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
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The FCPA Compliance Report was recently named the world’s best business ethics podcast by FeedSpot.
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