President Dilma Roussef Wednesday issued a presidential decree with regulations under the Clean Company Act. Although the statute has been in force since January 2014, several key terms had not yet been defined.
Under Brazil’s legal system, those definitions were to be supplied by a presidential decree. That decree was delayed until Wednesday.
The new regulations issued through the decree address some of the crucial questions concerning the administrative procedure for imposing corporate liability and assessing fines.
The regulations further specify the contours of some of the most important issues for companies currently facing challenges under the Petrobras investigation, widely referred to in Brazil as the “Lava Jato” or “Car Wash” operation: the criteria for determining fines, evaluating compliance programs, and entering into leniency agreements.
The decree also provides that books and records accuracy and completeness will be a key criterion for evaluating compliance programs, inspired by the FCPA accounting provisions.
The regulations under the Clean Company Act are a critical milestone in the effort to restore credibility to Brazil’s federal government, in light of its past commitments to fighting corruption in the corporate world.
The FCPA Blog is now working to obtain English translations of this highly detailed decree. We’ll share further specifics as they become available.
Leonardo Ruiz Machado is the partner in charge of compliance and corporate integrity of Machado, Meyer, Sendacz e Opice Advogados in São Paulo, Brazil. The firm offers legal assistance to both Brazilian and international clients, including large corporations in the most varied sectors of activities, financial institutions and government bodies.
Andy Spalding is a Senior Editor of the FCPA Blog and Assistant Professor at the University of Richmond School of Law.