Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. In this episode, Tom welcomes back Matt Ellis to discuss a newly announced FCPA enforcement action involving Scoular Company.
The case invoiced about $400,000 in payments labeled as “reinspection fees” to Mexican customs and food inspectors to move agricultural goods across the Mexico–U.S. border. border, allegedly generating over $6.5 million in avoided costs and raising concerns about cartel-linked beneficiaries. They discuss why customs and customs brokers are recurring high-risk areas in Mexico, how long-running employee involvement suggests broader controls and tone-from-the-top failures, and why these payments are not facilitation payments under Mexican law and given discretionary official acts. Ellis emphasizes analytics on customs documents and broker invoices, stronger third-party diligence beyond traditional screening to address cartel/TCO risks, and defensible governance for WhatsApp/off-channel communications. Despite no voluntary self-disclosure, the company received cooperation credit and a 25% fine reduction, and Ellis previews an ACI conference focused on cartels, TCOs, and compliance in Latin America.
Key highlights:
- Border Bribes and Safety Risks
- Controls Failures and Monitoring
- Data Analytics Red Flags
- Facilitation Payment Myth
- DOJ Cartel Warning and Implications
- Rethinking Due Diligence for Cartels
- WhatsApp and Messaging Governance
- Cooperation, Credit, and Remediation
Resources:
Cartels, TCOs and Compliance in Latin America, July 20-21
Matt Ellis on LinkedIn
Tom Fox
The FCPA Compliance Report was recently named the world’s best business ethics podcast by FeedSpot.