USA – FLORIDA Trends and Developments Contributed by: Wifredo A. Ferrer, Barbara A. Martinez, Marcelo J. Ovejero and Oscar Alejandro Quiroz-Chávez, Holland & Knight LLP
Penalties under the AEDPA are severe. Individuals face up to 20 years of imprisonment and fines up to USD250,000 or double the gross gain or loss result - ing from the offence. Corporations face fines of up to USD500,000 per violation or double the gross gain or loss. These penalties, combined with the broad defini - tion of material support and expansive jurisdictional reach, make AEDPA violations a critical concern for companies operating in regions where designated cartels are active. Civil liability under the AEDPA In addition to criminal penalties, the AEDPA creates a private right of action that allows US nationals injured by acts of international terrorism to seek civil rem - edies. Plaintiffs may sue both designated cartels and those who facilitate their activities, including individu - als and entities who knowingly provide material sup - port. The civil cause of action, thus, incorporates the same broad definition of material support and knowl - edge requirements as the criminal provisions. The statutory framework provides for enhanced damages that make civil litigation particularly attrac - tive to plaintiffs. Successful plaintiffs are entitled to treble damages. Additionally, prevailing plaintiffs can recover attorney’s fees and litigation costs, remov - ing a significant barrier to bringing suit and poten - tially encouraging more private enforcement actions. The combination of treble damages and fee-shifting creates substantial financial exposure for companies found liable under the civil provisions. Civil litigation under the AEDPA also presents unique procedural challenges for defendants. Discovery in these cases can be extensive and intrusive, potentially exposing sensitive business information and compli - ance practices. Moreover, the emotionally charged nature of terrorism-related litigation can create unfa - vourable dynamics for corporate defendants, particu - larly in jury trials. Companies must therefore consider not only the direct financial exposure but also the reputational risks and litigation costs associated with defending against private AEDPA claims. Part II: corporate compliance Developing and updating policies and procedures
The designation of cartels as terrorist organisations calls for a fundamental review of corporate compliance programmes. Companies operating in Latin America, especially Mexico, must recognise that existing anti- corruption and anti-money laundering policies, while important, may not adequately address the unique challenges posed by anti-terrorism laws. The starting point for any effective compliance programme is the development or revision of policies and procedures that specifically address the risks of engagement (even if inadvertent) with designated cartels. Companies with existing compliance programmes should begin by conducting a gap analysis to identify areas where current policies may fall short of address - ing terrorism-related risks. This process should exam - ine whether existing policies adequately capture the broad definition of material support, the constructive knowledge standard, as well as the expanded juris - dictional reach of US anti-terrorism laws. Updating policy language to explicitly reference anti-terrorism laws and related cartel designations serves important purposes: it demonstrates corporate awareness of evolving legal requirements, provides clear guidance to employees, and can serve as evidence of good faith compliance efforts in any future enforcement proceedings. The policy development process should involve key stakeholders from across the organisation, including legal, compliance, operations, finance, and human resources. This cross-functional approach ensures that policies address practical operational realities while maintaining legal compliance. Policies should be written in clear, accessible language that employees at all levels can understand and implement. Technical legal requirements should be translated into practi - cal guidance that employees can apply in their daily activities. Regular review and updating of policies are essen - tial given the dynamic nature of cartel operations and evolving enforcement priorities. Companies should establish a formal review cycle, typically on an annual basis, but with provisions for interim updates when significant changes occur in the legal or operational environment.
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