27 August 2010

When it comes to complex regulations on banks or the Internet, Latin American nations often look to the United States and Europe for cues. But varying interpretations can result in a pastiche of different rules across countries in the region, complicating operations for multinational companies.

One way that companies can help Latin America craft rules that may be more similar: When meeting with government officials, bring in staff and lawyers from that country, plus executives from the United States or Europe. Flying in U.S. or European experts signals to the Latin American officials that your business is serious about discussing the issues underlying new rules.

That’s just one tip shared at the Aug. 27 meeting of WorldCity’s Government Affairs Connections, which included top executives from Yahoo!, Chevron, Fedex and Visa, among other companies.

Laura Juanes, who helps run legal compliance in the Americas for internet company Yahoo!, led the roundtable and offered the advice. She started with Yahoo in her native Spain in 2002, interacting there with European counterparts, and since 2009, runs the Latin American team from Miami, often collaborating with U.S. colleagues in Washington, D.C. and other U.S. cities.

Juanes said most regulatory issues facing Latin America have already been hashed out in the United States. So, she’s found it helpful to consult with Yahoo’s government affairs team in Washington to learn from their experience “what strategies work and don’t, what messages work and don’t.”

She then tweaks the lessons for Latin America, where some arguments might carry different weight. Economic growth and development, for example, tend to matter more in emerging markets.

“When you tell Latin American officials the shaping of the legislation can affect business development, they listen. It’s not disregarded,” Juanes told the group.

 

Still, countries differ within Latin America in how much they follow either U.S. or European cues. Their orientation can profoundly affect company operations, down to the way you run a web site, said Stan Clemente, senior regulatory affairs advisor-international for delivery giant FedEx.

For example, internet privacy rules influence whether users tend to “opt-in” or “opt-out” of new features on a site. In Europe, rules aim to protect consumers by generally requiring they “opt-in.” But in the United States, companies more often release new features unless users “opt-out,” participants said.

That’s because the U.S. system tends to assign consumers more responsibility in protecting themselves than Europe’s, said Salvador Perez-Galindo, vice president for government affairs at Visa Latin America. But Washington seems busy now adding regulations to boost consumer protection.

“Some of the most intrusive regulations are coming from the United States,” said Perez-Galindo, referring to aspects of financial reform. “In Latin America, there will be some copy-cat exercises.”

Many participants said their government affairs teams operate within the legal department of their companies, not as a stand-alone. That’s partly because of the weight of lawsuits in the U.S. system.

Said Don Johnson, a government relations veteran with FedExExpress: “In corporate America, the lawyers rule. If you don’t have their endorsement, you can’t do much.”

Government Affairs Connections is one of six event series that WorldCity organizes to bring together executives on international business topics. The series is sponsored by oil and energy company Chevron. The next Government Affairs meeting is set for Oct. 22.

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