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levels of corruption, drawing on a variety of polls and other corruption-related data. For 2014, Transparency International ranked Brazil 69 th out of 175 countries in terms of corruption perception. For the record, Can- ada ranked 10 th . (Transparency International was scheduled to produce the 2015 numbers just as this article went to print.) Will Brazil's new strict anticorruption sys- tems help the country improve its position in the index? Mota Prado is hopeful that they will. "Transparency International in many of its reports has said Brazil's problem was a lack of punishment. We caught corruption in the past and there were massive scandals, but we rarely managed to punish anybody. This new law changes the dynamic." PETROBRAS' ONGOING SAGA Perhaps not surprising given the sheer ex- tent of the situation, the Petrobras story continues to unfold. In December 2015, The Associated Press reported that the Brazilian government was investigating 21 compa- nies and 59 Petrobras executives for alleged involvement in a cartel to fi x the terms and prices for contracts between the company and contractors. Other reports say it's one of the world's largest corruption cases, in- volving companies not only in Brazil but also Norway, Italy, and other nations. Don't forget: Petrobras isn't the only scandal underway. Look at what happened in São Paulo with its passenger rail project. According to the Financial Times, in Decem- ber 2014, Brazilian police indicted 33 people and seized R$600 million in assets from six companies including German engineering fi rm Siemens and French train maker Al- stom following an investigation into collu- sion to win contracts to build the rail sys- tem. Like Petrobras, this problem involved politicians accused of co-operating with the construction cartel. Bombardier Inc. was implicated, too. According to The Globe and Mail in March 2014, Brazilian prosecutors charged execu- tives from the transportation arm of that Canadian company with participating in the collusion. At the time, a spokesman said Bombardier operates ethically and that the four employees named in the charge no lon- ger work for the organization. These crackdowns may expose Brazil to unwanted international scrutiny, but the results could be positive. As Barutciski says: "You now have senior politicians and administrators who were appointed politi- cally and who got into the game of extract- ing personal wealth — and they're being fl ushed out. That will have a sobering effect on those who are tasked with taking their places. The next generation says, 'We don't want to go down that road.'" Indeed, these corruption cases could count as the latest in a number of steps toward a fair and reasonably competitive marketplace. But the question remains: Is Brazil doing enough to create a positive foreign-investment envi- ronment? Boscariol points out that the coun- try has no foreign-investment protection and promotion agreement in place with Canada. FIPAs bind a country to protect investors from another nation. Under a Brazil-Canada FIPA, if a Canadian company invested in Brazil, and Brazil expropriated that invest- ment or discriminated against the invest- ment, the company would have the right to sue Brazil. FIPAs are common, Boscariol says. "We have them in place with more than 20 countries around the world including many in Latin America, but Brazil has been reluctant to ratify these agreements." He explains why: Brazil saw what happened to Argentina. In the late 1990s, that country ran into signifi cant economic trouble — and since then, it has been subject to a num- ber of investor-state claims under FIPAs, largely lawsuits from organizations that saw the value of their investments in Argentina devalued as the country enacted measures to manage an economic depression. Brazil doesn't want investors to be able to make the same sorts of claims. All that said, Brazil is taking a new, per- haps more mature approach to investment protection. The government has started to enter into co-operation and facilitation in- vestment agreements with other nations, signing with Mexico in 2015, and with Angola and Mozambique in 2014. CFIAs include provisions on non-discrimination, expropriation, corporate-social responsibil- ity, and other matters. But these agreements don't allow investors to sue the govern- ment. Brazil still seems reluctant to provide for fi nancial recovery through the courts, Boscariol says. Yet the country apparently recognizes "that they have to create a stable investment environment, and part of that is entering into these agreements to assure in- vestor protection." Brazil's corruption crackdown also fol- lows similar action in other states. "It's what we've seen in the last few years with China, now Brazil, and even with Cuba: Countries are stepping up enforcement of their own domestic corruption laws," Boscariol says. "The message we're giving clients now is: It's not just the Canadian, the U.S., and the U.K. laws you have to worry about. You need to understand the requirements of local law, too. And even if you perceive a local practice of engaging in corrupt activity, you have to make sure you comply with the law, not the custom." NEXT STEPS FOR CANADIANS IN BRAZIL In that Brazil's anticorrup- tion law requires com- panies to run anticor- ruption systems, Boscariol is worried. the U.S., and the U.K. laws you have to worry about. You need to understand the requirements of local law, too. And even if you perceive a local practice of engaging in corrupt activity, you have to make sure you comply with the law, not the custom." NEXT STEPS FOR CANADIANS IN BRAZIL In that Brazil's anticorrup- tion law requires com- panies to run anticor- ruption systems, Boscariol is worried. Whether there's a change in the way business is done here for the better will really ultimately depend on the perception that corrupt conduct has been punished regardless of who committed it. GLENN FAASS, Norton Rose Fulbright LLP '' ''

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