Brazil's New Anti-Corruption Law: What Every Multinational Employer Should Know

Author:Mr Juan Carlos Varela, Geida D. Sanlate and Daniela Sedes
Profession:Littler Mendelson
 
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On August 1, 2013, Brazil enacted Law 12.846, a new anti-corruption law that establishes a comprehensive system of corporate and individual liability for acts of corruption against Brazilian and foreign public officials or governmental bodies.1 The new anti-bribery law becomes effective on January 28, 2014. Companies conducting direct or indirect activities in Brazil - whether through an employee, independent contractor, subsidiary, or as part of a supply chain - should pay special attention to the contours of this law, the severe penalties for violations, and recommended steps to ensure full compliance.

Background

During the past two decades, Brazil has demonstrated a serious commitment to combat the bribery of public officials in business transactions. During the 1990s, Brazil enacted a myriad of penal laws to combat corruption, including legislation against bribery-related money laundering, securities fraud, concealment of assets, and economic power abuse.2 In August 2000, Brazil adopted the Organisation for Economic Co-operation and Development's (OECD) Convention on Combating Bribery of Foreign Public Offices in International Business Transactions.3 and became a signatory to the United Nations Convention against Corruption in December 2003. These international standards are aimed at combating political and governmental corruption in business dealings.4 However, according to the OECD, Brazil had not taken sufficient measures to establish corporate and personal liability for the bribery of a foreign public official.5

With the enactment of the anti-corruption law, Brazil now establishes its own legally binding standard to combat and prosecute bribery of public officials. The new law not only establishes direct corporate and personal liability for illicit conduct against any level of the three branches of government - executive, legislative and judicial - for particular acts of corruption and fraud within the bidding and procurement of public contracts process, but also applies to acts of corruption committed against foreign public officials, whether the offense occurs within or outside Brazilian borders.

Key Provisions of the Anti-Corruption Law

Covered Persons and Entities

The anti-corruption law applies to companies, regardless of their corporate or legal form, whether foreign or domiciled in Brazil, and whether the unlawful act is committed within or outside Brazilian territory. Civil liability extends to the entity's directors...

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