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Are You a Latin American-Based Company or Entrepreneur Who Would Like to Learn The Advantages of Having a Compliance Manual that Conforms to U.S. Law?

Having a Compliance Manual in place on a proactive basis allows companies to establish sound business practices and avoid violating, among others, the Foreign Corrupt Practices Act (FCPA), Office of Foreign Assets Control (OFAC) sanctions, Securities and Exchange Commission (SEC) rules, and the Committee on Foreign Investment in the U.S. (CFIUS) regulations.  Compliance Manuals provide guidance to all stakeholders as well as practical tools that employees can use as they run a specific business.  

Compliance Manuals can be particularly useful in: 

Addressing the Office of Foreign Assets Control (OFAC) Compliance Requirements Upfront

The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic sanctions against foreign countries, terrorists, and persons considered to be harmful to U.S. national security.  Companies conducting business in the U.S. or with U.S. persons would benefit from assessing which sanctions risks they might be vulnerable to and mitigating those risks by creating a sanctions compliance program and keeping it up to date.  Having a Compliance Manual already in place at the time of an apparent OFAC violation is beneficial because OFAC views persons with effective Compliance Manuals/programs in place more favorably than those without proper compliance standards.   In fact, the Department of Treasury has reported that lack of a strong compliance guidance has been one of the root causes of sanctions violations.  A Compliance Manual may help mitigate civil monetary penalties and avoid sanctions violations altogether.

Avoiding Money Laundering Before It Happens

U.S. anti-money laundering laws are vast—both the state and federal levels.  A Compliance Manual can help companies navigate the various statutes that govern this field.  The Foreign Corrupt Practices Act (FCPA), enforced by the U.S. Department of Justice, includes a variety of anti-money laundering and anti-bribery laws. Violations of these laws can cause harsh criminal and civil penalties including prohibitions on conducting business, prison time, and heavy fines.  Companies and individuals can also face investigations by state and local authorities as well as violations in their home country.  Promoting familiarity with the provisions of the FCPA by all stakeholders and employees through conducting the relevant training significantly strengthens a company’s standing in the international markets.  Stakeholders and employees without knowledge of relevant regulations are more susceptible to misinterpreting and inadvertently violating those rules. 

Steering Clear of Illegal Payments to Foreign Officials

The Foreign Corrupt Practices Act (FCPA) bans bribes to foreign government officials in exchange for favorable business dealings.  Being unfamiliar with the FCPA anti-corruption provisions can create significant exposure to a business and its stakeholders, employees, and representatives.  Outlining what types of payments and promises are prohibited, who qualifies as a foreign official, and what exceptions fall under the FCPA in the manual helps ensure that companies and their employees understand what is considered a bribe, and what might result in a violation of the FCPA.  For example, stakeholders or employees may not be aware that an indirect charitable contribution can qualify as a bribe under the FCPA.  Companies unaware of the FCPA’s nuances may make assumptions about what is (or is not) considered a violation, creating significant exposure to the business, its stakeholders, employees, and representatives.

Understanding CFIUS Risks 

A comprehensive Compliance Manual typically identifies and addresses Committee on Foreign Investment in the U.S. (CFIUS) risks.  While CFIUS is typically focused on U.S. businesses with government contracts, in more recent years, CFIUS has been keeping a close eye on foreign investments in any U.S. business that produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies; performs certain functions with respect to covered investment critical infrastructure; or maintains or collects, directly or indirectly, sensitive personal data of U.S. citizens.  Companies engaging in “covered transactions” should have a CFIUS compliance section included in their Compliance Manuals.  CFIUS rules and regulations are constantly evolving, so companies that have already addressed compliance will be in a better position to understand and tackle emerging CFIUS risks. 

A proper Compliance Manual proactively addresses ever-developing legal compliance requirements and fosters best practices for a company’s stakeholders, employees, and representatives, preventing violations that could bring about criminal and civil charges.

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If you need assistance in creating a tailored-made Compliance Manual for your business, we can help prepare the manual adapted to your industry, geographic location, and stage of business growth, as well as design and assist in implementing the relevant training programs for stakeholders and employees.