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

A Lei Anticorrupção e os Programas de Compliance

Empresas multinacionais investem em mercados emergentes para abertura de novas oportunidades de negócios e de crescimento contínuo.

A sua decisão de investir em determinado mercado é parametrizada em avaliações político-econômicas que se estendem á analise da influência que a corrupção exerce no mercado e se tais práticas poderão afetar a sua capacidade em produzir dividendos.

Entretanto, o problema da corrupção endêmica vem frustrando o aporte de novos investimentos, dissipando importantes oportunidades comerciais para estes mercados emergentes.

O fato é que o mercado corporativo não pode mais se vincular a práticas de corrupção sistêmica, ainda que este seja o modelo em operação em determinados Países.

A Lei Anticorrupção, Lei n. 12.846/14 veio para respaldar legalmente os processos internos das corporações atuantes no Brasil, aos estabelecer responsabilidade jurídica, administrativa e civil a atos de corrupção praticados por estas companhias privadas.

Como exemplos de previsões jurídicas de corrupção corporativas temos as clássicas vantagens indevidas ofertadas ou concedidas a agentes públicos, fraudes em licitações e financiamentos de atos ilícitos.

Ao decidirem pelo investimento em determinado mercado emergente as corporações avaliam as seguintes premissas de risco:

1. Existe Infra-estrutura adequada neste mercado? Quais são Portos, aeroportos, estradas e parques industriais disponíveis?

2. Há Segurança Política? O País está passando por grandes rupturas políticas em função de extensos problemas de corrupção?

3. A Legislação é eficiente a lida com atos de corrupção?

4. O Poder Judiciário é aparelhado e eficiente?

5. Qual o risco vinculado a Flutuação Cambial; e

6. Qual será a necessidade de capital de curto prazo para se obter retorno financeiro de longo prazo sobre o investimento efetuado no País?

O fato é que a corrupção aumenta a responsabilidade legal em potencial dos investidores, cria um concorrência desigual, desvia recursos e muitas vezes perpetua ineficiência econômica profundamente arraigada.

A corrupção aparece em muitas formas diferentes e em uma variedade de contextos nos diversos segmentos de mercado, se apresentando como uma barreira real entre as empresas e seus objetivos de negócios.

A atividade empresarial corrupta é cada vez mais alvo de promotores em todo o mundo.

Investigações, independentemente de onde eles se originam, criam potenciais riscos de responsabilização legal, perda de reputação e de gerar grandes prejuízos.

Desde 1977 os Estados Unidos impõe a obediência corporativa a sua Lei Anticorrupcao denominada "Foreing Corrupt Practices Act", conhecida como FCPA.

Cumpre recordar que a FCPA atinge também empresas no exterior e tem sido objeto de renovada prioridade e ênfase em sua aplicação nos Estados Unidos e em outros lugares do mundo.

No Brasil as regras de prevenção e combate à Lavagem de Dinheiro (Lei 9.613/1998, alterada pela Lei 12.683/2012) e a tramitação do Projeto de Lei 6862/2010, que dispõe sobre a responsabilização civil e administrativa da pessoa jurídica por atos contra a administração pública, tem levado as corporações a adotarem o denominado "Programa de Compliance".

A adoção de um "Programa de Compliance" tem por escopo implantar procedimentos éticos a mentalidade empresarial através (i) da orientação, formação e reciclagem de empregados e diretores sobre políticas de combate à lavagem de dinheiro; (ii) da elaboração de Códigos internos de conduta, organização de um sistema de coleta, sistematização e checagem de informações sobre clientes, empregados, parceiros, representantes, fornecedores e operações praticadas com sua colaboração ou assistência; (iii) do desenvolvimento de sistemas de comunicação interna e externa que facilite o repasse de informações sobre atos suspeitos; (iv) da implementação de sistema de controle interno de atos imprudentes ou dolosos, com mecanismos de apuração e sanção disciplinar.

A esperança é que Programas de Compliance e o decorrente pensamento ético permeiem os demais entes da sociedade e "oxalá" o Poder Público em todas as suas instâncias.

A HISTÓRIA DO ESCRITÓRIO CRAVATH, SWAINE & MOORE

A Cravath, Swaine & Moore foi originalmente constituída em 1854 à partir da associação de dois escritórios predecessores - Richard M. Blatchford de Nova York e Wiliam H. Seward de Auburn, Nova York, usando incialmente o nome Blatchford, Seward & Griswold.

Em 1882 o sócio Samuel Blatchford foi nomeado pelo Presidente americano Chester Arthur para a Suprema Corte Americana. Por sua vez, o sócio Seward enveredou para a política, tendo sido eleito Governador, Senador por Nova York e Secretário de Estado de Abraham Lincoln.

Em 1867 intermediou a compra do Alasca da Rússia numa transação maliciosamente chamada de a "Loucura de Seward." (Anos mais tarde a compra do Alasca foi reconhecida como um dos negócios mais lucrativos da história, em virtude dos vastos campos de petróleo e minérios encontrados na região).

Em 1899 Paul Drennan Cravath ingressou no escritório, o qual passou em 1944 a se chamar Cravath, Swaine & Moore.

 Cravath representou alguns dos grandes inventores da América, de Samuel F. B. Morse (código Morse e pioneiro na telefonia), Charles Goodyear em 1850 e Thomas Edison na década de 1880.

Importantes clientes iniciaram o relacionamento com o escritórios nos anos 1800 e assim mantiveram até hoje, como a CBS, o JPMorgan e a PricewaterhouseCoopers.
Posteriormente o escritório patrocinou a defesa da IBM em dois importantes casos antitruste, que foram apelidados pela revista Time como "os casos do século."

O escritório tem filial no Reino Unido desde a década de 1820, tendo como clientes o Banco de Inglaterra, o Tesouro Britânico, Grupo Modelo, Santander, e HSBC como foco na prestação de suporte em negócios internacionais.
Em novembro de 2014, o escritório participou de três operações de M & A (fusão e aquisição de empresas) em um único dia, dentre estas o acordo firmado entre a 3G Capital e a Berkshire Hathaway Inc., que criou a terceira maior empresa de alimentos e bebidas na América do Norte.

Outros trabalhos de importância significativa incluíram a formação da rede NBC, a fusão da United Airlines com a Continental Airlines (criando a maior companhia aérea do mundo) e aquisição pela Unilever da empresa Alberto Culver. (produtos de beleza e cuidados pessoais)

Em 2010, o departamento contencioso do escritório representando a Morgan Stanley venceu, por julgamento sumário litigio em face da Discover Financial Services por quebra de contrato, resultando em um acordo onde a Discover Financial Services pagou a Morgan Stanley US$ 775 milhões de dólares para encerrar a ação judicial.

Na última década o escritório representou a Netscape em um processo antitruste contra a Microsoft, resultando em um acordo de mais de US$ 750 milhões.

Grandes fusões, aquisições e ofertas públicas tem sido patrocinadas desde então, tais como a fusão DuPont com a Conoco, a fusão Ford com a Jaguar, a fusão Bristol-Myers como a Squibb, a fusão entre a Time e a Warner e a fusão da AOL com a Time-Warner;

O escritório faz questão de enfatizar que não busca prevalecer ante os demais como base no número de advogados ou de filiais, mas sim pela confiança absoluta depositada por seus clientes

INTERNATIONAL TRIBUNAL FOR THE LAW OF THE SEA - ITLOS

The International Tribunal for the Law of the Sea is an independent judicial body established by the United Nations Convention on the Law of the Sea to adjudicate disputes arising out of the interpretation and application of the Convention. The Tribunal is composed of 21 independent members, elected from among persons enjoying the highest reputation for fairness and integrity and of recognized competence in the field of the law of the sea.

The Tribunal has jurisdiction over any dispute concerning the interpretation or application of the Convention, and over all matters specifically provided for in any other agreement which confers jurisdiction on the Tribunal (Statute, article 21). The Tribunal is open to States Parties to the Convention (i.e. States and international organisations which are parties to the Convention). It is also open to entities other than States Parties, i.e., States or intergovernmental organisations which are not parties to the Convention, and to state enterprises and private entities "in any case expressly provided for in Part XI or in any case submitted pursuant to any other agreement conferring jurisdiction on the Tribunal which is accepted by all the parties to that case" (Statute, article 20).

The United Nations Convention on the Law of the Sea was opened for signature at Montego Bay, Jamaica, on 10 December 1982. It entered into force 12 years later, on 16 November 1994. A subsequent Agreement relating to the implementation of Part XI of the Convention was adopted on 28 July 1994 and entered into force on 28 July 1996. This Agreement and Part XI of the Convention are to be interpreted and applied together as a single instrument. 

The origins of the Convention date from 1 November 1967 when Ambassador Arvid Pardo of Malta addressed the General Assembly of the United Nations and called for "an effective international regime over the seabed and the ocean floor beyond a clearly defined national jurisdiction". This led to the convening, in 1973, of the Third United Nations Conference on the Law of the Sea, which after nine years of negotiations adopted the Convention. 

The Convention establishes a comprehensive legal framework to regulate all ocean space, its uses and resources. It contains, among other things, provisions relating to the territorial sea, the contiguous zone, the continental shelf, the exclusive economic zone and the high seas. It also provides for the protection and preservation of the marine environment, for marine scientific research and for the development and transfer of marine technology. One of the most important parts of the Convention concerns the exploration for and exploitation of the resources of the seabed and ocean floor and subsoil thereof, beyond the limits of national jurisdiction (the Area). The Convention declares the Area and its resources to be "the common heritage of mankind". The International Seabed Authority, established by the Convention, administers the resources of the Area. 

Part XV of the Convention lays down a comprehensive system for the settlement of disputes that might arise with respect to the interpretation and application of the Convention. It requires States Parties to settle their disputes concerning the interpretation or application of the Convention by peaceful means indicated in the Charter of the United Nations. However, if parties to a dispute fail to reach a settlement by peaceful means of their own choice, they are obliged to resort to the compulsory dispute settlement procedures entailing binding decisions, subject to limitations and exceptions contained in the Convention.

The mechanism established by the Convention provides for four alternative means for the settlement of disputes: the International Tribunal for the Law of the Sea, the International Court of Justice, an arbitral tribunal constituted in accordance with Annex VII to the Convention, and a special arbitral tribunal constituted in accordance with Annex VIII to the Convention. 

A State Party is free to choose one or more of these means by a written declaration to be made under article 287 of the Convention and deposited with the Secretary-General of the United Nations (declarations made by States Parties under article 287).

If the parties to a dispute have not accepted the same settlement procedure, the dispute may be submitted only to arbitration in accordance with Annex VII, unless the parties otherwise agree.

Pursuant to the provisions of its Statute, the Tribunal has formed the following Chambers: the Chamber of Summary Procedure, the Chamber for Fisheries Disputes, the Chamber for Marine Environment Disputes and the Chamber for Maritime Delimitation Disputes. 

At the request of the parties, the Tribunal has also formed special chambers to deal with the Case concerning the Conservation and Sustainable Exploitation of Swordfish Stocks in the South-Eastern Pacific Ocean (Chile/European Community) and the Dispute Concerning Delimitation of the Maritime Boundary between Ghana and Côte d'Ivoire in the Atlantic Ocean (Ghana/Côte d'Ivoire).

Disputes relating to activities in the International Seabed Area are submitted to the Seabed Disputes Chamber of the Tribunal, consisting of 11 judges. Any party to a dispute over which the Seabed Disputes Chamber has jurisdiction may request the Seabed Disputes Chamber to form an ad hoc chamber composed of three members of the Seabed Disputes Chamber. 

The Tribunal is open to States Parties to the Convention and, in certain cases, to entities other than States Parties (such as international organizations and natural or legal persons) (Access to the Tribunal). 

The jurisdiction of the Tribunal comprises all disputes submitted to it in accordance with the Convention. It also extends to all matters specifically provided for in any other agreement which confers jurisdiction on the Tribunal. To date, twelve multilateral agreements have been concluded which confer jurisdiction on the Tribunal (relevant provisions of these agreements).

Unless the parties otherwise agree, the jurisdiction of the Tribunal is mandatory in cases relating to the prompt release of vessels and crews under article 292 of the Convention and to provisional measures pending the constitution of an arbitral tribunal under article 290, paragraph 5, of the Convention.

The Seabed Disputes Chamber is competent to give advisory opinions on legal questions arising within the scope of the activities of the International Seabed Authority. The Tribunal may also give advisory opinions in certain cases under international agreements related to the purposes of the Convention.

Disputes before the Tribunal are instituted either by written application or by notification of a special agreement. The procedure to be followed for the conduct of cases submitted to the Tribunal is defined in its Statute and Rules.

COMPREHENDING THE LEGAL PRINCIPLES OF BRAZILIAN LABOR LAW

When a foreign worker provides services in Brazil the laws governing the contract are the laws of the country of origin or the laws of Brazil? This special article is about the foreign employment in Brazil and principles adopted by the Brazilian Labor Court on the demands arising from those relationships.

"The TST (Brazilian Supreme Labor Court) formally adopted the principle of "lex loci executionis" to regulate the labor relationships in Brazil." 

The policy of the Labor Court is that the legal work relationship shall be governed by the laws of the country were the services are delivered as specify the Statement of Precedent No. 207/TST stated by the Supreme Labor Court in April, 2012, with base on the vote of the Vice- President Minister Maria Cristina Peduzzi at the Process 93.2000.5.01.0019-RR-219000.

The summary embraced the principle of "lex loci executionis" claiming to be the legal relationship governed by the labor laws of the country where the services are effectively render and not the country of the worker´s previous hiring.

However inversely to this principle the Law No. 7.064/1982 allow a different rule for Brazilians working abroad.

Such law (previously limited to Brazilian employees of engineering companies working abroad), enable the Brazilian companies rendering service in another country to choose to enforce the labor legislation with more beneficial standards, as taxation, vacation periods, etc.

The legislature that came through the Law No. 11.962/2009 changed the wording of Article 1 of Law No. 7.064/82, extending such rights to be enforced over all workers employed in Brazil and transferred by their employers to provide services abroad.

"Recent jurisprudence have removed the application of Abstract No. 207 that indicated the prevalence of the principle of more favorable rule over the principle of territoriality," said the Minister Pedruzzi, adding that this trend has also been observed in the legal legislation from other countries.

- Non-Brazilians have the same rights as Brazilians when working in Brazil:

The remarkable growth of the Brazilian economy in the recent years attracted the attention of large numbers of non-Brazilians to work in Brazil. 

According to statistics from the Ministry of Justice (2014) there was a 57% growth in the number of foreign workers, reaching a total of 1.51 million in comparison to December of last year (2013).

It should be noted at this juncture, the increase in the flow of immigrants from other countries of South America, as Bolivians, Peruvians and Paraguayans, mostly without a college degree and who saw an opportunity to improve their living conditions in Brazil.

- What is the profile of the non-Brazilians who come to work into the country? 

A lot of young people have been trained and are in search of new experiences in smaller companies, which offers the opportunity for rapid growth. 

One cannot fail to mention illegal immigrants, which, despite this condition, constitutes a significant workforce laboring as street vendors, at the construction industry and in clothing manufactures, especially in the State of São Paulo, usually with low education and qualification.

When working in the country, the foreigner shall have the same labor rights of an employee native of Brazil, as 13th salary, vacation, Social Security rights, among others. Also worth mentioning the standard journey of eight hours per day or 40 per week, with one day off, preferably on Sundays.

There are numerous decisions by the Labor Court, in which foreigners claim the recognition of rights under the employment relationship, but it is not unanimous.

The Third Chamber of the Superior Labor Court ruled that the Brazilian Labor Court has jurisdiction over the action of an Argentine engineer who worked for years concomitantly in Brazil and Argentina. Dismissed after 23 years working as a contractor in a company on the area of telecommunications with subsidiaries in Brazil, the engineer asked for recognition of employment and the several rights arising from this type of labor contract. But he had this requests denied at the first and second instances.

Another case, judged by the Sixth Class of TST in September 2006, opened an important precedent. A Paraguayan illegally working in Brazil, won the right to be recognized as a formal employee after exercising the function of electrician for 17 years in a local small company. The rapporteur Minister Horacio de Senna Pires, granted the worker's appeal based on constitutional principles and the Mercosul Protocol of Cooperation, which provides equal treatment among those born in countries that have signed the pact (Argentina, Brazil, Paraguay and Uruguay), in their respective territories. Article 3 of the Protocol provides that "citizens and permanent residents of one of the States Parties shall enjoy the same conditions of citizens and permanent residents of another State Party, as well to free access to the Courts in the jurisdiction of that State for the protection of their rights and interests".

- Legal requirements to work in Brazil

As in any country there are legal requirements for non-Brazilians work in Brazil and it could not be different.

It was Law No. 6.815/80, regulated by Decree No. 86.715/81 that defined the legal status of these workers in the country and created the National Immigration Council (CNI) -Organ of the Ministry of Labor and Employment responsible, among other elements, for the formulation of immigration policy and coordination of the work activities in the country.

The CNI establishes and directs the granting of work permits for foreigners who intend to stay provisionally or permanently.The Ministry of Foreign Affairs issues a consular authorization to be registered in the passport - a "visa", allowing the worker to enter, work and remain in the country.

The visa (temporary or permanent) is the first obligation to be observed by those who enter in the country on a cultural vacation, business, as an artist, athlete, student, scientist, radio correspondent, newspaper, television or agency foreign news, among others. By the other hand, the permanent visa is specifically granted for those who wish to permanently reside and work regularly in Brazil.

Since 2006 there was an increase in the number of work permits issued for foreign workers. This is due (according to Paulo Sergio Almeida, former general coordinator of Immigration at the Ministry of Labour and Employment) to the increment of investments in Brazil, mainly in the sectors of industry, oil, gas and energy.

"There is crescent demand for the coming of professionals specialized in supervision and implementation of the most sensitive performances in the deployment of equipment and technology transfer," Almeida said in an article published on the website of the MTE. 

However, this specialized professional are required to prove their qualification and / or experience, which should be done at the Ministry of Labor and Employment, through the presentation of diplomas, certificates or declarations provided by educational institutions.

A new criteria for the authorization of these professionals work with temporary visas were established by Resolution No. 64 of 09.13.2005 of the National Immigration Council. According to this resolution, to demonstrate the qualifications or experience the candidate will needs to demonstrate experience of a 2 (two) years alternately in the performance of mid-level profession, with minimum education of nine years or one year experience in the exercise of high level profession.

- Liability over underpaid work

São Paulo Labor Court has dismissed a civil suit filed by the Public Ministry of Labor (MPT) against exploitation of workers via underpaid salaries. A prime example was the action filed by MPT São Paulo in February 2012 against a large retail store for exploiting workers - mostly.

This was the first civil suit on "slave labor" involving foreigners in urban facilities in Brazil. The SP-MPT requested, the Labor Court of São Paulo to advance relief (immediate suspension of this practice), plus punitive damages to the collective of workers worth £ 5 million, to be reverted to the Fund of Workers Assistance (FAT). By the present time the civil action was not dismissed.

A BBC special program reported the situation of a group of 25 foreigners working in the factory of a giant commodities producer in the Federal District, who worked in the poultry slaughter by halal method that were living in poor conditions of accommodation in company. The MPT and the Ministry of Labor conducted inspections to investigate those allegations of mistreatment. But the case of this factory repeats in several other Brazilian States.

Another unit of this giant commodities producer, located in the municipality of Parana State was processed by the Ministry of Labor of Parana through civil action in the Labor Court which granted an injunction banning the work of 30 Muslims working as outsourced manpower to perform halal slaughter.

According to prosecutors, outsourcing - as made by the Group of Halal Slaughter - is irregular because the slaughter of animals is the core activity of the company.

Finally, companies interested in using non-Brazilian in the execution of its activities in Brazil should seek detailed information about the local legislation in order to properly calculate the costs, taxes and other rights incident over wage as per the Brazilian Labor Law.

ABOUT THE AUTHOR: Mauricio Ejchel

Expert in International Law, Civil, Commercial Planning and Labor Law, Mauricio Ejchel holds a Bachelor of Law Degree from the Pontifical Catholic University of the State of São Paulo in 1994 and is partner at the law firm MF Ejchel Advocacy. As a consultant lawyer provides legal consultancy to domestic and foreign companies, and is also an experienced litigation attorney pleading before the Brazilian Courts in a considerable number of lawsuits and providing services in a wide ranges of location thru partner offices in several regions in Brazil and abroad.