Mon, Nov 23, 2015
Brazil has a broad portfolio of opportunities in industries such as agribusiness, oil and gas, energy and, predominantly, infrastructure. All of these industries are to a different extent influenced or controlled by the Brazilian government, and as a result are intertwined with Brazilian politics. This makes it more challenging for foreign investors to enter the markets and to navigate an unfamiliar political environment.
During this past year, Brazil has seen a colossal shift of the corporate and political landscape as a result of the highly publicized prosecution of corruption involving Brazil’s oil giant, Petrobras, and the key players within the construction industry. The prosecutions have involved top executives at most of the companies in these promising industries as well as government officials in high-level positions. The prosecutions were the culmination of a mission to fight corruption that was started years ago and were preceded by the passing of Brazil’s Anti-Corruption Law. Both events have been instrumental in changing the way Brazilian companies face and deal with corrupt conduct.
Despite the economic and political turbulence that Brazil is undergoing at the present—economic indicators are not as favorable as those of eight years ago and there is speculation whether or not the president will complete the end of her term—foreign investors remain interested in Brazil. Some even claim that this is a better time to invest than five or eight years ago, as the prices of Brazilian assets are attractive to investors from the U.S., Europe and Asia due to the devaluation of the real.
A key concern for foreign and local investors and their corporate management is preventing their business from becoming entangled in any corrupt activities and the attendant legal and financial liabilities and reputational damage. Kroll has seen a significant increase in awareness as well as efforts by companies to establish sound policies aimed at preventing and detecting corruption.
While multinational companies have been at the forefront in implementing compliance programs worldwide, and especially in Brazil after the passage of the Brazilian Anti-Corruption Law, Brazilian companies have been quickly trying to catch up by implementing compliance programs or improving their existing policies and procedures.
Our Insights
Based on our experience in Brazil, three key elements of an effective corporate compliance program include:
Learn more about fraud statistics and trends in Kroll’s annual Global Fraud Report.
The Kroll Investigations, Diligence and Compliance team partners with clients to anticipate, detect and manage regulatory and reputational risks associated with global ethics and compliance obligations.
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