The prospect of sustained economic growth in certain Latin American countries has continued to attract the interest of international investors. However, the region's well-chronicled history of public corruption has caused potential investors--particularly those from the United States and Europe--to approach such opportunities with a healthy dose of skepticism.
One need not look far into the past to find examples of public corruption investigations by U.S. authorities. In December 2010, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) reached a $137 million settlement with Alcatel-Lucent, S.A., relating in part to alleged illicit payments to former Costa Rican President Miguel Angel Rodriguez. In November 2011, Brazil-based aircraft manufacturer, Embraer, S.A., announced that it is cooperating with the SEC and the DOJ in an investigation of potential Foreign Corrupt Practices Act (FCPA) violations involving its activities in several Latin American countries. In March 2012, Biomet Inc. agreed to pay more than $22 million to settle SEC and DOJ charges relating to alleged bribes to publicly employed physicians in Argentina, Brazil and China. And in the most high-profile example in recent years, Wal-Mart announced in May 2012 that the SEC and DOJ would investigate possible FCPA violations relating to alleged payments by Wal-Mart de Mexico in connection with permits and licenses necessary to facilitate the growth of its business in Mexico.
While U.S. authorities have perhaps been the most aggressive--and most vocal--in their pursuit of anti-corruption investigations around the globe through enforcement of the FCPA, the United States does not stand alone. The UK's Bribery Act of 2010, which prohibits bribery of foreign officials as well as commercial bribery, promises to usher in a new era of anti-corruption enforcement by UK authorities. Many countries in Latin America have recently responded to this global trend and are considering new legislation, or enhancing existing laws, to bolster anti-corruption enforcement.
In Brazil, for example, lawmakers have been debating--and are likely to enact--legislation that would permit the government to bring criminal charges against companies for bribing public officials. Current law only permits the prosecution of individuals. As another important step, Brazilian legislators have also approved the Ficha Limpa Law, which prohibits politicians with criminal convictions from running for office for eight years. …