- Fighting corruption in the United Kingdom and Brazil
- August 4, 2011
- Law Firm: KLA - Koury Lopes Advogados - São Paulo Office
Finally, the UK authorities announced the long-awaited guidance to the dreaded Bribery Act, which was enacted a year ago, but lacked regulation until now.
The UK Bribery Act will come into effect July 1st. The various definitions of that act had been expected worldwide, the main reason being that British laws are applicable not only in the UK, but to any British entity doing business overseas as well. These companies, regardless of whether they operate in the UK or elsewhere in the world will be strictly and criminally liable for improper payments made in their name even if there is no direct link between such payments and the company in the UK or made without headquarter’s approval.
Brazil should heed the new law, especially because, according to the British Consulate in São Paulo, the country is United Kingdom´s main trading partner in Latin America, with a bilateral trade volume of 4 billion pounds in 2010.
The UK Bribery Act resembles the US Foreign Corrupt Practices Act ("FCPA"), but is stricter than the US version. The UK law applies not only to bribery of public officials, but also to any type of improper payment. It also criminalizes commercial corruption and bribery among individuals.
In the midst of this fascinating world of corruption prevention, the new law is relentless and innovative, going far beyond of what had been expected. The UK authorities gave a clear warning to companies doing business in their territory. They have 90 days to create mechanisms for protection and prevention of corporate corruption.
Although the new legal degree is extremely rich, this article discusses only one of its aspects, placing emphasis on the elements where Brazilians feel most exposed. These are what the Anglo Saxons call "business courtesies" or "corporate hospitality".
The potential corruption stirred by events like the Olympic Games in 2012 in the UK and in 2016 in Brazil takes away the sleep of many entrepreneurs. That is because one of the targets of the UK Bribery Act is the pressure for companies to sponsor, finance, provide funds and engage in all sorts of activities that can eventually be close to corruption.
While US companies agonize over this subject and here in Brazil company executives are clueless about it, or not completely aware of the extent of our legislation, the UK Bribery Act seems to be good news for dealing with the issue amid the prospect of the Olympic Games in London.
In Brazil, there is an incorrect perception that we lack the tools to fight corruption. In addition to the Criminal Code and other laws applicable to government officials, the "Comissão de Ética Pública" (Public Ethics Commission - CEP) enacted the Code of Conduct for the High Administration and many other ethical behavior rules for public authorities.
The CEP code is quite strict even by British standards. For example, it does not allow public officials at senior level to participate in seminars, conferences and similar events if the sponsoring company inviting them is under the regulatory supervision of the entity to which the official belongs. According to Brazilian rules, these authorities cannot accept gifts from such companies, including tickets and hotel accommodation, with rare exceptions.
For further information on this matter, please contact:
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In Brazil, many companies take upon themselves the role of enforcing the precepts of CEP. In fact, these companies are the subsidiaries of foreign companies which avoid any chance to be blamed as incurring in corruption under the FCPA and now the UK Bribery Act.