New Brazilian Anti-Corruption Legislation: Law No. 12.846

Kegler Brown Global Business News

On August 1, 2013, President Dilma Rouseff signed Brazilian Law No. 12.846 imposing liability on business entities and individuals, including foreign companies and foreign persons doing business in Brazil, for acts of corruption involving public administration. The law will be effective on January 28, 2014.

The law prohibits: 1) the offer, promise or the giving of any undue advantage to any public servant or third person related to the public servant; 2) funding, sponsoring, or subsidizing any prohibited act; and, 3) using any person or entity to conceal the true beneficiaries of the illegal acts. Under the new law it will be illegal to undertake any unauthorized acts intended to affect or obtain any undue advantage respecting the competitive nature of the public bidding process, of public contracts and/or the performance of public contracts. It will also be illegal to interfere with or attempt to interfere with any governmental investigation related to public finances.

The new anti-corruption law has a broad reach bringing within is ambit acts committed in or outside of Brazil as well as corrupt acts directed at foreign governments, entities directly or indirectly controlled by foreign governments and public international organizations.

The highest authorities of the executive, legislative and judicial branches of the Brazilian government can initiate investigations and judicial or administrative actions for violations. Sanctions for violations can include a fine valued between one tenth percent (0.1%) to twenty percent (20%) of the gross revenues earned the year prior to the initiation of an administrative procedure or up to sixty million reals (R$ 60,000,000.00). Full compensation for damages caused can be ordered in addition to fines or other sanctions which can include a complete shutdown of business operations.