Anti-Corruption 2024 Comparisons

Brazil has signed up to the following international conventions relating to anti-bribery and anti-corruption:

• Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, ratified on 15 June 2000 and promulgated by Presidential Decree No 3,678 of 30 November 2000 (OECD Convention);
• Inter-American Convention against Corruption, ratified on 25 June 2002 and promulgated through Presidential Decree No 4,410 of 7 October 2002 (OAS Convention); and
• United Nations Convention against Corruption, ratified on 18 May 2005 and promulgated through Presidential Decree No 5,687 of 31 January 2006 (UN Convention).

The main national legislation relating to anti-bribery and anti-corruption in Brazil are:

• Federal Law No 12,846 of 1 August 2013 (Anti-Corruption Law);
• Decree Law No 2,848 of 7 December 1940 (Criminal Code); and
• Federal Law No 8,429 of 2 June 1992 amended by Law No 14.230 of 25 October 2021 (Administrative Improbity Law).

These statutes cover not only corruption, but also related violations, such as the illegal enrichment of government officials, bid rigging and fraud in government bids and contracts, and obstruction of government monitoring and oversight. Brazil does not adopt corporate criminal liability for corruption-related offences. Liability of companies for such offences are covered in the civil and administrative spheres.

Enforcement in Brazil is largely guided by precedents in court (especially higher courts) and administrative proceedings, executive orders and guidelines issued by enforcement agencies, and the writings of scholars, which are to a great extent non-binding but carry high persuasive value.

Concerning the Anti-Corruption Law, the Brazilian Federal Executive Branch has issued Decree No 11,129 of 11 July 2022 (the Federal Anti-Corruption Decree) to regulate, among other topics, the calculation of administrative fines and the guidelines for Brazilian enforcement authorities to assess anti-corruption compliance programmes when enforcing the Anti-Corruption Law in administrative proceedings.

The Federal Comptroller General’s Office (CGU) has also published non-binding guidelines on matters related to the administrative enforcement of the Anti-Corruption Law and corruption prevention in the public and private sectors. The following guidelines issued by CGU are relevant for the purposes of this guide.

• “Integrity Program – Guidelines for Private Companies”, issued in 2015 and recently updated, which details CGU’s orientation on best practices for corporate anti-corruption compliance programmes. The guide covers issues such as the commitment of top management to the programme, risk-based compliance mechanisms, codes and internal policies, due diligence of third parties, and gifts and hospitality to public officials.
• “Manual for Evaluation of Compliance Programs in Administrative Enforcement Proceedings”, issued in 2018, which sets guidelines for CGU public officials when evaluating compliance programmes and assessing penalties in enforcement proceedings.
• “Practical Manual for the Calculation of Penalties under the Anti-Corruption Law”, issued in 2020, to guide and standardise the calculation of fines.
• “Anti-Corruption Leniency Program Guide”, issued in 2023, which provides guidance to legal entities for negotiating leniency agreements with the CGU, including best practices that should be adopted before, during, and after the execution of the agreement.

The two most important changes that have occurred in the anti-bribery legal framework recently were the issuance of the new Federal Anti-Corruption Decree in 2022, to replace the prior regulation issued in 2022, and the passing of Federal Law No 14,230 of 2021, which amended the Administrative Improbity Law of 1992.

The new Federal Anti-Corruption Decree introduced new provisions to regulate the Anti-Corruption Law, such as:

• changes in the aggravating and mitigating factors used to calculate fines;
• more detailed provisions to regulate administrative enforcement proceedings;
• guidelines for the commencement of investigations prior to the start of administrative enforcement proceedings;
• updated guidelines to determine the effectiveness of corporate integrity programmes; and
• permission for the CGU to accept requests to negotiate, execute and monitor leniency agreements related to violations of the Anti-Corruption Law against other government branches, such as state and municipal authorities.

Federal Law No 14,230 of 2021 amended the Administrative Improbity Law to implement significant changes to the enforcement of wrongful behaviour by public officials and private entities, such as:

• limitation of liability standard to wilful misconduct;
• requirement that enforcement agencies show evidence that a defendant was duly aware of the illegality of the conduct at the time it was carried out;
• reduction of the maximum amount of fines;
• increase of the maximum period of the prohibition from entering into administrative contracts or receiving tax or financial incentives; and
• unification of the statute of limitations for filing improbity lawsuits at eight years from the occurrence of the alleged violation.

Definition of a Bribe

Bribery is defined in Section 333 of the Criminal Code as “to offer or promise an undue advantage to a public official in order to make such public official do, omit or delay any official act”. The Criminal Code does not contain a specific definition of a bribe or “an undue advantage”. Due to the language adopted by the Criminal Code, the Brazilian legal community refers to this crime as “active corruption”.

In 2002, following Brazil’s signing of the OECD Convention, the Criminal Code was amended to include the crime of active corruption of a foreign public official, in connection with an international commercial transaction (Section 337-B). The definition of this crime mirrors the definition of active corruption described above.

The Administrative Improbity Law states that a violation to the statute occurs when a public official “receives, for oneself or a third party, money, a movable or immovable asset, or any other economic advantage, directly or indirectly, on a basis of commission, percentage, gratification or gift, from one who has a direct or indirect interest that may be attained or supported by an action or omission related to the responsibilities of the public official” (Section 9, item I). 

The Anti-Corruption Law establishes that a violation against the public administration occurs if companies “promise, offer or give, directly or indirectly, an undue advantage to a public official, or to a related third party” (Section 5, item I). Violations also include financing, covering of expenses, sponsoring or in any way subsidising, an undue advantage (item II) or using an intermediary to conceal the real identity of the beneficiary of the conduct (item III). The Anti-Corruption Law does not define “undue advantage”.

Offer or Acceptance of a Bribe

The receipt of a bribe is also a crime under the Federal Criminal Code: “to request or receive, for oneself or a third party, directly or indirectly, even outside of office or before entering it, but in connection to it, an undue advantage, or accept a promise of such advantage” (Section 317). Due to the language adopted by the Federal Criminal Code, the Brazilian legal community refers to this crime as “passive corruption”.

Brazilian law qualifies the mere promise, offer or acceptance of an unlawful advantage to or by a public official as a criminal offence, regardless of whether the bribe is actually paid, or the results expected by the conduct effectively occur.

Hospitality, Gifts, Promotional Expenditures and Facilitation Payments

Brazilian laws do not contain a universal rule on acceptable hospitality, gifts, or promotional expenditures applicable to all public officials. The federal government and each state and municipality, and each of their respective branches of government (executive, legislative and judiciary), have jurisdiction to approve internal regulations concerning the acceptance of hospitality, gifts, and promotional expenditures by their own officials. However, the vast majority of government agencies have not issued specific regulations on the matter.

The Federal Executive Branch has the most extensive and specific regulatory regime with respect to hospitality, gifts, and promotional expenditures offered by private entities to public officials in Brazil. The Federal Public Officials Act (Federal Law No 8,112/1990) specifically prohibits federal public officials from receiving bribes, commissions, gifts, or advantages of any kind in connection with or related to their duties.

The Federal Conflict of Interest Act (Federal Law No 12,813 of 2013) and the Federal Conflict of Interest Decree (Federal Decree No 10,889 of 2021) prohibit public officials from receiving gifts from any private entity or individual who may have an interest in a potential decision by the public official or by a collegiate in which he or she participates.

On the other hand, the statutes allow a public official to receive promotional or marketing gifts that do not exceed 1% of the maximum salary of the Federal Executive Branch. The Federal Conflict of Interest Executive Decree also contains guidelines for private entities or individuals to offer hospitality to public officials, when appropriate to their offices and institutional roles and with the prior approval of the respective government agency.

As a result, regulations on the receipt of hospitality or promotional expenditures by public officials frequently vary, requiring a case-by-case assessment. In general terms, if an expense violates a specific rule, an objective threshold set forth in applicable regulations, or has been offered in connection with any action or omission by a public official, such expense may be considered an “undue advantage” for the purposes of anti-corruption legislation.

Brazilian law does not contain exceptions for facilitation payments, which are considered illegal regardless of the amount involved.

Failure to Prevent Bribery

Failure to prevent bribery is not an autonomous offence. Under applicable criminal law principles, the failure (omission) is relevant for criminal purposes only if the individual refrains, through negligence or wilful misconduct, from acting when action is required or feasible for such individuals. Therefore, authorities may treat the failure to prevent bribery as a bribery offence if the individual had a legal duty of care, protection, or surveillance, if the individual had undertaken the responsibility to prevent the violation and failed to do so, or if the individual’s previous behaviour created the risk of the violation.

Definition of a Public Official

Brazilian laws contain different definitions of public officials. For criminal law purposes, a public official is defined as “one who, even if temporarily or without pay, holds a public position, employment or function” as well as “one who holds a public position, employment or function in a public agency, or in a company hired to perform activities typically rendered by the government” (Section 327, caput and Section 1 of the Criminal Code).

The Administrative Improbity Law defines a domestic public official as “the political agents, public servants and anyone who performs, even if temporarily or without pay, by election, appointment, designation, hiring or any other form of vesting or bond, a mandate, an office, an employment, or a function” in:

• the executive, legislative, and judiciary branches, as well as the direct and indirect administration in the scope of the federal union, states, municipalities, and the federal district;
• private entities that receive subsidies, benefits or incentives, either tax or credit, from public entities; and
• private entities for which creation or funding the public treasury has contributed or contributes (Section 2 of the Administrative Improbity Law).

Foreign public officials are defined in the Anti-Corruption Law as those “who, even if temporarily or without pay, hold a public position, employment or function in agencies, public entities, or diplomatic offices of a foreign country, as well as in corporate entities controlled, directly or indirectly, by a foreign government, or international public organisations” (Section 5, subsection 3 of the Anti-Corruption Law).

Bribery of Foreign Public Officials

The Criminal Code applies to any crime that has occurred in the Brazilian territory (Section 5), and to certain crimes that have occurred outside of Brazil, including crimes of corruption of a foreign public official in connection with an international commercial transaction.

The Anti-Corruption Law applies to the bribery of both domestic and foreign public officials with an extra-territorial reach, as well as to infractions by Brazilian companies against foreign governments, even when committed abroad (Section 28).

Bribery Between Private Parties in a Commercial/Other Setting

Brazilian law does not recognise the specific offence of commercial or private bribery, although in certain circumstances the conduct may constitute the crimes of larceny or unfair competition.

Larceny is defined in Section 171 of the Criminal Code as to “obtain, for oneself or for others, an unlawful advantage, to the detriment of another person, inducing or maintaining someone in error, by means of artifice, deception, or any other fraudulent means”.

Unfair competition is defined in Federal Law No 9,279 of 14 May 1999 (Industrial Property Law): “A crime of unfair competition occurs when someone [...] gives or promises money or other benefit to an employee of a competitor, so that the employee, disregarding his duties, provides him with an advantage” (Section 195, item IX).

Although commercial or private bribery is not explicitly addressed, there are statutes that establish the duties of directors and officers of legal entities. Both the Civil Code (Sections 1,010 and 1,011) and the Federal Corporations Act (Federal Law No 6,404/76) (Sections 153 through 156), provide that director and officers must not prioritise their interests in lieu of those of the company.

Section 332 of the Criminal Code defines the offence of influence peddling as “to request, demand, charge or obtain, for oneself or for a third party, advantage or promise of an advantage, with the purpose of influencing an action performed by a public official in the exercise of his or her duty”. The Criminal Code does not contain a specific definition of “advantage”.

The Criminal Code, Administrative Improbity Law and Anti-Corruption Law do not contain crimes or violations specifically relating to accounting or bookkeeping. However, the Criminal Code provides that producing or using false documents and creating documents with misrepresentations are crimes (Sections 177, subsection 1, I, 297, 298, 299 and 304).

The Criminal Code also provides that the books of businesses are equivalent to public documents for criminal purposes (Section 297, subsection 1), therefore making penalties for this type of conduct stricter. Offences relating to accounting or bookkeeping in Brazil can also be prosecuted as tax crimes pursuant to Law No 8,137 of 27 December 1990 (Tax and Economic Crimes Law).

Furthermore, Law No 7,492/1986, commonly referred to as the Law of Crimes Against the Financial System, stipulates that an individual who purposely misleads a partner, investor, or competent public department about financial operations or situations, by withholding information or providing false information, is subject to imprisonment for two to six years and a fine (Section 6). The legislation imposes sanctions of imprisonment for those who insert false elements or omit required elements in the financial statements of financial institutions, insurers, or institutions within the securities distribution system.

The Anti-Corruption Law contains a specific offence of obstructing the supervision or monitoring actions of government agencies, and this provision has been applied to punish companies that provide false or misleading information that affect or jeopardise the duties and responsibilities of government agencies.

Finally, the Federal Anti-Corruption Decree sets forth that the maintenance of accurate and complete books and records as criteria to be used by Brazilian authorities to assess the quality and effectiveness of an anti-corruption compliance programme when enforcing the Anti-Corruption Law in administrative proceedings.

The Criminal Code defines the misappropriation of public funds by public officials as an offence: “to give public funds and income a different use than that provided by law” (Section 315).

Section 316, subsection 1 of the Criminal Code also defines as a crime “to levy taxes or social security contributions that one knows or ought to know to be undue […]”, which may be aggravated if the public official diverts funds illegally received for his or her own benefit or for the benefit of others, disguised as a tax levy (Section 316, subsection 2).

The Administrative Improbity Law states that an improbity violation occurs if a public official “receives any economic advantage to intermediate the release or application of public funds of any nature” (Section 9, IX).

Conflict of Interest

Law No 12,813 of 16 May 2013 (Conflict of Interests Law) prohibits Federal Executive Branch officials from acting in situations in which a conflict of interests may exist, which may include disclosing or using privileged information for their benefit or for the benefit of a third party. The violation may occur while the official is in office or after the official leaves his or her position.

Embezzlement of Public Funds

Section 312 of the Criminal Code defines the embezzlement of public funds by public officials as “to misappropriate public funds or any other public or private assets in one’s possession due to one’s position, or to divert it, for one’s benefit or for the benefit of others”.

The Administrative Improbity Law also sets forth that an improbity violation occurs if a public official “incorporates into his or her assets, in any way, assets, funds, or amounts belonging to entities of the public administration” (Section 9, XI).

Favouritism

The Criminal Code prohibits public officials from “violating the confidential nature of a proposal in a public bid or allowing a third party to have access to it” (Section 326).

Law No 8,666 of 21 June 1993 (Public Procurement Law) and Law No 14,133 of 1 April 2021 (New Public Procurement Law, which will come into force on 30 December 2023) set forth administrative and criminal sanctions for violations of the competitive nature of bids or fraud in public bids and administrative contracts.

The Administrative Improbity Law considers it an act of administrative improbity to “reveal a fact or circumstance of which one is aware due to his/her duties, and which should be confidential; providing an advantage through privileged information or jeopardising the security of society and the state.” (Section 11, III).

The Anti-Corruption Law classifies it as an act against the public administration to “thwart or defraud the competitive nature of a public tender by an adjustment, arrangement or any other means” (Section 5, IV, a).

The Criminal Code, the Administrative Improbity Law and the Anti-Corruption Law apply to offences or violations that are committed through an intermediary. Also, the Anti-Corruption Law states that “strict liability shall apply to legal entities, in the civil and administrative levels, for harmful acts set forth in the Law and performed on the legal entity’s behalf or for its benefit” (Section 2), thereby creating liability for an offence by an intermediary regardless of wilful misconduct, fault or even knowledge of the conduct by the company and its representatives.

The statute of limitations for the crime of bribery is 16 years (Section 109, item II of the Criminal Code) beginning on the date in which the crime is completed in all its aspects (Section 111, item I).

The statute of limitations for violations under the Administrative Improbity Law is eight years as of the occurrence of the event or, in the case of continued infraction, from the date in which the illegal activity has ceased (Section 23).

The statute of limitations for infractions of the Anti-Corruption Law is five years as of the date in which the government becomes aware of the violation, or in the case of a continued infraction, from the date in which the illegal activity has ceased (Section 25 of the Anti-Corruption Law). The new Federal Anti-Corruption Executive Order states that the signing of a memorandum of understanding with the corporate entity in preparation for the execution of a leniency agreement will toll the statute of limitations for the duration of the negotiations, up to a maximum term of 360 days.

In August 2018, the Brazilian Supreme Court issued a binding decision stating that lawsuits for the recovery of damages in connection with wilful acts of improbity are not barred by the statute of limitations, even if penalties are time-barred: “The actions for compensation to the Public Treasury based on the practice of intentional acts typified in the Administrative Improbity Law are not barred by the statute of limitations” (Supreme Court Theme 897).

The Criminal Code applies to any crime conducted in the Brazilian territory (Section 5), and to certain crimes occurred outside of Brazil, including corruption of a foreign public official in connection with an international commercial transaction. The Administrative Improbity Law applies only in Brazil and with respect to Brazilian public officials, as well as to any person (entity or individual) found to have induced, participated, or became the beneficiary of an illegal act with the aid of public officials. As detailed in 2.1 Bribery under “Bribery of Foreign Public Officials”, the Anti-Corruption Law applies to both domestic and foreign public officials with an extra-territorial reach (Section 28).

Only individuals can be held criminally liable in connection with bribery and corruption in Brazil. See 1.2 National Legislation and 2.1 Bribery for details on the corporate liability regimes.

The Anti-Corruption Law imposes joint liability to controlling companies, controlled companies, affiliates and consortium partners fines and damages arising out of violations under the Anti-Corruption Law (Section 4, subsection 2). In case of a merger and in the absence of fraud, successor’s liability applies, but will be restricted to the obligation of payment of a fine and full compensation of any damages, up to the amount of the assets transferred.

Pursuant to the Brazilian constitution, parties, in judicial or administrative processes, as well as defendants in general, are protected by the presumption of innocence and entitled to due process of law” (Section 5, item LV).

Apart from the lack of violation defence, criminal law defences are found in the Criminal Procedure Code and Criminal Code, including state of necessity, self-defence, and fulfilment of a legal duty or exercise of a legal right (Section 23). There are also other traditional defence arguments not expressly addressed by the Criminal Procedure Code but widely used in practice regarding an individual’s culpability and the substantive qualification of a crime. Defence arguments based on merits, such as duress and extortion, and defences based on procedural shortfalls, such as violation of due process, prohibition of double jeopardy, and statute of limitations are frequent in anti-corruption and anti-bribery enforcement cases.

In the civil sphere, apart from the lack of infraction defence, there are no specific defences available in the Administrative Improbity Law and the Anti-Corruption Law, though it may be possible to use the same merits and procedural arguments mentioned above as a defence. Under the Anti-Corruption Law, the existence of an effective compliance programme can be used as a potential mitigating factor of fines, but there is no compliance defence available for corporate entities that would legally avoid the application of sanctions altogether (Section 7, item VIII).

There are no exceptions to the defences noted in 4.1 Defences.

The Brazilian concept of a de minimis defence is the principle of immateriality. When a crime is formally to have occurred, but the conduct and its result do not substantially harm the institution, principle, or legal value that the criminal provision was designed to protect, the principle of immateriality may apply. However, Brazilian precedents (non-binding) show that courts refuse to dismiss criminal cases of bribery, embezzlement of public assets, and other crimes against the government on grounds of immateriality.

No sectors or industries are exempt from the offences mentioned in 4.3 De Minimis Exceptions.

There are no safe harbour or amnesty programmes for bribery-related violations in Brazil. Nonetheless, Brazilian law recognises co-operation mechanisms such as plea-bargain agreements for individuals, leniency agreements and civil non-prosecution agreements for corporate entities (similar to the DPAs and NPAs used by US authorities), which may result in reduced penalties in exchange for co-operation with enforcement authorities and other requirements.

Finally, CGU Executive Order No 19/2022 introduced a new and distinct resolution mechanism called a “Summary Judgment”, which is essentially a form of admission of guilt by the wrongdoer charged in an administrative proceeding in exchange for a reduction in fines.

Plea-Bargain Agreements

Individuals may enter into plea-bargain agreements pursuant to Law No 12,850 of 2 August 2013 (Criminal Organisations Law). For the purposes of obtaining a plea-bargain agreement, the individual must co-operate wilfully and effectively with the law enforcement agents, including by means of identifying conspirators and the location of potential victims.

In exchange, individuals may receive immunity for their crimes or other benefits such as reduced sentences or alternative penalties. These agreements are subject to court approval and may be negotiated jointly or separately by different enforcement agencies.

Leniency Agreements

Legal entities may enter into leniency agreements pursuant to the Anti-Corruption Law. The following conditions apply should a legal entity wish to enter into a leniency agreement with an enforcement agency (Section 16, subsection 1):

• the legal entity must be the first to declare its interest in co-operating with the investigation;
• the legal entity must cease its involvement in the investigated violation, as of the date it proposes to enter into the leniency agreement; and
• the legal entity must admit its participation in the unlawful act and fully co-operate with the investigations and the administrative proceeding, at its own expense and whenever required, in all procedural acts until its conclusion.

A leniency agreement must contain enough detail to allow the authorities to identify other participants in the violation, when applicable, and the gathering of related information.

Leniency agreements under the Anti-Corruption Law are not conditioned to court approval. However, the leniency agreement may generate effects in the criminal sphere. Therefore, enforcement agencies and prosecutors have been combining the provisions from the Anti-Corruption Law, the Criminal Organisations Law and other statues to foster agreements that may be entered with both individuals and legal entities, as part of co-ordinated settlements.

Civil Non-Prosecution Agreements

Individuals and legal entities accused of improbity acts may enter into civil non-prosecution agreements, pursuant to the Administrative Improbity Law. The requirements to enter into such agreements are (Section 17-B) the full disgorgement of profits to the injured party and the compensation of the losses incurred by the public administration.

In addition to the requirements provided in the Administrative Improbity Law, the 5th Chamber of Co-ordination and Review of the Federal Public Prosecutor’s Office (MPF) issued Guidance No 10, containing other requirements for the execution of a civil non-prosecution agreement, such as:

• admitting responsibility;
• detailing the unlawful acts;
• describing the situation of the investigations, procedures, and proceedings in which the unlawful acts subject to the agreement are being investigated;
• providing requested information and co-operating with the investigation;
• committing to cease its participation or involvement in the unlawful acts subject to the agreement; and
• assuming other obligations that contribute to the prevention and repression of the unlawful acts subject to the agreement.

The non-prosecution agreement may provide benefits for individuals or legal entities, such as exemption or reduction of possible sanctions, suspension, or termination of judicial proceedings, among other benefits.

Summary Judgment

This is a procedure whereby a legal entity admits responsibility for certain conducts set forth in the Anti-Corruption Law in an administrative enforcement proceeding before CGU in exchange for a quicker resolution and reduced fines. The following requirements apply if an interested party wishes to apply for Summary Judgment (Section 2, I and II):

• admit that it committed the investigated conduct(s);
• reimburse financial sums that correspond to the damage caused;
• pay the fine provided for in the Anti-Corruption Law;
• comply with information requests regarding the conduct in question, to the extent the legal entity is aware of it; and
• waive its right to present a defence.

The Summary Judgment can result in the reduction in the fine amount by up to 4.5%, depending on the stage of the administrative enforcement proceeding when the Summary Judgment was proposed (Section 5, subsection 1º), in addition to other benefits.

Bribery Pursuant to the Criminal Code

The penalties upon conviction for bribery, including active corruption and passive corruption, are incarceration of between two and 12 years and fines (Sections 317 and 333). The penalties upon conviction for bribery in an international commercial transaction are incarceration of between one and eight years and fines (Section 337-B).

If the public official (domestic or foreign) does not perform, omit, or delay an official act, in breach of his/her duties, the court may aggravate the sentence of the convicted individuals by one third (Section 317, subsection 1; Section 333, sole paragraph; and Section 337-B, sole paragraph). If the public official breaches his/her legal duties, at the request or influence of someone else, the penalty for the public official is incarceration with a day-time curfew of between three months and one year, or a fine (Section 317, subsection 2).

Pursuant to the Criminal Code, the amount of the fine is calculated in days-fine and will be between ten and 360 days-fine. The amount of the day-fine is fixed by the trial court judge and must rage between one-thirtieth and five times the highest monthly minimum wage in force at the time of the wrongdoing.

Infractions Pursuant to the Administrative Improbity Law

The Administrative Improbity Law, amended by Law No 14.230 of 25 October 2021, establishes sanctions for public officials and, as applicable, for any person (entity or individual) that is found to have induced, participated, or became the beneficiary of an illegal act committed in conspiracy with public officials. Such improbity acts are related to:

• unlawful enrichment;
• violations of the principles applicable to the public administration; and
• damages to the public treasury.

In addition to the full compensation of damages, the individual or legal entity responsible for the act of improbity may be subject to the following penalties – which may be applied separately or cumulatively, based on the seriousness of the offence (Section 12).

• Prohibition from entering into contracts with the government or to receive tax or financial credits and incentives, which may, under strict circumstances, be extended to companies in which the implicated entity owns a majority stake for up to 14 years.
• Payment of civil fines up to the amount of the damages or asset increase.
• The loss of assets and values obtained from the illegal conduct.

Infractions Pursuant to the Anti-Corruption Law

Administrative sanctions

Administrative fines ranging from 0.1% to 20% of the entity’s gross revenue in the year prior to the initiation of the administrative proceeding, but never less than the advantage secured through the unlawful act. If the gross revenues of the legal entity are for any reason not measurable, fines will be determined within a range between BRL6,000 and BRL60 million.

The Anti-Corruption Law also provides for an administrative reputational sanction consisting of the mandatory disclosure of the decision, at the entity’s own expense, in:

• a widely circulated newspaper within the area where the infraction was committed and where the legal entity does business, or in a national newspaper;
• a visible public notice posted in the entity’s main place of business, for a minimum of 30 days; and
• an immediately visible place on the website of the entity, for 30 days.

Court-enforced sanctions

Public prosecutors, the federal union, the states, the federal district, and the municipalities, through their respective public attorneys’ office or equivalent legal representation bodies, may file a lawsuit under the Anti-Corruption Law seeking court-enforced sanctions and damages. 

Court-enforced sanctions are the following:

• seizure of assets, rights, or values obtained through the illegal act;
• partial suspension or prohibition of activities;
• mandatory dissolution of the implicated legal entity; and
• impairment of receipt of donations, grants, subsidies or funding from public entities and financial institutions, for up to five years (Section 19 of the Anti-Corruption Law).

Bribery Pursuant to the Criminal Code

The Criminal Code provides that the courts must abide by certain guidelines to determine a base penalty, including the defendant’s past records, his or her social conduct, and personality (as applicable), motivation, the circumstances and consequences of the crime, and the behaviour of the victim (Section 59 et seq). After the calculation of the base penalty, courts will consider a range of other aggravating and mitigating circumstances, and lastly, the causes of a lower and higher sentencing, in accordance with the law (Section 68).

Administrative Improbity Law

The Administrative Improbity Law sets forth the guidelines which must be observed during the assessment of penalties, including but not limited to the following (Section 12, subsections 1–7):

• fines may be duplicated in the event that the court finds the original calculated fine to be ineffective for the prevention of future unlawful acts;
• in the case of a legal entity, the economic and social effects of the sanctions will be taken into account to determine whether to maintain the entity’s activities; and
• sanctions applied to legal entities based on the Administrative Improbity Law and the Anti-Corruption Law must observe the constitutional principle of non bis in idem.

Anti-Corruption Law

According to the Anti-Corruption Law, sanctions will be assessed considering the following guidelines (Section 7):

• the seriousness of the offence;
• the advantage obtained or desired by the wrongdoer;
• the consummation of the infraction;
• the degree of harm caused or the potential harm;
• the negative effect caused by the offence;
• the economic situation of the wrongdoer;
• the effectiveness of the legal entity’s co-operation with the enforcement authorities;
• the existence of internal mechanisms and procedures to foster integrity, auditing and encouragement of reporting of irregularities and the effective application of codes of ethics and conduct within the corporate entity; and
• the value of administrative contracts entered between the legal entity and the affected public entity or agency. 

According to Federal Regulations, at the federal level, fines ranging from 0.1% to 20% of the legal entity’s gross revenues of the fiscal year prior to the initiation of administrative proceedings, excluding taxes, will be calculated considering the following guidelines: 

• if there are multiple harmful acts – add up to 4%;
• if management had knowledge of or tolerated the infraction – add up to 3%;
• if the offence resulted in the suspension of public services or of supply of goods or services essential to the public welfare or in the case of non-compliance with regulatory requirements – add up to 4%;
• if, in accordance with the legal entity’s financial statements for the fiscal year prior to the offence:
1. the entity’s solvency index current liquidity ratio, calculated in accordance with Brazilian GAAP were greater than 1; and
2. the legal entity turned a net profit – add 1%;
• if the legal entity was found liable for an offence covered by the Anti-Corruption Law in the past five years – add 3%;
• if the value of the contracts, agreements and other instruments maintained or intended with the harmed body or entity, in the years of the infraction, was:
1. greater than BRL0.5 million – add 1%;
2. greater than BRL1.5 million – add 2%;
3. greater than BRL10 million – add 3%;
4. greater than BRL50 million – add 4%; and
5. greater than BRL250 million – add 5%.

After the calculation based on the factors described above, the following mitigatory circumstances will be taken into consideration:

• if the offence was not concluded – deduct up to 0.5%;
• if there the wrongdoer spontaneously disgorges all undue advantages and compensates for damages, or, if there is no proof of undue advantages or damages – deduct up to 1%;
• if the legal entity co-operates with the investigations, regardless of the execution of a leniency agreement – deduct up to 1.5%;
• if the legal entity voluntarily and formally admits its strict liability for the infraction – deduct up to 2%; and
• if the legal entity shows evidence of an effective anti-corruption compliance programme – deduct up to 5%.

Although the Anti-Corruption Law does not include an obligation for legal entities to implement compliance programme, it does grant credit to effective such programmes when determining sanctions. The criteria for the evaluation of compliance programmes by enforcement authorities under the Anti-Corruption Law are set forth in the Anti-Corruption Executive Order and are generally consistent with international best practices.

Section 57 of the Anti-Corruption Executive Order provides that enforcement authorities must evaluate compliance programmes in accordance with various standards, including but not limited to the following criteria:

• commitment of senior management to the programme;
• standards of conduct, code of ethics, integrity policies and procedures applicable to all employees and senior management, and extended, if necessary, to third parties;
• periodic training and communication actions based on the integrity programme;
• channels for reporting irregularities, available to employees and third parties, as well as mechanisms aimed at protecting whistle-blowers; and
• disciplinary measures in cases of violations of the compliance programme.

Certain Brazilian states (for example, the State of Rio de Janeiro and the Federal District) have enacted state laws requiring that companies implement anti-corruption compliance programme to enter into agreements with state government entities. Likewise, companies in certain regulated sectors, such as financial institutions and insurance and electricity utility companies, are also required to implement compliance mechanisms and controls.

Brazil does not have a specific statute to regulate lobbying activities, which are considered legal if not in violation of laws and regulations discussed in this guide. At the Federal Executive Branch level, Federal Decree No 10.889, of 9 December 2022, imposes to certain federal public officials (not to lobbyists) the obligation to register meetings with lobbyists acting in the defence of a private interest, and such records must be available to the public. The Decree also regulates the offering of hospitality, gifts, and promotional expenses, as discussed, and forbids public officials from doing so if the entity offering such expenses have an interest in a decision by the public official, even if as part of a collegiate.

Nevertheless, a regulatory and legal framework is on the agendas of the federal executive and legislative branches. Both the Federal House of Representatives and the Federal Senate have presented bills concerning lobbying activities. The most relevant initiative is reflected in Bill of Law No 1.202/2007, which was approved by the Federal House of Representatives and submitted to the Federal Senate in November 2022.

Brazilian laws generally do not impose mandatory disclosure, either for violations of anti-bribery and anti-corruption provisions, or the disclosure of wrongdoings in the award and/or performance of government contracts in which individuals and/or companies are involved. However, it is increasingly common for government entities and state-owned companies to include specific clauses in agreements setting forth obligations for contractors to report any suspected wrongdoings.

Certain disclosure obligations may apply to publicly traded companies under the jurisdiction of the Brazilian Securities Commission.

In this regard, Resolution No 59 of the Brazilian Securities Commission (CVM), which amended Resolution CVM No 80, established that publicly traded companies must disclose in their reference forms the number of confirmed cases related to deviations, frauds, irregularities, and illegal acts committed against the public administration, as well as the corrective measures adopted, in the last three fiscal years.

The Anti-Corruption Law grants credit in the form of reduced fines for companies that self-disclose violations.

Brazilian Law No 13,608/2018 created a government-managed whistle-blowing hotline for citizens to report crimes and administrative violations. The law sets forth that whistle-blowers who use this hotline will have their identity protected, but it does not contain specific protections.

Federal Decree No 10,153/2019 (amended by Decree No 10,890/2021) establishes procedures to protect the identity of whistle-blowers of illicit acts against Brazil’s public administration. The regulation grants authority to the CGU to promote the protection of the identity of whistle-blowers, but it does not contain specific provisions on such protections.

Brazilian Law No 9,807 of 13 July 1999 (Witness and Victim Protection Law) establishes standard protections for victims and witnesses of crimes, as well as for defendants who voluntarily and effectively co-operate with investigations and proceedings.

Brazilian Law No 13,608/2018 allowed federal, state and local government entities to create reward mechanisms for whistle-blowers. Further regulation on Brazilian whistle-blowing mechanisms is expected.

The main provisions regarding whistle-blowing may be found in Federal Law No 13,608/2018, Federal Decree No 10,153/2019, corporate internal policies and sparse government rules regarding hotlines approved within the scope of certain regulatory or enforcement agencies.

Brazil has civil, criminal and administrative enforcement of anti-bribery and anti-corruption laws. Companies are subject to civil and administrative strict liabilities. Individuals are subject to civil, administrative, and criminal liabilities.

Federal and State Public Prosecutors’ Offices

The Brazilian constitution vests the MPF and state Public Prosecution Offices (PP) with authority to bring criminal charges, and to pursue criminal and civil cases in court. In addition to the police, the MPF and PP may conduct criminal investigations, but often do not restrict such activities to offences involving public assets, public officials, or public interest. The MPF and PP are also in charge of supervising police investigations. The MPF and PP may also bring lawsuits based on the Administrative Improbity Law.

The CGU

The CGU is the agency of the federal government in charge of assisting the Brazilian president in matters within the federal executive branch that are related to the defence of public assets. The main role of the CGU is enhancing management transparency through internal control activities and audits; impose corrective and disciplinary measures; corruption prevention and law enforcement; and co-ordinating ombudsman activities. The CGU is also responsible for the enforcement of the Anti-Corruption Law at the administrative level, on violations committed against the federal executive branch and against foreign governments.

Higher Authority of Public Agencies or Entities

Brazil adopted a decentralised structure for the enforcement of the Anti-Corruption Law. At the administrative level, the enforcement of this law is incumbent upon the highest authority of each agency or entity of the executive, legislative and judicial branches. Such highest authority acts on their own initiative or upon third-party requests to initiate administrative proceedings against violators, with due regard to due process of the law. At the civil level, each public agency or entity may initiate legal proceedings in court through their public attorneys or equivalent legal representative.

Enforcement bodies are generally empowered to request documents or hearings, perform audits or inspections, initiate investigative or administrative proceedings and file lawsuits, as required. Without a court order, enforcement bodies may not conduct dawn raids, perform covert surveillance, intercept telephone or other telematic communications or correspondence, and/or lift bank or tax secrecies.

Enforcement authorities may request non-legally privileged documents and information within the scope of their jurisdiction. However, any enforcement action by such agencies to seize such documents will be subject to court approval. In some instances, certain regulatory agencies may impose fines for the failure to comply with document and information requests.

Enforcement bodies must prepare and serve a written official notice with the details of the investigation or administrative proceeding at hand, the scope of the information or documentation request. Certain regulatory agencies may resort to electronic communication channels that are specific and official to a particular industry or business activity.

The MPF and PP have reasonable discretion to mitigate the effects of its enforcement authority, through settlements and other similar devices. The amount of discretion is provided in the applicable statutes, which contain the guidelines described in this Law and Practice guide.

The jurisdictional reach of Brazilian enforcement bodies is generally limited to the territory of Brazil. However, under the Anti-Corruption Law, Brazilian authorities may investigate the conduct of Brazilian entities or citizens outside of Brazil. Brazil is also a party to several mutual legal assistance treaties that regulate the procedures for Brazilian authorities to seek information and hearings outside of Brazil.

In the last few years, Brazil has seen several landmark investigations and decisions involving bribery and corruption, and a rise in enforcement activity. More recently, it is worth noting the following.

• In March 2021, the Brazilian Federal Supreme Court granted favourable relief on a claim filed by Brazilian infrastructure companies to suspend the application of the sanction of debarment from bidding or contracting with the public administration previously imposed by the Federal Court of Accounts (TCU). The companies sought relief arguing that all of them had entered into leniency agreements with Federal agencies covering the conduct for which they were now being punished by another Federal agency. According to the decision, the TCU does not have jurisdiction to declare the debarment of legal entities that have entered into leniency agreements with other Brazilian authorities for conduct already covered by the settlement, under the risk of compromising the leniency agreements’ effectiveness.
• In September 2023, Brazilian Supreme Court Justice Dias Toffoli declared the nullity of all evidence obtained through the leniency agreement entered into between the construction company Odebrecht and the MPF, in any “scope or degree of jurisdiction”, for all involved parties.
1. The decision was motivated by a claim filed by the defence of the Brazilian President Luiz Inácio Lula da Silva, who requested access to the leniency agreement that supported criminal charges against him.
2. The decision is an extension of a determination given in 2021 by now retired Supreme Court Justice Ricardo Lewandowski, who also declared null and void the evidence related to Lula’s cases obtained through the leniency agreement entered into with Odebrecht.
3. Justice Toffoli also determined the opening of investigations against public officials who mishandled the leniency agreement without following legal procedures and holding them accountable. The decision may create legal uncertainty because it affects evidence collected in various proceedings and investigations related to other leniency agreements, particularly evidence obtained outside of Brazil without following mutual legal assistance procedures.

According to publicly available information in government data-based and media outlets, the anti-corruption enforcement actions taken during the past three years (2019–2022) include:

• 895 administrative enforcement proceedings;
• 738 penalties imposed, totalling approximately BRL790 million in fines;
• 46 leniency agreements with the CGU and the MPF, totalling approximately BRL4 billion in fines;
• 947 arrests, including 366 preventive detention and 581 temporary detention by the Federal Police; and
• 756 probes by the Federal Police.

Despite the above figures, there is considerable debate about declining levels of enforcement following the closure of the Car Wash Probe.

In January 2023, Transparency International released its latest global report, which not only claimed that Brazil maintained a poor performance below the global average in the Corruption Perceptions Index but also stated that the last few years were marked by an “accelerated dismantling of anti-corruption legal and institutional frameworks” and a “regression in the ability to combat corruption”.

Since joining the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions in 2000, Brazil has undergone four phases of evaluation on the implementation of mechanisms for the prevention and combat of transnational corruption: in 2004, 2007, 2014, and in 2023.

In December 2020, the OECD Working Group on Bribery formed a Permanent Monitoring Subgroup to monitor Brazil’s fight against corruption processes. The Subgroup’s conclusions were incorporated in the final report of the Phase 4 of evaluation, which was published on 19 October 2023 and expresses concerns about impunity in cases of transnational corruption in Brazil, which remain unresolved or have been dismissed by the judiciary.

As a positive aspect, the report recognised Brazil’s efforts to combat transnational corruption, pointing out the recent execution of several leniency agreements with international bribery components and the CGU’s advancements in the field of prevention. It also noted a significant increase in resources allocated to the Federal Police for investigating corruption crimes.

The final report also specifically mentioned Justice Dias Toffoli’s decision, which annulled all evidence from collected through the leniency agreement with Odebrecht, as the main issue. According to the report, this question will be under the monitoring of the OECD Working Group on Bribery, and Brazil will have to report its progress in two years. The report sets forth that in addition to its impact on the legal certainty of leniency agreements in Brazil, the consequences of the decision may reflect on Brazil’s international co-operation efforts.

The anti-corruption legislation has undergone recent changes with the issuance of the new Federal Anti-Corruption Decree and the amendments to the Administrative Improbity Law by the Law No 14,230 of 25 October 2021. As a result, there are no specific proposed changes to the applicable anti-corruption legislation expected to be adopted in the foreseeable future.