Four new pieces of legislation were published this week in the Official Gazette following a recent regulation enacted by the President implementing Law 12,846/2013 ("Anti-corruption Law"), namely: Normative Instruction No. 1, of April 7, 2015, establishing the methodology for calculation of taxes to be excluded from gross revenues when calculating the penalty referred to in article 6 of the Anti-corruption Law; Normative Instruction No. 2, of April 7, 2015, regulating the registration of information with the National Registry of Inapt and Suspended Companies (Cadastro Nacional de Empresas Inidôneas e Suspensas - CEIS) and with the National Registry of Punished Companies (Cadastro Nacional de Empresas Punidas - CNEP); Ordinance No. 909, of April 7, 2015, regulating the evaluation of compliance programs of corporate entities; and Ordinance No. 910, of April 7, 2015, approving procedures for determining administrative responsibilities and for execution of leniency agreements contemplated in the Anti-corruption Law.
Normative Instruction No. 1 stipulates that the fine provided for in the Anti-corruption Law must be calculated based on the principle of gross income (defined in article 12 of Decree No. 1,598/1977 and in paragraph 1 of article 3 of Complementary Law No. 123/2006 in the case of micro and small enterprises) excluding taxes on net revenue. These amounts can be calculated based on requests for tax sharing information made to the Public Treasury (section II of §1 of article 198 of the Brazilian tax code) or on a review of accounting records produced or published by the accused entity in Brazil or abroad.
Normative Instruction No. 2 establishes that penalties that contain an expiration date must be removed from the National Registry of Inapt and Suspended Companies and the National Registry of Punished Companies on such date. In addition, individuals or corporate entities registered with the National Registry of Punished Companies pursuant to regulations that require rehabilitation should apply for such removal directly to the authority that applied the sanction. Information related to leniency agreements will remain with the National Registry of Punished Companies until the date the corporate entity is declared compliant with the relevant authority's rules.
Ordinance No. 909, governs the evaluation of compliance programs and it mandates that corporate entities submit to the Office of the Comptroller General ("CGU") a corporate profile report and a report certifying that it is in compliance with the program, attaching all the information required in the Ordinance. In addition, the corporate entity must demonstrate that the program has been incorporated into its daily routines including historic data, statistics on specific cases, as well as the ability of the compliance program to prevent, detect or mitigate the harmful effects of actions which were the subject of the investigation.
Lastly, Ordinance No. 910 establishes procedures for the investigation of administrative responsibilities and execution of leniency agreements. It establishes the jurisdiction of the CGU to initiate, withdraw and judge Administrative Liability Proceedings ("PAR"), and sets forth guidelines to be followed in such proceedings.
As for leniency agreements, Ordinance N. 910 provides that settlement proposals be submitted to the Executive Secretariat of the CGU (Secretaria-Executiva da CGU), which will form a commission to negotiate and supervise the work. The topics in the leniency agreement proposal will receive confidential treatment and access to its contents will be restricted to members of the commission and persons assisting them.
In addition, Ordinance No. 910 establishes that the commission will: (i) identify the legal requirements of the proposal; (ii) evaluate the topics raised by the corporate entity; (iii) propose the signing of a memorandum of understanding; (iii) evaluate the entity's compliance program, if available; and (iv) submit a conclusive report to the Executive Secretariat of the CGU on the topics of the negotiation.
The execution of a leniency agreement will exempt the corporate entity from extraordinary publication of a decision against the company and from being prevented from receiving incentives, subsidies, grants, donations, or loans from public authorities or entities, public financial entities, or financial entities controlled by the government. Moreover, the amount of applicable fines will be reduced by up to 2/3 (two thirds) of the original amount when a leniency agreement is executed. The corporate entity will be exempt from, or will be entitled to a reduction of, the administrative penalties under articles 86 to 88 of Law No. 8,666/1993, and sanctions provided for in public bidding legislation. However, it will not be released from the obligation to repair the damages it caused.