Monday, December 10, 2012

Bolivia: Jailed US Business Executive Not Charged or Tried in 18 Months

As a follow-up to my November 27 posting, US Representatives Chris Smith (R-NJ) and Nydia Velazquez (D-NY), both responsible for the oversight of human rights issues, arrived in Santa Cruz late last week to seek the release of Jacob Ostreicher, a US businessman who has been  jailed since June 2011, and has neither been charged or tried.

Yet, from all indications the legislators will return to Washington without facilitating Mr. Ostreicher's release from prison, after the arrest on November 27 of a senior Interior Ministry attorney and five other Bolivian officials who reportedly demanded a US$50,000 bribe to secure his release.

COMMENT: Ostreicher first came to Bolivia in 2008, in conjunction with a "get-rich quick" scheme stemming from rice production, yet his failure to conduct effective due diligence on those he was working with resulted in his being arrested and jailed on money-laundering charges.

Since his arrest in June 2011, the US Embassy has essentially reported the status of Ostreicher's back to the US Department of State, with little success in alleviating his situation.

As I pointed out previously, American citizens who engage in business operations abroad, particularly in developing nations, are well-advised to minimally do the following before finalizing any business deal:

1. Hire a reputable US-educated law firm experienced in doing business in the country you've decided to operate in;

2. Hire a reputable US-educated accounting firm with tax experience in the country you've decided to operate in;

3. Have someone you impeccably trust conduct a thorough due-diligence work-up on your partners, distributors, employees, etc.;

4. Brief the US Commercial Attaché in the country you're planning to operate in to ensure that you fully understand what you're getting into; and

5. Avoid all business ventures which you have no business experience in.

As I have often said, if you engage in a business venture in a developing nation, you should cross ever "T" and dot every "I" and depend solely on your own resources, for if you get into a BIG legal jam, don't expect the US Government to help you get out of it.