Brazil took a significant step towards developing comprehensive anti-corruption legislation with President Dilma Rouseff’s recent enactment of Decree 8,420 (the Decree) creating regulations to the Anti-Corruption Law (Lei 12,846/2013), commonly known as the Clean Company Act, which has been in force since January 2014. The Decree creates rules for compliance programs, establishes fines and other administrative procedures and provides much needed guidance to companies with Brazilian operations.
Of particular note, the Decree sets specific rules for establishing codes of conduct and ethics codes, as well as whistleblowing channels, and includes other business integrity provisions. Compliance programs must be adopted by companies in Brazil, and the Decree, while still leaving some questions unanswered, is important progress towards understanding the substance and scope of compliance programs and the criteria against which they will be assessed.
In addition to guidance on compliance programs, the Decree also establishes the criteria for calculating fines in the event of non-compliance, designates the Office of the Comptroller General of the Union as the responsible body for overseeing many of these protocols (including the exclusive jurisdiction to start investigations and prosecute violations), establishes rules for plea bargains for offending companies seeking to cooperate with authorities, and develops a national registry for offenders.
Taken together with other legislative initiatives, the Decree outlines the direction of things to come in Brazil, where the compliance environment is still maturing. In light of the ongoing corruption scandal involving the national oil company, Petrobras, and mounting public protests, it is expected that further legislative action will be undertaken.
While the Decree has put an end to some speculation following the introduction of the Clean Company Act, it is unclear whether this modern legislation will be accompanied by meaningful enforcement.