MoFo Client Alert: “The Brazilian Clean Companies Act – What You Need to Know”

Excerpt: On January 29, 2014, the Brazilian Clean Companies Act (CCA) will enter into force. The CCA is an aggressive and broadly drafted piece of legislation which represents a firm statement of intent from the Brazilian government to align itself with global trends and tackle corruption head on. Brazil is an important trading partner for many UK companies and the reverse is also true.1 Companies doing business in Brazil should take note of the CCA and ensure that their existing compliance controls and procedures respond appropriately to its particular features. The good news is that the CCA shares several features of established anti-corruption legislation, the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA).

The coming into force of the CCA in January 2014 serves as a timely reminder to international businesses to check that their existing compliance procedures accord with developing international standards.

The key features of the CCA were covered in our previous client alert dated August 6, 2013.2 In short the CCA:
•applies to any legal entity, branch or office, whether domestic or foreign that does business in Brazil;
•prohibits bribes to any official (domestic or foreign) – this is anticipated to cover an individual who holdsan office in the government at any level;
•prohibits other related acts such as fraud, data manipulation and the blocking of governmentinvestigations;
•prohibits facilitation payments – there is no de minimis exception as in the FCPA;
implements strict liability for legal entities involved in corruption – proof that the punishable act wascaused by an act or omission on the part of the legal entity is sufficient to subject it to sanctions; and
•introduces harsh administrative and civil sanctions that apply directly to legal entities’ income and assets.3
The broad application of the CCA clearly echoes the international reach of the FCPA and the UKBA. The CCA applies to all legal entities that do business in Brazil and imposes liability for acts committed in Brazil or abroad. The CCA’s focus on government officials recalls the FCPA whilst the prohibition of facilitation payments and strict liability for legal entities are familiar features from the UKBA. Although the potential sanctions under the CCA are severe, the key difference between the CCA, the FCPA and the UKBA is that the CCA does not impose criminal liability on legal entities for acts of bribery.

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The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

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