• Brazilian Anti-Corruption Law Passes Brazil’s House of Representatives
  • May 2, 2013
  • Law Firm: Jackson Lewis P.C. - White Plains Office
  • The Brazilian Chamber of Deputies has approved a bill imposing liability on companies for foreign and domestic bribery. Versions of the Brazilian Anti-Corruption Law (Bill n° 6.826/2010) were introduced by the former President Luiz Inácio Lula da Silva in 2010, but passage has been stalled for nearly three years. The Bill will now proceed to the Brazilian Senate for consideration.

    The Brazilian Anti-Corruption Law is intended to strengthen Brazil’s commitments under the Organisation of Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials. The version of the Law passed in the Chamber of Deputies includes the following notable provisions:

    (1) civil liability of corporations for the acts of their directors, officers, employees and agents;

    (2) significant fines for bribery that can be as high as 20 percent of a company’s gross revenue from the previous year;

    (3) application both to bribery of foreign officials as well as Brazilian officials, meaning that foreign companies operating within Brazil could be subject to penalties for bribery of local officials; and

    (4) incentives for companies that have effective compliance programs as well as those companies that self-disclose violations of the law. (Similar to the U.S. Federal Sentencing Guidelines, companies with compliance programs and those that self-disclose to and cooperate with the authorities may have fines reduced or possibly avoid prosecution under the Anti-Corruption Law.)

    While the Anti-Corruption Law still must pass the Brazilian Senate, passage by the Chamber of Deputies highlights the expanding global focus on corruption. Moreover, like the recent guidance from the U.S. Department of Justice and the Securities and Exchange Commission (for more on the guidance, see our article, Government Releases Long-Awaited Foreign Corrupt Practices Act Guide), the Anti-Corruption Law makes clear that employers must continue to focus on effective compliance programs to avoid liability and reduce penalties. At a minimum, effective compliance programs include:

    • Commitment from senior management and a clearly articulated policy against corruption

    • Code of conduct and compliance policies and procedures
    • Oversight, autonomy, and resources
    • Risk assessment
    • Training and continuing advice
    • Incentives and disciplinary measures
    • Third-party due diligence and payments
    • Confidential reporting and internal investigations
    • Continuous improvement that includes periodic testing and review
    • Pre-acquisition due diligence and post-acquisition integration (in the context of mergers and acquisitions)