BRASILIA (Reuters) - Brazil has started to watch its multinational companies for corrupt practices they might commit in other countries in the wake of a massive bribery scandal at home, the nation's top anti-corruption official told Reuters.
Six years after encouraging homegrown conglomerates to expand beyond Brazil with cheap credit and eased regulatory rules, the government is now moving to ensure they are complying with international transparency and corporate governance standards.
Brazil Comptroller General Valdir Simão said his office, known as the CGU, has begun to gather information on Brazilian firms operating abroad and is in talks with US authorities to enter a cooperation agreement to fight corporate corruption.
"We are drawing up a map of where Brazilian companies are present, in which markets and what economic activities, to identify the areas of most risk and decide which countries to sign bilateral agreements with," Simão told Reuters in an interview this week.
Brazilian authorities are already exchanging information with the US Department of Justice and the US Securities and Exchange Commission in the investigation of the bribery scandal that has engulfed state-run oil company Petróleo Brasileiro SA, or Petrobras, he said.
Brazilian companies rapidly expanded overseas in recent years, buying foreign rivals in the meat, beer and mining sectors, propelled by a boom in the world's seventh-largest economy and low interest loans from Brazil's development bank, BNDES.
They also enjoyed regulatory leniency at home that allowed them to expand and consolidate without facing antitrust issues in Brazil.
The CGU is preparing to deal with cases of international bribery that might involve Brazilian companies in other countries, Simão said.
A pact with the United States is vital even if companies are not based there because most international business is conducted in US dollars and could be under US jurisdiction, he added.
Many of the companies involved in the Petrobras scandal have shares listed or bonds issued in the United States, making them subject to the US Foreign Corrupt Practices Act.
Brazil is striving for greater international transparency as it reels from the biggest corruption scandal in its history. Dozens of executives from top Brazilian construction and engineering firms have been arrested for allegedly paying bribes to Petrobras executives and kickbacks to politicians in President Dilma Rousseff's governing coalition.
The CGU is currently negotiating leniency settlements with seven of the 29 Brazilian builders implicated in the Petrobras scandal, which would allow them to bid for future government contracts in return for admission of guilt, reparation of financial damages and payment of fines.
"We expect to conclude most of these negotiations by the end of the year," Simao said.
Other companies, such as Brazil's largest engineering firm Odebrecht SA, have so far declined to negotiate with the CGU. They could be penalised if corruption is proven and barred from federal, state and municipal government contracts for two years.