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Cross-Border Investigations in Latin America: Key Considerations for General Counsel During a Crisis
A crisis that initially appears local can quickly become a cross-border legal, regulatory, and reputational challenge. A problematic third-party payment, a detained import shipment, a whistleblower complaint, an NGO report, or a wire transfer that touches the U.S. financial system can turn a local issue into a US federal matter within weeks. For general counsel with operations across Latin America, the first question is often not just what happened, but which legal systems will assert jurisdiction, which rules will govern the response, and where the company may have to defend itself.
These challenges were the theme of a panel I recently hosted at the ACC Annual Conference in Boston titled, “Lost in Translation,” with a senior white-collar attorney from Colombia, Paula Cadavid, Managing Partner at Prias Cadavid Abogados. While much of the conference focused on artificial intelligence, our discussion focused on a more immediate source of corporate risk derived from human behavior.
One theme emerged consistently throughout our discussion. Cross-border crises cannot be managed as a U.S. matter in principle with local assistance added later. General counsel should assume parallel proceedings from the start, build an integrated response team, protect attorney-client privilege, obtain evidence following U.S. rules of evidence but assure respect for local rules, and prepare board and media strategy before facts begin moving through multiple legal settings.
The practical insights below draw on decades of experience helping clients navigate investigations and crises throughout Latin America, the U.S, and beyond.
Plan for Parallel Proceedings from Day One
We have seen U.S. parent companies focus on the exposure they know best — their own legal system — while underestimating the risks on the ground. In our experience, the local jurisdiction often drives the greatest financial and reputational impact and may drag cases out decades.
From the start, assume that both U.S. and local systems may move at the same time. Improper payments to public officials or misrepresented financial books and records can trigger FCPA or other federal inquiries. Sanctions rules, the Alien Tort Statute, and money flowing through the U.S. financial system can each give U.S. authorities outreach to act, local authorities may still pursue separate proceedings, remedies, and public narratives in their respective jurisdictions.
The working rule is strict coordination with independent execution. A statement in a local pleading can be used as an admission in a U.S. proceeding, and a U.S. filing can create problems for the local defense. Someone with visibility across both systems should review every filing, submission, public statement, and investigative step before it goes out.
Build a Unified Response Team
When a potential legal issue surfaces, form a crisis response team immediately, empower local counsel and maintain constant communication. It should include:
- Company representatives from both headquarters and local operations
- Legal counsel from each affected jurisdiction
- An independent investigative team
- A crisis strategic communications firm
Bringing these stakeholders together early gives the company a complete view and one voice before every authority. It also settles the common tension between a U.S. litigation team that wants control of every document and a local team that fears an aggressive American-style strategy will cost the company goodwill with local judges.
Experienced local counsel is essential. U.S. attorneys, however capable, do not know local statutes, how local prosecutors work, or the local nuances or business culture. We have seen matters where a parent company required every message to route through U.S. outside counsel. This slowed decisions and local counsel spent dozens of billable hours teaching local law to U.S. lawyers at the client’s expense. Provide local counsel with direct access to company leadership and make sure language is not a barrier.
Protect Privilege and Preserve Evidence Across Jurisdictions
Rules of evidence may vary from one jurisdiction to another. What may be useful in the U.S., may be considered a crime elsewhere. U.S. courts expect broad discovery and full preservation, while in Latin America, privacy laws and habeas data take precedent. For example, privacy laws in Brazil and professional secrecy rules in Mexico may make the same disclosure a local crime. Before you collect or transfer anything, our team recommends confirming the rules in each jurisdiction. Several points deserve attention:
- In Colombia and much of the region, evidence gathered improperly is excluded, and the collection itself can be an offense.
- Employers can generally access company systems, but not material an employee has clearly marked as private.
- Bank records, phone records, and cell tower data require a court order.
- Even publicly available information may pose a risk. A subsidiary’s general manager was criminally convicted for downloading data from a target’s public social media profile.
The Fragility of Privilege: Why Separating Legal Communications Matters
- Communications with in-house counsel may not be protected in some countries, and corporate correspondence can be seized in a raid. Label legal communications clearly as privileged legal advice and keep them separate from business email.
- Many local systems lack a clear equivalent to the crime-fraud exception, so privilege challenges are less defined. We have heard recordings of counsel’s own privileged calls with a client played in open court because prosecutors failed to filter them.
The nuances of witness preparation
- Intensive deposition preparation is standard in the United States.
- In countries such as Colombia, leading a witness’s answers is prohibited, and prior interviews must avoid anything that looks like pressure.
- Paying a witness for time spent testifying is regulated in the U.S. but not locally, which can expose the witness to challenge.
- Foreign bank data may be contested unless it arrives with an original bank certification, is obtained through a judicial inspection, or is introduced by a witness who can confirm its authenticity.
- Finally, Colombia has no broad pre-trial discovery in criminal cases. The defense gathers its own evidence, so the local investigative effort must be thorough from the outset.
Vet Your Investigators and Put Safety First
In many Latin American countries, the private investigation industry is unregulated, and anyone can claim the title. In one counterfeit-products matter, local investigators reported seizures that later proved, on audit, to be fabricated. Management had been misled for months. Verify credentials, require written protocols, and audit reported results.
In high-risk areas, do not put your team members in danger. Specialized security and intelligence firms should assess conditions first and send professionals who understand the local environment. Where armed groups or Cartels control an area, consider bringing witnesses at company expense to safer cities for interviews in controlled settings, and collect documents digitally through trusted third parties where possible.
Compliance Programs Must Reflect Local Realities and Risks
We have seen companies penalized in LATAM despite having 300-page compliance manuals, because the policies were never applied or did not address operational risks. Generic templates do not meet that standard, and local enforcement is tightening across industries. Under recent tax rules, in places like Colombia, a company or executive can avoid criminal prosecution by demonstrating that a tax position rested on a reasonable, well-supported legal interpretation. That is only possible if a documented process exists before the investigation begins.
Account for Extortion and Anti-Corruption Risk
Extortion exposure warrants particular attention. Under U.S. law, a payment to a designated terrorist organization can be a violation even when made under threat. In most Latin American countries, by contrast, extortion payments are not a crime. Nevertheless, local authorities may later characterize forced payments as voluntary cooperation or financing of illegal armed groups. Landmark U.S. enforcement matters have produced multimillion-dollar fines and mass civil suits. With drug cartels now designated as FTOs, companies operating in affected areas should review payment controls and security practices now.
Finally, some companies assume FCPA enforcement has faded under the Trump administration. We would not plan around that assumption. The UK, the OECD, and local governments across Latin America continue to prioritize corruption investigations.
Prepare the Board and Manage the Narrative
Boards want to know what a matter will cost, individual liability, reputational consequences, and how it could affect the shareholder’s value. Cross-border cases often run five to ten years, so avoid promising quick wins. Success more often means reaching a deferred prosecution agreement, a non-prosecution agreement, or a civil settlement before reputational damage sets in.
The general counsel must lead, establish the strategy, and ensure continuous communication between U.S. and local teams. Friction can arise even among well-coordinated teams, such as when local rulings or other significant developments reach the U.S. team late. Prosecutors in most Latin American countries are independent of the government, which many American lawyers are unfamiliar with.
Media considerations should also be addressed early. Judges and prosecutors in the region also operate under heavy media pressure. In one matter, our team held a media interview to defend two executives and discovered that the journalist knew more about the parallel U.S. proceeding than local counsel did because U.S. counterparts had not kept them informed. Share developments in both directions and decide on a media strategy together.
Where to Start
You may believe a crisis begins in the ‘war room’, but experience shows that it almost always takes shape when and where the company least expects it to. Guidepost Solutions supports general counsel and compliance leaders with cross-border investigations, compliance assessments, and due diligence across Latin America. Bringing on an independent investigative team early gives counsel on both sides of the border a shared, defensible record to work from. If your company operates in the region, reviewing how your response protocols would hold up in both U.S. and local systems is a practical first step.
MSU Institutional Assessment + RAMAGELLAN MonitorshipEmpire/Liberty Review