The Brazilian Anti-Corruption Act ( pt-BR, Lei anticorrupção) officially "Law No. 12,846" and commonly known as the Clean Company Act ( pt, Lei da Empresa Limpa, label=none) is a Brazilian law enacted in 2014 targeting corrupt practices among business entities doing business in Brazil. It defines

civil Civil may refer to: *Civic virtue, or civility *Civil action, or lawsuit * Civil affairs *Civil and political rights *Civil disobedience *Civil engineering *Civil (journalism), a platform for independent journalism *Civilian, someone not a membe ...

and administrative penalties, as well as the possibility of reductions in penalties for cooperation with law enforcement under a written leniency agreement signed and agreed to between the business and the government. The law is directed only at

juridical person A juridical person is a non-human legal person that is not a single natural person but an organization recognized by law as a fictitious person such as a corporation, government agency, NGO or International (inter-governmental) Organization (suc ...

s which includes corporations and other institutions, but not

individuals An individual is that which exists as a distinct entity. Individuality (or self-hood) is the state or quality of being an individual; particularly (in the case of humans) of being a person unique from other people and possessing one's own need ...

, who are covered by other laws. The Act has been invoked numerous times, resulting in leniency agreements returning billions of reals to the Brazilian Treasury, notably the agreement with Odebrecht S.A., which by itself was responsible for twelve billion reals.

History

The anti-corruption law is directed at juridical persons () only. This includes corporations and other institutions, but not individuals. Under this law, corporations are administratively and civilly liable for acts of corruption. Criminal liability in Brazil due to acts of corruption applies only to individuals, so there is no possibility of criminal liability for a corporation. Corruption and other criminal acts by a company or other business organization can result in criminal sanctions only for its employees, partners or other natural persons who have committed the acts, and the public prosecutor may decide to charge them with criminal acts punishable by prison, but that is a separate juridical procedure targeting a "natural person" (a human). To avoid more serious penalties resulting from corruption investigations, companies may decide to cooperate with the investigation voluntarily, and enter into a as prescribed by the law. This may reduce their fines by up to two thirds. Other advantages to self-disclosure and signing a leniency agreement include exemption from other provisions of the Clean Company Act which otherwise requires publication of the legal decision imposing the fines, a prohibition from receiving grants from public institutions, and restrictions on taking part in bids on public projects. The law was amended in 2015 to make certain improvements based on experience up to that point. Provisional Measure 703/2015 made it easier for companies to apply for the benefits of a leniency agreement, and also changed the nature of the benefits. The previous cap for reduction in penalties was 2/3, and this law changed the cap to 100%. Formerly, only the first company to apply for leniency were permitted, and only before a lawsuit had commenced. These provisions were removed. The amendment also established a compliance, audit, and reporting requirement which was added to the law.

Leniency agreements

Leniency agreements () are defined under the Brazilian Anti-corruption Act in article 16. (bilingual pt/en) They target Brazilian companies and foreign ones with a presence in Brazil who are involved in corruption investigations. Under the law, companies are responsible for corruption and can face heavy penalties, a restriction on participation in future bids, confiscation of their assets, suspension of business activity, or dissolution.

Related agreements

Brazilian companies have been involved in corruption investigations in countries outside Brazil, some in collaboration with Brazilian justice, and have paid fines in agreements reached in such procedures. The most notable such case was the investigation of Brazilian construction corporation

Odebrecht Odebrecht S.A. (), officially known as Novonor, is a Brazilian conglomerate, headquartered in Salvador, Bahia, Brazil, consisting of diversified businesses in the fields of engineering, construction, chemicals and petrochemicals. The company w ...

carried out by the United States and Switzerland with the cooperation of the Brazilian government. As a result of the investigation into kickbacks paid to hundreds of politicians, including presidential candidates, as well as to judges on the

Supreme Federal Court The Supreme Federal Court ( pt, Supremo Tribunal Federal, , abbreviated STF) is the supreme court (court of last resort) of Brazil, serving primarily as the Constitutional Court of the country. It is the highest court of law in Brazil for consti ...

, Odebrecht agreed to pay a record fine of R$ 6 billion (R$ billion) in a leniency agreement. in a case described by attorney general Deltan Dallagnol as the "largest damages agreement in the history of the world".

Examples

Some leniency agreements signed by July 2018 include: *

SBM Offshore SBM Offshore N.V. (IHC Caland N.V. prior to July 2005) is a Dutch-based global group of companies selling systems and services to the offshore oil and gas industry. Its constituent companies started their offshore activities in the early 1950s an ...

R$ 1.22 billion ($ million) *

R$ 2.72 billion ($ million) *

MullenLowe and FCB Brasil MullenLowe U.S. is a Boston, Massachusetts-based advertising and marketing communications agency, a part of MullenLowe Group owned by multinational advertising network Interpublic Group of Companies (IPG). It has regional offices in Los Angeles, ...

R$ 53.1 million ($ million) *

Bilfinger Bilfinger SE (previously named Bilfinger Berger AG) is a German company specialized in civil and industrial construction, engineering and services based in Mannheim, Germany. History Bilfinger dates back to 1880 when August Bernatz founded Be ...

R$ 9.8 million ($ million) * UTC Engenharia R$ 574 million ($ million)

Compared with plea bargains

Clean Company leniency agreements in Brazil apply exclusively to

s, i.e., corporations or other business entities, but not individuals, and are not the same as

plea bargain A plea bargain (also plea agreement or plea deal) is an agreement in criminal law proceedings, whereby the prosecutor provides a concession to the defendant in exchange for a plea of guilt or '' nolo contendere.'' This may mean that the defendan ...

agreements () which apply only to

natural person In jurisprudence, a natural person (also physical person in some Commonwealth countries, or natural entity) is a person (in legal meaning, i.e., one who has its own legal personality) that is an individual human being, distinguished from the bro ...

s, i.e., people. Plea bargain agreements may be reached with executives or employees of those corporations to avoid personal fines or prison time. Individuals accused of involvement in corruption schemes may enter into plea bargains with the Public Prosecutor's Office (MPF) on their own. These individual agreements are known commonly as pt, colaboração premiada, lit=rewarded collaboration, and officially as pt, delação premiada, lit=rewarded whistleblowing. Although leniency agreements and plea bargains under Brazilian law are similar in the sense that they both have legally defined reductions in penalties, monetary on the one hand, monetary or prison time on the other, their differences under Portuguese law is clear: the is civil and administrative, and applies exclusively to juridical persons (business entities); the (a.k.a. ) are for people only. They are covered by different laws. Some English sources which translate these terms observe the distinction, and others may be more lax, and confuse the two; they may use the term ''plea bargain'' (or ''plea deal'') for both. The first page of the affidavit between the United States Department of Justice and Odebrecht was filed in District Court in New York, and names it as a "plea agreement" (number 16-643), with the parties involved in the agreement named as "United States of America" and "Odebrecht, S.A., defendant", in which it specified a 25% reduction in penalties in exchange for the investigation assistance already provided and other remedies.

Related laws

Other important anti-corruption laws passed in Brazil include laws such as Law No. 12.527 of 18 November 2011 (Freedom of Information Act), Law No. 12.813 of 16 May 2013 (Conflict of Interests Act; ), Law No. 12.850 of 2 August 2013 (Organized Crime Act; ), and Law No. 12.683 of 9 July 2012 (amended Money Laundering Act)Lei Nº 12.683/2012 http://www.planalto.gov.br/ccivil_03/_ato2011-2014/2012/lei/l12683.htm

References

;Notes ;Citations

External links

Constituição Da República Federativa Do Brasil De 1988

Constitution of the Federative Republic of Brazil
pdf; 432 pages
Official Senate legislation search engine for Brazilian law

Anti-Corruption Act
(full text) Anti-corruption measures Society of Brazil Government of Brazil 2014 in Brazil Corruption in Brazil Political corruption Political history of Brazil Politics of Brazil