As frequent readers of the FCPA Blog are well aware, nowadays companies must consider not only the anti-corruption regulatory regimes in their home jurisdictions, but also the criminalization and prosecution of bribery in other locales — sometimes very distant ones — where they do business.
This point has been underscored by the recent uptick in coordinated, multijurisdictional investigations into corruption issues, including the spate of high-profile investigations involving authorities in the United States and Brazil (most notably, the Odebrecht case).
For corporations operating in Brazil and throughout Latin America, anti-corruption compliance has become an especially fraught regulatory challenge. The road to compliance requires navigating not only the FCPA, but also the Brazilian Clean Company Act (CCA).
Particularly in Brazil, companies linked to the much-publicized Petrobras matter have experienced firsthand the U.S. government’s appetite for anti-corruption investigations, along with a growing willingness by American authorities to partner with foreign regulators to enforce U.S. law. For its part, the CCA has been in force since 2014 and Brazilian law enforcement priorities are still developing.
Given this reality of broad, multijurisdictional anti-corruption investigations and the significant consequences thereof, corporations doing business from, or within, Brazil must be mindful of a few key cross-border considerations. We’ve spelled out these considerations in detail in a recent article published by Law360 that was also co-authored by Natasha Trifun and Renato Polillo of our firm. The article is here (subscription only).
One critical tip to remember is that in Brazil, there are many government-owned enterprises and other entities connected to individuals who might be considered government officials for purposes of the FCPA or CCA (e.g., state-run hospitals, public utilities). Accordingly, it is critical for multinationals operating in Brazil to perform comprehensive due diligence on all potential business contacts to evaluate whether they are — or resemble in status or function — government officials.
Another key point to bear in mind is while the SEC and DOJ are jointly responsible for enforcing the FCPA in the United States, the responsibility for enforcing the CCA is assigned to the highest-level jurisdiction in Brazil affected by the underlying bribery. Thus, the prosecutor’s office — state or federal — responsible for enforcing the CCA in a particular instance will correspond to the level of the official involved in the alleged bribe. Experienced Brazilian and American counsel are required to navigate these nuances in the event of a multijurisdictional investigation.
At any rate, bribery cases in Brazil are likely to remain a hot topic, with additional high-profile corporate investigations rumored to be announced in 2017. It is crucial, not only for companies, but also for their executives and boards, to require their counsel to closely coordinate efforts in both North and South America in the unfortunate event of a complex multijurisdictional investigation.
Jason Jones is a partner in the Special Matters and Government Investigations Practice Group in King & Spalding’s Washington office. He formerly served as Assistant Chief of the FCPA Unit in the Fraud Section of the Department of Justice.
Amelia Medina is a senior associate in the Special Matters/Government Investigations Practice Group at King & Spalding based in the firm’s Atlanta office. Her practice focuses on white-collar criminal defense, internal corporate investigations, complex civil litigation, and crisis management.
Kyle Sheahen is a senior associate in the Special Matters/Government Investigations Practice Group in King & Spalding’s New York office. His practice focuses on white collar criminal defense litigation, federal and state government investigations, corporate internal investigations, and advice concerning corporate compliance programs.
The authors thank Natasha Trifun, an associate in King & Spalding’s Atlanta office who previously served as the Brazil Compliance Officer for Pfizer, Inc., and Renato Polillo, a foreign attorney in King & Spalding’s Houston office and holder of a Master of Laws in Civil Law from the University of São Paulo in Brazil, for their assistance with this post.