FCPAméricas Blog
How Brazil’s New Anti-Bribery Law Compares to the FCPA – Part 1
8.06.2013
On August 2, 2013, Brazil’s new Anti-Bribery Law (“Anti-Bribery Law”), which imposes civil and administrative liability on legal entities for acts committed against local and foreign public administration, especially those related to corrupt practices, was published in the Official Gazette. The new law will come into force in 180 days. The main features of the new Anti-Bribery Law are described here.
Some of the key differences and similarities between Brazil`s new Anti-Bribery Law and the FCPA are described in this series of two blog posts. Part I (below) highlights the subjected persons, protected persons, prohibited acts, facilitation payments, strict liability, and books and records. Part II discusses corporate criminal liability, corporate fines and sanctions, credit for compliance programs, and self-disclosure and cooperation.
Subjected persons. While the FCPA establishes jurisdiction over both natural and legal persons, the Anti-Bribery Law covers only legal entities (legally or de facto organized, even if temporarily). Individuals involved in wrongdoing, in contrast, are subject to sanctions set forth in the Criminal Code and other Brazilian laws (e.g. Public Tender Law, Improbity Law, etc.).
Bribery of foreign and local officials. The anti-bribery provisions of the FCPA prohibit only the bribery of foreign officials. The Anti-Bribery Law prohibits bribery of both local and foreign officials. Brazilian companies and local subsidiaries of foreign companies should be aware of the new risks to which they will now be subject. In two major anti-corruption events that took place in Brazil in the last months, representatives of Brazilian enforcement agencies stated that enforcement of the Anti-Bribery Law will be a priority for the Brazilian Government.
Prohibited acts. The scopes of the FCPA and the Anti-Bribery Law are different. While the FCPA covers the bribery of foreign officials (and the accounting / internal controls provisions include certain requirements applicable to issuers), the Anti-Bribery Law covers more than just corruption. Significant parts of its prohibited acts address illegal conduct related to public tenders and public contracting (not necessarily linked to corruption). Given this, a compliance program designed to prevent and detect only corrupt conduct might not address all the conduct prohibited by the Anti-Bribery Law. To comply with the Brazilian law, companies should enhance their compliance programs, among other things, intensifying trainings and developing specific policies related to public tenders and public contracts. These measures are important because employees in companies operating in Brazil often commit wrongdoing because they are not familiar with the law and because they do not know how to react when presented with high risk situations.
Facilitation payments. The FCPA provides an exception for facilitating payments. This exception does not exist under the Anti-Bribery Law or other local laws. In fact, facilitating payments are prohibited under Brazilian law. They can subject companies to civil and administrative liability, and can subject individuals to imprisonment of up to 12 years and fine.
Strict liability. The anti-bribery provisions of the FCPA require the government to show corrupt intent of the defendants. The Anti-Bribery Law, in contrast, holds companies strictly liable, meaning that the government need not show any intent, just that bribes were paid. The new Brazilian law should be more easily applied than current laws that, as a general rule, do not allow for strict liability and require a finding of fault. This has often led to long proceedings. Given strict liability, in which anything given to a public official may represent a risk for companies, it is essential that companies have policies that are consistent with local regulations for gifts, hospitality, and entertainment.
Books and records. The Anti-Bribery Law does not have accounting provisions. This may be due to the fact that certain existing laws and regulations already prescribe general rules for accounting and financial reporting, especially for listed companies.
The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com.
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© 2013 Matteson Ellis Law, PLLC
Post authored by Carlos Henrique da Silva Ayres, FCPAméricas Contributor
Comments
August 14th, 2013 at 1:19 pm
[…] Part I of this series compares the following aspects of Brazil’s new Anti-Bribery Law with the FCPA: the subjected persons, protected persons, prohibited acts, facilitation payments, strict liability, and books and records. Part II (below) discusses corporate criminal liability; corporate fines and sanctions; credit for compliance programs; and self-disclosure and cooperation. […]