In 2022, a high-profile trial took place, which included two Hollywood actors: the famous Johnny Depp and his ex-wife Amber Heard.
One experiment took place in Virginia, United States. In 2019, Depp sued Heard for defamation, over an opinion article about abusive relationships that he published. Washington Post In December 2018.
What does this have to do with Chilean companies? There are two points I find interesting.
The first is that Virginia was chosen because the penalties for defamation are higher compared to those in other states.
The second is that neither Depp nor Heard live or work in Virginia. So how was the lawsuit accepted? because Washington Post She has a server and a printing press in that state.
The second point is especially important for company managers.
The North American law that punishes corrupt practices abroad is known as the FCPA, an abbreviation of its name in English. Department of Justice (DOJ). Securities and Exchange Commission The SEC oversees these regulations, and their work has been particularly aggressive. This law punishes individuals and entities.
Originally the FCPA was intended to eliminate corrupt practices by companies in North America. However, the spirit of the law had the side effect of expanding the scope of oversight of international corruption by North American authorities, who became veritable international inspectors. These authorities have pursued foreign companies that violate the Foreign Corrupt Practices Act and that have some ties to the United States.
Our national “business culture” has no real awareness that domestic actions can have legal effects abroad. Believes –innocently– That the mere fact of not doing business in the United States provides a kind of “shield” with respect to its securities law is a grave mistake. The Department of Justice and the SEC have been very clear about this.
In 2012, these institutions issued important guidance on the Foreign Corrupt Practices Act, which refers to cross-border influences and the board’s responsibility to ensure proper compliance with rules and oversight systems. This is how North American authorities have implemented sanctions on foreigners and non-exporting foreign companies based on minimal contacts with the United States.
And what do the Department of Justice and the SEC mean by “minimum contact”? The guidance itself provides that foreign issuers, as well as their officers, directors, employees, agents or shareholders, may submit to the jurisdiction of the FCPA simply by “making a phone call, sending an email, letter, text message, or fax.” From, to or through the United States (…) an electronic transfer to or from a bank in the United States or other use of the banking system in the United States, or travel across state or international borders to or from the United States.”
In a globalized world, it is clear that any significant modern company must, almost by definition, have a presence in key global markets. From large investments and companies, to a simple phone call, an email to a supplier or customer, or a trip. This means that the modern company has at least “minimal contact” with the developed world.
Another important side effect of the above is that local court cases can be referred to North American headquarters where there are no due process guarantees, due to, among other factors, a violation of the randomization mechanism for cases, allowing the prosecution to fail. The Convenience Court’s selection of an interested party… who has ‘connections’.
The ethical principles for directors and CEOs of Chilean companies are clear and profound. Regardless of whether a company has ADRs, investments, or business in the United States, it must not only be aware of the FCPA law, but also fully understand its implications, given the Department of Justice’s stated focus on pursuing individual liability. They must understand well that the Department of Justice and the SEC are not like the CMA, which is content with an illustrative basic fact laden with adjectives and catchphrases.
Johnny Depp and Amber Heard as a point on the table at the next board meeting of the two companies sanhattan?