Corporate crime, fraud and investigations in Brazil: overview

A Q&A guide to corporate crime, fraud and investigations in Brazil.

The Q&A gives a high level overview of matters relating to corporate fraud, bribery and corruption, insider dealing and market abuse, money laundering and terrorist financing, financial record keeping, due diligence, corporate liability, immunity and leniency, and whistleblowing.

To compare answers across multiple jurisdictions, visit the Financial and Business Crime Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to corporate crime, fraud and investigations law. For a full list of jurisdictional Q&As visit www.practicallaw.com/corporatecrime-mjg.

Contents

Fraud

Regulatory provisions and authorities

1. What are the main regulatory provisions and authorities responsible for investigating corporate or business fraud?

Corporate or business fraud can constitute a criminal offence, an administrative infraction and/or the basis for a civil suit.

The criminal offences that have fraud as an intrinsic element are provided in the Brazilian Penal Code and in specific statutes that regulate particular areas, such as the:

  • Securities Market Act (Law 6.385/76).

  • Act on crimes against the National Financial System (Law 7.492/86).

  • Consumers Act (Law 8.078/90).

  • Act on tax evasion and crimes against the economic order (Law 8.137/90).

  • Public Bidding Act (Law 8.666/93).

  • Intellectual Property Act (Law 9.279/96).

  • Anti-Money Laundering Act (Law 9.613/98).

  • Company Recovery and Bankruptcy Act (Law 11.101/05).

Criminal offences are generally investigated by the police and pursued by public prosecutors at state and federal levels.

Administrative infractions are mostly regulated by Law 8.429/92, which focuses on wrongdoing by civil servants and private entities that benefit from such illegalities. Administrative infractions are investigated by public prosecutors at state and federal levels. In addition, certain fields of activities are subject to specific legal and administrative regulation and if such legal provisions are infringed, investigations are carried out by the public body in charge of the matter involved in the case, such as the:

  • Brazilian Securities Commission (Comissão de Valores Mobiliários) (CVM).

  • Brazilian Central Bank (Banco Central do Brasil) (BACEN).

  • Audit Courts.

  • General Federal Control Office (Controladoria-Geral da União) (CGU).

  • Revenue Office (Secretaria da Receita Federal) (SRF).

  • Superintendence of Private Insurance (Superintendência de Seguros Privados) (SUSEP).

Frauds may also violate rules that govern the activities of private companies, such as those provided by Law 6.404/76 (Law on Public Limited Companies), and may also constitute an actionable civil wrongdoing under the Brazilian Civil Code.

For more information on the public prosecutors, CVM and BACEN, see box: The regulatory authorities.

 

Offences

2. What are the specific offences relevant to corporate or business fraud?

There are various criminal offences related to fraud in the corporate business context. The most relevant conducts are:

  • Swindling (estelionato) (Article 171, Penal Code): the act of obtaining undue advantage by deceiving someone to support a damage, through any fraudulent means.

  • Commerce frauds (Article 175, Penal Code; Law 8.078/90; Law 8.137/90).

  • Frauds in the administration of Sociedades Anônimas (public limited companies) (Article 177, Penal Code).

  • Misappropriation (apropriação indébita) (Article 168, Penal Code): the act of misappropriating someone's asset that is under the agent's possession.

  • Misappropriation of public funds (peculato) (Article 312, Penal Code).

  • Extortion (Article 158, Penal Code).

  • Falsifications and false statements (Articles 289 to 311, Penal Code).

  • Tax evasion (Articles 168-A and 334, Penal Code; Law 8.137/90).

  • Money laundering (Law 9.613/98).

  • Fraud in public bids (Law 8.666/93).

  • Misappropriation of funds, deceit, parallel accountancy, false statement, in the context of financial institutions (Law 7.492/86).

  • Crimes against patents and brands, and crime of unfair competition (Law 9.279/96).

  • Anti-trust violations (Law 8.137/90).

All the criminal offences listed above require intent and malice.

Attempts are punishable under Article 14 of the Penal Code.

 

Enforcement

3. What are the regulator's powers of investigation, enforcement and prosecution in cases of corporate or business fraud and what are the consequences of non-compliance?

The administrative and criminal authorities' powers of investigation are limited under the Brazilian Constitution, and under specific legal provisions. These rules focus mainly on protecting fundamental rights, particularly with respect to bank secrecy, communications, and privacy. A court order is required to conduct searches and seizures, to wiretap, and to obtain bank or tax information. In such cases, the administrative authorities must apply to the civil court for a court order or injunction, to be processed as a precautionary measure. Anyone under investigation, either by administrative authorities or criminal investigators, has the right to due process and has the right to not incriminate themselves. They are compelled to do only what is provided by law.

In general terms, Brazilian authorities are allowed to proceed with the analysis of documents, request information and documentation, and hear witnesses.

While in general administrative authorities can impose sanctions for administrative infractions, criminal offences must be prosecuted before a judge in a trial. A criminal proceeding is started by the public prosecutors bringing charges against individuals, normally based on evidence gathered in a police investigation.

Freezing orders and other provisional measures depend on judicial decisions, and may be granted on proof of "probable cause" regarding the criminal offence.

Non-compliance with the above powers of investigation, enforcement and prosecution may give rise to fines or to the crime of contempt (disobedience).

The Penal Code establishes some cases of extra-territorial jurisdiction, concerning interests of Brazilians, conduct practiced by Brazilians abroad and situations included in international treaties (Article 7, Penal Code). However, any measures needed in other jurisdictions must be processed through international co-operation, through rogatory letters or as provided in mutual legal assistance treaties (see Questions 29 and 30). More and more, regulatory authorities have been interacting with their corresponding authorities abroad, to implement international co-operation, exchange information or to enter into new agreements and treaties.

 

Penalties

4. What are the potential penalties or liabilities for participating in corporate or business fraud?

Civil/administrative proceedings or penalties

Certain statutes set out administrative penalties for misconduct in specific areas. For instance, individuals or companies guilty of banking regulation offences are subject to suspension from professional activities and fines (Law 6.385/76).

Similarly, offenders involved in illegality involving public entities may be compelled to pay a monetary fine equivalent to three times the damage caused, in addition to redressing the damage. They may also be prohibited from engaging in any sort of relationships with public entities for a certain length of time (Law 8.429/92).

Criminal proceedings or penalties

Corporations cannot be criminally liable under Brazilian law, except in cases of environmental crimes.

Brazilian criminal law generally sanctions criminal offences with imprisonment and monetary fines. The length of imprisonment depends on the offence committed.

Penalties of less than four years of imprisonment can be replaced by alternative sanctions, such as payment of damages, community service, forfeiture, temporary restriction of rights, and weekend incarceration.

Penalties may be increased or diminished under certain specific circumstances.

Civil suits

In civil law the main sanction applicable is the redress of the damage incurred. As a general rule, corporate or business fraud will give rise to redress of the damage caused, regardless of the subject matter involved in the case and whether there is a public entity involved in the case.

Class actions are established under Brazilian Law, and may be initiated as long as the applicable requirements are satisfied. The purpose of these claims is to protect the public interest, mainly in fields such as consumer rights, environmental issues, and matters involving frauds against governmental bodies.

Class actions may be commenced by the public prosecutor in any area. Additionally, private entities set up to protect specific interests (such as governmental transparency) may also initiate class actions in order to protect such interests.

Punitive damages are not available for civil wrongdoing and the penalty for civil illegalities is exclusively the compensation of the loss sustained by the victim.

 

Bribery and corruption

Regulatory provisions and authorities

5. What are the main regulatory provisions and authorities responsible for investigating bribery and corruption?

The criminal offences related to bribery and corruption are described in Articles 316, 317, 333, 337-B and 337-C of the Penal Code.

At state and federal levels, the police are responsible for investigating the crimes of bribery and corruption, while public prosecutors bring charges for these conducts before a criminal court.

Brazil has recently enacted Law 12.846/13 (Anti corruption Law), which establishes civil and administrative liability for companies and associations engaged in acts against the national (or foreign) public administration, particularly acts of corruption.

The federal government, and some states and municipalities have recently created internal bodies whose aim is to pursue bribery and corruption at the administrative level.

For more information on the public prosecutor see box: The regulatory authorities.

 
6. What international anti-corruption conventions apply in your jurisdiction?

Brazil is a party to the:

  • OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions 1997, ratified in 2000.

  • Inter-American Convention against Corruption (IACAC) 1997, ratified in 2002.

  • United Nations Convention against Corruption 2003, ratified in 2005.

  • United Nations Convention against Transnational Organised Crime, referred to as the Palermo Convention, ratified in 2004.

Brazil is also a member of the Financial Action Task Force (FATF) and of the Financial Action Task Force of South America (GAFISUD), since 2000.

 

Offences

7. What are the specific bribery and corruption offences in your jurisdiction?

Foreign public officials

The offences relevant to bribing foreign officials are:

  • Active corruption in an international commercial transaction. This consists of promising, offering or giving, directly or indirectly, an unlawful benefit to a foreign public officer, or a third party, in order for him to perform, abstain from or delay an official act related to an international commercial transaction (Article 337-B, Penal Code)

  • Traffic of influence in an international commercial transaction. This consists of soliciting, demanding, charging or obtaining, for himself or for another, directly or indirectly, a benefit or promise of benefit, under the pretext of influencing a foreign public officer's official act, related to an international commercial transaction (Article 337-C, Penal Code).

Domestic public officials

The offences relevant to bribing officials are:

  • Active corruption. This consists of offering or promising an unlawful benefit to a public officer for him to perform, abstain from or delay an official act, as well as to perform an official act against the law (Article 333, Penal Code).

  • Passive corruption. This consists of the conduct of a public officer in soliciting or receiving, or accepting the promise of an unlawful benefit, in relation to the performance of a public function (Article 317, Penal Code).

  • Exaction. This consists of the demand of an unlawful benefit in relation to the performance of a public function (Article 316, Penal Code).

In administrative law, infractions are mostly regulated by Law 8.429/92 (Law of Administrative Improbity), which focuses on wrongdoing incurred by civil servants and by private entities that benefit from such illegalities.

Private commercial bribery

Brazilian Law incriminates bribery and corruption related only to the performance of public functions, not of a private actor in the context of private business. These conducts may constitute a fraud.

 

Defences

8. What defences, safe harbours or exemptions are available and who can qualify?

There are no exemptions for the payment of unlawful benefits to a public officer in relation to the performance of public functions.

 
9. Can associated persons (such as spouses) and agents be liable for these offences and in what circumstances?

Article 29 of the Penal Code attributes criminal liability to everyone that contributes to the crime. In this sense, associated persons and agents can be liable for these offences if they commit the main criminal conducts or if they instigate or materially aid the perpetrator to commit the offence.

 

Enforcement

10. What are the regulator's powers of investigation, enforcement and prosecution in cases of bribery and corruption and what are the consequences of non-compliance?

The regulators' powers of investigation, enforcement and prosecution in cases of bribery and corruption are similar to those for corporate fraud (see Question 3).

 

Penalties

11. What are the potential penalties for participating in bribery and corruption?

Civil/administrative proceedings or penalties

Law 12.846/13 establishes fines that vary from 0.1% to 20% of the annual gross revenue of the company.

Criminal proceedings or penalties

Criminal charges are only applicable to individuals, who can be convicted and subject to the following penalties:

  • Active corruption in an international commercial transaction: imprisonment of one to eight years, plus a fine; note that the benefit of stay of proceedings may be applicable.

  • Traffic of influence in an international commercial transaction: imprisonment of two to five years, plus a fine.

  • Active corruption: imprisonment of two to 12 years, plus a fine.

  • Passive corruption: imprisonment of two to 12 years, plus a fine.

  • Exaction: imprisonment of two to eight years, plus a fine.

The penalties may be increased or reduced in certain specific circumstances.

Penalties of less than four years of imprisonment may be substituted by alternative sanctions, such as payment of damages, community service, forfeiture, temporary restriction of rights, and weekend incarceration.

Civil suits

Companies may also face sanctions imposed by judges in civil lawsuits, including forfeiture of assets, suspension or interdiction of the company's activities, winding up of the company, and prohibition from receiving subsidies and loans from public entities, for a period varying from one to five years.

 

Tax treatment

12. Are there any circumstances under which payments such as bribes, ransoms or other payments arising from blackmail or extortion are tax-deductible as a business expense?

There are no such provisions in Brazilian Law.

 

Insider dealing and market abuse

Regulatory provisions and authorities

13. What are the main regulatory provisions and authorities responsible for investigating insider dealing and market abuse?

Law 6.385/76 regulates the securities market and criminalises market manipulation (Article 27-C) and insider trading (Article 27-D). The police and the public prosecutor are responsible for investigating these conducts, which may lead to criminal proceedings before a criminal court.

The Brazilian Securities Exchange Commission (CVM) is responsible for the investigation and enforcement of administrative infractions related to the securities market.

For more information on the public prosecutors and CVM see box: The regulatory authorities.

 

Offences

14. What are the specific insider dealing and market abuse offences?

The criminal offence of market manipulation consists of performing simulated transactions or other fraudulent manoeuvres with the intent to artificially alter the functioning of the securities market, in order to obtain undue advantage or profit or cause someone else damage.

Insider trading is the use of non-public relevant information, which must remain secret, and that may give rise to undue advantage, through the trade of securities.

Both criminal offences require intent.

Attempts are punishable under Article 14 of the Penal Code. These crimes are classified as "material", meaning they need the occurrence of an effective result to be completed. If a result is not reached because of reasons unwanted by the perpetrator, the crime can be punished as an attempt.

 

Defences

15. What defences, safe harbours or exemptions are available and who can qualify?

While the law does not provide specific exemptions for this conduct, the defence may be focused on the lack of the elements of the criminal offence, particularly:

  • The lack of fraud or of ability to alter the functioning of the securities market, in relation to market manipulation.

  • The irrelevance or the lack of secrecy of the information, or the absence of the duty to keep the information secret, in relation to insider trading.

 

Enforcement

16. What are the regulator's powers of investigation, enforcement and prosecution and what are the consequences of non-compliance?

The regulators' powers of investigation, enforcement and prosecution in cases of insider trading and market manipulation are similar to those for corporate fraud (see Question 3).

 

Penalties

17. What are the potential penalties for participating in insider dealing and market abuse?

Civil/administrative proceedings or penalties

In administrative law, penalties for insider dealing and market abuse consist mostly of monetary fines and the suspension of professional activities.

Criminal proceedings or penalties

Market manipulation is punishable by imprisonment of one to eight years, plus a fine. Insider trading is punishable by imprisonment of one to five years, plus a fine. The penalties may be increased or reduced in certain circumstances.

Penalties of less than four years of imprisonment may be substituted by alternative sanctions, such as payment of damages, community service, forfeiture, temporary restriction of rights, and weekend incarceration.

Civil suits

Civil suits focus on the redress of the loss and do not allow for punitive damages.

 

Money laundering, terrorist financing and financial/trade sanctions

Regulatory provisions and authorities

18. What are the main regulatory provisions and authorities responsible for investigating money laundering, terrorist financing and/or breach of financial/trade sanctions?

Money laundering

The main regulatory provisions on money laundering are set out in Law 9.613/98, recently modified by Law 12.683/12. This Law establishes the obligations regarding reporting of suspicious activities and the corresponding sanctions for non-compliance.

The criminal offence of money laundering is pursued by the police and public prosecutors before criminal courts at state and federal levels.

The Council of Control of Financial Activities (COAF) is the financial intelligence unit, responsible for regulating customer due diligence, record-keeping and suspicious transaction reporting, and for analysing the information gathered through mandatory communications.

Terrorist financing

Terrorist financing is not described as a stand-alone crime in Brazil.

Financial/trade sanctions

The securities market is regulated by the Brazilian Securities Commission (Comissão de Valores Mobiliários) (CVM), while banks are regulated by the Brazilian Central Bank (BACEN). The regulation of the securities market is provided by Law 6385/76, and the national financial system is organised and regulated by Law 4595/64.

There are no specific provisions relating to breach of financial/trade sanctions imposed by the government.

For more information on the public prosecutors, COAF, CVM and BACEN, see box: The regulatory authorities.

 

Offences

19. What are the specific offences relating to money laundering, terrorist financing, and breach of financial/trade sanctions?

Money laundering

Money laundering consists of the concealing or disguising of the nature, origin, source, location, disposition, movement or ownership of assets, rights or values that come from, directly or indirectly, a criminal offence (Article 1, Law 9.613/98 (modified by Law 12.683/12)).

According to Article 1, §3rd, attempts are punishable based on the terms of Article 14 of the Brazilian Penal Code. There must be intent to commit the money laundering, and mere negligence would not be criminal. Strict liability is not applicable in criminal law.

Non-compliance with money laundering regulations may give rise to administrative penalties, but is not considered a crime.

Terrorist financing

There is no specific legal provision under Brazilian law as to terrorist financing.

Financial/trade sanctions

The offences regarding the securities market and the national financial system are defined by Law 6385/76 and 7492/86, respectively. They provide for offences relating to the following, among others:

  • Market manipulation and insider trading.

  • Fraudulent or reckless management of a financial institution.

  • Fraud.

  • Accountancy manipulation.

  • Operation of a financial institution without authorisation.

  • Crossed loans.

  • Currency evasion (capital flight).

According to Article 1, §3rd, attempts are punishable based on the terms of Article 14 of the Brazilian Penal Code. There must be intent to commit those crimes.

There are no specific provisions relating to breach of financial/trade sanctions imposed by the government.

Strict liability is not applicable in criminal law.

 

Defences

20. What defences, safe harbours or exemptions are available and who can qualify?

Money laundering

While the law does not provide specific exemptions for this conduct, the defence may focus on the lack of the elements of the criminal offence, particularly:

  • The lack of predicate offence (that is, an offence from which proceeds have been generated that may form an offence of money laundering).

  • The lack of connection between the conduct and the predicate offence.

Terrorist financing

There is no specific legal provision under Brazilian law as to terrorist financing.

Financial/trade sanctions

In relation to the offences regarding the securities market and the national financial system, while the law does not provide specific exemptions for this conduct, the defence may focus on the lack of the elements of the criminal offence (see above, Money laundering).

 

Enforcement

21. What are the regulator's powers of investigation, enforcement and prosecution?

The regulators' powers of investigation, enforcement and prosecution in cases of money laundering and financial/trade sanctions are similar to those for corporate fraud (see Question 3).

 

Penalties

22. What are the penalties for participating in money laundering, terrorist financing offences and/or for breaches of financial/trade sanctions?

Money laundering

Administrative proceedings. Under Article 14 of Law 9.613/98 (modified by Law 12.683/12) the Council of Control of Financial Activities can impose several administrative sanctions, including admonitions, fines, disablement, suspension and loss of permissions for activity. Individuals and corporate bodies may be punished for administrative infractions.

Criminal proceedings. The criminal sanction for participating in money laundering is three to ten years of imprisonment, plus a fine (Article 1, Law 9.613/98 (modified by Law 12.683/12)). Penalties are only applied to individuals.

Terrorist financing

There is no specific legal provision under Brazilian law as to terrorist financing.

Financial/trade sanctions

Administrative infractions may be punished with admonitions, fines, disablement, suspension and loss of permissions for activity. Criminal sanctions vary according to the specific crime, and range from one to 12 years of imprisonment, plus a fine.

 

Financial record keeping

23. What are the general requirements for financial record keeping and disclosure?

Legal duties in relation to financial record keeping and disclosure are regulated by various legal provisions, mainly in the field of tax law and anti-money laundering legislation.

Under Brazilian law, there are two main legal regimes applicable to companies. Limited liability companies are regulated by the Civil Code, and must have financial records that reflect information as to the daily transactions of the company.

Such financial records must be prepared and kept by an accountant, and must be delivered to the quota-holders at the annual meeting of the company.

Companies based on shares, which usually have a high number of shareholders and may be listed on the stock market, are subject to Law N. 6,404/76, meaning the financial records requirements are stricter. There are several formal requirements related to financial records, as well as regarding information provided to shareholders.

Additional requirements may apply to listed companies, according to the specific regulation laid down by the relevant stock market.

 
24. What are the penalties for failure to keep or disclose accurate financial records?

The absence of accurate financial records may be characterised as a commercial fraud, a tax fraud and/or a bankruptcy crime.

The failure to comply with the requirements of the anti-money laundering legislation, including record-keeping and reporting of suspicious transactions, may also constitute an administrative violation, leading to sanctions such as admonitions, fines, disablement, suspension and loss of permission to undertake activity.

In addition, shareholders may initiate proceedings in order to hold managers liable for irregularities concerning financial information. If the company is listed, the CVM may also initiate administrative proceedings, and may eventually impose sanctions for the legal violation committed.

 
25. Are the financial record keeping rules used to prosecute white-collar crimes?

The absence or inaccuracy of financial statements may lead to the prosecution of white-collar crimes if they represent intrinsic elements of the criminal offence.

 

Due diligence

26. What are the general due diligence requirements and procedures in relation to corruption, fraud or money laundering when contracting with external parties?

Due diligence focuses on the:

  • Identification of the relevant monetary transaction.

  • The background of any individuals or companies engaged in relationships with the company under analysis.

  • Identification of the final beneficial party.

  • The proportionality of the contract as against the entire operation.

For anti-money laundering purposes, "gatekeepers" should identify their clients and keep their information updated, and keep records of their financial transactions (Law 9.613/98).

 

Corporate liability

27. Under what circumstances can a corporate body itself be subject to criminal liability?

Corporations are not subject to criminal liability under Brazilian Law, except for environmental crimes, where corporations may be criminally liable if the offence is committed by a decision of its representative or collective body in the interest of or for the benefit of the entity (Article 3, Law 9.605/98).

 

Cartels

28. Are cartels prohibited in your jurisdiction? How are cartel offences defined? Under what circumstances can a corporate body be subject to criminal liability for cartel offences?

This question was added in the 2015/16 edition of the guide.

 

Immunity and leniency

29. In what circumstances is it possible to obtain immunity/leniency for co-operation with the authorities?

Leniency agreements for co-operation with the authorities are possible in both administrative and criminal law. Generally, the co-operation agreement provides that the perpetrators of an offence may benefit by immunity or reduction of penalties (by one- to two-thirds of the total penalty), in exchange for effective collaboration with the investigations and proceedings, in a way that such collaboration results in:

  • The identification of other perpetrators of the violation.

  • Asset recovery.

  • Information and documents that may prove the offence.

In criminal law, the benefits for collaboration are provided by Laws 7.492/86, 8.137/90, 9.034/95, 9.613/98, 11.343/06, and in Article 159 of the Penal Code. Co-operation with the criminal authorities is also regulated by Law 9.807/99, which establishes the programme for the protection of witnesses.

Leniency agreements are specifically provided for in administrative proceedings by:

  • Article 86 of Law 12.529/11, with relation to violations of competition policy.

  • Article 16 of Law 12.846/13, in relation to bribery and corruption and other acts against the public administration.

In the first instance, the Administrative Council for Economic Defence, through the General Superintendence, may enter into leniency agreements with individuals and corporate entities who are perpetrators of cartel violations.

 

Cross-border co-operation

30. What international agreements and legal instruments are available for local authorities?

Obtaining evidence

Brazil has signed mutual legal assistance treaties with several countries, including the US, Canada, Spain, France, Italy, Portugal, Switzerland, Colombia, Peru, Chile and Korea. These establish civil and criminal legal co-operation, regarding, among other things, the obtaining of evidence.

Brazil is also a party to the:

  • Hague Conference on Private International Law (Decree 764/74) (the Convention on the Taking of Evidence in Civil or Commercial Matters).

  • United Nations Convention against illicit trafficking of narcotic drugs and psychotropic substances, known as the Vienna Convention (1988, ratified in Brazil in 1991).

  • United Nations Convention against Corruption (2003, ratified in Brazil in 2005).

  • United Nations Convention against Transnational Organised Crime, referred to as the Palermo Convention (2000, ratified in Brazil in 2004).

  • Inter-American Convention on Mutual Legal Assistance in Criminal Matters (1992, ratified in Brazil in 2007).

Brazilian authorities can also request legal assistance through reciprocal diplomatic means.

Seizing assets

These treaties also provide mechanisms for the seizure of assets and repatriation of property.

Sharing information

Regulatory authorities and investigators have been interacting with their corresponding authorities abroad. In most cases, their co-operation is prompted by a request for information, based on an ongoing case. They may also notify authorities in other jurisdictions, although this seems less usual for Brazilian authorities to do.

 
31. In what circumstance will domestic criminal courts assert extra-territorial jurisdiction?

Under Article 7 of the Penal Code, Brazilian criminal law may apply to a crime committed in other jurisdictions if it is:

  • Committed against Brazilian interests or a Brazilian citizen.

  • Committed by a Brazilian citizen.

  • Committed in a private Brazilian airplane or ship.

  • Subject to prosecution by Brazil under an applicable international treaty.

Where Brazilian authorities do not have extra-territorial powers, co-operation from foreign authorities will be based on mutual legal assistance treaties or diplomacy.

 
32. Does your jurisdiction have any statutes aimed at blocking the assertion of foreign jurisdictions within your territory?

Any criminal offence committed within the Brazilian territory is subject to national law, without prejudice to conventions, treaties or rules of international law (Article 5, Penal Code).

 

Whistleblowing

33. Are whistleblowers given statutory protection?

Brazilian Law does not provide any specific protection to whistleblowers within a company, such as the prevention of a dismissal.

Law 9.807/99 establishes a programme for the protection of victims and witnesses, in cases of threat or coercion only.

 

Reform, trends and developments

34. Are there any impending developments or proposals for reform?

The effect of the global economic downturn on the Brazilian regulatory system remains unclear. Rather than changing the applicable rules, it seems that the Brazilian government has focused on improving the functioning of the governmental and judiciary bodies in charge of the supervision of activities, and prosecution of potential illegalities.

However, some relevant changes in legislation have occurred within the context of the economic downturn, and as a result of domestic pressure, including:

  • Law 12.846/13, which establishes civil and administrative liability for companies and associations for acts against the Brazilian or foreign public administrations.

  • Law 12.850/13, which establishes the legal concept of criminal organisation.

  • Law 12.683/12, which modified the applicable regime for money laundering.

Currently, there has been much discussion concerning the implementation of Law 12.846/13, and it is expected that the federal government will issue a regulation on the administrative procedure and guidelines regarding the sanctions for corrupt acts.

The Petrobras case, which is an investigation of potential corruption and fraud in the Brazilian gas and oil company, has involved the use Law 12.846/13 and Law 12.850/13, as suspects have contacted the law enforcement authorities to enter into co-operation agreements (see Question 28).

Finally, the presidential elections have led to discussions about political reform.

 

Market practice

35. What are the main steps foreign and local companies are taking to manage their exposure to corruption/corporate crime?

In order to increase control over fraudulent transactions, companies in Brazil are increasing internal controls, by means of compliance rules and the internal bodies in charge of applying them. (Companies whose shares are listed on the stock market are subject to additional external auditing.)

 

The regulatory authorities

Federal Prosecution Office (Ministério Público Federal) (MPF)

W www.mpf.mp.br

Status. Governmental organisation.

Principal responsibilities. Prosecution of criminal offences at the federal level, as well as of civil and administrative wrongdoing related to the federal government and corresponding public interest.

Prosecution Office of the State of Sao Paulo (Ministério Público Estadual de São Paulo) (MPSP)

W www.mpsp.mp.br

Status. Governmental organisation.

Principal responsibilities. Prosecution of criminal offences at state level, as well as of civil and administrative wrongdoing related to the state of Sao Paulo and corresponding public interest.

Brazilian Securities Commission (Comissão de Valores Mobiliários) (CVM)

W www.cvm.gov.br

Status. Governmental organisation.

Principal responsibilities. Regulation and supervision of the securities exchange market.

Brazilian Central Bank (Banco Central do Brasil) (BACEN)

W www.bcb.gov.br

Status. Governmental organisation.

Principal responsibilities. Regulation and supervision of the banking system.

Council of Control of Financial Activities (Conselho de Controle de Atividades Financeiras) (COAF)

W www.coaf1.fazenda.gov.br

Status. Governmental organisation.

Principal responsibilities. Intelligence unit responsible for regulating the anti-money laundering programme, as well as gathering and analysing reported suspicious transactions.

Administrative Council for Economic Defence (Conselho Administrativo de Defesa Econômica) (CADE)

W www.cade.gov.br

Status. Governmental organisation.

Principal responsibilities. Regulation and supervision of the market, responsible for the analysis of mergers and acquisitions, and investigating alleged anti-competitive conduct.



Online resources

Planalto

W www4.planalto.gov.br/legislacao

Description. Official updated website maintained by the Federal Government, providing access to the constitution and federal legislation in Portuguese.

Supreme Court

W www.stf.jus.br/portal/principal/principal.asp

Description. Official website of the Brazilian Supreme Court, with access to case law, in Portuguese.

Superior Court of Justice

W www.stj.gov.br/portal_stj/publicacao/engine.wsp

Description. Official website of the Brazilian Superior Court of Justice, with access to case law, in Portuguese.

Department of Asset Recovery and International Legal Cooperation (DRCI)

W http://portal.mj.gov.br/drci/data/Pages/MJDFBD6D24PTBRIE.htm

Description. Official website of the Brazilian Central Authority for Mutual Legal Assistance, providing access to international treaties.



Contributor profiles

Antonio Sergio Altieri de Moraes Pitombo, Founder

Moraes Pitombo Advogados

T +55 11 3047 3131
F +55 11 3047 3141
E apitombo@mpp.adv.br
W moraespitombo.com.br

Professional qualifications. Lawyer, Brazil (São Paulo, Rio de Janeiro and Brasilia) University of São Paulo (1993); PhD in Criminal Law from the Law School of the University of São Paulo (2007).

Areas of practice. Criminal law; white-collar crime; money laundering; mutual legal assistance.

Languages. Portuguese and English.

Professional associations/memberships. Member of the Brazilian Institute of Criminal Sciences (IBCCrim); the Institute Manoel Pedro Pimentel, related to the Department of Criminal Law, Criminology and Judicial Medicine; the Law School of the University of São Paulo; the National Association of Criminal Defense Lawyers; the Association Internationale de Droit Pénal; and of the Association Internationale des Avocats de la Défense.

Publications.

  • "Money Laundering: the Specificity of the Predicate Crime".
  • "Criminal Organization- New perspective of the legal kind".
  • Several newspaper articles, magazines and compilations on law and criminal procedure.

Denise Provasi Vaz

Moraes Pitombo Advogados

T +55 11 3047 3131
F +55 11 3047 3141
E dvaz@mpp.adv.br
W moraespitombo.com.br

Professional qualifications. Lawyer, Brazil. University of São Paulo (2002); PhD in Criminal Procedure from the Law School of the University of São Paulo (2012).

Areas of practice. Criminal law; white-collar crime; money laundering; mutual legal assistance; digital evidence.

Languages. Portuguese and English.

Professional associations/memberships. Member of the Brazilian Institute of Criminal Sciences (IBCCrim) and of ASF Institute for Advanced Study in Criminal Procedure.

Renato Duarte Franco de Moraes

Moraes Pitombo Advogados

T +55 11 3047 3131
F +55 11 3047 3141
E rmoraes@mpp.adv.br
W moraespitombo.com.br

Professional qualifications. Lawyer, Brazil. University of São Paulo (2003). LLM Cambridge University (2009).

Areas of practice. Corporate litigation and arbitration.

Languages. Portuguese, English and Italian.


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