Brazil has finally passed the long proposed Anti Corruption Law which will ensure that Brazilian and foreign companies with offices, branches or agents in the country are strictly liable for acts of corruption against public authorities
Online PR News – 23-August-2013 – 1250 Oakmead Parkway, Suite 210 Sunnyvale, CA 94085, U.S – Brazil has finally passed the long proposed Anti Corruption Law which will ensure that Brazilian and foreign companies with offices, branches or agents in the country are strictly liable for acts of corruption against public authorities (either domestically or abroad). The Brazilian President signed the proposed bill into law during the first week of August.
The rigorous anti corruption regulations also cover international organizations, diplomatic representations, and non-Brazilian state-owned companies. The new law (Federal Law number 12,846) will soon come into effect (within 180 days from the day the law was published in the gazette).
It is similar to the U.S. Foreign Corrupt Practices Act (FCPA) and in line with OECD (Organization for Economic Co-operation and Development) Convention on Combating Bribery of Foreign Public Officials, says Nair & Co. which provides international expansion services for companies setting up foreign operations.
Brazilian Anti Corruption Law: Highlights
* The law prohibits corrupt practices against public administration (directly/indirectly).
* The new law paves way for severe sanctions and the penalties range from 0.1 to 20 % of the defaulting company's annual gross revenue. A limit of R $60 million applies on penalties in case the annual gross revenue criterion cannot be applied.
* In addition, a defaulting entity may be required to forfeit assets, rights or sums obtained from illegal acts. Defaulting entities may even be asked to temporarily suspend their operations; they could also be compulsorily dissolved.
Brazilian Anti Corruption Law: Implications
* The new regulations provide inducement for Brazilian companies adopting internal compliance programs and good governance practices. It also helps Brazil match regulations of developed nations to prevent corruption.
* Even though the overall enforcement of the new legislation is yet to be known, companies are strongly advised to adopt good governance practices and internal compliance programs.
* It is advisable for overseas businesses involved in mergers and acquisitions, tenders, contracts or joint ventures in Brazil to conduct an anti-corruption due diligence of the concerned local entities.
* Any foreign business entity performing activities in Brazil must make sure that its local subsidiaries (affiliate companies, controlled companies), agents, or business partners not only put in place, but also implement suitable anti-corruption compliance procedures.
For details of our previous press release on this subject, please visit http://www.nair-co.com/BrazilAntiCorruptionLaw-06-06-2013.aspx.
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