SELF-REPORTING IN BRAZIL: WHERE ARE WE NOW?
Brazil has been making efforts to tackle corrupt practices since the early 2000s, when it became a party to the OECD Anti-Bribery Convention. A few years later, in 2006, the United Nations Convention against Corruption was ratified and passed as domestic law. Since then, enforcement has gradually picked up, during which time criminal, procurement and auditing authorities began working together to enforce the relevant statutes.
The case known as Mensalão (monthly allowance) was the first high profile case that resulted from such efforts. The investigation targeted an alleged scheme in which public funds were used to buy political support for the then-Lula government and to pay off debts from election campaigns. At the time, Brazil’s Attorney General referred to it as “the most outrageous corruption scheme and embezzlement of public funds ever seen in Brazil”. It was the first time that one of the defendants decided to come forward and cooperate with a major investigation in exchange for the reduction of sanctions. The case prompted the issuance of Brazil’s Clean Company Act, which introduced the possibility for legal entities to also self-report corrupt practices.
The Clean Company Act has established a leniency programme under which self-disclosure of corrupt practices and cooperation by corporations could result in a reduction of up to two-thirds of fines and immunity from some, but not all, sanctions. In order to qualify for the leniency programme, the company must: (i) be the first party to apply for leniency; (ii) confess and cease its involvement in the investigated misconduct; and (iii) commit to full and permanent cooperation with the investigation. Additionally, the Clean Company Act’s leniency programme may also address violations of Public Tender Law to exclude or waive penalties prescribed therein.
Apr-Jun 2017 Issue
Levy & Salomão Advogados