FCPAméricas Blog
Brazilian Office of The Comptroller General takes Another Step Forward In Combating Corruption
5.25.2016
Michel Sancovski is an Associate attorney at Trench, Rossi e Watanabe Advogados.
Since January 29, 2014, when the Clean Companies Act came into force, the Brazilian Office of the Comptroller General (Controladoria Geral da União – CGU) has consistently increased its efforts to combat and prevent corruption and bribery.
Recently, the CGU took another important measure. On April 28, 2016, CGU enacted Directive No. 784 (Portaria No. 784), which creates the Program to Promote Integrity in Public Service (Programa de Fomento da Integridade Pública – PROFIP). This program aims to guide and enable the federal administration, including its agencies and foundations, in creating Integrity Programs — the name given for anti-bribery compliance programs or systems of self-governance established by companies to prevent and detect bribery and remediate compliance failures. Participation in the PROFIP program is voluntary and requires the signing of a commitment term by the highest authority within a public entity.
On March 18, 2015, the Brazilian Federal Government issued a Decree setting forth the regulatory mechanism for the application of the Clean Companies Act (“Anti-Corruption Decree”) – which among other things provides guidance on what needs to be covered in an entity’s Compliance Program (referred to as an Integrity Program) for the program to be considered effective. Directive No. 784 provides the so called “fundamental axles” of an Integrity Program in the Public Service: (a) tone at the top; (b) definition and fortification of units responsible for coordinating, operating and monitoring the Integrity Program; (c) risks management and assessment; and (d) strategies for continuous monitoring.
It should be noted that Directive No. 784 incorporates by reference – to the extent applicable – the same Chapter from the Anti-Corruption Decree regarding Integrity Programs. In doing so, CGU sends the message that the same rigor, complexity and seriousness applicable to private legal entities will be applied to public service.
By expressly referencing the Anti-Corruption Decree, Directive No. 784 also indicates that Integrity Programs in the Public Service (PROFIP) must be individualized and structured in accordance with the characteristics of each entity within the federal administration and based on the particularities of its activities. This provision is important and solidifies the understanding that there are not “off-the-shelf” or “one-size-fits-all” compliance programs. The development of an adequate Compliance Program must take into account the specific risks of each entity, as well as the particularities of its activities.
According to the Directive, the public entity that adheres to the PROFIP shall develop – with the assistance from CGU – an Integrity Plan covering the following actions and measures: (a) creation and improvement of ethics and conduct standards, as well as other necessary policies, rules and proceedings; (b) communications, courses and trainings to disseminate the rules and contents of the policies and procedures; (c) improvement and institutionalization of the reporting lines; (d) improvement and institutionalization of proceedings and units responsible for disciplinary actions; and (e) creation of other necessary remediation actions which contemplates the continuous improvement of the work processes.
The Integrity Plans will provide a mechanism by which CGU will be able to follow up and monitor the pace of the Integrity Program implementation by a public entity that has adhered to the PROFIP.
This new Directive seems to confirm the genuine interest of and actions taken by CGU to promote in the country a straightforward, ethical and transparent corporate environment not only in the private but also in the public sector. Due to the voluntary character of PROFIP, it remains to be seen whether the public entities will join CGU in this new step forward in its continuing effort to combat corruption in Brazil.
Note: On May 12, 2016 the acting president of Brazil created the Ministry of Transparency, Fiscalization and Control and transferred to it the activities of CGU.
Michel Sancovski is an Associate attorney at Trench, Rossi e Watanabe Advogados, a Brazilian firm with a cooperation agreement with Baker & McKenzie. In São Paulo, Brazil, he has earned a law degree from the Universidade Presbiteriana Mackenzie Law School and a post-graduate law-specialization diploma from the Fundação Getúlio Vargas (FGV Direito SP). He also holds a Master of Laws Degree (LL.M.), with the Business Law Certificate, from the U.C. Berkeley School of Law (Boalt Hall).
The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.
© 2016 FCPAméricas, LLC
Post authored by Guest
Comments