Brazil Proposes Revised Anti Corruption Law: Update from International Tax Compliance Services Team

The Brazilian government has presented an anti-corruption bill for consideration before the senate; the anti- corruption bill imposes liability on businesses involved in foreign and domestic bribery.

Online PR News – 08-June-2013 – 1250 Oakmead Parkway, Suite 210 Sunnyvale, CA 94085, U.S – (Sunnyvale, CA)- The Brazilian government has presented an anti-corruption bill for consideration before the senate; the anti- corruption bill imposes liability on businesses involved in foreign and domestic bribery. The bill if approved is expected to strengthen the country’s commitment to the OECD Convention on Combating Bribery of Foreign Public Officials, says Nair & Co. which provides international expansion services for companies setting up foreign operations.

Highlights of the Proposed Brazilian Anti Corruption Law

• Provision for civil liability of Corporate: Any acts of corruption by directors, officers, employees and agents of any company local or foreign, having an office, branch, or representation in the country, would be subject to a civil liability in Brazil.
• The Bill states that fines to the extent of 20% of last year’s gross revenue of a company can be imposed in bribery cases.
• In a situation, where the establishment cannot estimate the gross revenue, the proposed regulation provides for imposing fines ranging from R$ 6,000 to R$ 60 million.
• Harsh penalties can be imposed by the Brazilian courts, including ending any benefits which have been obtained by a company; or an order to temporarily discontinue the company’s business activities; and in some cases even the dissolution of the business itself.
• For considering the level of sanctions, the provision has set forth that the authorities must consider a number of factors. These factors may include the gravity of the transgression; the benefits gained or intended the nature of damages and any other harmful effects.
• Imposing of administrative sanctions would be made public.
• The provision would also apply to bribery of foreign officials besides the Brazilian officials. It must be noted that multinational (foreign) companies in Brazil may be implicated in case of bribing local officials.
• Incentives for businesses would be provided to those companies who implement effective compliance programs. The incentives would also be offered to any of the businesses that would self-disclose the violations.
• The following are mentioned as the key components of compliance under the proposed law:
• internal integrity procedures,
• audits and
• reporting mechanisms.
However, detailed guidelines are expected from Brazil’s Executive Branch.
Action Points for Businesses:

The businesses operating in Brazil need to bring in place an effective compliance program, in order to avoid liability and avoid penalties. An effective compliance program must include the following:

• The company’s policy against corruption including the Code of conduct, compliance policies and procedures.
• A risk assessment process which illustrates the training procedures as well.
• A process of continuing advice, incentives and disciplinary measures.
• A set mechanism for continuous improvement which includes periodic testing and review.

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