Six years of the Anti-Corruption Law: a look at the work of public agencies
A survey by Mattos Filho points out the main data of Administrative Liability Proceedings
The Anti-Corruption Law (Law No. 12,846 / 2013) was amended in 2014 and, since then, the fight against corruption has been intensified in Brazil. A survey done by Mattos Filho points out the key data referring to Administrative Liability Proceedings of the Anti-Corruption Law (PARs) established in this period within the scope of the Federal Executive Branch, including the Office of the Federal Controller General (CGU). The PAR aims to assess the administrative liability of the companies involved in the illegal practices described mainly in the Anti-Corruption Law.
Thiago Luís Sombra, partner of the Compliance and Corporate Ethics practice, explains that the Anti-Corruption Law has become a connection point between other laws that provided for civil and administrative punishments. “The normative scenario of corporate criminal liability for acts of corruption was very limited. The new legislation is the result of the international commitments undertaken by Brazil when the OECD Convention was ratified and had the virtue of placing the country among the main players in the fight against public corruption, especially since we currently have no corporate criminal liability, except for environmental crimes. Another relevant aspect of the legislation was the structuring of the leniency agreement regime, which can be negotiated at any time in the course of the PARs.”
Since the law was created, the Federal Government has initiated 808 PARs, of which 333 have already been concluded. The main themes that justified the creation of the PARs were:
- payment of bribes to government officials or related persons;
- unjustified breach of government contracts;
- procurement fraud.
Most PARs were established by the Ministry of Economy (203), followed by the Ministry of Education (187), the Ministry of Mines and Energy, the CGU (119 each), the Ministry of Justice (56), the Ministry of Agriculture ( 52), the Ministry of Science and Technology (52), the Ministry of Health (48), the Ministry of Infrastructure (31), and the Ministry of Citizenship (7).
Over the six years that the Anti-Corruption Law has been effective, 16,749 sanctions were applied against private entities, totaling BRL 22.3 million in monetary fines. Another 1,905 restrictions on contracting with the public administration remain in effect.
Renato Portella, partner of the Compliance and Corporate Ethics practice, analyzes that, after a few years, a degree of maturity has been reached, with several investigations and ongoing proceedings filed by the authorities. Companies, in general, are more aware of the risks involved and have started to invest preventively through integrity programs.
Leniency agreements are instruments that allow the reduction of companies’ financial sanctions, as well as the exemption from other sanctions provided for in the Anti-Corruption Law. In return, companies must commit to assisting in the negotiation, with the identification of those involved in the infraction and the presentation of evidence that demonstrates the wrongdoing, in addition to reimbursing the financial damage and implementing or improving its integrity program.
Since the Anti-Corruption Law became effective and until July of this year, CGU had already collected BRL 10.5 billion in agreements, forecasting that another BRL 3.1 billion would be added to the public treasury.
There are, however, several challenges yet to be faced. One of them is the difficulty of coordination between the different control bodies – CGU, the Office of the General Counsel for the Federal Government (AGU), the Federal Prosecutor’s Office (MPF), the Judiciary branch and others -, generating legal uncertainty and sometimes requiring ingenious work by companies and their lawyers. Similar problems also occur regarding the common need in Brazil of coordinating the agreement of legal entities with the minimization of risks to individuals related to them, whose cooperation can even be useful to the company and the control agencies. “In the first half of this year, the 5th MPF Coordination and Review Chamber issued a technical brief to provide greater legal certainty to individuals who enter into corporate leniency agreements, which was an improvement. But in practice, we see that in each concrete case, there are distinct coordination challenges between the different bodies and the Public Ministry, and the lack of greater legislative clarity and a culture of respect for agreements by state bodies often makes solutions legally complex and imperfect”, says Rogério Taffarello, partner of the White Collar Crime practice.
To read the Anti-Corruption in Data booklet, click here.