As Brazil takes the world stage for the 2014 FIFA World Cup and, shortly thereafter, for the 2016 Summer Olympics — the third to be held in a BRIC country in a decade — the governments of Brazil, Chile and other leading Latin American economies are increasingly responding to calls from their people and the international community for increased anti-corruption efforts and transparency. Though it remains to be seen to what extent new anti-corruption regulations will change the status quo in Latin America — where public corruption in many countries is common and, until now, enforcement investigations targeting complex international schemes have been limited — corporations with significant business in Latin America would be wise to prepare for a new era of increased local enforcement.

Public corruption remains a reality in several of Latin America’s largest economies, and progress toward combating such corruption has proven slow. Transparency International’s global Corruption Perceptions Index 2013, which measured the perceived levels of public sector corruption in 177 countries and territories, ranked Brazil at No. 72 overall, lagging behind Uruguay (No. 19), Chile (No. 22) and Costa Rica (No. 49), but notably ahead of Argentina and Mexico (tied at No. 106). Both Chile and Mexico have taken initial steps to combat international public corruption and have become members of the Organization of Economic Cooperation and Development (OECD), while non-members Argentina, Brazil and Colombia have also adopted the OECD’s Anti-Bribery Convention, a prerequisite to membership that requires signatories to criminalize bribery of foreign public officials in international business transactions.

Despite significant steps toward greater international cooperation and the adoption of enhanced anti-bribery laws, such efforts have not yet translated into regular enforcement actions to combat international corruption. One common challenge to developing effective anti-corruption systems is the decentralization of enforcement responsibilities between federal and local agencies, resulting in a lack of coordination that has hindered enforcement investigations. For example, the OECD Working Group on Bribery reported that, in the eight years since Brazil criminalized the bribery of foreign officials as required under the Convention, it had not yet successfully prosecuted a single person or entity for a foreign bribery offense. Indeed, Transparency International’s most recent Progress Report noted that Brazil commenced only four investigations in 2012.

Nonetheless, signs point to these initial growing pains giving way to greater anti-corruption enforcement. For instance, Brazil, already a member of the OECD’s working Group on Bribery (composed of 39 countries, including Argentina, Chile, Colombia and Mexico), recently qualified for “Enhanced Engagement” and is now a “Key Partner” of the OECD. Most recently, Brazil’s enactment of the Clean Companies Act, effective as of Jan. 29, 2014, quickly gained the attention of the international business community. For the first time, both Brazilian companies and multi-nationals operating in Brazil may be subject to severe civil and administrative sanctions for bribery of domestic or foreign public officials. The Act broadly defines prohibited conduct, imposes strict liability for violations, and, unlike the FCPA, does not except so-called “facilitation payments” from liability. Potential sanctions may constitute 20 percent of the company’s gross revenue, suspension or dissolution of the company, and other civil penalties. The Act affords significant benefits to companies with strong internal compliance programs and protections. Companies that voluntarily self-report misconduct and cooperate with Brazilian authorities may also qualify for leniency, resulting in reduced fines and other potential sanctions.

Given the institutional hurdles facing Brazil and other Latin American countries in applying and enforcing new anti-corruption legislation, authorities will likely respond to international pressure to increase their foreign anti-corruption efforts by improving their cooperation with investigations led by U.S. and other foreign authorities. In a December 2013 interview with the Thomson Reuters Foundation, Hamilton Cota-Cruz, Brazil’s Director of Integrity, International Cooperation and Agreements for the Office of the Comptroller General, recognized Brazil’s newfound opportunity to access the benefits of international cooperation, remarking that “as soon as we can gather information that is in the hands of the West and share evidence, we can get some traction.” With new tools to combat foreign corruption, there is little doubt that companies facing potential compliance issues related to conduct in Brazil are now facing the additional threat of enforcement by eager Brazilian authorities.

Regardless of the uncertainty surrounding the scope and intensity of anti-corruption efforts in Latin America, the governments of the leading Latin American economies are clearly focused on the issue and have taken concrete measures to address it. Corporations doing business in Latin America need to be aware of the new legislative reforms and the increased cooperation between Latin American and U.S. regulators in order to put themselves in the best position moving forward.