He focused on the analysis of the impact of compliance on the global anti-corruption agenda, which consisted of analyzing the impact of compliance in the arrangement of M&A transactions, and especially through the incorporation of what, in practice, has been known as the implementation of a compliance due diligence work.

The need to undertake this professional work was supported, according to the practice and expertise of the speakers, not only by the devastating reputational impact that could result from acquiring a controlling interest in a company with serious compliance failures (without having been identified ex ante as part of the due diligence), but, as the "worst case scenario", it could also lead to an event of "succession or transfer" of the liability attributable to the target company for the commission of corrupt practices (e.g., the acquisition of a controlling interest in a company with serious compliance failures), but also to a "succession or transfer" of the liability attributable to the target company for the commission of corrupt practices (e.g., the acquisition of a controlling interest in a company with serious compliance failures). e.g. : the payment of bribes to local or foreign public officials, in their name, interest or benefit), not only foreseen by the most important legislations worldwide (such as the FCPA), but which also have extraterritorial scope, so that, analyzed this institute from the prism of Latin American practice, they could also be affected, Given the fact that, in almost all the countries of the region, "local laws" have been enacted, which established the autonomous criminal or administrative infringement liability of legal entities, and such liability may be transferred to the absorbing or acquiring entity, as the case may be, in an M&A transaction.        
The local speakers argued the need to evaluate the "compliance risk" as a key risk in the conclusion of an M&A transaction, especially after the outbreak of some corporate corruption scandals that took place in recent years, such as, for example, the "Lava Jato" in Brazil, and the case of the "notebooks" in Argentina, in which, in the latter, several businessmen acknowledged before the Courts the payment of bribes to public officials.

At a transactional level, the speakers agreed that those "findings" relevant to compliance issues that could be detected during the compliance due diligence would also have an impact on the open negotiations between the parties involved in the projected transaction, essentially in the fixing of the purchase price (and its form of payment), as well as in the scope of the content of the structural clauses of a stock purchase agreement ("SPA"), more specifically, in its covenants or pre-closing obligations, the representations & warranties of the seller, and the indemnity granted in favor of the buyer, respectively.

The speakers also agreed in emphasizing the importance of carrying out compliance due diligence in cases where the business operated by the target company has been classified as a "regulated" industry or economic sector, or, if applicable, has permanent interaction with public officials.

Likewise, as part of the implementation of a compliance due diligence work, each speaker in this panel agreed on the importance of adopting several investigative measures, which should be undertaken by the legal-regulatory and compliance team responsible for its performance, among which they mentioned the elaboration of a check list of compliance issues to be surveyed, the possibility of holding Q&A sessions with those responsible for the internal compliance area of the target company, access to public sector information sources (not controlled by the vendor), and especially, that the compliance policies and procedures adopted by the target company should not operate only as "cosmetic" (also known as "paper compliance").

Also, according to the speakers, it would be necessary, as part of the compliance due diligence, to investigate the situation of certain "third parties" (intermediaries) that maintain links with the target company, since they could "disguise" formal mechanisms through which the payment of bribes could be channeled in the name, interest or benefit of that entity.

The speakers concluded by pointing out, as an alternative, that in the event that as part of the findings of a compliance due diligence, a series of "red flags" had been detected, derived from non-compliances with compliance, attributable to the target company, alternative structures to a "red flag" could be evaluated, alternative structures to an "outright purchase" of a "controlling shareholding" could be evaluated, and thus, the possibility of transferring the "clean" assets of such company to a "newco" could be considered, in order to avoid being exposed to inherit potential compliance liabilities.

The vision of Law Firms in Latin America

The closing panel of this new edition of the Marval Summit was in charge of leading law firms in the treatment of corporate compliance in Argentina, Chile, Brazil and Mexico, respectively, and consisted of the following speakers: Gustavo Morales Oliver, Partner of Compliance, Anticorruption and Investigations (Marval, O’Farrell Mairal) (Argentina); Luis Dantón Martínez Corres, Partner (LEC, Litigio Estratégico y Compliance, S. C.) (Mexico); Flávia Leardini, Partner (Mattos Filho) (Brazil); Marcelo Zenkner, Partner, Co-head of the Regulatory Practice Group (TozziniFreire Advogados) (Brazil); and, Rodrigo Campero, Partner (CMS Carey & Allende) (Chile), respectively. 

The speakers, as part of the dynamics generated by this panel, pointed out a series of legislative reforms, and recent jurisprudential developments, in their respective jurisdictions, on the treatment of compliance.

Thus, in the case of Chile, a bill was analyzed, currently in the parliamentary process, which could soon be passed, whereby the criterion for attributing liability to legal entities would be modified, which, if effectively approved, would adopt a criterion close to the "strict liability" standard, and would also be applied to more than 200 crimes typified under its criminal legislation, compared to the 28 crimes that could currently be charged to the ideal entities.

On the other hand, Brazil has recently passed a modification to the so-called "Clean Company Act", which has distinguished the scope of compliance programs from integrity programs.

Furthermore, a few weeks ago, also in Brazil, a Federal case was opened (more precisely, in the State of Goias), in which the possible commission of a fraud and money laundering operation is being investigated, which would be impacting its lower soccer leagues, for which the payment of sums of money to several soccer players to modify the result of some matches was denounced.

Finally, there were some new developments that could be described as encouraging regarding the practice of anti-corruption enforcement in Mexico.

This jurisdiction has a new Prosecution Office, which has recently cooperated on behalf of the DOJ in reaching an agreement with a waste collection company with operations in Argentina, Mexico and Brazil.

Gustavo Morales Oliver, representing Marval O’Farrell Mairal (Argentina), was in charge of the final words of thanks and closing of this new edition of the Marval Summit.

The event was attended by more than 3,500 people, including both formats, in person and via streaming. It should also be noted that the profile of those attending the Summit was that of a specialized professional and/or holding senior positions in private sector organizations.   

It should also be noted that 96% of the participants who answered the "post-event" survey prepared by Marval rated it as "excellent".

The complete recording of the sixth edition of the "Marval Annual Summit on Compliance, Anti-Corruption and Investigations" can be accessed through the following link: https://www.youtube.com/watch?v=8fbNPFiP0fs

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