[1]A lot has been going on in Brazil in the anti-bribery field. Some specific developments are particularly noteworthy. A previous post [2] highlighted 5 relevant developments that took place in 2016. Four other relevant developments are summarized below.
Compliance as a requirement of public procurement. ENCCLA – Brazil’s National Strategy Against Corruption and Money Laundering – is a forum in the Brazilian government that brings together a broad range of ministries and agencies involved in the prevention and combat of money laundering and corruption. Members of ENNCLA include Federal Police, Federal Prosecutors, Office of the Comptroller General (CGU), and the Brazilian Securities and Exchange Commission. At the end of 2016, ENCCLA finalized a draft bill to be presented to Congress (they have also prepared a decree to regulate it) requiring the RFPs of public procurement related to the purchase of goods and services, concessions, and leasing above R$ 30 million (around USD$10 million) to require a certified compliance program as a condition of participation. The decree sets forth that the criteria for the accreditation and certification of the compliance programs will later be determined by a regulation of the Ministry of Transparency, Fiscalization and Comptroller-General (MTFC).
Enforcement of the Clean Companies Act in its initial phase. While the enforcement of anti-bribery legislation in Brazil has been strong for some time now (see here [3] and here [2]), most of the sanctions applied have been criminal (not applicable to legal entities) or based on other laws (e.g., improbity law), rather than based on the Clean Companies Acts, which came into force in January 2014. As of February 18, 2017, the CNEP [4] (the National Registry of Punished Companies – a database kept by the MTFC that consolidates information about companies punished under the Clean Companies Act) listed just 7 companies sanctioned (4 of them are related to the same enforcement action) and the cases are relatively small. Brazilian authorities; however, have said that there are dozens of proceedings in the pipeline what should be resolved in during 2017.
Continued cooperation among authorities. In 2016, we saw continued cooperation between authorities. At the national level, authorities are acting in tandem. As an example, at the press conferences related to the Car Wash Operation, there are representatives of the Federal Prosecutors Task Force as well as representatives of the Federal Police and IRS. Coordination has been mentioned by all of them as a key factor to the success of the case. At the International Level, the same is true. In the Car Wash operation alone, as of February 23, 2017, there had been 131 requests for international cooperation: 103 made by Brazil to 31 countries and 28 requests received from 15 countries. The MFTC has traditionally been very active in the international arena, sharing experience and best practices with foreign authorities.
Use of leniency agreements. One of the most innovative features of Brazil’s Clean Companies Act is the ability of authorities to enter into Leniency Agreements with companies. This is a new concept in Brazil’s anti-corruption arena. Companies that enter into leniency agreements with public authorities and satisfy their conditions have their fines reduced by up to two thirds, and certain judicial and administrative sanctions exempted. While authorities, at least at the Federal level, are working in a more integrated way in the discussions of leniency agreements, Brazil’s Clean Companies Act provides an extraordinary number of authorities authorized to enforce the law (see here [5]), which presents a challenge. A few leniency agreements were signed in 2016 (some not successful) and more will be signed in 2017. There is also legislation pending in Congress in an attempt to correct some legal flaws of the leniency program.
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