The Foreign Corrupt Practices Act (FCPA) is one of the most consequential pieces of legislation for any US company operating abroad. Its anti-bribery provisions and accounting requirements apply to a wide range of activities, and enforcement has only intensified in recent years.
For companies expanding into Latin America — where regulatory environments vary widely and local business practices may differ from US norms — FCPA compliance is not optional. It is a fundamental part of responsible market entry.
What the FCPA Actually Covers
At its core, the FCPA prohibits US companies, their officers, and their agents from bribing foreign government officials to obtain or retain business. This includes payments to officials of state-owned enterprises, political parties, and in some cases private parties acting on behalf of a government entity.
The accounting provisions are equally important: companies must maintain books and records that accurately reflect transactions, and they must have a system of internal accounting controls sufficient to provide reasonable assurances that transactions are executed in accordance with management's authorization.
Common Compliance Risks in Latin America
Several risk factors are particularly relevant for companies operating in the region. Intermediaries — including distributors, agents, and joint-venture partners — can create exposure if adequate oversight is not in place. Gifts and hospitality, while part of many business cultures, must be reasonable, documented, and never tied to obtaining a business advantage from a government official.
Facilitation payments, which some markets treat as routine, are explicitly prohibited under the FCPA. Companies must be clear-eyed about this distinction between local custom and legal obligation.
Building an Effective Compliance Program
An effective FCPA compliance program starts with a risk assessment tailored to your specific operations, markets, and industry. From there, companies should implement clear policies, provide regular training for employees and intermediaries, conduct ongoing due diligence on third parties, and establish confidential reporting channels.
The key is not just having a compliance manual on the shelf — it is creating a culture where compliance is understood, valued, and embedded in day-to-day decision-making.
The Cost of Non-Compliance
FCPA enforcement actions routinely result in penalties in the tens or hundreds of millions of dollars, not to mention reputational damage, loss of business relationships, and potential criminal liability for individuals. The reputational toll is often the most lasting — once trust is lost, it is extremely difficult to rebuild.
Investing in compliance upfront is dramatically cheaper than dealing with an enforcement action later. Companies that take this seriously protect not only their legal standing but their ability to operate and grow in Latin American markets for years to come.
How Global Ideals Can Help
Our FCPA and risk assessment services help companies identify compliance gaps, implement practical controls, and operate confidently in Latin American markets. We combine legal expertise with real-world business experience to build compliance programs that work — not just on paper, but in practice.
If you are expanding into Latin America and want to make sure your compliance foundation is solid, we would welcome a conversation.