Brazils Anti-Corruption Law comes into Force February 2014

Brazil’s Anti-Corruption Law comes into Force – February 2014

British Embassy Brasilia

Summary

Brazil’s new anti-bribery law is now in force. FCO Prosperity Fund projects played a key role in its development. Companies now liable if employees engage in bribery, with harsh penalties. A milestone in our prosperity campaign to create better business environment for UK companies in Brazil. An opportunity to share Brazilian experience to support this agenda in the region.

Detail

Brazil’s new anti-bribery law, the Clean Companies Act, came into force on 29 January, having been signed into law in August. The law means companies will now be liable if their employees engage in bribery, financing criminal acts, or manipulating public tender processes. The law applies equally to foreign companies, including those without a permanent presence in Brazil. The penalties are harsh, including large fines and even forced dissolution of the company in serious cases, beyond the scope of either the UK Bribery Act or US Foreign Corrupt Practices Act (FCPA).

 

FCO Prosperity Fund projects played an important role in the law’s development. In 2012 we took a delegation of senior Brazilian officials developing the new law from Brazil’s Comptroller General’s Office (CGU) and the Ministry of Planning to meet both the Ministry of Justice and Serious Fraud Office to learn about the UK Bribery Act. Last year our seminar in Sao Paulo brought Brazilian government and business together with UK experts to understand the implications of the new law and to encourage the development of effective compliance programmes. These activities complimented other Prosperity Fund and SPF projects over a number of years to tackle corruption and improve transparency, supporting the development of Brazil’s new FOI law, a significant overhaul of Brazil’s online transparency portal, and training officials in audit and investigation procedures.

 

The law is a further milestone in the fight against corruption in Brazil. Recent new FOI legislation, the Clean Slate law (barring convicted politicians from standing for election) and the successful conviction of major political figures in the Mensalao scandal are all significant steps forward. Despite this, corruption remains a major problem. Transparency International ranks Brazil 72 out of 177 in its perceptions of corruption index.

 

The next priority is to ensure effective implementation of the law. Brazil has decentralised enforcement to each of the 27 states and 5,570 municipalities. Though this takes pressure off the federal system, concerns have been raised that each entity could apply the law differently, making effective enforcement and compliance difficult.

 

The law is also an important step in our coordinated campaign to develop a better business environment for UK business in Brazil, one of five cross-network campaigns to help business access the commercial opportunities here Our campaign also focuses on the other key challenges British business face: tax, trade barriers and ineffective financial markets. Sustained high level engagement on these issues will be supported by technical assistance through the FCO Prosperity Fund.

 

There are also opportunities to share Brazilian experience within the wider region and beyond, as a key element of strengthening the rules-based global economic system. Brazil is one of only 6 non-OECD members to have signed up to the OECD anti-bribery convention, and is one of only 5 signatories within Latin America. Brazil is keen to share its experience, remaining strongly engaged in the Open Government Partnership. 

Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.

Countries: Brazil
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