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FCPA: Execs See Benefits, Challenges

U.S. and Latin American business people see benefits and challenges with the FCPA.


LIMA -- The Foreign Corrupt Practices Act (FCPA) has produced both advantages and disadvantages for American companies, businessmen in Latin America say.

“As an international businessman, I think it’s a good law, an important law,” says Michael Kaye, who co-owns South-Am Group, a food processing holding company in Chile. “But for the FCPA, it would be the wild, wild West in a lot of countries.”

Kaye used a hypothetical to describe how the law benefits businessmen. “It’s given U.S. businesses a crutch when they are shaken down,” he says. “You walk into a [government] office and say, ‘We’re here for the airport expansion.’ The official says, ‘Great, but I’ll need three Rolex watches.’ You say, ‘I’d love to give them but I’d go to jail and my company would be fined millions of dollars.’ It’s given companies a shield.”

Kaye says he attended a meeting once in a former Soviet Union republic where a government official said of his bid, “Yours is the biggest and best. But a French competitor was just in here.” He showed us a box of cash and six Rolex watches. “We said, ‘We’re sorry. We can’t offer you cash or gifts.’ U.S. businesses are at a competitive disadvantage.”

Kaye says he finds that corruption demands are diminishing in Latin America – especially in Colombia -- and said corruption is not as prevalent as in Thailand, Indonesia and the former Soviet countries.

He identifies Brazil and Argentina as the most problematic countries. “Korean, Chinese and ...

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