Anti-Bribery Laws Coming to Brazil


Brazil is about to become the latest country where corruption is no longer tolerated, and that creates new bribery risks for every organization that operates there. There’s soon to be nowhere to hide, even in emerging countries like Brazil, meaning it is a must that even mid-market scale organizations, all over the world, begin to implement serious bribery and corruption controls.

Here’s the story on Brazil’s version of FCPA…

In Brazil, President Dilma Rousseff has, after intense international and internal pressure, finally signed the Clean Companies Act. For the international companies operating in the country, this could completely change the way they do business, starting January 2014. Brazil has long been a center for questionable ethical business practices, which means that for years, many businesses have benefitted from the ability to conduct business under the table. Now, compliance officers in and out of Brazil are facing a whole new set of rules that have been designed to fight corruption. What’s going to change, exactly? Two things: First, the liability of an entire company; secondly, the way that corruption is legally recognized. Before this legislation, employees and representatives of a company were the only ones liable to be charged with criminal activity if the sought to bribe Brazilian officials or businesspeople. From a business standpoint, this meant that corruption, so far as it affected their business in and with Brazil, was financially viable. From January, any company whose employees are found guilty of bribery stand to be charged as an entire corporation.

Corruption Penalties

Brazil fully realizes the fact that a high percentage of businesses operating within the country are involved, to some degree, in corruption. To make the transition period simpler, the government intends to treat any business that admits to such practices with a soft touch. If and when internal auditors find discrepancies in the books, they will need to convince their executing officers to fess up to a lawyer instead of facing steep charges further down the line. Charges for participating in corruption are going to be stiff:

“Administrative fines may amount to as much as twenty percent of the liable entity’s gross revenue for the fiscal year prior to that in which the administrative proceeding was initiated.”

Anti-bribery legislation will not be the one and only step towards ethical business in Brazil, however it is an important step. Continuous monitoring will be necessary by internal audit officials, as well as the genuine cooperation of CEOs and managers who have traditionally been responsible for high-level bribery.

For auditors, legal pros, and other GRC professionals; Brazil’s business landscape is the one to watch over the course of the several years.

(Source: ACL Blog)

Sunday, December 1, 2013 In: Hot Topics Comments (None)

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