A lot has been going on in Brazil in the anti-bribery field. There have been different developments that are noteworthy. This post highlights 5 relevant developments that took place in 2016. Other relevant developments will be summarized in the next post.
Car Wash continues to advance. The Operation Car Wash was initially launched in March 2014. In 2016 alone, 17 special operations were carried out by the Federal Prosecutors task force and 20 criminal charges were filed in connection with corruption, money laundering, conspiracy, and related crimes. In 2015, 15 special operations were carried out and 15 criminal charges were filed. In 2014, 8 special operations were carried out and 17 criminal charges were filled. In total, as of December 2016, the Car Wash resulted in:
- 1,434 different proceedings
- 182 arrest orders
- 730 search and seizure orders
- 71 plea agreements signed with individuals
- 7 leniency agreements signed with companies
- 259 individuals criminally charged
- Around US$ 3.10 billion recovered (including an amountthat is expected to be recovered soon)
- 98 requests for cooperation sent to 31 countries
- 22 requests for cooperation received from 13 countries
It should be noted that the Car Wash operation is not related only to companies in the oil & gas industry. Companies in other industries such as marketing and IT, for example, have also been implicated. Several cooperation statements were signed at the end of 2016 and, according to local media, there is a line of cooperators waiting to negotiate plea agreements. Based on this, new developments are expected to happen in 2017.
Ten measures against corruption. The Brazilian Federal Prosecution Service launched a campaign in 2015 to close ranks on corruption, proposing ten measures. The initiative is known as 10 Measures Against Corruption and, in March 2016, it obtained more than two million signatures from supporters around the country (a summary of the proposed measures can be found here and here). It was then delivered to Congress as a bill of law by popular initiative. In late November 2016, the House of Representatives approved a version of the ten measures that was substantially different from the original document. According to Federal Prosecutors, the changes to the measures made it so weak that the Car Wash task force threatened to withdraw from the case. In mid-December, the Brazilian Supreme Court determined that the House of Representatives did not follow a legislative process and ordered the House of Representatives to analyze and vote on the measures a second time. Discussions about the ten measures are expected to continue in 2017.
Increased FCPA impact in Brazil. In October 2016, we saw the first Brazilian company to be sanctioned in the United States for violations of the FCPA. Embraer paid $ 205 million to settle FCPA charges (see here and here). In December, Odebrecht and Braskem were also sanctioned in the United States for violations of the FCPA (combined, their FCPA settlement amounts were US$ 419.8 million), as part of its US$ 3.5 billion global settlement with various countries (see here and here). Petrobras and Eletrobras had already publicly announced that they are being investigated in the United States as well. Per information from the FCPA Blog, as of December 31, 2016, Brazil is the country with the highest number of references in known ongoing FCPA investigations. The country was mentioned in connection to 19 matters, followed by China with 17 mentions.
Prison after confirmation from Court of Appeals. Traditionally, an individual would go to jail in Brazil after a conviction is final, meaning that no further appeal could be filed. According to procedural rules, In addition to appealing from a decision from a district judge to a court of appeals, defendants, in principal, could still appeal to the Superior Court of Justice, Brazil’s highest federal court, and to the Supreme Court, Brazil’s supreme court. This would often make a criminal proceeding time-consuming. In fact, several cases took more than 10 years until a final conviction was reached. Some have claimed that certain defendants would appeal to the Superior Court of Justice and the Supreme Court just to try to reach the statute of limitation of the cases. In February, the Supreme Court decided that a defended can be arrested after a conviction is confirmed by a Court of Appeals, even in cases where appeals are pending before superior courts. The decision was confirmed by the Supreme Court in another case about the same matter in October. These decisions may have the impact of influencing defendants’ strategies, being more willing to sign a plea agreement than to hope for the statute of limitation to run.
Whistleblower protection and incentives. 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 detailed draft bill to be presented to Congress addressing whistleblower protections and incentives, including allowing whistleblowers to be entitled to receive an amount between 10% to 20% of the fines paid to authorities as result of the tip provided.
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Post authored by Carlos Henrique da Silva Ayres, FCPAméricas Contributor