The Anti-Corruption Law and Compliance Programs in Brazil

The Anti-Corruption Act has been approved as a result of the international commitments made by Brazil to confront and fight major local corruption. In the same path, the implementation of Compliance Program has increasingly gain importance in the international economic scenario and started to receive major role to give the guidelines contained in the new legislation.

Multinational companies invest in emerging markets to open up new business opportunities and continuous growth.

Its decision to invest in a given market is mostly based in the current political-economic assessments that extend to the analysis of the influence that corruption exerts in the market and if such practices could affect its capacity to produce dividends.

However, the problem of endemic corruption in Brazil has been frustrating the infusion of new investments, thus dissipating important commercial opportunities for these emerging markets.

The fact is that the corporate market can no longer be link to practices of systemic corruption, even though this is the model in operation in certain countries.

The Anti-Corruption Law, Law no. 12,846/2014 came to legally support the internal processes of corporations operating in Brazil, to establish legal, administrative and civil liability to acts of corruption practiced by these private companies.

As examples of legal predictions of corporate corruption, we have the classic undue advantages offered or granted to public agents, frauds in public bids and financing of illicit acts.

When deciding to invest in a particular emerging market, corporations evaluate the following risk assumptions:

1. Is there adequate infrastructure in this market? What are ports, airports, roads and industrial parks available?

2. Is there endemic Political Corruption? Is the country experiencing major political disruptions due to extensive corruption problems?

3. Is Legislation Efficient Handles Corruption Acts?

4. is the Judiciary effective and efficient?

5. What is the risk linked to Foreign Exchange Fluctuation; and

6. What will be the need for short-term capital to obtain a long-term financial return on the investment made in the country?

The fact is that corruption increases potential legal liability of investors, creates unequal competition, diverts resources, and often perpetuates deep-rooted economic inefficiency.

Corruption appears in many different forms and in a variety of contexts across diverse market segments, presenting itself as a real barrier between companies and their business goals.

Promoters around the world increasingly target corrupt business activity.

Investigations, no matter where they originate, create potential risks of legal accountability, loss of reputation and great loss.

Since 1977, the United States has imposed corporate compliance with its Anti-Corruption Act known as the "Foreing Corrupt Practices Act," known as the FCPA.

It should be remembered that the FCPA also reaches overseas companies and has been the subject of renewed priority and emphasis on its application in the United States and elsewhere in the world.

In Brazil, the rules for preventing and combating Money Laundering (Law 9.613 / 1998, as amended by Law 12,683 / 2012) and the Bill 6862/2010, which deals with the civil and administrative liability of the legal entity for acts against The public administration, has led corporations to adopt the so-called "Compliance Program".

The adoption of a "Compliance Program" is intended to implement ethical procedures in the business mindset through:

(i) Guidance, training and retraining of employees and directors on anti-money laundering policies;

(ii) The elaboration of internal codes of conduct, organization of a collection system, systematization and verification of information about clients, employees, partners, representatives, suppliers and operations practiced with their collaboration or assistance;

(iii) The development of internal and external communication systems to facilitate the transfer of information about suspected acts;

(iv) The implement of a system of internal control of reckless or malicious acts, with verification mechanisms and disciplinary sanction.

The hope is that Compliance Programs and the resulting ethical thinking permeate the other entities of society and "hope" the Brazilian Public Authorities in all its instances.The Anti-Corruption Law and Compliance Programs in Brazil