The regulation of the Brazilian Clean Companies Act (BCCA) in the federal scope has changed with the publication of Decree No. 11,129/2022, which revoked Decree Nº 8,420/2015 that regulated the BCCA, and it will become effective as of July 18, 2022.
The new Decree kept the structure and approach already adopted by the former regulation and brought clarifications and substantial complementation as to the administrative liability and fines, leniency agreement, and integrity programs. Some of these changes reflected practices that had already been adopted by the Brazilian Office of the General Comptroller (CGU).
With respect to administrative liability, the different phases were systematized, featuring a specific section to regulate the preliminary investigation. The Administrative Liability Proceeding (PAR) was altered, focusing on the need to prepare a Note of Indictment, which enables the implementation of the adversary system and ensures the right to a full defense.
The parameters for defining fines were revised, including in relation to the percentages for defining the rate. Regarding the aggravating factors, the continuity of the wrongful acts was substituted by the aggravating factor of the concurrency of wrongful acts, and the aggravating factor of the sum of the contractual instrument maintained or intended is now more severe. As regards mitigating factors, spontaneous communication was replaced by voluntary admission of strict liability, a new mitigating factor was included for inexistence or lack of proof of undue advantage gained and damages resulting from the wrongful act, and the percentage applicable for the existence and application of an integrity program was increased.
Concerning the leniency agreement, the concept of the leniency agreement was defined and its objectives included, namely, to increase the investigative capacity of the public administration, to enhance the state's capacity to recover assets, and to foster a culture of integrity in the private sector. Other innovations include the requirement that leniency recipients admit strict liability for wrongful acts, fully repair the uncontroversial portion of the damage caused and forfeit amounts of undue asset increase or illicit enrichment. In addition, the Decree sets parameters for the reduction of up to two-thirds of the fine by entering into a leniency agreement, including the timeliness of the self-reporting and its unprecedented nature. The CGU can also accept delegation to negotiate, conclude, and monitor compliance with leniency agreements involving damaging acts by other federal branches and entities.
- Allocation of adequate resources for the operation of the program within the scope of commitment of the top management;
- Periodic communications actions of the integrity program in addition to training;
- Adequate risk management and its periodic reassessment;
- Mechanisms for handling complaints and not just the existence of reporting channels; and
- Appropriate risk-based due diligence for hiring and supervising third parties, politically exposed persons and for sponsorships and donations.