Corruption has been one of the hottest topics on the Brazilian agenda for the past few years for a number of reasons.
The country has been going through a deep political crisis, which stems from the involvement of several politicians in corruption scandals, aggravated by an economic recession from which Brazil is very slowly starting to recover. After former president Dilma Rousseff's impeachment by Congress in 2016, Michel Temer, former vice president, was brought to power.
President Temer has been at the centre of a corruption scandal involving alleged payment of bribes by the world's largest meatpacking company, Brazilian JBS. President Temer was indicted on corruption-related allegations by the Prosecutor General of the federal Public Prosecutor's Office twice in three months. Both indictments were rejected by Congress (which has to approve the hearing of an indictment against the President). The 2018 presidential elections in October are highly anticipated.
However, the Brazilian legal framework has been enriched in recent years and public authorities have been conducting several high-profile investigations, notably Operation Car Wash, which has uncovered the largest corruption scandal in Brazilian history.2
This situation reflects the fact that although Brazil has one of the top 10 largest gross domestic revenues in the world as of 2017 (currently ranking eighth),3 it still ranks 96th out of 176 countries in Transparency International's Corruption Perceptions Index.4
Against this backdrop, it is important to shed light on the main developments in anti-corruption matters in Brazil.
II DOMESTIC BRIBERY: LEGAL FRAMEWORK
The payment and receipt of bribes has been prohibited in Brazil at least since the creation of the 1830 Criminal Code.5 Nowadays, the Brazilian legal framework is far more complex, framing acts of corruption and bribery not only as crimes, but also as civil and administrative offences. Nevertheless, the framework is limited to corruption and bribery in the public sector, as there are no legal provisions in Brazil penalising private commercial bribery.
Also, both individuals and companies can be held liable for bribery of a public official in civil and administrative spheres, but criminal liability itself is limited to individuals.
The Brazilian legal system considers criminal liability as personal and non-transferable, thus being imposed only on the individual who has in any way contributed to a crime either by action (i.e., committing a criminal action) or by omission (i.e., remaining silent or refraining from action despite it being within the powers or duty of the individual to prevent the crime). Therefore, with a very limited exception pertaining to environmental crimes, there is no corporate criminal liability under Brazilian law.
The current legal framework is mainly composed of:
- Legislative Decree No. 2,848 of 1940 (the Criminal Code);6
- Law No. 8,666 of 1993 (the Public Procurement Law);7
- Law No. 8,429 of 1992 (the Administrative Misconduct Law);8
- Law No. 12,846 of 2013 (the Anti-Corruption Law);9 and
- Decree No. 8,420 of 2015 (the Anti-Corruption Decree).10
i Criminal Code
Criminal liability for corruption and bribery acts in Brazil is mainly governed by the Criminal Code, which sets out the crimes committed by public officials and private persons against the public administration.
For criminal law purposes, a public official is anyone who, even if temporarily or without compensation, holds a position, an employment or a function within a public entity or agency, or state-owned or mixed-capital company, or works for a company hired to provide services or perform activities germane to the public administration.
Passive or active bribery is a corruption crime defined by the Criminal Code, which prescribes two to 12 years of imprisonment and a fine for:
- any public official who directly or indirectly requests or receives an improper advantage, or accepts the promise of such an advantage, for himself or herself or others, even if this occurs outside the function of the official's office or before the office has been assumed; and
- any private person who offers or promises an improper advantage to a public official to induce the latter to perform, omit or delay any official act.
Influence peddling is also penalised under the Criminal Code, which establishes two to five years of imprisonment and a fine for anyone who requests, requires, charges or obtains, for himself or herself or others, an advantage or promise of advantage, under the pretext of influencing an act committed by a public official in the exercise of his or her function.
ii Public Procurement Law
The Public Procurement Law establishes criminal liability for specific acts of corruption committed during a public tender procedure or during the performance of a public contract, such as:
- illegally waiving a public tender procedure;
- frustrating or committing fraud against the competitive character of a tender procedure; and
- modifying the contract to benefit the private party without good cause.
Anyone who commits any of these offences is subject to up to six years of imprisonment and a fine of up to 5 per cent of the amount of the public contract involved.
The Public Procurement Law also imposes the following civil and administrative penalties on companies and individuals for acts of corruption during the performance of public contracts:
- civil fine;
- termination of contract;
- temporary prohibition from participating in public tenders and from entering into public contracts (debarment) for up to two years; and
- declaration of permanent unsuitability to participate in public tenders.
iii Administrative Misconduct Law
The Administrative Misconduct Law sets out the sanctions applicable to public officials for misconduct detrimental to the Brazilian public administration.
In line with the Criminal Code, the definition of 'public official' set by the Administrative Misconduct Law for civil and administrative purposes is also quite broad. The definition encompasses any person who exercises, even temporarily or without compensation, by election, appointment, designation, contracting or any other form of investiture or bond, a mandate, position, job or office in any federal, state and municipal governments, independent agencies, regulatory agencies, state-owned or mixed-capital companies, or entities in whose assets or annual revenues the public treasury holds or has an interest of more than 50 per cent.
The Administrative Misconduct Law also applies to anyone who, whether a public official or not, induces or takes part in an act of misconduct or else benefits directly or indirectly from such an act.
In other words, the Administrative Misconduct Law may be – and is in fact – applied not only to public officials, but also to private persons or private companies interacting with the public sector that may benefit directly or indirectly from the acts in question. However, prosecution of such persons or companies under the Administrative Misconduct Law only occurs when public officials are also involved.
The said acts of misconduct penalised under the Administrative Misconduct Law may be framed as those acts: (1) entailing unjust enrichment; (2) causing losses to the public treasury; or (3) running against the principles of the public administration.
The Administrative Misconduct Law prohibits public officials from receiving, directly or indirectly (through third parties such as agents and distributors), for themselves or for third parties, money, assets, properties or any other economic advantage in the form of a commission, percentage, bonus or gift from whomever may be favoured by nonfeasance, malfeasance or misfeasance in office.
Therefore, facilitating (or 'grease') payments are also forbidden. For instance, public officials must not facilitate the acquisition, exchange or lease of assets or properties, or the contracting of services, by public entities other than at market prices.
In relation to this, codes of ethical conduct11 forbid public officials from receiving any gifts, transportation, accommodation, meals and entertainment, except: (1) those from foreign authorities in protocol cases where there is reciprocity; (2) those with no commercial value; and (3) those distributed by entities as a courtesy, advertisement or during special events or holidays that do not exceed a token value of 100 reais.
As for penalties, the Administrative Misconduct Law provides that those liable for acts of misconduct are subject to the following sanctions:
- full redress of the damage;
- confiscation of assets or values embezzled from the public treasury, if any;
- dismissal from public service;
- suspension of political rights for a period of three to 10 years;
- payment of a fine;
- debarment; and
- prohibition against receiving benefits or tax or credit incentives, directly or indirectly, even if by the intermediary of a company of which the offenders are majority shareholders, for a period of three to 10 years.
iv Anti-Corruption Law and Anti-Corruption Decree
The Anti-Corruption Law establishes corporate civil and administrative liability for injurious acts contrary to the Brazilian or foreign public administrations.
This Law, enacted on 1 August 2013, originates from a bill submitted to Congress by the executive branch and is aimed both at fulfilling international commitments assumed by Brazil upon ratification of various anti-corruption treaties, as well as at meeting the population's growing demand for more effective mechanisms to fight corruption at the public administration level.
Legal entities are liable for wrongful acts against government agencies when the acts are carried out in the interest of or for the benefit of the entities.
Wrongful acts are defined as those committed against national or foreign public assets, against public administration principles, or against international commitments assumed by Brazil.
The Anti-Corruption Law provides for a strict liability regime, meaning that the legal entity is accountable even if the wrongdoings are attributable to a sole employee or service provider who acted despite the company's compliance procedures or without the company's knowledge.
Companies belonging to the same economic group, consortium members or joint-venture partners are held jointly and severally liable for wrongful acts under the Brazilian Anti-Corruption Law. Such joint and several liability, however, is limited to payment of fines and to full redress of damage.
According to the Anti-Corruption Decree, which regulates the Anti-Corruption Law, the acts treated as administrative offences in the Public Procurement Law or in other statutes regulating public contracts, if also regarded as violations of the Anti-Corruption Law, will be jointly investigated in an administrative proceeding as prescribed in the Anti-Corruption Decree. This provision is relevant because the existing laws clearly overlap – both the Administrative Misconduct Law and Public Procurement Law, for instance, have provisions leading to blacklisting.
Companies in breach of anti-corruption and anti-bribery provisions are subject to heavy penalties, some of which are imposed through administrative proceedings and others solely via court channels.
The administrative penalties set out in the Anti-Corruption Law include fines and publication of the sentence in the media, and these are imposed at the end of the administrative proceeding initiated and decided by the highest authority of each body or entity of the executive, legislative and judiciary branches against which the wrongful act was committed. A conflict of interest may arise from this rule of jurisdiction as the highest authority of a public entity may also be under investigation.
The administrative fine ranges from 0.1 per cent to 20 per cent of the gross revenues in the fiscal year before that in which the administrative proceeding was initiated, minus taxes; in no event will the fine be less than the advantage obtained, where it is possible for it to be estimated. This fine is subject to a cap: penalties will not be greater than the lowest value between (1) either 20 per cent of the gross revenue of the company in the past fiscal year, minus taxes, or (2) three times the benefit intended or obtained through the illegal act.
The Anti-Corruption Decree sets standards for the calculation of these fines, which take aggravating and mitigating factors into consideration. Each factor translates into a percentage of gross revenues (less taxes) in the fiscal year before that in which the administrative proceeding was instated.
A legal entity's cooperation with investigations and the existence of compliance programmes do not preclude the imposition of sanctions but are taken into consideration when punishment is meted out.
A fine or other penalties imposed under the Law do not release the offenders (entities or individuals) from the obligation to fully redress the damage caused by the wrongful act.
In addition to the administrative penalties (fine and publication of the sentence in the media), the Anti-Corruption Law lists the following penalties that can be imposed only at the end of a court action, brought by the aggrieved public administration entity or by the Public Prosecutor's Office:
- confiscation of assets, rights or values representing an advantage or profit directly or indirectly obtained by way of the wrongful act, with due regard for the rights attributable to the injured party or to third parties acting in good faith;
- suspension or partial shutdown of activities;
- compulsory dissolution of the company; and
- prohibition from receiving incentives, subsidies, grants, donations or loans from public bodies or entities and from public financial institutions or publicly controlled institutions, for a period of one to five years.
Under Brazilian law, neither companies nor individuals are compelled to disclose wrongdoing to public authorities. This privilege against self-incrimination12 applies in all spheres (criminal, administrative and civil).
Nevertheless, voluntary disclosure of wrongdoing (say, under a leniency programme) may help obtain a waiver or reduction of sanctions. To qualify for a leniency programme, the company must be the first to express its willingness to cooperate, cease and admit its participation in the wrongdoing, and fully cooperate with investigations.
Leniency negotiations are kept confidential until a settlement is reached. In practice, however, leaks are frequent. A potential self-reporting does not provide immunity for employees and companies that participated in the wrongdoing within the same economic group. The effects of a leniency programme, however, may be extended to them, provided that they take part in the leniency agreement itself.
A company reaching a leniency agreement with authorities under the Anti-Corruption Law may enjoy one or more of the following benefits:
- exemption from public disclosure of the sentence;
- waiver of the prohibition from receiving incentives, subsidies, subventions, donations or loans from public entities;
- reduction by up to two-thirds of the fine, which could originally reach up to 20 per cent of the company's annual gross revenues; and
- waiver or reduction of the debarment sanction.
The leniency agreement covers only the facts described there. Should new facts surface during investigations or the applicant fail to report all relevant facts, the authorities may open new investigations into those facts.
As currently worded, the Anti-Corruption Law13 does not expressly provide for total remission of its penalties under a leniency programme.
III ENFORCEMENT: DOMESTIC BRIBERY
i Operation Car Wash
Operation Car Wash is an investigation being carried out by the Federal Police and the federal Public Prosecutor's Office, which was publicly unveiled in March 2014. Initially a money laundering probe into a currency exchange company located in a petrol station, it has evolved to investigate acts of corruption at oil giant Petrobras.
The scheme involved cartel behaviour, bid rigging and illegal increase in profits by bribing some Petrobras executives in exchange for improper advantages. Those bribery acts took the form of sham services agreements executed between construction companies and companies owned by those Petrobras executives (or other pass-through companies). Political contributions to political groups involved in the bribery scheme are also under scrutiny.
Cooperation and exchange of sensitive information between Brazilian and foreign authorities have also been crucial to the success of investigations (e.g., Swiss authorities provided important information on bank accounts held by Brazilians under investigation), as several of those under investigation used offshore bank accounts to hide money obtained illegally through bribery.
Investigative measures to uncover this multimillion money laundering scheme have ranged from the enforcement of hundreds of search and seizure warrants to temporary and preventive arrest and compulsory deposition. The operation is the largest corruption and money laundering investigation Brazil has ever had.
Although currently no actions have been filed in relation to Operation Car Wash on the basis of the Anti-Corruption Law, actions have been filed by the Public Prosecutor's Office and the Attorney General's Office for violations of the Administrative Misconduct Law. These actions have yet to be heard by the courts, but certain of the demands of prosecutors in the complaints filed provide useful guidance on the approach adopted by the authorities.
One such notable demand by prosecutors is for the suspension from participation in public tenders and execution of public contracts, and blacklisting, of companies that fall within the same economic group of offenders under the Administrative Misconduct Law. Authorities have included as co-defendants companies within the same economic group and same field of activity as the actual offenders, claiming that these companies also incurred benefits from the illegal acts committed. The authorities have therefore sought to establish the joint and several liability of these companies – although the Administrative Misconduct Law makes no such provision regarding liability. (This provision, however, is found under the Anti-Corruption Law). As the courts have yet to deal with these complaints, there is currently no case law to provide guidance on the extent of the application of such joint and several liability. In any case, it has become increasingly common for prosecutors to seek this outcome, which has probably been 'borrowed' from the concept found in the Anti-Corruption Law.
ii SBM leniency agreement
On 15 July 2016, it was publicly announced14 that SBM Offshore, a Dutch oil services company, entered into a leniency agreement with four Brazilian authorities: the Ministry of Transparency and Comptroller General's Office (the Comptroller General's Office), the Attorney General's Office, the federal Public Prosecutor's Office, and Brazilian state-controlled oil giant Petrobras.
This was the first time a leniency agreement was signed by both administrative and criminal enforcers under the Brazilian Anti-Corruption Law. The deal resolved allegations that SBM had won contracts by bribing officials at Petrobras between 1996 and 2012.
As part of the deal, SBM was to hand over US$328 million to Petrobras, of which US$149 million was by way of a fine and US$179 million was to be offset against payments under existing contracts between the companies. A further US$13.6 million was to be paid to the Comptroller General's Office and to the anti-money laundering authority – the Council for Financial Activities Control. In consideration, SBM would not be debarred and would be allowed to bid for new contracts with Petrobras, which would in turn refrain from suing for damages.
However, on 1 September 2016 one of the high chambers of the federal Public Prosecutor's Office refused to recognise the leniency agreement as signed.
The SBM leniency agreement showed that such settlements are possible in Brazil between federal prosecutors and administrative anti-corruption authorities. It also exposed, however, that leniency agreements on corruption matters are quite difficult to negotiate, as some of the authorities conducting investigations, such as the federal Public Prosecutor's Office, may have access to confidential information that cannot be shared with other public bodies. On the basis of such confidential information, some authorities may be unwilling to enter into leniency agreements but, even so, cannot disclose the reasons for their refusal.15
This gridlock arose from the current legal framework in Brazil: as several public administration bodies have concurrent authority to investigate acts of corruption, for any leniency agreement to be 'bulletproof', it must involve all these bodies, otherwise the private persons and companies may remain subject to investigations and lawsuits by any of the public bodies kept out of the settlement talks. The previous non-recognition of the SBM leniency agreement did little to provide assurances regarding the legal certainty of leniency programme negotiations.
Nevertheless, on 26 July 2018, SBM executed a leniency agreement with the Comptroller General's Office, the Attorney General's Office and Petrobras, undertaking the commitment to pay approximately US$148 million, of which approximately US$71 million is a civil fine and approximately US$77 million is compensation for alleged damage, to be paid within 90 days. Under the leniency agreement, the authorities committed to terminate all investigations into SBM and refrain from initiating new proceedings under applicable anti-corruption laws. SBM is also allowed to participate in Petrobras tenders.
Also, the leniency agreement provides for a reduction of 95 per cent in future performance bonus payments related to lease-and-operate contracts, representing an agreed nominal value of approximately US$180 million over the period 2016 to 2030, of which US$41 million relating to historical bonus payments (from 2016 to signature date) is to be paid within 90 days of the signing of the leniency agreement. The future bonus payments (from signature date to 2030) represent a net present value of approximately US$110 million, as further compensation for alleged damage.
Furthermore, on 1 September 2018, SBM also entered into an agreement allowing the company to reach a final settlement with the federal Public Prosecutor's Office. As with the previous agreement, executed in 2016, the agreement with the Public Prosecutor's Office is subject to approval by the fifth high chamber of the federal Public Prosecutor's Office. The comments made by the same high chamber in 2016 (when it did not approve the agreement) were addressed in the new document.
Under this agreement, the Public Prosecutor's Office commits to refrain from initiating new proceedings under applicable anti-corruption laws, and will jointly request with SBM that the court close the ongoing administrative misconduct lawsuit filed in 2017, including the associated provisional measure to secure payment of potential damages. As for SBM, in addition to the amounts agreed in the leniency agreement with the Comptroller General's Office, the Attorney General's Office and Petrobras, a fine of approximately US$48 million was also imposed, to be paid to Petrobras in instalments.
Thus, with both agreements, SBM aims to close its legacy issues in Brazil.
iii Supreme Federal Court decision on political contributions
The Supreme Federal Court declared on 17 September 2015 that political contributions from domestic or foreign companies to political parties or candidates are unconstitutional. Thus, the 2016 local elections solely relied on public funding (especially government-funded television and radio advertisements), contributions from individuals and resources from the Political Parties Fund.
Although expectations on individual contributions were high, the 2016 local elections showed that there was difficulty in individual engagement in making contributions, mostly owing to the fact that (1) these types of contributions are not a habit in Brazilian culture (which they are in the United States, for example), and (2) the political crisis aggravated public distrust of politicians. Consequently, the 2016 local elections were much more subdued than in previous years. The ban on contributions from companies also privileged richer candidates, who invested in their own campaigns by means of self-funding. The 2018 election campaigns are moving along the same lines.
IV FOREIGN BRIBERY: LEGAL FRAMEWORK
Both the Criminal Code and Anti-Corruption Law impose liability for acts against foreign public administrations.
In terms of criminal liability, the Criminal Code has specific provisions regarding both active bribery and influence peddling in international business transactions.
Active bribery in international business transactions is a crime by which anyone directly or indirectly promises, offers or gives an improper advantage to a foreign public agent or a third party, to influence him or her to practise, omit or delay an official act related to an international business transaction. The established penalties are one to eight years of imprisonment and a fine.
As for influence peddling, the Criminal Code sets two to five years of imprisonment and a fine for anyone who requests, demands or obtains, for himself or herself or for another, a promise of advantage or benefit, under the pretext of influencing an act to be performed by a foreign public official in connection with an international business transaction.
Furthermore, the Anti-Corruption Law provides for corporate civil and administrative liability for injurious acts contrary to foreign public administrations, including acts of corruption and bribery. In general, all statutory provisions concerning domestic wrongdoing extend to foreign bribery as well. The main difference between the two lies in the fact that the Comptroller General's Office – and not the highest authority of the public entity aggrieved by the wrongful act – has exclusive jurisdiction to initiate and conduct the administrative proceeding through which the acts against foreign public bodies will be investigated.
V ASSOCIATED OFFENCES: FINANCIAL RECORD-KEEPING AND MONEY LAUNDERING
The Brazilian anti-corruption legal framework does not punish money laundering or wrongdoing related to financial record-keeping. Liability for these activities is only established by specific laws, such as the Tax Crimes Law16 and the Anti-Money Laundering Law.17
Frauds involving financial record-keeping are considered crimes under the Tax Crimes Law and are punishable by up to five years of imprisonment and fines.
Money laundering is described as the act of concealing or dissimulating the true nature, origin, location, availability, transaction or ownership of assets, rights or valuables directly or indirectly arising from criminal offences. This crime is punishable by three to 10 years of imprisonment and a fine.
VI ENFORCEMENT: FOREIGN BRIBERY AND ASSOCIATED OFFENCES
Despite the existence of legal provisions on criminal and civil liability for foreign bribery acts, there are no reports of their application as of yet. This lack of precedent may be due not only to the fact that this legal framework is still quite new, especially concerning civil and administrative liability (enacted by means of the Anti-Corruption Law in 2013), but also because the Brazilian authorities have focused on fighting domestic bribery.
VII INTERNATIONAL ORGANISATIONS AND AGREEMENTS
Brazil has so far ratified several conventions related to anti-corruption, including:
- the Organisation for Economic Co-operation and Development Anti-Bribery Convention, ratified on 24 August 2000 and enacted by Decree No. 3,678 on 30 November 2000;
- the Inter-American Convention against Corruption, enacted by Decree No. 4,410 on 7 October 2002;
- the United Nations Convention against Transnational Organized Crime, ratified on 29 January 2004 and enacted by Decree No. 5,015 on 12 March 2004; and
- the United Nations Convention against Corruption, ratified on 15 June 2005 and enacted by Decree No. 5,687 on 31 January 2006.
Brazil has also signed cooperation agreements with other countries to fight corruption and bribery. Brazil and Switzerland entered into a cooperation agreement on 12 May 2004, enacted by Legislative Decree No. 300 on 13 July 2006. Brazil also entered into a technical cooperation agreement with India and South Africa during the second annual India-Brazil-South Africa Dialogue Forum on 17 October 2007, with the purposes of fighting commercial fraud, money laundering and other illicit international trade activities.
The international commitments undertaken by Brazil have mostly been fulfilled with the enactment of the Anti-Corruption Law and through the considerable efforts of the Brazilian authorities (such as the Comptroller General's Office) in recent years.
VIII LEGISLATIVE DEVELOPMENTS
i Leniency agreements provisional measure
Provisional Measure No. 70318 was issued on 18 December 2015 by the Executive Branch to implement several changes to the Anti-Corruption Law, especially with regard to voluntary disclosure and leniency agreements. However, it was not converted into law by the National Congress, which led to its expiration on 29 May 2016.
The main changes introduced by the Provisional Measure, now no longer in effect, were the following much less stringent requirements for leniency agreements:
- companies would be able to submit an application after the commencement of administrative investigations. Conversely, however, a company was likely to be granted lesser benefits if applying at a later stage;
- the application for leniency would no longer require an acknowledgement of guilt;
- other companies could also engage in voluntary disclosure after the first company had done so, if they were in a position to cooperate with the authorities;
- the first applicant would be exempted from fines based on the company's gross revenues, whereas fines imposed on other applicants would still be reduced by two-thirds;
- companies would be released from the debarment sanction provided in the Public Procurement Law;
- leniency agreements would also: (1) cover wrongdoing committed before the Anti-Corruption Law entered into force (29 January 2014); (2) prevent indemnity claims; and (3) preclude prosecution regarding the facts covered in the agreement if the Public Prosecutor's Office were to take part in negotiations;
- the parties would be able to agree on a payment plan regarding the compensation for damage; and
- pending investigations would be suspended at the time the company applied for leniency, and dismissed in the event of an agreement being signed.
Bills to modify provisions regarding leniency agreements and others of the Anti-Corruption Law are currently under discussion in the National Congress.
ii Public Companies Law
In the wake of corruption scandals involving state-owned companies such as Petrobras, the Brazilian National Congress enacted the Public Companies Law19 and the President enacted Decree No. 8,945 of 27 December 2016,20 which regulates the Public Companies Law. The Law and Decree establish specific rules that government-owned and government-controlled companies, as well as their subsidiaries at the federal, state and municipal levels, must follow in terms of corporate governance, public tenders and contracts, compliance and supervision by public control bodies. These companies were obliged to adapt to the new provisions of the Public Companies Law by the end of June 2018.
IX OTHER LAWS AFFECTING THE RESPONSE TO CORRUPTION
The Law on Access to Information21 establishes that all public entities and private entities receiving public resources must disclose online all information of public interest, particularly institutional, financial and budgetary data, except those ranked as classified, secret and top secret.
The Conflict of Interest Law22 is applicable to high-ranking officials from the federal public administration with access to sensitive information. If an official subject to this Law makes improper use of sensitive information, exercises private activities that may conflict with his or her public function, or acts as an informal consultant for private persons or companies, the penalties set out in the Administrative Misconduct Law will apply.
i Compliance programmes
The Anti-Corruption Decree provides generic standards for evaluation of compliance programmes implemented by corporate entities. The compliance programme must be structured, applied and updated according to the specific characteristics and risks of those activities carried out by each corporate entity, and it must evolve constantly to ensure its effectiveness and to avoid the company being exposed to corruption.
If a company is subject to the administrative sanctions prescribed in the Anti-Corruption Law, its compliance programme may be taken into consideration to reduce the administrative fine.
In evaluating the effectiveness of a compliance programme and considering it as a mitigating factor, the public authorities will consider the company's profile and the tenor of its compliance programme.
To that end, the Brazilian Comptroller General's Office has issued Ordinance No. 909 of 7 April 2015 setting guidelines for companies to develop the reports on which public authorities will rely when considering a reduction in the administrative fine under the Anti-Corruption Decree.
The company must prove its allegations and ensure that reported information is accurate, complete and organised, which may be evidenced by means of official documents, electronic mail, letters, declarations, correspondence, memoranda, minutes of meetings, reports, manuals, computer printouts and screenshots, audiovisual and sound records, photographs, purchase orders, invoices, accounting records or other documents, preferably in digital media.
XI OUTLOOK AND CONCLUSIONS
The Brazilian legal framework has been enriched over the past few years, but its application and enforcement are still in the early stages.
Recent developments in corruption investigations, such as Operation Car Wash, have, however, raised hopes across the country that the fight against corruption and bribery may pay off. Brazilian authorities have been working to keep up with growing demands from both the international community and Brazilian society in this regard.
The fight against corruption continues unabated, even in the light of the economic and political crisis. Furthermore, there seems to be an ongoing change in the corporate culture as a whole, as anti-corruption precautions are routinely being taken by both multinational and local companies doing business in Brazil.
1 Ricardo Pagliari Levy is a partner and Heloisa Figueiredo Ferraz de Andrade Vianna is an associate at Pinheiro Neto Advogados.
11 Such as the Code of Ethical Conduct for Federal Public Officials Working in the Presidency:
12 Article 5, LXXIII of the Brazilian Federal Constitution and Article 186 of the Criminal Code.
13 See Section VIII regarding Provisional Measure No. 703 of 2015.
14 www.cgu.gov.br/noticias/2016/07/ministerio-da-transparencia-celebra-acordo-de-leniencia-com-a-sbm-offshore; www.mpf.mp.br/rj/sala-de-imprensa/noticias-rj/mpf-celebra-acordo-de-leniencia-com-a-sbm-offshore.