IMPACT OF BRAZIL’S COMPANIES ACT
RC: Could you provide an insight into how companies are currently complying with Brazil’s new anticorruption law? What are the main compliance issues and challenges?
Peixoto: The anticorruption law in Brazil came into effect on 29 January 2014 without a clear definition of the law’s compliance requirement. It wasn’t until March 2015 that the General Comptroller’s Office set forth the compliance obligations associated with the Brazilian anticorruption law. A few companies have begun to create their compliances programmes, updating their codes of conduct, running training programmes and establishing hotlines. However, the regulations also require a number of other features to be established, including the commitment of top management, the carrying out of corruption risk analyses, accounting record transparency, establishing internal controls, and developing procedures to prevent illegal conduct. Companies must establish an independent compliance structure, guarantee the protection of good faith whistleblowers, establish disciplinary measures in the event of compliance violations, establish procedures for promptly interrupting and remedying irregularities, carry out appropriate third party due diligence and supervision, as well as continually monitor compliance programmes. There must be transparency regarding donations to political candidates and parties. The main compliance issues in Brazil are all related to the required cultural change, particularly since the Brazilian people have not been made aware of the official definition of corruption. Companies will be responsible for training their teams, including both employees and third parties, on compliance culture and how to do business ethically.
Oct-Dec 2015 Issue
KPMG LLP