Brazil enforcement lags but is on the rise, TI says
Tuesday, September 1, 2015 at 1:08PM
Lucas Zanoni in Brazil, Exporting Corruption, OECD Convention on Combating Bribery of Foreign Public Officials, Transparency International

Transparency International’s 2015 Exporting Corruption report indicates that about half of the OECD antibribery convention countries have failed to prosecute any foreign bribery cases since 1999.

Nine countries with 12.6 percent of world exports have only limited enforcement, and twenty countries with 20.5 percent of world exports have little or no enforcement.

Included in this latter group is Brazil, which accounts for 1.3 percent of world's exports. Although still a laggard, Brazil's enforcement score is improving. 

Using Transparency International's point system, Brazil's score went from 5 to 12 points in a year -- just one point below the level needed to be considered a country with “limited enforcement.”

Despite having not completed any case with sanctions between 2011 and 2014, Brazil commenced two investigations in 2011, three investigations in 2012, and three investigations in 2014, with one of them considered a “major case.”

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In addition to Brazil's enforcement score, TI also talked about three other issues: the adequacy of sanctions, protection of whistleblowers, and collection and access to enforcement information.

TI considers adequate sanctions crucial for success in the enforcing the OECD antibribery convention. As discussed earlier on the FCPA Blog, the Brazilian congress is debating a bill addressing the criminal liability of legal entities. Passage of the bill could help promote effective, proportionate and dissuasive sanctions.

The Clean Company Act imposes administrative sanctions on entities for acts against the public welfare. But the Brazilian legal system still doesn't provide for criminal liability of legal entities committing bribery. 

One rather narrow exception is the 1998 Environmental Crimes Act. Its extension is now being discussed in connection with the new Criminal Code (PLS nº 236/2012).

That new criminal law includes Article 41. It establishes that “the legal entities of private law will be held criminally liable for acts committed against the public administration, the economic order, the financial system and the environment, where the offense is committed by a decision of its legal or contractual representative or its collegiate body, in the interest or benefit of the entity.”

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Also being debated in Brazil's congress is the protection of whistleblowers  -- one of the recommendations of the OECD Working Group on Bribery in 2009.

Civil servant whistleblowers are already entitled to some protections. The Access to Information Act states that “No civil servant could be held civil, criminal or administratively responsible for giving science to a higher authority or, when there is suspicion of involvement of this one, to another competent authority, for verification of information regarding the commission of crimes or misconduct brought to its attention, although as a result of is position, job or public function.”

One bill congress is debating would authorize monetary rewards for whistleblowers who expose public corruption or waste (PL nº 1701/2011). 

Another bill would protect workers who report the commission of a crime, acts of misconduct, violation of labor rights, or any other unlawful act within the context of the employment relationship (PLS nº 362/2015).

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TI's 2015 Exporting Corruption report cited serious shortcomings in Brazil's collection and publication of enforcement data. But the report noted that the Clean Company Act and its regulations require more detailed reporting to the National Registry of Inapt and Suspended Companies (CEIS) for public entities under all branches and government spheres.

The aim under the CEIS database is to consolidate the list of companies and individuals who have been sanctioned in order to restrict their right to participate in bidding for or performing public contracts.

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Lucas Zanoni is an undergraduate student of law at University of São Paulo and a legal intern in the compliance and anti-bribery team of Chediak Advogados. The firm offers legal assistance for both Brazilian and international clients across different industries and business sectors.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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