Mondaq: The FCPA On Steroids: Brazil Ups The Ante In Fighting Corporate Corruption

Recently, in the wake of massive protests throughout Brazil concerning corruption and other issues, Brazilian President Dilma Vana Rousseff dramatically increased anti-corruption prohibitions in Brazil by signing into law the Anti-Bribery Act or Lei Anticorruptio. The newly enacted Anti-Bribery Act for the first time imposes strict liability on corporate entities for their involvement in acts of corruption in Brazil. Although the law does not contain criminal penalites, it does feature potential draconian civil fines of 0.1 percent to 20 percent of the violator's gross revenues from the year preceding an enforcement action1, full disgorgement of illegally obtained benefits, partial or full suspension of corporate activities, and potential debarment, among other remedies. The new law goes into effect in early 2014, and ushers Brazil into a group of nations that has recently enacted or is in the process of enacting more expansive anti-corruption statutes.2 Given the law's strict liability focus and potentially draconian civil penalties, corporations operating in Brazil would be well advised to redouble efforts to enhance anticorruption compliance programs in order to prevent violations and provide a basis for seeking reduced penalties should a violation occur.

Differences Between Brazil's Anti-Bribery Law and the FCPA

There are three significant differences between Brazil's Anti-Bribery Law and the U.S. Foreign Corrupt Practices Act of 1977 (as amended), 15 U.S.C. Ё 78dd-1, et seq. (FCPA) which merit discussion:

1. Unlike the FCPA, which incorporates the element of corrupt intent, the Brazilian Anti-Bribery Law requires no element of intent and imposes strict liability for offenders;

2. Whereas the FCPA only applies to corrupt payments to foreign officials, the Brazilian Anti-Bribery Law prohibits corrupt payments to both foreign and domestic officials;

3. While violators of the FCPA can face criminal penalties in the United States, the Brazilian Anti-Bribery Law does not impose criminal sanctions but instead relies upon the imposition of the potentially draconian civil penalties discussed below.

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