The Anti-Bribery and
Anti-Corruption
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Editor
Mark F Mendelsohn
Law Business Research
The Anti-Bribery and
Anti-Corruption Review
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This article was first published in The Anti-Bribery and Anti-Corruption Review,
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i
contents
Editor’s Preface
������������������������������������������������������������������������������������������������vii
Mark F Mendelsohn
Chapter 1
AUSTRALIA�����������������������������������������������������������������������������1
Robert R Wyld and Jasmine Forde
Chapter 2
BRAZIL����������������������������������������������������������������������������������21
Antenor Madruga, Ana Maria de Souza Belotto and
Mariana Tumbiolo Tosi
Chapter 3
CANADA�������������������������������������������������������������������������������32
Kenneth Jull and Matt Saunders
Chapter 4
CHINA�����������������������������������������������������������������������������������46
Lesli Ligorner and Michael Hickman
Chapter 5
DENMARK����������������������������������������������������������������������������62
Andreas Bernhard Kirk
Chapter 6
FRANCE��������������������������������������������������������������������������������77
Kiril Bougartchev, Emmanuel Moyne and Sébastien Muratyan
Chapter 7
GERMANY����������������������������������������������������������������������������88
Sascha Kuhn
Chapter 8
GREECE���������������������������������������������������������������������������������98
Ilias G Anagnostopoulos and Jerina (Gerasimoula) Zapanti
Chapter 9
HONG KONG���������������������������������������������������������������������107
Abdulali Jiwaji and Tom Fyfe
Chapter 10
INDONESIA������������������������������������������������������������������������120
Shinta Nurfauzia Husni and Todung Mulya Lubis
Contents
Chapter 11
ITALY�����������������������������������������������������������������������������������142
Luca Basilio and Silvia Levis
Chapter 12
JAPAN����������������������������������������������������������������������������������157
Junya Naito, Rin Moriguchi and Takashi Kobayashi
Chapter 13
KOREA���������������������������������������������������������������������������������171
In Jong Chang and Kyoung Ho Hong
Chapter 14
MEXICO������������������������������������������������������������������������������184
Oliver J Armas, Luis Enrique Graham and Thomas N Pieper
Chapter 15
NETHERLANDS�����������������������������������������������������������������195
Diederik van Omme and Tessa van Roomen
Chapter 16
NORWAY�����������������������������������������������������������������������������208
Tarjei Thorkildsen, Jon Christian Thaulow and Atle J Skaldebø-Rød
Chapter 17
POLAND������������������������������������������������������������������������������219
Agnieszka Wardak and Marcin Tomasik
Chapter 18
SOUTH AFRICA�����������������������������������������������������������������232
Darryl Bernstein and Kelsey Havenga
Chapter 19
SWITZERLAND������������������������������������������������������������������247
Roman Richers and Louise Dräyer-de Moor
Chapter 20
TURKEY������������������������������������������������������������������������������254
E Sevi Bozoğlu Fırat, Orçun Çetinkaya and Filiz Toprak Esin
Chapter 21
UNITED KINGDOM���������������������������������������������������������264
Nick Benwell and Emily Agnoli
Chapter 22
UNITED STATES����������������������������������������������������������������277
Mark F Mendelsohn
Appendix 1
ABOUT THE AUTHORS���������������������������������������������������301
Appendix 2
CONTRIBUTING LAW FIRMS’ CONTACT DETAILS���317
iii
Editor’s Preface
This inaugural edition of The Anti-Bribery and Anti-Corruption Review contains the views
and observations of leading anti-corruption practitioners in jurisdictions spanning every
region of the globe. The worldwide scope of this volume reflects the reality that anticorruption enforcement has become an increasingly global endeavour.
In recent years, a growing number of countries have enacted important anticorruption and anti-bribery legislation and, as importantly, have begun to enforce
those laws. This volume touches upon a wide range of important recent legislative
developments, from the United Kingdom Bribery Act 2010, which entered into force
in July 2011, to amendments to the anti-bribery provisions of China’s Criminal Code.
In the area of foreign bribery (FCPA) enforcement, the United States has seen
continued robust enforcement; an increase in the number of charges against individuals
in addition to continued focus on corporate conduct; a focus on diverse industries
ranging from pharmaceutical and medical devices to financial services; the continued
use of deferred and non-prosecution agreements; self-reporting by companies; the
uncovering of bribery in M&A diligence; and an increase in private litigation related to
FCPA investigations.
While the United States still leads the world in foreign bribery enforcement,
Germany, Italy, Switzerland, the United Kingdom, Norway and Denmark have also
brought forth a substantial number of investigations and enforcement actions in recent
years. This growth has been supported by a significant trend toward greater international
cooperation in anti-corruption enforcement efforts. There are many recent examples
of cooperation between United States authorities and other national authorities. The
United Kingdom Serious Fraud Office’s cooperation with the United States Department
of Justice in the recent Johnson & Johnson/DePuy International settlement is just one
example of this trend toward global coordination in anti-corruption enforcement.
The global anti-corruption landscape is expected to continue to change, with
some exciting developments just over the horizon. As this edition of The Anti-Bribery
and Anti-Corruption Review goes to print, new FCPA guidance is anticipated from the
vii
Editor’s Preface
US Department of Justice. Assistant Attorney General Lanny Breuer has indicated that
the forthcoming guidance will provide ‘detailed’, ‘transparent’ and ‘useful’ guidance, and
it is expected that it will address, inter alia, transactional diligence and successor liability,
who is a ‘foreign official’, and corporate self-reporting and cooperation. This guidance,
which has been anticipated for nearly a year, will undoubtedly inform the views and
decisions of corporate in-house counsel, compliance professionals and anti-corruption
practitioners in the upcoming years.
I wish to thank all of the contributors for their support in producing this volume.
I appreciate that they have taken time from their practices to prepare chapters that will
assist practitioners and the private sector in navigating the complexities of transnational
business and the national and international frameworks addressing corruption.
Mark F Mendelsohn
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Washington, DC
November 2012
viii
Chapter 2
Brazil
Antenor Madruga, Ana Maria de Souza Belotto and Mariana Tumbiolo Tosi1
IINTRODUCTION
2012 will likely be seen in the future as a turning point in the enforcement of anticorruption laws in Brazil. At the time of writing, the Supreme Court, which houses
the most senior Brazilian judges, has decided to convict most of the 38 defendants
in a case that involved bribery, money laundering and embezzlement of public funds
by individuals, companies, banks, political parties and high-ranking public officials,
including members of Congress and the former Chief of Staff of the last President of
Brazil, Luis Inácio Lula da Silva. This case, known as Mensalão (‘big monthly stipend’)
in a reference to the allowances illegally provided to congressmembers in exchange of
political support, is being reported as the ‘trial of the century’.
Corruption is not a new topic in Brazil. Like most democratic nations, Brazil has
adopted administrative, civil and criminal ‘anti-corruption’ rules, which have been part
of the Brazilian legal framework for many years. In fact, corruption has been criminalised
through the Brazilian Criminal Code since 1830.2
Despite the legal framework, Brazil has always been a country where corruption,
if not endemic, is very much present within its large bureaucratic government, both at
federal, state and municipal levels. Brazil ranks 73rd out of the 183 countries measured
in the Corruption Perception Index of Transparency International. The law has clearly
lacked enforcement.
However, a careful observer may have seen, even before the Mensalão case,
the signs of transformation in the Brazilian anti-corruption law enforcement actions.
1
2
Antenor Madruga is a partner, Ana Maria de Souza Belotto is a senior associate and Mariana
Tumbiolo Tosi is a junior associate at Barbosa, Müssnich & Aragão Advogados.
Criminal Code, Articles 130–133, www.planalto.gov.br/ccivil_03/leis/lim/lim-16-12-1830.
htm.
21
Brazil
Independence of courts, well-paid, motivated and independent public prosecutors, more
effective police investigations, especially by the Federal Police, and a free press, among
other factors, have made corruption a much riskier activity. Despite the few convictions
at present, a considerable number of individuals, companies and public officials have
been subject to investigation, prosecution (both civil and criminal) and public exposure.
The coexistence in a jurisdiction of extensive corrupt practices with an increasingly
effective law enforcement environment certainly poses difficult compliance challenges
for individuals and companies.
II
DOMESTIC BRIBERY: LEGAL FRAMEWORK
The Brazilian legal framework on anti-corruption matters consists of criminal, civil and
administrative offences that seek to punish both the public official and the private party
(individual or legal entity) that participates in the act of corruption.
The concept of corruption under Brazilian law, regardless of whether in the
criminal, civil or administrative spheres, necessarily requires the participation of a
government institution or a public official. In other words, the Brazilian legal framework
has not yet formally adopted the concept of corruption in the private sector or commercial
corruption/bribery. In that sense, the Brazilian legal framework adopts a broad concept
of ‘public official’ for the purposes of applicable criminal, civil and administrative laws.
In general, anyone who works for any level, branch or agency of government, or
for any company or entity owned by the government, is considered a public official. The
definition of public official is also extended to anyone who works for a private company
that is hired to provide a public service.
For criminal purposes, Article 327 of the Brazilian Criminal Code defines a public
official as ‘anyone who, even if transitorily or without remuneration, holds a public post,
employment or function’. Additionally, Article 327 further states that ‘anyone who holds
a post, employment or function in a parastatal entity, and who works for companies that
have been contracted to render services or to execute activities that are typical of the
public administration’, are also regarded as public officials.
Wrongdoings involving public officials are also governed outside criminal law.
Law No. 8429/1992 (‘the Administrative Improbity Law’)3 establishes civil sanctions
for acts qualified as illicit for constituting ‘administrative improbity’. The Administrative
Improbity Law also gives a broad definition of ‘public official’. Article 2 of the Law
considers a public official to be anyone who holds, ‘even if transitorily or without
remuneration, upon election, nomination, designation, hiring or any other means of
endowment a mandate, post, employment or function’:
a
in the direct or indirect administration of any of the national powers, the states,
the federal district, the municipalities and territories;
b
in a company that has been incorporate in the public coffers;
3
Civil law related to acts against the public coffers. This Law is discussed in more detail below.
22
Brazil
c
d
e
in an entity whose creation or funding was incurred by the public coffers of which
the public coffers have contributed or contribute more than 50 per cent of its
assets or annual income;
in an entity for which the creation or funding was or is incurred by the public
coffers with less than 50 per cent of the assets or annual income (in such cases,
the patrimonial sanctions shall be limited to the illicit repercussion over the
contributions to the public coffers); or
in an entity that receives grants, benefits, tax or credit incentives (in such cases,
the patrimonial sanctions shall be limited to the illicit repercussion over the
contributions to the public coffers).
Finally, Law No. 8666/1993 (‘the Procurement Procedures and Public Agreements Law’)
defines public officials as ‘anyone who holds, even if transitorily or without remuneration,
a public function or employment,’ as well as ‘anyone who holds a post, employment or
function in parastatal entities, as well as in foundations, public companies and mixed
economy companies, and other entities that are, directly or indirectly, controlled by the
public administration’.
i
Criminal offences
Criminal offences are generally defined in the Brazilian legal framework though the
Criminal Code or other specific laws. Under the Brazilian system, legal entities have
no criminal liability, except for environmental crimes. Nevertheless, administrators,
employees and representatives in general of legal entities may be individually criminally
liable for acts of corruption or bribery involving the legal entity. The legal entity, despite
not being a defendant, may have its assets seized and forfeited in a criminal action if such
assets are found to be instrumentalities or proceeds of crime.
Title XI of the Brazilian Criminal Code defines crimes against the public
administration. Such offences are divided into four main groups: crimes committed
by public officials; crimes committed by private parties; crimes against foreign public
administrations; and crimes against the conduction of justice.
The crime of trafficking influence is defined in Article 332 of the Criminal Code
as ‘to request, demand, collect or obtain for oneself or for another, promise of advantage
or benefit, under the pretext of influencing an act committed by a public official in the
exercise of his function’, regardless of whether the public official is aware of such undue
advantage or effectively receives an undue advantage. The penalties applicable to those
who are found guilty of trafficking influence are two to five years’ imprisonment plus a
fine.
Passive and active corruption defined in Articles 317 and 333 of the Brazilian
Criminal Code clearly prohibits the payment of bribes to public officials and the receipt
of bribes by such public officials. In fact, the terms of such articles are even broader.
Article 317 of the Brazilian Criminal Code, under the chapter of crimes committed
by public officials, defines passive corruption as ‘to request or receive, for oneself or for
another, directly or indirectly, even if outside or prior to assuming the function, but for
reason of such function, undue advantage, or to accept as promise of such advantage’.
The crime of active corruption is defined under Article 33 of the Criminal Code as ‘to
23
Brazil
offer or promise an undue advantage to a public official, for him to conduct, omit or
delay an official act’.4
Therefore, the crime of corruption is not limited to the payment of bribes, but
rather any undue advantage, in a similar concept to the FCPA’s ‘anything of value’. The
undue advantage does not have to actually take place; the simple request of an undue
advantage by a public official or the offer and promise of such advantage to a public
official is enough for the crime of corruption to occur. The penalties for those who are
found guilty of active corruption consist of two to twelve years’ imprisonment plus a
fine.
ii
Civil and administrative offences
One of the most relevant civil statutes in Brazil, for anti-corruption purposes, is the
Administrative Improbity Law. Because this statute is of a civil nature, it is applicable to
both individuals and legal entities.
The Administrative Improbity Law seeks the punishment of an illicit enrichment
of public officials and of damages caused to the public coffers, as well as the restitution
of such damages. It is applicable to anyone who induces or contributes to the act of
improbity, or who in any way, directly or indirectly, benefits from such act.5
The following penalties may be applied to those who are guilty of violating the
Administrative Improbity Law:
a
confiscation of assets illicitly embezzled from the public coffers or of any profits
that may have been obtained to the detriment of the public coffers;
b
indemnification of any damages that may have been caused to the public coffers;
c
suspension of all political rights for the period of eight to ten years;
d
payment of a civil fine of up to three times the amount of the illicit gains;
e
payment of civil fine of up to 100 times the amount of the remuneration paid to
the public agent;
f
prohibition to enter into contracts with public entities; and
g
prohibition from receiving any direct or indirect public incentives or benefits for
between five and ten years (Article 12).
The sentence will vary according to the damages caused by the acts of improbity and the
economic gains obtained by the defendant.
Another important statute for purposes of anti-corruption in Brazil is the
Procurement Procedures and Public Agreements Law, which establishes the rules for
public tenders and public contracts.6 This Law applies both civil and criminal penalties,
and establishes rules for administrative procedures.
4
5
6
Id. at Article 333.
Brazilian Federal Law No. 8429 of 2 June 1992, Article 3, www.planalto.gov.br/ccivil_03/Leis/
L8429.htm.
Brazilian Federal Law No. 8666 of 21 June 1993, www.planalto.gov.br/ccivil_03/Leis/
L8666cons.htm.
24
Brazil
The civil penalties of the Procurement Procedures and Public Agreements Law
are applicable to both legal entities and individuals. However, for the reasons explained
above, the criminal sanctions are applicable solely to individuals. The civil sanctions for
any default in fulfilling the public contracts are:
a
reprimand;
b
civil fines;
c
contract termination;
d
temporary prohibition to participate in public biddings and to enter into contracts
with public entities for no longer than two years; and
e
declaration of unsuitability to bid or contract with the public administration.
Such sanctions can also be applied if the person or entity is convicted of fiscal fraud,
promotes illicit acts to frustrate the competitiveness of the public tender or demonstrates
unsuitability to contract with the public administration.
The criminal penalties under the law vary from six months’ to six years’
imprisonment plus a fine.
iii
Other applicable rules
The codes of conduct and ethics of different Brazilian public institutions may also be
used as guidance in the relation between private entities and individuals and public
agents.
Although not all public institutions in Brazil maintain codes of conduct or ethics
specifically regulating contacts between their employees and members of the private
sector, certain codes have become known as examples of general rules to be followed
when relating with the public sector.
One of the most significant codes of conduct applicable to public agents in Brazil
is the Code of Conduct of the High Federal Administration.7 Although this Code is
only applicable to officials holding high-ranking functions in the federal administration,
it lays out specific rules pertaining to issues such as gifts, travel and entertainment, and
other specific rules that are not only useful as guidance to public officials in general, but
also for companies or other private individuals who have contact with the public sector.
Besides such codes, which are more valuable for illustrative purposes since they
are not compulsory for the private sector, Brazil is still deficient in ethical rules that
specifically bind the private sector in its relationship with public officials. In that sense,
however, it is important to keep in mind that for criminal purposes, the concept of
offering or granting an undue advantage to a public official is very broad, making the
opportunity for giving gifts, trips and other invitations to public agents quite limited.
7
Code of Conduct of the High Federal Administration, 21 August 2000, www.planalto.gov.br/
ccivil_03/codigos/codi_conduta/cod_conduta.htm.
25
Brazil
Finally, as may be noted from the rules described above, any payment to public
officials constitutes an undue advantage under Brazilian law. Therefore, Brazilian law
allows no exception for facilitating payments.8
iv
Political donations
Financing of political campaigns is mainly governed by Federal Law No. 9504/1997
(‘the Electoral Law’). These rules are regulated in resolutions issued by the Superior
Electoral Court.
Legal entities and individuals may, under specific rules, make financial
contributions to political campaigns, directed to specific candidates, political parties or
coalitions of parties. Such contributions may consist of identified cash deposits, bank
transfers, nominal cheques or otherwise in assets or services estimable in cash. Any
donation must be made to bank accounts specifically opened for the purpose of receiving
donations for political campaigns. Giving cash through any other means is prohibited.
Candidates, political parties and coalitions cannot accept, directly or indirectly,
donations from the following entities:
a
a foreign entity or government;
b
an entity of the public administration or foundation maintained with public
funds;
c
companies that are the operators or grantees of public services;
d
public companies;
e
private entities, which, due to legal provisions, receive compulsory contributions;
f
public utility entities;
g
unions;
h
not-for-profit companies that receive funds from abroad;
i
religious and charitable institutions;
j
sporting entities;
k
non-governmental companies that receive public funding;
l
public interest civil society organisations; or
m
cooperatives whose members are operators or grantees of public services or
benefited from public funds.
The donation by legal entities to political campaigns is expressly limited under Brazilian
law, in the aggregate, to 2 per cent of the total gross revenue pertaining to the year
prior to the campaign.9 Any entity created in the year of the election may not make
contributions.
If a company surpasses such limitation it will be subject to fines of between five
and ten times the exceeded amount and may be prohibited from participating in public
biddings and contracting with the government for up to five years.
8
9
See Stuart H Deming, The Foreign Corrupt Practices Act and the New International Norms,
15–16 (American Bar Association, 2005).
Individuals may donate up to 10 per cent of their gross income.
26
Brazil
Finally, any donation made with the intent of getting a public official to conduct,
omit or delay an official act will constitute an undue advantage and will therefore be
illegal, even if the above-mentioned requirements for political donations are met.
III
ENFORCEMENT: DOMESTIC BRIBERY
The enforcement of the anti-bribery provisions has increased in Brazil in the past
decade. The Federal Police has substantially improved its investigation techniques and its
management, and has launched several operations to fight organised crime in three main
branches: financial crimes, tax crimes and corruption.
The Mensalão case is a good example of how prosecutions of bribery-related crimes
have developed in recent years. The case relates to the biggest political and corruption
scandal in Brazil, and involves alleged misconducts by public agents, political actors and
private banks and companies in a scheme to buy political support from coalition allies.
The scheme allegedly consisted of channelling money from state-owned companies
through the advertising budget to congressmembers to guarantee political support to the
proposals presented by the Executive Power. The case is currently under judgment by
the Brazilian Supreme Court (Criminal Lawsuit No. 470), which has already convicted
several defendants of active and passive corruption and money laundering, among other
offences. The ruling from the Supreme Court has generated a big change in the public
perception of impunity regarding corruption and will likely create a relevant repercussion
regarding the interpretation of corruption and money laundering laws in Brazil.
Investigations and prosecution against acts of corruption are undoubtedly
increasing.
IV
FOREIGN BRIBERY: LEGAL FRAMEWORK
The Brazilian Criminal Code, in accordance with the Organisation for Economic
Co-operation and Development (‘OECD’) Anti-Bribery Convention, also establishes the
liability of acts of corruption or bribery against foreign public officials and institutions.
For such purposes, Article 337-D of the Brazilian Criminal Code defines a foreign
public agent as ‘anyone who, even if transitorily or without remuneration, holds a public
post, employment or function, in state entities or in diplomatic representations of a
foreign country’.
Article 337-D further considers a foreign public agent as ‘anyone who holds an
employment or function in companies controlled, directly or indirectly, by a foreign state
or international public organisations’.
Active corruption in international commercial transactions (Article 337-B) is
defined as ‘to directly or indirectly promise, offer or give an undue advantage to a foreign
public agent, or to a third party, in order to influence him to practise, omit or delay an
official act related to an international commercial transaction’.
Those who are found guilty of active corruption in international commercial
transactions are subject to one to eight years’ imprisonment plus a fine.
Additionally, the Criminal Code also establishes the crime of traffic of influence in
international commercial transactions, defined by Article 337-C as ‘to request, demand,
27
Brazil
collect or obtain for oneself or for another, promise of advantage or benefit, under the
pretext of influencing an act committed by a foreign public official in the exercise of his
function related to an international commercial transaction’.
The penalties applied to those found guilty of this criminal offence are two to five
years’ imprisonment plus a fine.
As explained above, such criminal offences do not apply to legal entities, as under
the Brazilian legal system they only have criminal liability for environmental crimes.
V
ASSOCIATED OFFENCES: FINANCIAL RECORD KEEPING
AND MONEY LAUNDERING
Under Brazilian law, companies are required to keep accurate financial books and
records. The regulations are, however, essentially focused on tax and bankruptcy law and
accountability to shareholders, and not on anti-corruption provisions.
Federal Law No. 10406/2002 (‘the Brazilian Civil Code’) establishes, in its Article
1179, that ‘companies must follow an accounting system, based on uniform entries
in their books corresponding to the underlying documentation, and must draw up,
annually, a balance sheet and a profit and loss statement’. Federal Law No. 5172/1966
(‘the Brazilian Tax Code’) establishes that companies must keep their books required for
commercial and tax accounting and proof of entries made. It is a crime under Federal
Law No. 8137/1990 (‘the Tax Crimes Law’) to omit facts or insert inaccurate elements
on the company’s financial records in order to evade taxes,.
Neither companies nor individuals are required to report any criminal activity that
they come to know. The same is true for the disclosure of violations of anti-corruption
laws. The case is different in a scenario where an individual, in a management position,
with the responsibility for taking actions in this field within the company, comes to
know that bribery or any other criminal act is being practised. In this case, individuals
have been prosecuted for failure to take action in order to avoid the criminal conduct.
Federal Law No. 9613/1998 (‘the Anti-Money Laundering Law’) has recently
been amended (through Federal Law No. 12283/2012). Among the several changes
brought to the Law, the Brazilian legal system has eliminated an exhaustive list of possible
predicate offences for acts of money laundering, established that any criminal offence can
be a predicate of money laundering, and therefore expanded the extent of the Law.
The Anti-Money Laundering Law is also amorphous. The Law defines the criminal
offence of money laundering and establishes criminal penalties, as well as determining
administrative obligations and penalties to those subject to its terms.
The money laundering criminal offence is characterised as whenever one ‘conceals
or dissimulates the true nature, origin, location, availability, transaction or ownership
of assets, rights or valuables that constitute the direct or indirect proceeds of a criminal
offence’. The crime is also committed if one, in order to omit or dissimulate the proceeds,
converts the assets into licit goods; acquires, receives, exchanges, negotiates, gives or
receives in guarantee, keeps, keeps in deposit, transacts or transfers them; or imports or
exports them with values different from the real values. Finally, the criminal offence also
encompasses the use, in the economic or financial activity, of assets, rights or valuables
that proceed from the criminal offence, or participation in a group, association or firm
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with the knowledge that its main or secondary activity is directed to the practice of
money laundering crimes. The penalty established for the crime ranges from three to ten
years, plus a fine.
In determining client due diligence, record keeping and reporting obligations,
the Anti-Money Laundering Law establishes the following sanctions for the failure to
comply with administrative obligations:
a
a reprimand;
b
a fine;
c
temporary ineligibility for the function of administrator in any of the entities that
have the duty to report; and
d
revocation or suspension of business licences.
Investigations and prosecutions of money laundering in cases involving bribery-related
conducts are routine.
VI
ENFORCEMENT: FOREIGN BRIBERY AND ASSOCIATED
OFFENCES
Although the foreign bribery offences have been adopted in the Brazilian legal system
for nearly 10 years, there is currently no actual enforcement by the Brazilian authorities.
To date there is no information of a criminal action or investigation for acts of foreign
bribery.
VII
INTERNATIONAL ORGANISATIONS AND AGREEMENTS
Brazil is an active party in multilateral agreements pertaining to anti-corruption. It is
currently a party to (having effectively ratified) the following agreements:
a
the OECD Anti-Bribery Convention;
b
the United Nations Convention against Corruption;
c
the United Nations Convention against Transnational Organized Crime; and
d
the Inter-American Convention against Corruption.
In order to be compliant with the above conventions, Brazil has adopted specific legislation
such as the corruption of foreign agent offences. During reviews for the implementation
of the terms of the agreements, however, especially through the peer review conducted by
the OECD, it has been identified that Brazil still needs to intensify its efforts, especially
regarding corporate liability and the responsibility of legal entities.10
10
‘Brazil should rapidly amend its legislation to make companies directly liable for the payment of
bribes to foreign public officials, and to ensure that effective, proportionate and dissuasive sanctions
are applicable, according to a new report by the OECD Working Group on Bribery.’ In: ‘Brazil
should strengthen corporate liability laws on foreign bribery, says OECD’, 18 December 2007. www.
oecd.org/corruption/brazilshouldstrengthencorporateliabilitylawsonforeignbriberysaysoecd.htm.
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Brazil
Pressure due to such international obligations is likely to continue to cause
changes in the Brazilian anti-corruption efforts.
VIII LEGISLATIVE DEVELOPMENTS
A bill, currently before Congress (Legislative Bill No. 6826/2010), is specifically aimed
at defining civil and administrative liability of legal entities for practices related to acts of
corruption against both national and foreign public administrations.
This bill also brings new concepts to Brazilian anti-corruption enforcement.
It specifically establishes reporting and compliance measures that must be considered
when applying sanctions against legal entities. Such measures comprise the level of
cooperation of the legal entity with the authorities, including the possibility of reporting
the criminal act to the competent authorities, the existence of internal auditing and
integrity mechanisms and the effective application of a code of ethics.
Although it is hard to predict when the bill will pass into law, there are interested
parties within the Executive Power, especially the Office of the Comptroller General,11
who are pushing for the law. Additionally, pressure from Brazil’s international obligations
is also serving as a catalyst for the adoption of the bill in Congress.
IX
OTHER LAWS AFFECTING THE RESPONSE TO CORRUPTION
Brazilian labour laws (governed by Federal Law No. 5452/1943) must be considered
when developing and applying compliance programmes, especially regarding internal
rules for whistle-blowing protection and penalties for non-compliance.
There is, however, no specific law in the Brazilian legal system regarding
whistle-blowing related to anti-corruption enforcement.
XCOMPLIANCE
The adoption of compliance programmes by companies doing business in Brazil is
currently mostly caused by foreign obligations such as those established under the FCPA.
Many companies in Brazil are adopting compliance programmes and policies mostly due
to requests of foreign companies coming into Brazil through mergers, acquisitions or
other specific projects, or in order to attract business with foreign companies subject to
laws such as the FCPA and the UK Bribery Act.
Under the current Brazilian legal framework there is no direct guidance or
obligation for the implementation of compliance programmes. Although the programmes
adopted by Brazilian companies do reflect obligations under Brazilian law, and are also
11
The Office of the Comptroller’s General is ‘the agency of the Federal Government in charge
of assisting the President of the Republic in matters which, within the Executive Branch, are
related to defending public assets and enhancing management transparency through internal
control activities, public audits, corrective and disciplinary measures, corruption prevention
and combat, and coordinating ombudsman’s activities’. www.cgu.gov.br/english/default.asp.
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adapted from original programmes developed abroad in order to fit within the Brazilian
system, they are still very much based on guidelines and certain principles established
abroad.
As discussed above, if adopted, Legislative Bill No. 6826/2010, currently before
Congress, would make the adoption and effective implementation of compliance
programmes a mitigating factor in sentencing against legal entities, creating an additional
incentive for companies to adopt anti-corruption compliance programmes.
XI
OUTLOOK AND CONCLUSIONS
Brazilian enforcement efforts are clearly going through many changes, following trends
and concepts adopted internationally. Ahead of the Brazilian authorities are Brazilian
legal entities who do business abroad and who are seeking conformity with foreign
legislation such as the FCPA and the UK Bribery Act. This is creating changes for the
better in the Brazilian business environment and establishing new ethical standards.
Anyone doing business in Brazil should measure anti-corruption related risk with
a view not only to past and present perceptions, but also to the signs of transformation
that predict a much more responsive enforcement environment for the near future.
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Appendix 1
About the Authors
Antenor Madruga
Barbosa, Müssnich & Aragão Advogados
Antenor Madruga has been a federal attorney for more than 10 years, having held several
positions at the Brazilian government, such as National Secretary of Justice, Director
of the Department of Assets Recovery and International Legal Cooperation, Deputy
Solicitor General, member of the Board of the Brazilian Financial Intelligence Unit
(‘COAF’) and Head of International Affairs at the Office of the Solicitor General (‘AGU’).
He was also the coordinator of the Brazilian National Strategy against Corruption and
Money Laundering (‘ENCCLA’) and a member of the commission in charge of revising
the Brazilian Anti-Money Laundering Law, and head of the Brazilian delegations in the
negotiations of several mutual legal assistance treaties.
Antenor is a professor of law (conflict of laws and international legal cooperation)
at the Rio Branco Institute, the Diplomatic Academy of the Ministry of Foreign
Relations. He is a founding member and president of the International Legal Cooperation
Committee of the Brazilian Institute of Criminal Sciences.
Ana Maria de Souza Belotto
Barbosa, Müssnich & Aragão Advogados
Ana Maria de Souza Belotto is a consultant on foreign law, specialised in the law of the
United States. She was formerly the General Coordinator for Asset Recovery of the Asset
Recovery and International Legal Cooperation Department of the Ministry of Justice.
She participated in the Brazilian National Strategy against Corruption and Money
Laundering (‘ENCCLA’) and integrated the Brazilian delegation during the Conference
of the State Parties of the United Nation’s Convention against Corruption (2008). She is
a founding member of the International Legal Cooperation Committee of the Brazilian
Institute of Criminal Sciences, a registered attorney in the state of New York and a
member of the American Bar Association.
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About the Authors
Mariana Tumbiolo Tosi
Barbosa, Müssnich & Aragão Advogados
Mariana Tumbiolo Tosi graduated from Fundação Getúlio Vargas Law School with
partial formation at Harvard Law School. She is a criminal law attorney, a founding
member of the International Legal Cooperation Committee of the Brazilian Institute
of Criminal Sciences and a researcher in international criminal law at Fundação Getúlio
Vargas Law School. Ana Maria is also a member of the Brazilian Bar Association.
Barbosa, Müssnich & Aragão Advogados
SCS Quadra 01, Bloco F, 30 – 7o andar
70397-900 Brasilia
Brazil
Tel: +55 61 3218 0303
Fax: +55 61 3218 0315
[email protected]
[email protected]
[email protected]
www.bmalaw.com.br
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