In order to comply with international agreements for combating bribery to which Brazil is a signatory, the country has passed a new anti-bribery law (12.846/2013). The new law, which came into force on January 29, 2014, imposes civil and administrative liability on legal entities for acts committed against local and foreign public administration, especially those related to corrupt practices.
In fact, the new law covers more than just corruption, as 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.
Inspired by the U.S. model of corporate criminal responsibility – although the sanctions in the Brazilian law are civil and administrative – the new law embraces a respondeat superior notion that legal entities will be held liable for the acts committed by any of their employees or third parties. The new law will hold companies strictly liable, meaning that the government need not to show any intent, just that the illegal acts were committed for benefit or interest of the legal entity. 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. The law also authorizes successor liability.
The sanctions set forth in the new law are harsh and include administrative (which can be applied by the public administration directly) and judicial sanctions (which can only be applied by a judge). Administrative sanctions are: a) fines in the amounts of 0.1% to 20% of the gross revenue of the legal entity (if it is not possible to use the criteria of the value of the gross revenue of the legal entity, the fine will range from R$6,000 — around US$2,600 — to R$60 million — around US$26 million); and b) publication of the condemnatory decision. Judicial sanctions are: a) loss of assets, rights or valuables directly or indirectly related to the wrongdoing; b) partial suspension or interdiction of activities; c) compulsory dissolution of the legal entity; and d) prohibition to receive incentives and public funding. In all cases, the legal entities will also have to repair the damages caused.
The new law also brings important new concepts to the Brazilian anti-corruption arena. For example, the existence of compliance programs and cooperation with the investigations are among the list of factors that will be taken into consideration when applying the sanctions. The new law also allows the public administration to enter into leniency agreements with legal entities responsible for prohibited acts established in the law, provided that certain requirements are fulfilled, in which case fines will be reduced by up to two-thirds and certain judicial and administrative sanctions will be exempted.
The new Brazilian anti-bribery Law is another indication that Brazilian authorities are closing ranks against corruption. Representatives of Brazilian enforcement agencies have already stated that enforcement of the new law will be a priority for the Government.
An unofficial translation of Brazil`s new anti-bribery is available at http://f.datasrvr.com/fr1/813/29143/Trench_Rossi_e_Watanabe_-_Brazil’s_anti-bribery_law__12846-2013.pdf.