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#Brazilian Clean Company Act

Brazil’s Clean Company Act 2014 (Law No. 12,846) holds companies responsible for the corrupt acts of their employees and introduces strict liability for those offences, meaning a company can be liable without a finding of fault. The Act provides strict civil and administrative penalties but no criminal penalties for companies. However, the Criminal Code establishes domestic criminal offences.

Prohibited Conduct

• To finance, pay or subsidise the performance of a prohibited act;
• Bid rigging and fraud in public procurement; and
• Direct/indirect acts of bribery/attempted bribery of Brazilian public officials/foreign public officials.

Penalties for companies under the Act include fines of up to 20% of a company’s gross revenue from the previous year or suspension or dissolution of a company. Importantly, prosecutors are not required to prove a company’s representatives acted with criminal or corrupt intent, and companies are not afforded a legal defence for implementing ‘adequate procedures’ to prevent corrupt acts.

The Act allows for significant leniency if a company cooperates with investigators, self-discloses violations and enters into leniency agreements. Fines can be reduced by up to two-thirds of the total fine, and a company may be exempted from a number of sanctions.