Brazil’s Anticorruption Law Turns 10
Introduced in August 2013, Law 12.846 quickly became known as the “Anticorruption Law.” However, an analysis of actions by the Brazilian Comptroller General’s Office (the CGU – Controladoria Geral da União, which is the primary body responsible for enforcing the Anticorruption Law at the federal level), show a significant growth of penalties imposed in cases that do not involve acts of corruption as such (i.e. the offering of an undue advantage to a public official in exchange for some type of benefit).
The fact is that the offenses under article 5 of Law 12.846 are much broader than the definition of corruption found in the criminal law. Where corruption is only a crime if an advantage is offered to a public official in exchange for some form of favor, Law 12.846 penalizes the simple act of offering an undue benefit, even if no quid pro quo is requested. Moreover, under Law 12.846 acts harmful to the administration of government can be punished even in situations that do not involve conduct by public officials.
The early years of the CGU’s enforcement of Law 12.846 were marked by sanctions imposed on companies involved in Operation Car Wash (Operação Lava Jato), including some that had entered into leniency agreements in criminal proceedings. However, several recent cases indicate a growing disconnect between the application of the Law and acts of corruption per se. For example:
- In 2020, the CGU imposed a fine of over BRL 45 million on a company that distributed tickets to matches in the 2014 FIFA World Cup to public officials, even though there was no request for an undue advantage in exchange, or any conflict of interest. The CGU considered that the mere offering of the benefit was sufficient to violate article 5(I) of Law 12.846.
- In September 2022, a company was fined for allegedly failing to provide accurate information about the status of certain dams to the National Mining Agency. In the CGU’s view, this constituted a violation of article 5(V) of the Anticorruption Law (“hindering investigation or inspection activities by government bodies, entities or agents, or intervening in their actions, including actions by regulatory agencies or financial system oversight boards”). The fine was upheld at an appeal hearing in September 2023.
- Also in September 2022, the CGU fined a company that had purchased, from go-between companies, reports containing confidential information allegedly obtained illegally from Brazil’s Federal Revenue database. Subsequently, other companies were fined by the CGU for the same offense.
- In 2023, the CGU imposed penalties on a cultural production company, which it said had falsified the accounts of a subsidized project, along with one of the project’s sponsors (which opted for a consensual solution, assuming strict liability for the production company’s acts).
These examples emphasize the importance of adopting effective integrity and compliance programs that go beyond addressing the risks related to corruption in the more traditional sense. Direct and indirect relationships with persons involved in government, regulatory agencies and state-controlled companies require rigorous guidelines and careful oversight because of the strict liability imposed by Law 12.846 (including for acts committed by third parties) and the severity of the penalties that may be imposed.
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