Anti-Corruption

Last verified on Thursday 18th October 2018

Brazil

Ana Maria Belotto and Mariana Tumbiolo Tosi
Feldens Madruga

    Laws

  1. 1.

    What laws or regulations in your jurisdiction prohibit the offering, payment or receipt of bribes by: domestic government officials; foreign government officials; or other individuals, such as commercial counterparties?

  2. Promising, offering or paying bribes (“undue advantages”) to government officials to cause them to conduct, omit or delay an official act is defined as the crime of active corruption under article 333 of the Brazilian Criminal Code. The acceptance of such bribes (undue advantage) by the government official, in turn, constitutes the act of passive corruption under article 317. 

    Additionally, since 2002, through article 337-B of the Brazilian Criminal Code, acts of active corruption were extended to relations with foreign government officials through the offence of active corruption in an international commercial transaction – “promise, offer or give, directly or indirectly, and undue advantage to a foreign government official, or to a third-party, to cause him to conduct, moot or delay an official act”.

    In general, however, apart from environmental crimes, legal entities are not subject to criminal liability under Brazilian law. Therefore, the offences above are only attributable to individuals.

    Legal entities may, nevertheless, face civil and administrative liability for offering or paying bribes under Law No. 8,429/1992 – Administrative Improbity Law and Law No. 12,846/2013 known as the Clean Company Act. 

    The Administrative Improbity Law punishes acts against the public administration that: (i) cause the illicit enrichment of government officials or damages to the public coffers; (ii) arise from the undue concession or application of a financial or tax benefit; or (iii) are against the principles of public administration. 

    Although the administrative improbity law is focused on the act of improbity by government officials, article 3 extends its terms to anyone who “induces or participates in the act of improbity or benefits from the act in any manner, directly or indirectly”. 

    The administrative improbity law is applicable on individuals and corporate entities, establishing civil sanctions that may include disgorgement of profits and debarment to participate in contracts with government entities for up to 10 years. 

    The Clean Company Act is a newer law that entered into force in 2014 with the specific objective of imposing strict civil and administrative liability against legal entities involved in acts against national and foreign government administrations, as listed in its article 5, including to “promise, offer or give, directly or indirectly, an undue advantage to a government agent, or to a third party related [to the government agent]”. 

    Unlike the criminal offences of corruption, there is no requirement of an intent to cause the government official to conduct or delay an official act for a violation of the Clean Company Act to take place. 

    There are no specific offences of private or commercial bribery under Brazilian law. Depending on the facts, such as the use of fraudulent means, acts of commercial corruption may configure other crimes under Brazilian law. However, for an act to constitute corruption, there must necessarily be the involvement of a government official, either domestic or foreign.

  3. 2.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to corporate entities, whether based principally in your jurisdiction or elsewhere?

  4. As explained above, except for environmental crimes, corporate entities are not subject to criminal liability under Brazilian law. They may, however, face civil and administrative liability for acts of corruption.

    Law No. 12.846/2013, known as the Clean Company Act, specifically imposes strict civil and administrative liability against legal entities for acts against the national government institution (public administration) as well as against foreign government institutions. 

    Article 1 of the Clean Company Act establishes that its provisions apply to Brazilian corporate entities as well as foreign corporate entities that have set up their main office, a branch or representative office in the Brazilian territory, even if on a temporary basis.

  5. 3.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to individuals, whether resident in your jurisdiction or elsewhere?

  6. In general, Brazilian criminal law is territorial and applicable on acts conducted or that produce effects in the Brazilian territory by either Brazilian nationals, foreigners or foreign residents. Under certain circumstances, however, the law may indicate situations of extraterritoriality for acts outside of Brazil, such as the case of active corruption in an international commercial transaction, article 337-B of the Brazilian Criminal Code.

  7. 4.

    How do the anti-corruption laws in your jurisdiction define foreign government officials?

  8. The definition of foreign government officials under Brazilian law is broad. Under both the Clean Company Act and the Criminal Code, employees of state-owned companies and public international organisations are included in the concept of foreign government officials.

    The Clean Company Act defines the concept of “foreign public administrations” as “public agencies and entities, or diplomatic representations of a foreign country, at any governmental level or scope, as well as legal entities directly or indirectly controlled by the government of a foreign country”. Further, it establishes that, “international public organisations will be considered equivalent to foreign public administration bodies”.

    Article 5 of the Clean Company Act goes on to establish that “those who, even if transitorily or without compensation, hold a public position, job or office in government agencies and entities, or in diplomatic representations of a foreign country, as well as in legal entities directly or indirectly controlled by the government of a foreign country, or in international public organisation, will be considered foreign public agents.”

    Similarly, article 337-D of the Brazilian Criminal Code defines a foreign government official as one who “even if transitorily or without compensation, holds a public position, job or office in government agencies and entities, or in diplomatic representations of a foreign country”. The definition also states that it is “equivalent to a foreign government official one who holds a position job or office in legal entities directly or indirectly controlled by the government of a foreign country or in international public organisations”.

  9. 5.

    What level of knowledge or intent is required to prove a violation of the anti-corruption laws in your jurisdiction?

  10. Corruption is an intent crime and the prosecution must prove that an individual knowingly and wilfully caused the result, either by an act or by an omission.

    The burden of proof of a civil action of administrative improbity requires the prosecution to demonstrate that the individual or legal entity willfully induced or assisted in the act of improbity of the government agent (ie, wrongful enrichment) or knowingly benefited from such act, directly or indirectly.

    Finally, under the Clean Company Act, corporate entities are strictly liable, regardless of their knowledge or intent, for wrongful acts that are conducted in their interest or for their benefit, either exclusive or not. The corporate entity will be held liable irrespective of the individual liability of directors, officers, representatives or any other individual who is the offender, co-offender or participant in the wrongful act.

  11. 6.

    Do the anti-corruption laws in your jurisdiction prohibit facilitating payments? (That is, small payments to expedite or to secure the performance of a routine government action to which a company is entitled, such as obtaining permits, processing visas, utility services, customs clearance, police protection.)

  12. Yes. Any payment, present, favour or any undue advantage that is promised, offered or given to a public official for him or her to conduct, delay or omit an official act will be considered illegal under Brazilian law, regardless of the value. This includes small payments to expedite or secure actions that in themselves may be legal.

    Also, as mentioned above, under the Clean Company Act there is no requirement that the undue advantage is given to cause the government official to conduct or delay an official act. The mere act of promising, offering or giving undue advantages is considered illegal.

  13. 7.

    What affirmative defences are available with respect to the anti-corruption laws in your jurisdiction?

  14. In general, there are no affirmative defences with respect to anti-corruption laws.

    Individuals and legal entities may eventually claim that the criminal conduct must be excused because they were extorted into making the illicit payments. 

    Throughout the Operation Car Wash, discussed in detail below, several companies and individuals have tried to claim an extortion excuse and the allegations did not succeed in Brazilian courts.

  15. 8.

    What are the maximum potential fines or other penalties for violating the anti-corruption laws in your jurisdiction?

  16. Individuals found guilty of acts of corruption may face two to 12 years of imprisonment and a pecuniary fine. The penalty may be increased by one-third if, due to the bribe (undue advantage), the government official delays, omits or conduct an official act in violation of his or her duties. 

    In the case of active corruption in an international commercial transaction, the penalty is from one to eight years imprisonment and a pecuniary fine.

    Under the Clean Company Act, the highest penalty for administrative liability is of (i) 20 per cent of the gross revenue earned by the corporate entity during the fiscal year prior to the filing of the administrative proceedings, excluding taxes, which shall never be lowers than the advantage obtained by the corporate entity, when it is possible to estimate it; and (ii) the publication of the condemnatory decision.

    If it is not possible to adopt a criterion regarding the value of the corporate entity’s gross earning, the applicable fine will range from 6,000 Brazilian reais to 60 million Brazilian reais.

    Civil liability under the Clean Company may lead to (i) loss of the assets, rights or valuables representing the advantage or profit directly or indirectly obtained from the wrongdoing, except for the right of the damaged party or of third parties in good faith; (ii) partial suspension or interdiction of the activities of the corporate entity; (iii) compulsory dissolution of the corporate entity, under specific situations; and (iv) prohibition from receiving incentives, subsidies, grants, donations or loans from public agencies or entities and from public financial institutions or government-controlled entities from one to five years.

    Under the Administrative Improbity Law, individuals and legal entities may also be subject to (i) disgorgement of the profits obtained from the illicit conduct; (ii) a civil fine of up to three times the amount earned by the government official and (iii) prohibition from entering into contracts and to receive incentives from government institutions for up to 10 years.

  17. 9.

    Is there any pending legislation related to anti-corruption in your jurisdiction?

  18. The Clean Company Act of 2013 is the latest anti-corruption legislation passed in Brazil.

    Enforcement

  19. 10.

    Are corporate entities and individuals that violate the anti-corruption laws in your jurisdiction subject to criminal, administrative or civil liability, or a combination thereof?

  20. Individuals may be subject to criminal, civil and administrative liability under Brazilian law. As for corporate entities, as previously indicated, except for environmental crimes, they are not subject to criminal liability although they may face civil and administrative liability for acts of corruption. 

    Administrative liability will be ruled through an administrative proceeding before government bodies. Criminal and Civil liability claims are brought before competent courts.

    In general, harsher enforcement actions such as searches and the seizure of assets come from criminal investigations and procedures. In that sense, although not subject to criminal liability, corporate organisations may face such actions in the ambit of criminal investigations and proceedings against related individuals.

  21. 11.

    Which prosecutors or other government agencies may bring enforcement actions under your jurisdiction’s anti-corruption laws?

  22. The Clean Company Act may lead to administrative proceedings conducted by the highest authority of the interested government agency from the executive, legislative or judiciary branches or by the Ministry of Transparency and General Controller (CGU), and to civil judicial actions brought by the federal or state prosecution (Ministério Público).  

    Under the Administrative Improbity Law, civil judicial enforcement actions may be brought by federal and state prosecution as well as by the Solicitor General (AGU), before federal or state court. 

    Acts of corruption may also lead to repercussions and investigations before the Federal Audit Court (TCU) and the federal tax authorities (Receita Federal).

    Criminal action is, in turn, brought by the federal or state prosecution, before federal or state courts.

  23. 12.

    Have any multinational corporations or their domestic subsidiaries been subject to enforcement actions in your jurisdiction for domestic or foreign bribery violations?

  24. Yes. For the past few years, Brazilian authorities have intensified enforcement actions against companies doing business in Brazil that are involved in acts of corruption, including against foreign multinationals doing business in Brazil and Brazilian multinationals acting abroad. This has happened for the most part within Operation Car Wash.

    Operation Car Wash is a broad criminal investigation, initiated in 2014 by Brazilian federal law enforcement authorities (Federal Prosecutors and Federal Police) in the Brazilian southern state of Paraná (city of Curitiba), focused on alleged acts of bribery and corruption. The operation was originally based on contracts with state-owned oil company Petrobras.  

    The reach of the investigations and related proceedings have extended beyond Petrobras, targeting several government employees, including high-ranking government officials, congressmen, political parties, companies and related individuals.  

    Operation Car Wash is the largest corruption investigation in history of Brazil. Through unprecedented and extensive use of plea bargains, the law enforcement task force leading the investigations has collected and continues to collect a relevant amount of information and evidence, continuously expanding the reach of the investigations. To date, just in Paraná, according to the numbers from the federal prosecution (www.mpf.mp.br/para-o-cidadao/caso-lava-jato/atuacao-na-1a-instancia/parana/resultado), there have been 1,072 orders for searches and seizures, 548 requests for mutual legal assistance, over 120 preventive arrests, 347 people have been charged and 140 were convicted. The task force concluded 176 plea settlements with individuals and 11 leniency agreements with corporate entities.  

    Operation Car Wash and related proceedings have not only sought the criminal liability of individuals, both government officials and executives from some of the largest Brazilian companies, but also the civil liability of involved corporate entities from Brazil and abroad. The Federal Prosecution and Office of the Solicitor General have already filed several civil actions for administrative improbity against some of the companies and individuals that allegedly have induced, concurred with or benefited from the illicit enrichment of government employees.  

    Other government agencies are also involved in the investigations and proceedings related to Operation Car Wash, such as the Office of the Controller General (CGU), the Federal Audit Court (TCU), federal tax authorities, and state prosecutors.  

    Several offspring investigations have been launched in other states such as Operation Calicute in the State of Rio de Janeiro, which has led to the arrest of former Governor Sérgio Cabral, among others.

    The operation has also led to several proceedings in the Brazilian Superior Court of Justice and Supreme Court (both in Brasília).  

    The enforcement actions by Brazilian authorities have been quite frequent, Operation Car Wash continues to be active and is currently at its 55th phase.

  25. 13.

    Have the employees of any multinational corporations or their domestic subsidiaries been subject to enforcement actions by the authorities in your jurisdiction for domestic or foreign bribery violations?

  26. Yes. Although enforcement actions against employees of foreign multinational corporations have not been as common as those against employees of national corporate entities, there have been cases of arrests and judicial actions against employees of foreign companies acting in Brazil for bribery violations.

  27. 14.

    Have resolutions of anti-corruption enforcement actions with corporate entities resulted in settlements, such as deferred prosecution or non-prosecution agreements or leniency agreements?

  28. Yes. As mentioned above, until the current date, only in the ambit of Operation Car Wash in the state of Paraná, there had been 11 leniency agreements between corporate entities and the federal prosecution. Leniency agreements have also been reached between corporate entities and the CGU.

    There have also been cases in which the Brazilian authorities participated in multijurisdictional agreements.

  29. 15.

    In recent years, have there been trials or other proceedings in which an individual or corporate entity has contested alleged violations of anti-corruption laws in your jurisdiction?

  30. Yes. According to the figures from the federal prosecution (www.mpf.mp.br/para-o-cidadao/caso-lava-jato/atuacao-na-1a-instancia/parana/resultado) in the ambit of Operation Car Wash in the state of Paraná only, there have been, up until the current date, 347 people charged for crimes including corruption and money laundering and 140 individuals have been convicted. Additionally, also considering Operation Car Wash in Paraná alone, the federal prosecution has filed nine civil actions for administrative improbity against 50 individuals, 16 corporate entities and a political party.

    In several situations individuals and corporate entities have contested their charges. In general, allegations such as extortion as defence for the payment of bribes have not been accepted by the courts.  

    The administrative improbity proceedings are pending trial. In several circumstances, however, the interested corporate entities have reached leniency agreements with the prosecution.

  31. 16.

    To what extent do the enforcement authorities provide incentives for companies to self-report known or suspected violations?

  32. Brazilian law does not impose self-reporting or cooperation obligations on companies that identify indications of potential illicit acts, even if such acts involve members of its high management or if the company has benefitted from such acts.   

    The Clean Company Act officially introduced the concept of cooperation with authorities by regulating the possibility of leniency agreements in cases of corruption between legal entities and competent Brazilian authorities. It also officially introduced benefits for companies that self-report to the competent authorities by indicating it as a factor to be considered in the application of sanctions “the cooperation of the legal entity to the investigations of the offences”.

  33. 17.

    To what extent do the enforcement authorities take into account a company’s level of cooperation with the government’s investigation or the strength of its compliance programme when considering whether to bring enforcement actions or when assessing penalties?

  34. The Clean Company Act indicates both the cooperation with authorities and the strength of compliance programs as factors to be considered in the application of sanctions. The Federal Decree that regulated the law (Federal Decree No. 8.420/2015) establishes that the pecuniary penalties can be reduced in: (i) 1 per cent to 1.5 per cent if the legal entity cooperated with the investigations, (ii) 2 per cent if it self-reported the illicit acts before investigative proceedings were initiated, (iii) 1 to 4 per cent if the company has and enforces a compliance programme in accordance with the standards of the law.

    The effective cooperation with authorities may also lead to leniency agreements, if certain criteria are met.

  35. 18.

    To what extent and under what circumstances do the enforcement authorities provide incentives for whistle-blowers to report known or suspected anti-corruption violations?

  36. Aside from the possibility of the prosecution to negotiate plea agreements with individuals involved in criminal activity, there is no specific whistle-blower law in Brazil and no specific incentive for individuals to report known or suspected illicit conduct.

  37. 19.

    What has been the most significant fine or monetary penalty to date under the anti-corruption laws of your jurisdiction? 

  38. The Brazilian federal prosecution has closed several plea agreements with individuals involving large sums in fines. According to the federal prosecution, considering the plea agreements in Operation Car Wash, a total of 11.5 billion Brazilian reais have been recovered in almost four years. 

    As for monetary fines in leniency agreements with corporate entities, the largest agreement negotiated until the current date totalled 10.3 billion Brazilian reais.

  39. 20.

    Do the enforcement authorities use any other statutes to prosecute conduct related to bribery and corruption?

  40. Enforcement authorities have commonly prosecuted crimes of corruption together with the crimes of money laundering and conspiracy to commit crimes (criminal organisation).

    International cooperation

  41. 21.

    Have the enforcement authorities issued general guidance regarding compliance with and enforcement of the anti-corruption laws?

  42. Yes. The CGU has issued guidelines for legal entities in the implementation of their compliance programmes. The guidelines are available in Portuguese, English and Spanish (English version available in: www.cgu.gov.br/Publicacoes/etica-e-integridade/arquivos/integrity-program.pdf).

    The CGU has also recently issued a “Practical Manual” to evaluate companies’ compliance programs (Available in: www.cgu.gov.br/Publicacoes/etica-e-integridade/arquivos/manual-pratico-integridade-par.pdf).

  43. 22.

    To what extent do authorities in your jurisdiction cooperate with foreign authorities in enforcing applicable anti-corruption laws?

  44. Brazilian authorities have a high level of cooperation with foreign authorities in enforcing applicable anti-corruption laws.

    According to the Brazilian Ministry of Justice, Brazil currently has entered into mutual legal assistance agreements in criminal matters with 19 countries (www.justica.gov.br/sua-protecao/cooperacao-internacional/cooperacao-juridica-internacional-em-materia-penal/acordos-internacionais/acordos-bilaterais-1).

    Brazil is also a party to the UN Convention against Transnational organized crime, the UN Convention against Corruption, the Inter-American Convention on Mutual legal Assistance in Criminal Matters and the Inter-American Convention against Corruption. 

    According to the federal prosecution, in Operation Car Wash in the state of Paraná alone, there were 546 requests for mutual legal assistance (www.mpf.mp.br/para-o-cidadao/caso-lava-jato/atuacao-na-1a-instancia/parana/resultado).

  45. 23.

    Is there a formal understanding with authorities in other jurisdictions to share information and provide reciprocal assistance in enforcement matters?

  46. As indicated above, Brazil currently has bilateral mutual legal assistance agreements with 19 jurisdictions (Belgium, Canada, China, Colombia, Cuba, France, Honduras, Italy, Mexico, Nigeria, Panama, Peru, South Korea, Spain, Turkey, Switzerland, Ukraine, United Kingdom and United States). 

    Brazil also renders mutual legal assistance on the basis of reciprocity and under multilateral agreements such as the UN Conventions against Transnational Organized Crime and against Corruption.

    Investigations

  47. 24.

    Has the sharing of information with foreign authorities contributed to any enforcement actions in your jurisdiction?

  48. Yes. Information obtained from foreign authorities have been crucial to many enforcement actions in Brazil. Once again using Operation Car Wash as an example, information from jurisdictions such as the United States and Switzerland have not only assisted in investigations but has also led to multijurisdictional leniency agreements.

  49. 25.

    To what extent do the enforcement authorities consider principles of international double jeopardy in deciding whether to charge an individual or corporate entity with a local anti-corruption violation based on conduct underlying a foreign anti-corruption conviction?

  50. The principle of international double jeopardy has had little debate in Brazil.

    As a general practice, prosecutors have deferred the criminal investigation of foreign nationals to their foreign competent authorities. In the recent Operation Car Wash, foreign nationals have been charged for bribery only in a few cases.

    Brazilian authorities are, however, seeking to hold foreign companies liable for damages caused to the Brazilian administration. As mentioned above, Brazilian authorities are frequently sharing and receiving information from foreign authorities through international cooperation channels and also negotiating multijurisdictional leniency agreements.

    Risk areas

  51. 26.

    To what extent and under what circumstances do the applicable laws in your jurisdiction allow for extradition of your country’s nationals or foreign nationals charged or convicted of wrongdoing under anti-corruption laws in other jurisdictions?

  52. The Brazilian Constitution prohibits the extradition of native Brazilian citizens. Naturalized Brazilian citizens may be extradited for crimes committed prior to their naturalization or for involvement in crimes of drug trafficking. 

    Foreign nationals in Brazil may be extradited for crimes of corruption, so long as such crimes are not categorised in Brasil as political or opinion crimes.

    Requests for extradition are decided by the Brazilian Supreme Court.

  53. 27.

    Must publicly traded companies in your jurisdiction disclose pending investigations in their regulatory filings, or is such disclosure typical, even if not required?

  54. Brazilian law establishes that publicly traded companies must disclose “material facts”, as defined by the Brazilian Securities Commission (CVM) in its Instruction No. 358.

    Although there is no specific mention of investigations constituting a material fact, the current definition could be interpreted as including such obligation. Under such interpretation, it is becoming more typical for publicly traded companies to disclose their internal investigations and discussions with competent authorities as material facts.

    Currently it is not common, however, for companies to disclose their involvement in pending investigations conducted by government authorities.

    Compliance best practices

  55. 28.

    Have any companies publicly disclosed investigations relating to bribery or corruption issues within the past five years?

  56. Yes. Several companies have disclosed internal investigations and discussions with competent authorities as relevant facts. Brazilian multinational company Embraer made disclosures about internal investigations and agreements with Brazilian and foreign authorities throughout 2016, for instance.

    As indicated above, we are not aware of cases where companies have disclosed their involvement in pending investigations conducted by government authorities.


  57. 29.

    Which industries or business sectors in your jurisdiction are most vulnerable to public corruption?

  58. Because of Operation Car Wash, the major focus of enforcement actions involving corruption has been the oil and gas, civil construction and infrastructure sectors. Lately the investigations have also focused on the health sector and on frauds involving public pension funds.  

    In general, sectors that sell products and services to government entities tend to be most vulnerable to public corruption. Highly regulated business sectors are also more vulnerable, especially those that must obtain licences and are supervised by environmental bodies.

  59. 30.

    Is it common in your jurisdiction for companies to engage third parties to assist in interacting with government officials, whether in connection with sales and marketing or with obtaining permits, licences or other government approval?

  60. The practice of engaging third-parties to assist in interaction with government officials is historically very common in Brazil. The modus operandi revealed by Operation Car Wash included the use of third parties for the payment of bribes to public officials, especially in relation to contracts with the Brazilian State oil company, Petrobras.

    Consequences under Operation Car Wash and the enforcement of the Clean Company Act, establishing strict liability on legal entities, have caused companies to become increasingly careful when hiring third parties.

    Other

  61. 31.

    Is it common for companies in your jurisdiction to have an internal hotline or other mechanisms by which anonymous reports or other compliance questions or concerns may be raised?

  62. The implementation of mechanisms for anonymous reports and other measures considered as best practices in compliance programs is increasingly becoming a common practice by Brazilian companies. In fact, in recent years, the overall implementation of compliance programmes in Brazilian companies has become more common.

    This is especially true for companies that entered into leniency agreements and had to implement effective compliance programs as part of their obligation in the terms of the agreement, as well as for companies that supply or render services to government bodies.

    In the case of the Brazilian state oil company Petrobras, for instance, for a company to register as a supplier or a services provider, it must answer specific questions about its compliance practices and procedures.

    Furthermore, the regulation of the Clean Company Act through Decree No. 8,420/2015 lists the factors of an effective compliance program by Brazilian authorities, specifically indicating “channels to report irregularities, open and widely publicised to third parties, and mechanisms intended for the protection of good-faith whistle-blowers”.

  63. 32.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence before engaging third parties, such as agents, consultants and distributors?

  64. For the same reasons described above, conducting due diligence of third parties is also increasingly becoming a more common practice in Brazil.

    Decree No. 8,420/2015 also includes “proper diligences, for hiring, and should it be the case, supervising, third parties, such as suppliers, services providers, intermediary agents and associates”.

    The diligences conducted are generally background checks based on publicly available information. This search is either conducted internally or though the services of specialised services providers.

  65. 33.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence in the course of mergers, acquisitions or joint ventures? 

  66. This is not such a common practice, although it is increasingly becoming more familiar to Brazilian companies. Decree No. 8,420/2015 also indicates “verification, during procedures of mergers, acquisition and corporate restructurings, of acts of irregular or illicit acts, or of the existence of vulnerability of the involved legal entities”, as a parameter for an effective compliance programme.

    The diligence usually performed are the review of existing compliance practices and background checks on relevant corporate entities and individuals.

  67. 34.

    Have shareholders of publicly traded companies in your jurisdiction initiated civil actions related to any company’s violation of anti-corruption laws?

  68. The concept of shareholders of publicly traded companies initiating civil actions related to the company’s violations of anti-corruption laws is still new in Brazil. 

    The subject had been recently discussed due to an action filed by an association of minority shareholders against Petrobras based on an agreement that the company reached with shareholders in the United States.

    The action was filed before State Court in São Paulo for the losses caused to shareholders due to the devaluation of Petrobras shares because of the corruption scandal discovered by Operation Car Wash.

    The merits of the action have not been considered as the trial court of the state of São Paulo dismissed the case finding that the claims should be subjected to arbitration proceedings.

  69. 35.

    In the past three years, what do you view as the most notable legislative, regulatory or enforcement developments with respect to the anti-corruption landscape in your jurisdiction?

  70. For the past four years, Brazil has gone through considerable change in the anti-corruption enforcement environment. Operation Lava Jato, as described above, has led not only to the imprisonment of high-ranking politicians, but also to the imprisonment of some of the most powerful executives in the country.

    In the past three years, some of Brazil’s largest companies, seeking to reach leniency agreements with Brazilian authorities, have conducted internal investigations, proactively cooperated with authorities, changed their governance structure and implemented compliance programs.

    Also, in recent years, the Clean Company Act has been regulated, the CGU has launched guidelines for the implementation of compliance programs and several government entities have started to request the implementation of compliance measures from their suppliers and services providers.

  71. 36.

    Describe any other significant challenges (eg, legal or cultural issues) that impact anti-corruption compliance, due diligence or internal investigations in your jurisdiction.

  72. Although the “culture of compliance” is currently booming in the Brazilian business environment, smaller and more traditional companies are having a more difficult time in adapting to this new environment.

    Therefore, it is often not possible for companies with strict and well-structured compliance programmes to only do business with counterparties or suppliers with the same standards. This proves to be even more challenging for multinational companies that come to do business in Brazil, bringing in their culture and standards.

    The lack of regulation of certain aspects of anti-corruption compliance is another challenge in the Brazilian jurisdiction.

    Issues such as the eventual liability of compliance officers, for instance, have not been regulated in Brazil, creating a certain level of legal uncertainty for professionals acting in the area.

    Another example of uncertainty caused by lack of regulation is the conduction of internal investigations by private corporate entities. Brazilian law has not established clear standards and limitations on how such investigations must be conducted. Currently, the grounds to conduct internal investigations are mostly based on interpretation of current laws and of precedents from the Brazilian labour courts, that do not always specifically concern issues related to internal investigations.

     

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Questions

    Laws

  1. 1.

    What laws or regulations in your jurisdiction prohibit the offering, payment or receipt of bribes by: domestic government officials; foreign government officials; or other individuals, such as commercial counterparties?


  2. 2.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to corporate entities, whether based principally in your jurisdiction or elsewhere?


  3. 3.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to individuals, whether resident in your jurisdiction or elsewhere?


  4. 4.

    How do the anti-corruption laws in your jurisdiction define foreign government officials?


  5. 5.

    What level of knowledge or intent is required to prove a violation of the anti-corruption laws in your jurisdiction?


  6. 6.

    Do the anti-corruption laws in your jurisdiction prohibit facilitating payments? (That is, small payments to expedite or to secure the performance of a routine government action to which a company is entitled, such as obtaining permits, processing visas, utility services, customs clearance, police protection.)


  7. 7.

    What affirmative defences are available with respect to the anti-corruption laws in your jurisdiction?


  8. 8.

    What are the maximum potential fines or other penalties for violating the anti-corruption laws in your jurisdiction?


  9. 9.

    Is there any pending legislation related to anti-corruption in your jurisdiction?


  10. Enforcement

  11. 10.

    Are corporate entities and individuals that violate the anti-corruption laws in your jurisdiction subject to criminal, administrative or civil liability, or a combination thereof?


  12. 11.

    Which prosecutors or other government agencies may bring enforcement actions under your jurisdiction’s anti-corruption laws?


  13. 12.

    Have any multinational corporations or their domestic subsidiaries been subject to enforcement actions in your jurisdiction for domestic or foreign bribery violations?


  14. 13.

    Have the employees of any multinational corporations or their domestic subsidiaries been subject to enforcement actions by the authorities in your jurisdiction for domestic or foreign bribery violations?


  15. 14.

    Have resolutions of anti-corruption enforcement actions with corporate entities resulted in settlements, such as deferred prosecution or non-prosecution agreements or leniency agreements?


  16. 15.

    In recent years, have there been trials or other proceedings in which an individual or corporate entity has contested alleged violations of anti-corruption laws in your jurisdiction?


  17. 16.

    To what extent do the enforcement authorities provide incentives for companies to self-report known or suspected violations?


  18. 17.

    To what extent do the enforcement authorities take into account a company’s level of cooperation with the government’s investigation or the strength of its compliance programme when considering whether to bring enforcement actions or when assessing penalties?


  19. 18.

    To what extent and under what circumstances do the enforcement authorities provide incentives for whistle-blowers to report known or suspected anti-corruption violations?


  20. 19.

    What has been the most significant fine or monetary penalty to date under the anti-corruption laws of your jurisdiction? 


  21. 20.

    Do the enforcement authorities use any other statutes to prosecute conduct related to bribery and corruption?


  22. International cooperation

  23. 21.

    Have the enforcement authorities issued general guidance regarding compliance with and enforcement of the anti-corruption laws?


  24. 22.

    To what extent do authorities in your jurisdiction cooperate with foreign authorities in enforcing applicable anti-corruption laws?


  25. 23.

    Is there a formal understanding with authorities in other jurisdictions to share information and provide reciprocal assistance in enforcement matters?


  26. Investigations

  27. 24.

    Has the sharing of information with foreign authorities contributed to any enforcement actions in your jurisdiction?


  28. 25.

    To what extent do the enforcement authorities consider principles of international double jeopardy in deciding whether to charge an individual or corporate entity with a local anti-corruption violation based on conduct underlying a foreign anti-corruption conviction?


  29. Risk areas

  30. 26.

    To what extent and under what circumstances do the applicable laws in your jurisdiction allow for extradition of your country’s nationals or foreign nationals charged or convicted of wrongdoing under anti-corruption laws in other jurisdictions?


  31. 27.

    Must publicly traded companies in your jurisdiction disclose pending investigations in their regulatory filings, or is such disclosure typical, even if not required?


  32. Compliance best practices

  33. 28.

    Have any companies publicly disclosed investigations relating to bribery or corruption issues within the past five years?


  34. 29.

    Which industries or business sectors in your jurisdiction are most vulnerable to public corruption?


  35. 30.

    Is it common in your jurisdiction for companies to engage third parties to assist in interacting with government officials, whether in connection with sales and marketing or with obtaining permits, licences or other government approval?


  36. Other

  37. 31.

    Is it common for companies in your jurisdiction to have an internal hotline or other mechanisms by which anonymous reports or other compliance questions or concerns may be raised?


  38. 32.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence before engaging third parties, such as agents, consultants and distributors?


  39. 33.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence in the course of mergers, acquisitions or joint ventures? 


  40. 34.

    Have shareholders of publicly traded companies in your jurisdiction initiated civil actions related to any company’s violation of anti-corruption laws?


  41. 35.

    In the past three years, what do you view as the most notable legislative, regulatory or enforcement developments with respect to the anti-corruption landscape in your jurisdiction?


  42. 36.

    Describe any other significant challenges (eg, legal or cultural issues) that impact anti-corruption compliance, due diligence or internal investigations in your jurisdiction.


Other chapters in Anti-Corruption