Compliance and Investigations: the highlights that marked July 2026

Organized crime and Compliance: Cartels increase regulatory risks and drive the need for stronger corporate controls

Recent international investigations have intensified scrutiny of companies exposed, directly or indirectly, to cartels and criminal organizations. This scenario underscores the importance of enhanced due diligence, third-party monitoring, and integrated anti-corruption, AML/CFT, and sanctions controls.

Anti-corruption agenda reinforces the trend toward stronger governance and integrity in the public sector

A new set of anti-corruption recommendations highlights the growing importance of governance, transparency, internal controls, and risk management practices within the public sector.

French Anti-Corruption Agency’s first direct sanction raises the alert on internal controls

The French anti-corruption authority’s unprecedented sanction reinforces that regulators are increasingly focused on the effectiveness of compliance programs, rather than merely the formal existence of policies and procedures.

Supply chain compliance gains prominence amid the expansion of international investigations

The increased enforcement of international trade regulations has heightened the importance of risk management, supplier due diligence, and effective governance across supply chains.

Authorities reinforce the importance of transparency and corporate cooperation

An international decision underscores the quality of the information provided and data governance as central elements of an effective compliance program, capable of ensuring meaningful cooperation with authorities.

Record penalty reinforces the need for effective anti-money laundering controls

One of the largest penalties ever imposed for anti-money laundering compliance failures highlights the increasing regulatory expectations regarding the monitoring of high-risk customers, the identification and escalation of red flags, and the overall effectiveness of financial crime compliance programs.

CGU Observatory

The administrative proceedings (PARs) initiated in July 2026 demonstrate the continued focus of Brazilian authorities on misconduct involving procurement and public contract fraud, improper payments, preferential treatment of third parties, the use of intermediary entities, financing of unlawful acts, and obstruction of government oversight and investigative activities. This landscape underscores the importance of strengthening internal controls, corporate governance frameworks, and risk management processes for organizations that engage with the public sector.

National Highlights

Organized crime and Compliance: Cartels increase regulatory risks and drive the need for stronger corporate controls

Two recent international investigations highlight an important trend for companies across a wide range of industries: the increasing convergence of anti-corruption, anti-money laundering, sanctions, and organized crime compliance frameworks. Authorities are intensifying scrutiny of business activities that may directly or indirectly benefit criminal organizations, raising expectations regarding compliance programs and third-party risk management.

On one hand, investigations involving money laundering and the activities of criminal groups in Brazil, combined with the designation of certain organizations as terrorist entities by foreign authorities, have prompted companies to reassess their customer due diligence procedures, business partner monitoring practices, and mechanisms for mitigating financial and reputational risks.

On the other hand, U.S. authorities recently reached a significant settlement in a transnational corruption case involving improper payments made through intermediaries, a portion of which allegedly reached individuals linked to Mexican cartels. The case demonstrates that even indirect connections between business operations and criminal organizations can substantially increase regulatory scrutiny and corporate risk exposure.

Taken together, these cases demonstrate that risk assessments can no longer be limited to traditional anti-corruption reviews. Organizations are increasingly expected to adopt an integrated compliance approach that includes enhanced third-party due diligence, integrity assessments, transaction monitoring, sanctions-related controls, and procedures capable of identifying potential links to criminal organizations.

For companies, this evolving landscape underscores the importance of periodically reviewing compliance programs, particularly in operations involving intermediaries, complex supply chains, cash-intensive sectors, or activities with heightened exposure to organized crime risks. The implementation of robust preventive controls remains one of the most effective tools for mitigating regulatory, financial, and reputational risks in an environment of increasingly rigorous enforcement and oversight.

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Anti-corruption agenda reinforces the trend toward stronger governance and integrity in the public sector

Transparency International Brazil has published an agenda containing 40 recommendations aimed at strengthening transparency, integrity, and anti-corruption mechanisms within state governments. The proposals cover a range of topics, including internal controls, risk management, whistleblower protection, transparency in parliamentary budget amendments, the strengthening of internal oversight bodies, public participation, and enhanced accountability mechanisms.

Although directed at the public sector, these recommendations reflect broader regulatory and governance trends that directly affect private organizations engaged with government entities. The document highlights increasing expectations for more robust integrity frameworks, greater transparency in public contracting, improved traceability in the use of public resources, and effective mechanisms for preventing, detecting, and responding to misconduct.

From a compliance perspective, the initiative underscores the importance of implementing effective integrity programs, with particular emphasis on whistleblowing channels, conflict-of-interest management, third-party due diligence, continuous risk monitoring, and strengthened internal controls.

As the anti-corruption agenda continues to evolve, organizations that invest in governance and a culture of integrity will be better positioned to meet regulatory expectations, mitigate reputational risks, and demonstrate compliance to public authorities, investors, and business partners.

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International Highlights

French Anti-Corruption Agency’s first direct sanction raises the alert on internal controls

The French Anti-Corruption Agency (AFA) has, for the first time since its creation, imposed a direct financial penalty on a company and its legal representative for failures in the implementation of mandatory anti-corruption measures. The decision marks a significant shift in the French regulatory approach, demonstrating that authorities may impose financial sanctions without necessarily granting a prior remediation period to address identified deficiencies.

The inspection identified weaknesses in fundamental elements of the company’s integrity program, including risk mapping, third-party due diligence, anti-corruption accounting controls, training, monitoring mechanisms, and internal assessment procedures. The case reinforces the principle that the mere existence of corporate policies is not sufficient; organizations must be able to demonstrate their effective implementation and practical operation.

From a compliance perspective, the decision reflects a broader global trend toward heightened regulatory expectations regarding the effectiveness of integrity programs. Anti-corruption authorities are increasingly focused not only on the occurrence of misconduct, but also on an organization?s ability to prevent, detect, and appropriately respond to corruption risks.

This precedent serves as a warning for multinational companies and organizations operating under multiple regulatory regimes, highlighting the importance of conducting periodic compliance program maturity assessments, testing the effectiveness of internal controls, reviewing due diligence processes, and continuously enhancing risk management mechanisms.

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Supply chain compliance gains prominence amid the expansion of international investigations

The U.S. Department of Justice (DOJ) has announced an intensified enforcement effort targeting fraud related to international trade, signaling a shift toward greater reliance on criminal investigations and accountability measures across the entire supply chain. The initiative follows the achievement of more than US$1 billion in recoveries, penalties, forfeitures, and charged losses by the government?s specialized trade fraud task force in less than one year of operation.

Authorities are focusing on practices such as false customs declarations, tariff evasion, fraud involving country-of-origin designations, violations related to forced labor, and other misconduct that may undermine the integrity of international trade. Enforcement efforts are also extending beyond importers to include distributors, intermediaries, customs brokers, and other participants throughout the logistics chain.

The heightened enforcement environment underscores that governance failures in commercial operations can result in significant regulatory, financial, and reputational consequences. More broadly, the initiative reflects a global trend toward greater integration of compliance, international trade, human rights, and third-party risk management considerations, requiring organizations to adopt increasingly proactive and risk-based approaches to their operations and business relationships.

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Authorities reinforce the importance of transparency and corporate cooperation

A financial institution was fined US$50 million by the New York State financial regulator after authorities concluded that it failed to provide complete and accurate information in the context of a governmental investigation. According to the regulator, the penalty was not based on the underlying conduct originally under review, but rather on the institution’s failure to cooperate fully and transparently with information requests and supervisory inquiries.

The case reinforces a significant trend in the global regulatory landscape: growing expectations regarding transparency, timeliness, and full cooperation during audits, inspections, and investigations. Regulators are increasingly willing to sanction not only the underlying misconduct being investigated, but also actions that undermine the effectiveness of supervisory and investigative processes.
From a compliance perspective, the decision highlights the importance of robust governance frameworks for managing internal investigations, preserving documents, producing regulatory information, and engaging with authorities. Organizations must ensure that their processes for responding to regulatory requests are accurate, coordinated, and well-documented.

In its decision, the regulator concluded that the institution failed to provide relevant information requested during the investigation, including data related to certain transactions, customers, and foreign subsidiaries. According to the authorities, omissions and responses deemed incomplete impaired regulatory oversight and hindered the proper assessment of the risks under investigation, ultimately leading to the imposition of a financial penalty.

The case also demonstrates that the effectiveness of a compliance program is assessed not only by its ability to prevent misconduct, but also by how an organization responds when subjected to regulatory scrutiny. Transparent cooperation and strong internal investigative processes have become essential components of modern regulatory expectations.

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Record penalty reinforces the need for effective anti-money laundering controls

A recent enforcement action by U.S. authorities reinforces growing regulatory expectations regarding the effectiveness of anti-money laundering (AML) compliance programs. The penalty, reportedly the largest ever imposed by the Financial Crimes Enforcement Network (FinCEN) for violations of the Bank Secrecy Act, stemmed from recurring failures to identify, monitor, and appropriately escalate risks associated with high-risk customers.

According to regulators, the deficiencies included significant weaknesses in transaction monitoring processes and the timely identification of red flags, allowing higher-risk relationships and transactions to continue without adequate review. The case also drew attention because it involved allegations of repeat regulatory failures, a factor that often increases regulatory scrutiny and significantly heightens institutions’ financial and reputational exposure.

The enforcement action reflects a broader global trend toward more stringent supervision of AML/CFT controls, particularly in areas such as high-risk customer management, economic sanctions compliance, transaction monitoring, and compliance governance. Regulatory authorities increasingly expect organizations to maintain robust frameworks capable of identifying, investigating, and mitigating risks before they result in regulatory breaches.

For organizations, the case highlights the importance of periodically reviewing AML/CFT programs, properly calibrating transaction monitoring systems, strengthening due diligence processes, and conducting independent assessments of control effectiveness. In this context, compliance audits, governance reviews, regulatory compliance testing, and proactive internal investigations have become essential tools for mitigating regulatory, financial, and reputational risks.

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CGU Observatory

In July 2026, the administrative proceedings initiated by the Office of the Comptroller General (CGU) involved several public entities under its oversight for the purpose of opening Administrative Accountability Proceedings (PARs).

Authorities Involved:

_ Office of the Comptroller General

_ Ministry of Transport

_ Ministry of Finance

Subject Matter of the Allegations:

_ Self-dealing or favoritism toward third parties, including the improper granting of benefits, licenses, or authorizations;

_ Financing, funding, sponsorship, or subsidization of unlawful acts under the Brazilian Anti-Corruption Law (Law No. 12,846/2013);

_ Unethical conduct, irregularities, or fraud in public procurement procedures and government contracts;

_ Offering or making improper payments or advantages, directly or indirectly, to public officials or related third parties;

_ Financing, funding, sponsorship, or subsidization of unlawful acts under the Brazilian Anti-Corruption Law (Law No. 12,846/2013);

_ Obstructing or interfering with investigations, audits, or oversight activities conducted by public authorities or government officials.

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