Doing Business in Latin America How to support your business partners in a fluctuating political and economic environment

Speakers: o Luciano Dequech, General Counsel - Odebrecht Agroindustrial S.A. o Gonzalo Rovira, Regional IP & Licensing Strategy, Policy, Regulation and Government Lead Latin America & Brazil Region - Monsanto Company o Martín Castro, Legal & Public Affairs Manager - Bridgestone Argentina 2

Rank 1-38 Rank Rank Rank Rank topics : 1.Starting a business 2.Dealing with construction permits 3.Getting electricity 4.Registering property 5.Getting credit 6.Protecting minority investors 7.Paying taxes 8.Trading across borders 9.Enforcing contracts 10.Resolving insolvency Source: Doing business database – World Bank Group Ease of doing business 3

Source: Doing business database – World Bank Group There is a connection between the ease of doing business and the growth of a country Ease of doing business / Growth Momentum 4

What is the connection? It´s all about politics: open markets vs closed markets 5

Doing business in Latin America is like riding a roller coaster Why? 6

But despite the ups and downs, the growth is there… 7 The difference in GDP forecast varies depending on the source, but there is a growth

So, what can the Legal Department do to be a business partner?  Understand the political/economic environment  Preempt risks and to be a problem-solver by maximizing opportunities (SWOT analysis)  Litigation vs Negotiation  Be a Game-changer 8

General remarks Latin America is not one country, not even the Spanish-speaking ones. Personal relationships matter, everywhere. The importance of effective compliance programs (Ethics is also Corporate Social Responsibility). The evolution of the role of the In-House Counsel: Lawyer + Compliance + Public Affairs. Law outsourcing assessment: The importance of choosing the right law firm. Tips 9

Trade barriers Labor issues New regulations Compliance: antitrust, anti-bribery Enforcement of the law 10 Trending legal topics

How to deal with Trade Barriers? Closed markets Semi-closed markets Open Markets Mexico/Chile/Colombia/Peru: Trade Barriers reduced. Broad FTAs with North America, EU, Japan and some Latin American countries. Mexico: Deregulation in foreign investment, foreign trade, energy and telecommunications sector. Argentina in the 90s. Brazil: Permits to import. Automatic & Non-Automatic Licenses (WTO). Argentina: Permits to import. From Non-Automatic Licenses to certain products to DJAI (Advanced Affidavits) to import everything. WTO DS444 – Argentina Import Measures: What can we expect after Jan. 1 st 2016? Antidumping in the region. 11

How to deal with Labor issues? Labor laws: With certain exceptions (Chile) the region is becoming more and more protective - Labor Bill of Laws – The problem of work- related accidents and illnesses. Light Duty Assignments: An increasing issue in factories. Contract termination: Reinstatements in Argentina – candidates running for the position of union representative (immunity). Outsourcing: Joint and Several Liability. Precedent #331 of Brazil Superior Labor Court. Unions: Dealing with unions in the region. 12

How to deal with new regulations? Common Law vs Continental Law Consumer Protection Laws: regulation being more restrictive in the region - The cultural difference between US consumer and Latin American consumer - Class Actions – Price Observatory, regulations on supply. New Civil & Commercial Code in Argentina: New regulation of commercial channels (distribution, franchise) - the importance of negotiation. New Civil Procedure Code in Brazil: Practical tips to consider. Reinstatements: Reinstatements in Argentina – the issue of candidates running to be representatives of the union. 13

Corruption perception Index around the world 14

Corruption Perception Index in Latin America 15

How to deal with Compliance issues? Corruption: Broad anti-bribery laws and bill of laws almost everywhere since 2010: Law 12,846 in Brazil, Anti-corruption system reform in Mexico, Law 1474 in Colombia, Anti-corruption projects in Chile. Law 25,188 on Public Services in Argentina. Antitrust: Competition laws and projects almost everywhere since 2000: Law 25,156 in Argentina, Law 12,529 in Brazil, Colombia regime, Chile DL 211, Law 26,876 in Peru. Enforcement: It will always depend on politics. The importance of an independent judiciary. The risks of using Local Regulatory Authorities to maneuver economic policies in closed and semi-closed markets. 16

How to deal with Compliance issues? The importance of effective compliance programs:  Corruption and unethical business behaviors are cultural problems. To address them properly requires a cultural solution.  The importance of effective regional compliance programs (Corporate Social Responsibility): how to effectively spread the importance of an ethical behavior beyond the company.  Best practices in the region. 17

General remarks *The average time of enforcement might vary significantly per country Source: Doing business database – World Bank Group Is it worth filing a lawsuit? The importance of knowing the judicial/administrative precedents and the cultural environment of the country (again, politics) The advantage of settlements Enforcement 18

Stifling regulations Interventionism Increasing tax levies Threat of Corruption/Money Laundering despite recent regulations Closed markets Commodities boom helped governments to postpone reforms and unpopular measures, but now it might be the time for a deregulation Cultural problem, cultural solution = The importance of effective Compliance programs Huge profits / Time to invest General remarks Challenges Opportunities 19

General remarks Questions? Thank You! 20