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Paraguay - Chile could be kicked out of the World Cup unless the Chilean club Rangers drops a court case by December 3 contesting its disputed demotion to the second division of the national soccer league.
CONMEBOL, the governing body of South American soccer, said on Thursday it was notified by FIFA about the possible sanction.
Rangers were deducted three points for using six foreign players - the limit is five - in a league match on November 8. The three points cost them relegation to the second division, and last week they appealed the case to a Chilean court.
Chile, which has not played in the World Cup since 1998, is one of five South Americans countries that have qualified for the tournament next year in South Africa.
Brazil, Paraguay, Argentina and Uruguay have also won through to the finals.
The appeal by Rangers has forced the Chilean league to suspend play in its postseason playoffs.
"If Rangers don't drop the case, then FIFA could expel (the national federation) because they can't expel a club," Harold Mayne-Nicholls, president of the Chilean federation, said on radio Agricultura. "This could bring consequences that would be deadly for Chilean football."
