Civil asset recoveryParallel proceedings
Is there any restriction on civil proceedings progressing in parallel with, or in advance of, criminal proceedings concerning the same subject matter?
There is no such restriction.
In Brazilian law, criminal proceedings are separated from and independent of civil proceedings (article 935, Civil Code, and article 64, Criminal Procedure Code). However, after an unappealable judgment by the Criminal Court, the Civil Court cannot review findings of fact or identity of the agents in the same matter.
When the civil liability originates in a fact that must be solved in the Criminal Court, the civil proceeding can be issued a stay until the criminal proceeding (article 64, Criminal Procedure Code) is finished. When this is the case, the running of the limitation period is also suspended (article 200, Civil Code).Forum
In which court should proceedings be brought?
All civil matters must be brought in state or federal courts.
Basically, federal courts have jurisdiction in cases of which the Union, a federal agency or federal government controlled company have an interest as plaintiffs, defendants, privies or interveners, with the exception of cases of bankruptcy, of occupational accidents, and of those subject to the electoral and labour courts (article 109, Federal Constitution).
State courts’ jurisdiction is residual. They are responsible for judging matters that do not fall within the jurisdiction of the federal, labour, electoral and military courts.
The Code of Civil Procedure (article 46) provides the general criteria for the geographical jurisdiction of civil courts. For ordinary proceedings, the court is that of the place where the defendant is domiciled. If the defendant’s domicile is unknown, the defendant can be sued in the plaintiff’s domicile.
Furthermore, when the defendant does not have domicile or residence in Brazil, the lawsuit shall be brought in the venue of the plaintiff’s domicile and, if the plaintiff is also resident outside Brazil, the lawsuit can be brought in any venue (article 46, paragraph 3, Civil Procedure Code).
For claims related to civil reparation, the competent court is the location of the act or the fact giving rise to the action (article 53, IV, a, Code of Civil Procedure).
In contract disputes, when there is a mandatory venue clause, the parties shall bring the proceeding in the court required by the clause (article 63, Civil Procedure Code).Limitation
What are the time limits for starting civil court proceedings?
The limitation to sue for civil proceedings varies according to the subject matter of the claim and can be up to a maximum of 10 years (article 205, Civil Code).
Most claims become time-barred after three years (article 206, paragraph 3°, Civil Code), such as civil reparation and restitution of profits received in bad faith. In Brazilian law, as it has been established on many precedents, the three-year limitation for damages in contract disputes is restricted to the damages arising out of a breach of contract. The contractual obligation in itself is time-barred after a five-year period.
Unpaid amounts expressly stated in a contract fall under the collection of liquid debts in a public or private legal document (article 206, paragraph 5, I, Civil Code), which has a five-year limitation.
The limitation is counted from the date the plaintiff knows or could have known the facts. Specific events can determine either the suspension of the period or its renewal (only once in the latter case).Jurisdiction
In what circumstances does the civil court have jurisdiction? How can a defendant challenge jurisdiction?
Civil law disputes are decided by the state courts or federal courts, depending on the matter discussed and the parties involved in the litigation.
Defendants may challenge jurisdiction or venue of the court where litigation is filed, requesting an absolute lack of jurisdiction (in the case of public interest) or a relative lack of jurisdiction (in the case of private interest).
The absolute lack of jurisdiction can be argued at any time, whereas the relative lack of jurisdiction may only be requested as a preliminary objection on its statement or defence (article 64, paragraph 1, Civil Procedure Code).
Once the other party is heard, the judge shall immediately decide the preliminary objection. In the case of an absolute lack of jurisdiction, the judge may decide on his or her own initiative.
Should the challenge be accepted, the decisions rendered by the prior court shall be preserved until new ones are rendered (article 64, paragraph 4, Civil Procedure Code).Time frame
What is the usual time frame for a claim to reach trial?
The time frame for a claim to reach trial depends on a variety of factors, such as the court in which the case is pending, the proceeding class and the possibility of appeal.
Nevertheless, on average, according to the National Justice Council of Brazil (CNJ), the length of civil trials in state courts is 30 months and in federal courts is 28 months for first instance decisions. Appeals will usually be judged within eight months in state courts and 23 months in federal courts.
Some states resolve matters faster than others. For instance, the average time frame of the State Court of Rio de Janeiro is 18 months, whereas in the State Court of São Paulo the cases remain pending for around 16 months.Admissibility of evidence
What rules apply to the admissibility of evidence in civil proceedings?
Brazilian law relies on the free evaluation of evidence by the judge, but the court has to provide reasons to establish a conviction.
Article 369 of the Code of Civil Procedure states that the parties have the right to employ all legal, as well as morally legitimate, means to prove the truth of the facts on which the claim or the defence is based, such as oral evidence, material evidence and experts’ reports, including evidences produced in another claim (article 372, Code of Civil Procedure).
Additionally, in Brazil there is no US-style discovery or Norwich Pharmacal order. To obtain evidence before the beginning of a trial, the party must indicate precisely each document sought and demonstrate the purpose of the required evidence. It is called an ‘anticipated evidence production’ provision.
In all cases, the defendants (or third parties) are personally summoned to respond before the judicial order and, if the other party remains silent, the facts stated by the applicant are presumed to be true and correct (article 344, Code of Civil Procedure).Witnesses
What powers are available to compel witnesses to give evidence?
Summoned witnesses must appear before the court at the appointed day and time. When a witness does not appear at the court hearing without a justified reason, the expenses for postponing the hearing are her responsibility, and the court shall issue a warrant ordering a witness to be brought to court with police cooperation, if necessary.
Witnesses must take an oath to tell the truth about what they know regarding what is asked, otherwise they may face charges for the crime of false testimony.Publicly available information
What sources of information about assets are publicly available?
The following information about assets are publicly available (in some cases, it may require a fee payment) (the list is non-exhaustive):
- Real estate registration: deeds registry, distributed in the Brazilian municipalities, maintains public records and documents about real estate property rights. In addition, general information about rural properties can be obtained on INCRA’s website (a federal agency).
- Vehicle registration: land vehicles and motorcycles are registered and supervised by the Department of Transportation (DETRAN), an executive state branch agency. Almost all states provide online information about vehicle ownership history and vehicle debits information.
- Aircraft registration: National Civil Aviation Agency) (ANAC) provides certified information about civil aircraft with Brazilian nationality. The publicly available information includes ownership of aircraft (including negative certificates), registration certificates and aircraft details.
- Limited liability companies ownership: the Brazilian Internal Revenue Service discloses information of registration, corporate status and ownership structure of companies. Also, in the Commerce Registry, amendments to the articles of incorporation of companies are publicly available.
- Publicly traded companies’ financial data: through the Securities Exchange Commission of Brazil (CVM) it is possible to obtain online information about financial data of publicly traded companies.
Can information and evidence be obtained from law enforcement and regulatory agencies for use in civil proceedings?
The Code of Civil Procedure states that the court may allow the usage of evidence produced in another lawsuit (article 372). Consequently, records concerning lawsuits may be obtained, except in case of a gag order.
If the desired information and evidence are not public, it is necessary to request the court to order the regulatory agencies to provide the information.Third-party disclosure
How can information be obtained from third parties not suspected of wrongdoing?
Third parties can be summoned in any lawsuit to inform courts about facts and circumstances of which they may be aware or reveal documents that may be in their possession.
In case of refusal to cooperate, the court may determine levying of a fine, and other persuasive, coercive or injunctive measures (article 380, Code of Civil Procedure).
If a litigant needs to obtain access to documents before filing a lawsuit, a claim may be filed requesting the presentation of a specific document by another litigant or a third party (no ‘fishing expedition’ is admitted), explaining the purpose for which they are being sought.
The judge will not admit any refusal of the other party when:
- the party has a legal obligation to disclose the documents;
- the party makes reference to the document as a means of evidence; and
- the document is considered ‘common’ to the parties.
What interim relief is available pre-judgment to prevent the dissipation of assets by, and to obtain information from, those suspected of involvement in the fraud?
In special circumstances, when there are indications of fraud and dissipation of assets, a interim relief may be requested to freeze assets to guarantee future execution.
Generally, interim remedies are granted in cases when the party’s right is at risk of being lost before the final award is given (urgency). Even if there is no risk of loss, some relief may be granted when there are elements that prove the probability of the alleged claim.
Also, interim reliefs may be granted when there is abuse of the right of defence, and the party demonstrates clear intentions of delaying the proceedings, or when the complaint produces sufficient documental evidence of the facts that constitute the plaintiff’s right. However, in all cases, the alleged right may be challenged at a later stage in the proceedings.
At any time, provisional remedies may be revoked or modified while the lawsuit is pending, provided that the judge clearly and precisely states the reasons for the order.Non-compliance with court orders
How do courts punish failure to comply with court orders?
Non-compliance with a judicial order is a serious offence and defined as a crime under the Criminal Code (article 330). This crime is punished with imprisonment of up to six months and a fine.
Furthermore, in civil proceedings, courts may establish fines, which can be increased when the party seems to have no motivation to comply with the judicial order.Obtaining evidence from other jurisdictions
How can information be obtained through courts in other jurisdictions to assist in the civil proceedings?
Information located in foreign jurisdictions may be obtained through direct assistance, letters rogatory (based on the Code of Civil Procedure or on the Inter-American Convention on Letters Rogatory, if applicable), and letter of request, pursuant to the 1970 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, to which Brazil is signatory.
Direct assistance is appropriate to obtain procedural claims of a foreign entity, such as information regarding legal system and administrative or court proceedings, whether pending or finished, to gather evidence, unless the measure is adopted in proceedings abroad, which is the exclusive competence of a Brazilian judicial authority, and any other judicial or extrajudicial measure not prohibited by Brazilian law.
Additionally, the 1970 Hague Convention regulates the procedures for requesting letters rogatory to obtain evidence or to perform some other judicial act. These letters are sent directly to the Central Authority of the other state, which will transmit them to the competent authority.
Brazil is also a member of the Inter-American Convention on Letters Rogatory. In general, this convention applies to letters rogatory issued in conjunction with proceedings in civil and commercial matters that have purposes such as service of process, summonses or subpoenas, or taking of evidence and the obtaining of information.
These letters rogatory are transmitted through judicial channels, diplomatic or consular agents, or the central authority of the states. Whenever letters rogatory are transmitted through consular or diplomatic channels or through the Central Authority, legalisation shall not be required.
In Brazil, the Ministry of Justice, through the Department of Asset Recovery and International Legal Cooperation (DRCI) of Brazil, operates as the competent authority for the exchange information and acts as an intermediary for providing judicial assistance. The DRCI is an agency responsible ofor reporting public politics and coordinating the recovery of assets, international legal cooperation, as well as the prevention and fight against money laundering and transnational organised crime.Assisting courts in other jurisdictions
What assistance will the civil court give in connection with civil asset recovery proceedings in other jurisdictions?
Brazil will assist foreign courts in asset recovery proceedings through direct assistance, letters rogatory (based on the Code of Civil Procedure or on the Inter-American Convention on Letters Rogatory, if applicable), and letter of request (based on the 1970 Hague Convention).
As stated in question 13, the 1970 Hague Convention allows private litigants to seek evidence from another participating jurisdiction for use in judicial proceedings. This allows courts in other jurisdictions to send requests directly to the DRCI.
For requests of non-member countries of the 1970 Hague Convention and the Inter-American Convention on Letters Rogatory, if the request does not fulfil the direct assistance requirements, cooperations will be exercised through the use of letters rogatory based on the Code of Civil Procedure (if there is no other bilateral agreement between the two states).
A regular letter rogatory will only be enforceable in Brazil after the grant of exequatur, carried out by the Superior Court of Justice. In the event the exequatur is granted, the letter rogatory will be handed over to the appropriate court for enforcement.Causes of action
What are the main causes of action in civil asset recovery cases, and do they include proprietary claims?
The main causes of action in civil asset recovery cases are the following:
- breach of a contract;
- fraud and fraudulent transfer;
- proprietary claims; and
- directors’ and officers’ misappropriation of company funds.
What remedies are available in a civil recovery action?
Under the Civil Code and the Civil Procedure Code, restitution, damages and seizure are common types of remedies available in a civil recovery action.Judgment without full trial
Can a victim obtain a judgment without the need for a full trial?
A victim can obtain a judgment without the need for a full trial, typically by obtaining either a default or summary judgment.
In a default judgment, the facts stated by the claimant are presumed to be true and correct (article 344, Code of Civil Procedure). Judgment for the plaintiff does not, however, follow automatically. The default does not produce any effects if the dispute deals with inalienable rights, if the complaint is not accompanied by an instrument considered by law to be indispensable evidence of the act and if the facts appear to be untrue or contradictory. The defaulting party may intervene in the proceedings at any stage, in whatever state it may be found.
Summary judgments are also allowed when the matter involves only a question of law and when there is no need to produce further evidence.Post-judgment relief
What post-judgment relief is available to successful claimants?
Successful plaintiffs may obtain freezing orders from the court during the trial stage and after a judgment, when there is danger that a judgment will be wholly or partly unsatisfied.
To prevent the dissipation of assets, the post-judgment relief may be enforced through provisional attachment, sequestration, attachment lien on assets, and the lodging of a protest against the alienation of property.Enforcement
What methods of enforcement are available?
A money judgment may be enforced through compulsory conveyance of property from the judgment debtor to the judgment creditor, alienation and appropriation of gains and revenues of a company.
The enforcement proceeding shall be conducted by the following methods:
- Writ of execution: the judgment debtor shall be served with process in order to pay the debt. If the voluntary payment is not made in a timely manner, a writ of execution and appraisal shall be issued.
- Charging order: the judgment creditor may obtain a certificate attesting that the execution was admitted by the judge, with the identification of the parties and the value of the claim, for the purpose of making amendments in the records of the deeds registry, the Department of Transportation, or other assets subject to levy of execution, provisional attachment or freezing.
- Electronic judicial asset freezing: judges may issue asset freezing orders through the electronic system of the Central Bank of Brazil, called BacenJud, which expedites requests to pledge money directly into the debtor’s bank account.
Assets that cannot be levied or sold shall not be subject to execution, such as salaries, retirement pensions, earnings of self-employed workers and professional fees, life insurance and small rural properties, among others (described in article 833 of Code of Civil Procedure).Funding and costs
What funding arrangements are available to parties contemplating or involved in litigation and do the courts have any powers to manage the overall cost of that litigation?
Lawyers usually charge a fixed fee per event (eg, pleadings, evidence, appeal) plus a success fee (to be paid when there is a positive outcome). Although not usual in Brazil, there are no restrictions on different funding arrangements to be made between lawyers and clients.
Judges may influence the cost of litigation when determining the value of the cause - which is used to calculate litigation taxes. The court shall also fix a percentage of condemnation to be paid as lawyers’ fees by the defeated party - which can be from 10 to 20 per cent, according to article 85 of the Civil Procedure Code.
Criminal asset recoveryInterim measures
Describe the legal framework in relation to interim measures in your jurisdiction.
The Criminal Procedure Code establishes the following interim measures in criminal asset recoveries:
- Sequestration: this is the retention of immovable or movable properties acquired through the proceeds of the offence.
- Attachment orders: courts may issue an attachment order against the properties of an offender. It is intended to ensure future compensation and may also be a preparatory measure to a legal mortgage.
- Legal mortgage: this is a measure whereby real estate ensures the payment of a debt of a criminal offence, through an inscription of an encumbrance of non-transferability.
Federal Law No. 9,613/98 (Brazilian Money Laundering Act) authorises prosecutors and police authorities to request a seizure order against the proceeds of crime. The rights of bona fide third parties are retained. In the case of property confiscation or seizure, the third party may prove the payment of the goods or properties.Proceeds of serious crime
Is an investigation to identify, trace and freeze proceeds automatically initiated when certain serious crimes are detected? If not, what triggers an investigation?
The investigation to identify, trace and freeze proceeds of crime may be initiated by request of the offended person, by police authorities and Public Prosecutors, or be ordered by judges on their own initiative. In the latter case, however, a criminal lawsuit must be already pending.
Generally, the preliminary investigation is held by the police, ruled by a chief police officer or a police commissioner.
The Council for Financial Activities Control (COAF) can also trigger investigations (see question 25). This agency is the government department primarily responsible for the fight against financial crime. COAF examines suspicious transactions, monitors any clients or accounts that pose threats to Brazil’s financial sector, conducts investigations and shares information related to financial crimes with the enforcement authorities.Confiscation – legal framework
Describe the legal framework in relation to confiscation of the proceeds of crime, including how the benefit figure is calculated.
The proceeds of crime can be seized by the police in flagrante delicto as a preliminary proceeding, or through a search warrant issued by the judge.
The seizure is prior to confiscation (a measure that can only be ordered by the judge) and the proceeds of crime cannot return to their owners as long as they are useful to the investigation. In all cases, the loss of the proceeds of crime is automatic after the unappealable judgment, as an effect of the conviction.
In Brazilian law, there is also ’confiscation by equivalence’ (created in 2012 by Law No. 12,694). In other words, the loss of assets will reach goods that proportionally have the same value obtained by the criminal agent.
Besides the mentioned measures, the CNJ has issued Recommendation 30/2010 to stimulate courts to order prior transfer of confiscated assets. The purpose is to improve the efficiency and speed for criminal justice procedures.
In regard to calculating the benefit figure, the judge orders the valuation of the assets by a court-appointed expert. After the valuation, the confiscated assets are sold at auction.Confiscation procedure
Describe how confiscation works in practice.
Confiscation should take place after 90 days of an unappealable judgment, as an effect of the conviction. In practice, the proceeds of crime are transferred to the federal government, with the exception of the right of an injured party or a third party in good faith (see question 23).
It can be applied only to something belonging to someone who has taken part in the crime.Agencies
What agencies are responsible for tracing and confiscating the proceeds of crime in your jurisdiction?
Police departments and judicial authorities are responsible for tracing and confiscating the proceeds of crime.
Nevertheless, there are examples of government agencies that also assist in cases related to their areas of competence, such as the Central Bank, which investigates financial crimes, the CVM investigates offences in the securities market, the COAF acts in anti-money laundering and countering the financing of terrorism activities, the Internal Revenue Service investigates offences related to revenue frauds and other federal tax fraud and the DRCI, responsible for reporting public politics and coordinating the recovery of assets, international legal cooperation, as well as the prevention and fight against money laundering and transnational organised crime.Secondary proceeds
Is confiscation of secondary proceeds possible?
Yes. Confiscation applies not only to the proceeds directly derived from crime, but also covers both movable and immovable property that was acquired with the proceeds of the crime.
Confiscation also extends by ‘equivalence’ (article 91, paragraph 1, Criminal Code), reaching goods that proportionally have the same value obtained by the criminal agent, when the product of a crime or its profit are located abroad or cannot be found.Third-party ownership
Is it possible to confiscate property acquired by a third party or close relatives?
Yes. Confiscation shall be applied if a third party has acquired properties knowing that the proceeds were obtained illegally. Confiscation does not take place when the ownership of the properties is a third party in good faith.Expenses
Can the costs of tracing and confiscating assets be recovered by a relevant state agency?
There is no specific provision on the recovery of the costs of tracing and confiscating assets. Nevertheless, the state agency can file a lawsuit seeking civil damages as reparation for the costs incurred in the tracing and confiscating of assets.Value-based confiscation
Is value-based confiscation allowed? If yes, how is the value assessment made?
As stated in questions 23 and 26, value-based confiscation is allowed (confiscation by equivalence) when the recovery of the proceeds of crime is impossible or when it is located in a foreign jurisdiction (article 91, paragraph 1, Criminal Code).
The value assessment is based on the evidence provided by the prosecution and made by a court-appointed expert, if necessary.Burden of proof
On whom is the burden of proof in a procedure to confiscate the proceeds of crime? Can the burden be reversed?
In criminal proceedings, the burden of proof is on the party making an assertion (article 156, Code of Criminal Procedure). Regarding confiscation, the Public Prosecution generally bears the burden of proof, but it also applies to private claimants seeking to recover proceeds of crime.
According to the Money Laundering Act (Law No. 9,613/1998), circumstantial evidence is sufficient to confiscate property during the investigation or prosecution. However, defendants shall prove the legality of the provenance of the confiscated properties to require recovery (reverse burden of proof).
Criminal courts in Brazil have wide powers concerning gathering evidence, even before receiving the accusation from the Public Prosecutor’s Office. They are also allowed to order anticipated production of evidence considered urgent and relevant in the course of the investigation or before pronouncing judgments.Using confiscated property to settle claims
May confiscated property be used in satisfaction of civil claims for damages or compensation from a claim arising from the conviction?
As stated in question 21, Brazilian law establishes sequestration, attachment orders and legal mortgage as interim measures in criminal asset recoveries.
As repeatedly decided by Brazilian courts, the sequestration of assets is an automatic effect of conviction, and the criminal court shall determine the valuation and sale of assets in public auction and transfer the amount collected to the National Treasury, all set in criminal courts, excluding the amounts due to the injured party and bona fide third parties.
The Criminal Procedure Code states in article 143 that after the judgment of conviction becomes unappealable, attachment orders and legal mortgage will be sent to the civil judge, provided that a civil claim has already been filed by the public attorney. The movable goods and real estate may then be used to satisfy the civil claim.Confiscation of profits
Is it possible to recover the financial advantage or profit obtained through the commission of criminal offences?
Yes. Article 91 of the Brazilian Criminal Code establishes that any asset or value obtained through the commission of a crime may be recovered and transferred to the federal government as a consequence of a criminal conviction (see question 23).
Furthermore, criminal courts may order the loss of money or assets of equivalent value when the crime product or its profit are located abroad or cannot be found (see question 26).Non-conviction based forfeiture
Can the proceeds of crime be confiscated without a conviction? Describe how the system works and any legal challenges to in rem confiscation.
Yes. Proceeds of crime can be confiscated by criminal courts at the request of the Public Prosecutor’s Office, the offended person, or the police authority, at any stage of the criminal proceeding, or even during the police investigation. There must be strong evidence of the illicit provenance of the assets.Management of assets
After the seizure of the assets, how are they managed, and by whom? How does the managing authority deal with the hidden cost of management of the assets? Can the assets be utilised by the managing authority or a government agency as their own?
The asset management responsibility remains with the judges who may appoint professional judicial managers (court administrators or receivers) to assist them. Seized movable assets are stored in judicial warehouses while there is no decision ordering their transfer, and are managed by the authority responsible for the judicial warehouse. The cost of management is considered by law as an expense of the proceeding, and it is deducted of the amount received by the sale of the assets.
As a general rule, criminal courts are adopting anticipated sale of assets in case of perishable goods, when the seized assets are subject to depreciation or when they are difficult to maintain (according to Federal Law Nos. 9,613/1998, 11,343/2006 and 13,260/2016). Proceeds of such sales are deposited in a judicial bank account.
In Brazil, criminal courts report information about assets under their control to a centralised electronic database (National Seized Assets database), maintained by the National Council of Justice. The database contains information on assets with economic or non-economic value.
Not only assets that are subject to deterioration but also with economic content and any usefulness may be utilised by the managing authority or an indicated government agency. For instance, according to Federal Law No. 11,343/2006 (Anti-Drug Act, article 62), vehicles, vessels, aircraft and any other means of transport, machinery, fixtures, instruments and object of any nature, used to commit crimes related to drug trafficking, after seizure and proving public interest, may be utilised by law enforcement authorities.Making requests for foreign legal assistance
Describe your jurisdiction’s legal framework and procedure to request international legal assistance concerning provisional measures in relation to the recovery of assets.
Brasil has signed numerous bilateral and multilateral treaties on mutual judicial cooperation, providing a wide breadth of foreign legal assistance (see question 37).
Requests for international legal assistance formulated by domestic authorities (including with respect to the recovery of assets) shall be sent to the DRCI). Thereafter, the DRCI analysis administrative issues and transmits the request to the foreign authority (see question 13).
Some information shall be included in the application, varying according to the laws of the foreign jurisdiction. In general, the basic requirements are: (i) a brief summary of the investigation or lawsuit for which the request is made; (ii) a clear and objective narrative of the facts investigated, demonstrating the necessity of the requested measure; (iii) transcription of legal provisions; and (iv) a full description of the requested assistance.
When legal assistance is based on international treaties that provide direct communication, after verifying the fulfilment of the basic requirements, the DRCI transmits the request to the Brazilian Ministry of Foreign Affairs for diplomatic procedures. Additionally, other routes may be specified in treaties.Complying with requests for foreign legal assistance
Describe your jurisdiction’s legal framework and procedure to meet foreign requests for legal assistance concerning provisional measures in relation to the recovery of assets.
In Brazil, legal cooperation concerning provisional measures in relation to the recovery of assets is achieved through direct assistance, letters rogatory (based on the Code of Civil Procedure or on the Inter-American Convention on Letters Rogatory, if applicable), and letter of request (based on the 1970 Hague Convention) (see question 14).Treaties
To which international conventions with provisions on asset recovery is your state a signatory?
Brazil is a signatory to the following conventions:
- OECD Anti-Bribery Convention;
- Inter-American Convention on Mutual Assistance in Criminal Matters;
- Inter-American Convention Against Terrorism;
- United Nations Convention against Corruption;
- Inter-American Convention on Letters Rogatory;
- United Nations Convention against Transnational Organized Crime;
- United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances; and
- International Convention for the Suppression of the Financing of Terrorism.
Can criminal asset recovery powers be used by private prosecutors?
Criminal proceedings in Brazil are conducted in most cases by public prosecutors. Therefore, private prosecutors cannot typically use criminal asset recovery powers.
Update and trendsEmerging trends
Are there any emerging trends or hot topics in civil and criminal asset recovery in your jurisdiction?Emerging trends39 Are there any emerging trends or hot topics in civil and criminal asset recovery in your jurisdiction?
Following the wake of the institutional shift in the fight against white-collar crime, in the past few years, Brazilian courts have been perfecting tools available for tracing and securing assets.
In January 2019, Brazil established the DRCI as the national central authority responsible for the coordination and processing of all requests for international legal cooperation (Decree-Law No. 9,662).
In 2018, according to the DRCI, Brazil received and demanded 6,591 new requests for foreign legal assistance. Compared with 2017, the total number increased 21 per cent, and since the database began recording, more than US$1.6 billion was seized in assets in other jurisdictions, while US$280 million wasrecovered and transferred to Brazil. The major part of these numbers is from Operation Car Wash (Lava Jato), which has developed new mechanisms to recover assets located in Brazil and in foreign jurisdictions, leading to a greater efficiency in cooperation between law enforcement authorities. To May 2019, the operation had resulted in 242 convictions of politicians, businessmen, and public agents, 1,196 search warrants, 548 requests of foreign collaboration with over 80 countries, 183 plea-bargain agreements, 11 leniency agreements, criminal charges brought against 421 individuals, with a total recovery of 40.3 billion reais.
Brazil recently introduced a regulation (Federal Law No. 13,810/2019) updating and strengthening rules in the fight against offenders involved in money laundering and terrorist financing. The law authorises courts to issue an immediate asset-freezing order on personal and legal entities accused of terrorism, related to sanctions imposed by the United Nations Security Council.
The most recent achievement indicating a shift of Brazil in terms of free market guarantees and reduction of regulatory barriers is the Provisional Measure No. 881, dubbed the Economic Freedom Provisional Measure, enacted on 30 April 2019. The final text was approved by the Chamber of Deputies on 13 August 2019 and by the Senate on 21 August 2019, and on 20 September, the President sanctioned the Economic Freedom Act as Law No. 13,874.
More closely related to asset recovery, the Economic Freedom Act modifies the Civil Code to regulate in greater detail the criteria for disregarding legal entity doctrine. The purpose is mostly to align the Civil Code with the jurisprudence of the Superior Court of Justice, albeit with an important amendment regarding economic groups.
Partner João Accioly has been actively engaged in drafting private law provisions of the Economic Freedom Act, including veil-piercing.
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