IN LATIN AMERICA
Corruption still obstructs business
11-07-2008 | MARIJULIA PUJOL LLOYD [email protected]
U.S.companies are finding it almost impossible to do business in Latin America because of corruption within governments
There are special corruption prosecutors, who investigated those crimes within the government.
An electronic newspaper called Latin Business Chronicle has published an article stating that corruption is a significant obstacle to operating in Latin America, which has resulted in lost business for law-abiding companies, according to a new survey among more than 200 executives in the region. The worse part of it is that 82 percent believe anti-corruption laws in Latin American are not effective.
According to Homer E. Meyer from the U.S. based law firm Miller & Chevalier, the survey responses reflect both a high level of concern in the private sector about corruption and a cynicism about meaningful enforcement of the anti-corruption laws adopted to implement the OAS Convention.
The electronic daily said that the results from another survey commissioned by the American Chambers of Commerce in Latin America shows that corruption is a major concern. When asked what they believe is the key issue affecting the future of democracy in their country, 31 percent ranked corruption as the “most important”.
A frequent complaint by U.S. firms in Latin America is that they are unfairly weakened by the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits U.S.companies from corrupt payments to foreign officials for the purpose of obtaining or keeping business, when it comes to competing with companies from the region or other areas which do not have to comply with the FCPA type regulations.
Nearly 74 percent of the respondents say that they have lost business due to corrupt practicer by competitors.
Almost half of those involved in the survey said that corruption is a significant problem in Latin America. U.S. executives working in Colombia, Argentina, Mexico, Peru and Brazil said that corruption represents a significant obstacle for them to do business.
To make matters worse, according to the daily, 34.5 percent of those interviewed do not think a company individual or government official will be punished for their illicit activities.
Respondents in the survey said that the most corrupt countries in Latin America are Bolivia, Venezuela and Ecuador, while Chile and Costa Rica are the least corrupt. Mexico ranked right behind Ecuador and ahead of Argentina, while Brazil ranked among the least-corrupt countries. Although Panama was not mentioned in the survey as being on the top of the list, it can be assumed that it is in the middle. The new Panamanian Penal Code has introduced new anti- corruption measures and bigger sentences for government officials found guilty of taking bribes.
Peru recently coped with a major corruption scandal that forced half of the cabinet to resign. More than 55 percent of the respondent believe that dealing with corruption risk is a top priority of their company. U.S. executives believe that corruption will not be punished.