Superintendencia de Industria y Comercio
Top bar
.png){kind=small}
logo presidencia
By: Santiago León Gómez [1]
The Pacific Alliance is a regional integration agreement formed by Chile, México, Colombia and Peru in 2011 and formalized in 2012 with the signing of the General Framework Agreement of the Pacific Alliance [2] . The territory of the Alliance has a population of over 200 million people and a combined business account totaling more than half of all Latin America, with a GDP of 2.22 trillion USD [3] .
The agreement has no specific regulations on competition law or “compliance”; however, each of its Member States retain its own local competition agency [4] . These authorities have executed to some extent a compliance policy for the promotion of competition law in their territories, in addition to their traditional enforcement activities.
This article compares the general competition compliance guidelines issued by the competition authorities of the Pacific Alliance and opens a discussion related to the role of compliance guidelines in the context of regional commercial cooperation/integration.
1. Compliance Policy in the context of economic integration
It is important to emphasize that the Pacific Alliance, by recognizing itself as a deep integration mechanism, has the potential not only to promote trade, but also to gradually unify the economies of its member countries.
Local competition authorities remain independent; however, bearing in mind that the Pacific Alliance countries have similar legal systems based in civil law, the same language (Spanish) and a compatible business culture, the economic integration process tends to generate results in the short and medium term.
In this context, compliance as an instrument of competition policy can be an effective tool for the economic integration process, since it improves trust between authorities and business in line with the economic objectives of the Alliance. Likewise, consumers are the main beneficiaries of compliance with competition rules by economic operators participating in this new market.
Some firms have a strong compliance culture because they have recognized incentives to reward culture rather than profit seeking, likewise, conducts related to antitrust law violations may occur because of organizational failure [5] . In this context, corporate structures that allow for effective monitoring by legal and compliance staff may reduce the risk of being fined by local competition authorities.
This study highlights the efforts of the Pacific Alliance authorities to promote competition law via general compliance guidelines. For example, the Mexican documents that promote corporate culture as the main objective of a compliance strategy. In the case of Peru, specific compliance measures have been ordered ex-post facto as part of the compliance guarantees in a particular case [6] . In Chile, the guidelines recommend that entrepreneurs evaluate risks according to their own business and company size.
Colombia has issued industry studies for specific economic sectors and is discussing with stakeholders the possibility of a new institutional framework for the development of compliance policy applicable to competition law [7] .
2. Table of Compliance Guidelines in the Pacific Alliance countries.
| Country | Date | Topics including |
Observations |
|---|---|---|---|
| Chile [8] | June 2012 |
What is a compliance program, requirements, optional items, benefits? Who should implement a compliance program? |
The Guideline recognizes that each economic agent is expose to different risks and recommends hiring experts to identify them. The document also recognizes benefits in the prevention of infringements, possible fine reduction, and articulation with the benefits of offset leniency and extrajudicial agreement. The guidelines were issued prior consultation with market agents. |
| Mexico [9] | August 2015 | It explains the practices contrary to free competition, as the objectives of the handbook includes the generation of a corporate culture of legal fulfillment, the appointment of a person in charge, Risk assessment, specific measures that should be included in internal guides, manuals and policies.
Also, specific chapter for monitoring mechanisms, auditing and internal complaints is mandatory. The guide includes internal disciplinary actions and evaluation of the Compliance Program. |
It gives prevalence to the generation of a corporate compliance culture to ensure the success of internal compliance measures. Guidelines recognize an ethical element in the business culture. The handbook is pedagogical to the extent that it explains the behaviors contrary to the competition regime and the risks in which an economic agent may incur [10] . Guidelines where issued in cooperation with US-AID program. |
| Peru [11] | 2016 | Specific orders for sanctioned agents to implement "a program of compliance with the Competition rules to be approve by INDECOPI's Commission” [12]. | The purpose of the program is to counteract the conditions that promote or allow the commission of anticompetitive conducts. It does not establish general guidelines. |
| Colombia | - | For business associations and professional associations [13] , SICOMP [14] . |
It mentions that associations of companies are expose to certain risks especially when gathering economic agents competing with each other [15] . In particular, the guideline considers that such entities may create market entry requirements or become scenarios for transgressing the free competition regime when they have the potentiality or effect of unifying the behavior of their members in terms of various variables, such as price, quality, quantity and/or service. |
3. Conclusions
Local competition authorities in the Pacific Alliance have made the effort to promote competition law using compliance guidelines in various degrees, as showed.
The effectivity of this measures has to be analyzed taking into account that competition law enforcement is a complex task. The treat of a fine does not always deter illegal behavior by managers or corporations. In this context, the possibility to detect a risk or a conduct can help shareholders and corporations avoid incurring in fines imposed by competition authorities.
One of the positive outcomes of corporate compliance is the acknowledgment of internal incentives inside corporations that encourage managers and/or employees to comply or not comply with competition law. Agency conflicts may also be evidence during the implementation process of a compliance policy, which opens the path for the adoption of internal corrective actions.
The ability to detect a risk in a timely manner is the first step to create long-term effective compliance measures.
[1] Attorney of the Rosario University (2001). Specialist in Constitutional Law (2005). Master in Law (2009). Professor on International Economic Law of the Ibague University. Attorney of the Deputy Superintendence for Competition Protection of the Superintendence of Industry and Commerce (SIC).
[2] Pacific Alliance Agreement. Articles 1, 2 y 3.
[3] “An Emerging Model for Emerging Markets”. Samuel George. Bertellsmann Foundation. Link: https://alianzapacifico.net/download/pumas-de-la-alianza-del-pacifico/.
[4] COFECE (México); FISCALIA NACIONAL ECONOMICA (Chile), INDECOPI (Peru) and SIC (Colombia).
[5] Antitrust corporate governance and compliance. Minnesota Legal Studies Research Paper No. 13-18. Rosa M. Abrantes-Metz. Daniel Sokol. 2013. Link: HTTPS://PAPERS.SSRN.COM/SOL3/PAPERS.CFM?ABSTRACT_ID=2246564
[6] Resolution 0738 of 2017 of the Specialized Chamber of Competition. INDECOPI. EXP: 008-2010/CLC, known as "Pharmacy case."
[7] Revista Dinero. September 15, 2018: https://www.dinero.com/economia/articulo/andres-barreto-gonzalez-nuevo-s...
[8] Document “Compliance Programs” of the Chilean National Competition Authority. Fiscalía Nacional Económica (FNE). June 2012. (Free translation).
[9] Document "Recommendations for compliance with the Federal Law on economic competition for the private Sector". COFECE. August 2015.
[10] Document "Recommendations for compliance with the Federal Law on economic competition for the private Sector." COFECE. August 2015. Chapter 3. Pages 23 to 32.
[11] Consulted the website of INDECOPI no general guidelines were found in terms of Compliance with the regulation of free competition.
[12] Resolution 0738-2017 of the specialized chamber of competence of INDECOPI. EXP: 008-2010/CLC, known as "Pharmacy case."
[13] SIC. Link: http://www.sic.gov.co/recursos_user/documentos/CARTILLA_GREMIOS.pdf on 22/11/2018.
[14] The SICOMP is a database of competition decisions issued by SIC. These are administrative resolutions that decided specific cases. The following link can be consulted: Http://www.sic.gov.co/la-superintendencia-de-industria-y-comercio-pone-a-dispos... the 21.11.2018.
[15] Consulted in: Http://www.sic.gov.co/la-superintendencia-de-industria-y-comercio-pone-a-dispos... the 21.11.2018. Pp 5.