In the last couple of years, we’ve seen an increase in the number of UK companies that have approached us with the aim of understanding regulatory aspects that affected the, across different Latin American countries. From prepared meals to animal feed and from surfactants to insecticides, understanding the regulatory landscape in an export market is clearly business-critical. Most companies that approach us want to understand what this landscape is like before deciding whether or not to enter a certain market, so proving the right information becomes hugely important.
We work with solicitors and regulatory affairs consultants across the region, and are developing this network as the demand for this sort of work increases. We coordinate the efforts of these associates across the region so that the client has just one point of contact – which means the information is consistent across countries in content and form – saving our clients very precious time and lowering stress levels! It also helps us when we progress onto a much more commercial phase.
So today I would like to share with you some tips about dealing with regulatory affairs in Latin America:
1 – Language
I tend to be quite to-the-point when I write, and I have been trained to be as precise as possible, mainly through my university studies in the UK and working for different UK employers. Many Latin Americans, particularly lawyers and notary publics, write (and speak) very differently, in very roundabout ways and their documents often sound like they were written in the 17th century. Our education system has a lot to blame for this (“Castro, your sentences are like telegrams, colour it a bit”, “but I have said everything”, “true, but you need a bit more waffling in there”, high school). Our legal systems don’t help, with their hugely intricate sentences (same as in Italy or Spain).
So the challenge here is to probe the legal/regulatory experts with “say it like I’m a 5-year old” or “so exactly what does that mean?” and “can you put it in 20 words?”. They won’t like it, but they need to understand that you need to make business decisions… And remember you will be more than likely to have to deal with authorities in Spanish or Portuguese, and to translate documents.
2- Ambiguity
Sometimes life’s not that easier for our regulatory/legal specialists, and even if they try and be precise, there is too much ambiguity and they honestly won’t be able to tell you exactly how a process works or what documentation is required until the process actually starts. It’s very frustrating but it’s part of doing business in the region…
3- Google v Reality
What doesn’t help either is that one thing is what you can find on a government website or on a decree or article, another thing altogether is how things work in real life. The gap between the two is pretty narrow in the UK, from experience, and pretty big in a lot of settings in Latin America. This is something very difficult for Brits, Canadians, Americans, etc, to grasp. Keep asking “does this really apply?”, “how does this really work?” and “who is this likely to change in the near future?”
4- Enforcement
To me, the biggest challenge to come to terms with in Latin America is the difference between a norm/regulation and its enforcement. There are laws against using mobile phones while driving across the whole region, yet people use their phones constantly while driving (more so in some countries than others). There are laws about using seat belts and helmets, yet in some places you’re not very likely to be fined if you don’t wear them (definitely not on the back seat). There are laws about when and what to pay staff, yet so many workers get paid whatever, whenever. There are laws about folic acid in flour, but you still find bakery products without folic acid… So keep asking about the enforcement – “is that absolutely necessary?”, “how come x product got to that market without that?”, etc.
5- Bureaucracy
One thing that technical staff, particularly from UK manufacturers, complain about is that “this does not make sense, this regulation has no technical justification whatsoever”, and they are often right. Regulations don’t always need to make sense, sometimes they just exist to feed the monumental bureaucracy we live in (Brexiteers will argue that’s why they wanted to leave the EU!). C’est la vie.
6- Corruption
I am lucky enough to live in one of the two most transparent countries in the region (Uruguay, Chile is the other) so I don’t come across corruption and bribery on a daily basis. But the situation is, sadly, very different in other countries. Get legal advice about the UK Anti-Bribery policy and remember that you are responsible for what others do on your behalf in Latin American countries. So if your regulatory affairs consultant bribes someone in Mexico to get you a licence, you are responsible. It’s up to you how you want to do business, but it’s important that you understand the implications. Ask your local consultant about bribes straightaway and make your position clear, even sending them a copy of your company’s anti-bribery statement.
7- Latin America is a region
When a British client asks about “regulatory affairs in Latin America” I can often hear that they are equating the region with the EU – treating it as a unified mass in regulatory terms. That’s absolutely not the case. What applies in Bolivia will be miles apart of what applies in Colombia, Brazil or Chile. More so than ever, treat each market individually. If Colombia is a nightmare in regulatory terms, don’t rule out Chile. Similarly, if Paraguay has been fantastic, don’t assume Mexico will be.
Time, patience and contacts is what you need if you want to survive the regulatory landscape in Latin America.
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