Brazilian authorities have challenged corruption activities far more seriously over the last two years than ever before. Following both local and international demand, the Brazilian government enacted the Clean Companies Act, which came into force at the beginning of 2014. The new law imposes heavy fines on companies that offer or pay bribes to public officials, that finance, pay or subsidise the performance of a prohibited act or that hinder government auditing or investigation, and act fraudulently in public bidding processes. It also offers benefits to companies that admit wrongful practices and collaborate in evidence gathering, by means of leniency agreements that may reduce applicable fines. The Federal Comptroller’s Office (CGU) was the public authority given powers, at the federal level, to investigate and sanction offenders and, consequently, to execute related leniency agreements with companies involved.

The Clean Companies Act applies to any corporation, foundation or association that has its registered office, branch or representation in the country and engages in any harmful act against the ‘public administration’, which also encompasses foreign governments and public international organisations. Accordingly, the Act also foresees the Brazilian authorities’ extraterritorial jurisdiction, being applied to any wrongdoing carried out by a national legal entity against a foreign public one, even if the wrongdoing is practiced abroad. Such a feature of the law, similar to the one provided by the FCPA, consists of a novelty in Brazilian anti-corruption legal practice, which has been inspired by Brazil’s antitrust legislation.

Jan-Mar 2017 Issue

Demarest Advogados