A key vote has occurred in the Brazilian legislature on its anti-corruption bill, the Clean Company Act. And anti-corruption advocates may deem it only a partial success.
Recall that though Brazil was among the original 1997 signatories to the OECD Convention on Combating Bribery, its eventual statute imposed liability only on natural persons and not on companies. The original bill before the Brazilian legislature filled this gap, while also creating a number of incentives for voluntary disclosure and compliance. In July, we reported the introduction of an alternative bill that scaled back key provisions concerning fines and successor liability.
The House of Representatives has just approved a scaled-down version. It does indeed impose civil and administrative (but not criminal) liability on legal entities, and provides incentives for voluntary disclosure and compliance. But it weakens the original bill in key respects: it diminishes successor liability, limits the total fine to the value of the goods or services sought, and excludes debarment as a penalty. Some suspect that the eventual law will fail to meet the requirements of the OECD Convention.
But don’t think that the Brazilian business community is uniformly supporting this compromise bill. The Brazilian Institute of Business Law is working on a report to Congress to address these shortcomings. Stay tuned.
Andy Spalding is a senior editor of the FCPA Blog.