[1]The following guest post was authored by Eloy Rizzo, a partner at KLA-Koury Lopes Advogados, and Leah Moushey, an Associate at Miller & Chevalier.
On March 20, 2015, members of the Brazilian Federal Prosecution Service (“MPF”) serving on the task force responsible for prosecuting the Operation Lava Jato (“the Task Force”), launched a campaign called “10 Measures Against Corruption.” Drawing on past experience with anti-corruption investigations, the Task Force developed a legislative proposal to encourage the prosecution of corruption cases and to diminish impunity. Past blog posts (here [2] and here [3]) discussed each of the initial 10 Measures Against Corruption proposed by the Task Force.
After receiving more than 2,028,263 signatures from supporters throughout Brazil, the Task Force submitted the proposal to Congress, which led to the creation of Projeto de Lei 4850/2016 [4] (“Bill 4850/2016” or “the Bill”).
On November 30, 2016, the Chamber of Deputies (Brazil’s lower house) approved a version of Bill 4850/2016 that was substantially different from the Task Force’s original proposal. In fact, the changes were so significant that on the day following Chamber of Deputies’ approval of the Bill, the Task Force threatened to renounce its support.
The Bill, including the Chamber of Deputies’ most recent changes, was awaiting the Brazilian Senate’s consideration when on December 14, 2016, the Supremo Tribunal Federal (“STF”), Brazil’s highest constitutional court, determined that the Chamber of Deputies committed a procedural error because it failed to follow a special legislative process required for proposals that begin as popular initiatives. The STF has since ordered the Chamber of Deputies to analyze and vote on the Bill a second time.
Although the STF’s decision may cause other modifications, the following summarizes the changes that were incorporated into the current version of the Bill.
Of the 10 Measures Against Corruption initially proposed by the MPF, only two remained unchanged by the Chamber of Deputies, namely: (i) the increase in penalties for and the classification of high-value corruption as a heinous crime; and (ii) the creation of liability for political parties and the criminalization of the use of campaign slush funds.
The Chamber of Deputies, however, rejected the following proposals:
- The classification of unlawful enrichment of a public official as a crime. The most recent version of the Bill excludes the proposal that would have criminalized the act of unlawful enrichment of a public official and permitted the confiscation of ill-gotten gains related to that crime.
- The use of integrity tests for public officials. The Chamber of Deputies removed a proposal that would have allowed certain enforcement authorities to simulate offering bribes and other undue advantages to public officials to test their ability to resist engaging in such “illicit” behavior.
- Financial incentives for good reporting. The initial proposal creating financial incentives for individuals who report crimes of corruption was eliminated.
- Reform of appeals system in criminal cases. The initial Bill attempted to curb the practice of using appeals as a delay strategy and reduced the timeframe in which judges could request to review a matter, but the Chamber of Deputies rejected these proposals.
- Increased efficiency in actions alleging administrative improbity. The initial purpose of this measure was to reduce the number of steps required in administrative improbity actions to increase efficiency. For example, it proposed abolishing the “preliminary notification” stage. This proposal, however, was rejected.
- Statute of limitations reform. The current version of Bill 4850/2016 altered the original proposal, which included changes to the commencement and calculation of the statute of limitations.
- Adjustments in criminal nullity rules. The initial proposal attempted to make it more difficult to exclude evidence obtained by the Police and the MPF by limiting what is considered illegally obtained evidence. However, the Chamber of Deputies rejected this proposal.
- Pre-trial detention to ensure the return of ill-gotten gains. The original Bill authorized the use of pre-trial detention to more easily identify and locate the product of the crime. However, it did not pass the scrutiny of the Chamber of Deputies.
- Recovery of profits derived from crimes. The original proposal, which was removed by the Chamber of Deputies, created a new mechanism for recovering profits from certain crimes such as influence peddling, corruption, misappropriation of public goods, among others.
Furthermore, the Chamber of Deputies amended Bill 4850/2016 to create criminal liability for judges and prosecutors who abuse their power by acting based on political-party motivations or for recklessly prosecuting public agents for administrative improbity, among other acts. The amendment includes a penalty of anywhere from six months to two years in prison and also creates an obligation to compensate the accused for pecuniary and pain and suffering damages.
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.
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