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Brazil’s Office of the Comptroller General issues Guidelines in Connection with Entertainment of Public officials during the FIFA World Cup in Brazil




by:
Kelly B. Kramer
Mayer Brown LLP - Washington Office

Salim Jorge Saud Neto
Mayer Brown LLP - Rio de Janeiro Office

 
June 11, 2014

Previously published on June 3, 2014

Yesterday (2 June 2014), Brazil’s Office of the Comptroller General enacted Normative Guideline N. 01/2014 prescribing the terms under which Brazilian federal public officials may accept invitations to attend the 2014 FIFA World Cup being held in Brazil. The FIFA 2014 World Cup is the world’s most important soccer tournament and tickets to the events are in high demand from fans all around the world.
According to the Normative Guideline, Brazilian Federal Public Officials may not accept invitations to attend matches unless (i) the tickets are distributed by the public administration from tickets allocated by FIFA, the local organization committee, or the Brazilian Soccer Confederation; (ii) the invitation is extended by individuals who are related by blood to, or have preexisting friendships with, the official and the tickets are paid for personally by the individuals extending the invitations; (iii) the tickets are received as part of a commercial promotion open to the general public; (iv) the tickets are distributed in connection with the institutional representation of a governmental agency; or (v) the tickets are distributed by state-owned entities in connection with their institutional activities and no conflicts of interest exist.

Although existing Brazilian laws and regulations arguably prevented public officials from accepting tickets for World Cup games in situations other than those set out in the Normative Guideline, the newly-enacted regulation makes clear that a Brazilian federal public official who accepts tickets on terms not authorized by the Guideline will be deemed to have received an “undue advantage” within the meaning of the Brazilian Penal Code and the Brazil Clean Companies Act (Law 12846/2013). As a result, federal public officials may be subject to criminal and administrative sanctions if they accept invitations outside of the exceptions listed above. Similarly, companies that extend invitations to public officials other than in accordance with one of the exceptions above are subject to the administrative sanctions in Brazil’s Clean Companies Act, such as fines ranging from 0.1% to 20% of the company’s gross revenues for the preceding year.

The Guideline is also likely to inform potential prosecutions under the Foreign Corrupt Practices Act and the U.K. Bribery Act. For example, the FCPA provides an affirmative defense for gifts or offers that are “lawful under the written laws and regulations of the foreign official’s ... country.” Thus, companies that strictly adhere to the Guideline should be able to avail themselves of this defense. Although not covered by the Guidelines, companies should also be cautious when extending invitation to business contacts in private companies, as such invitations may be in violation of the restrictions imposed by the U.K. Bribery Act.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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