Academic journal article Business Law International

The Brazilian Anti-Corruption Policy in Motion

Academic journal article Business Law International

The Brazilian Anti-Corruption Policy in Motion

Article excerpt

Some years ago, Brazil's bright future seemed imminent. Rich oil fields had been found along the seashore, the commodities boom increased the prices of the main export products and economic growth was around seven per cent per year. Even after the 2008 financial crisis, the country seemed to be immune to the adverse international scenario.

However, from the anticipated bright future in 2008 to the dismal present, Brazilian policy-makers made several mistakes. While some of these are being tackled by recent government measures, other root causes of today's issues are more deeply ingrained in the organisation of the Brazilian political system: corruption can be largely blamed for making the country's economic condition even worse.

Although corruption in Brazil is not as serious as in China, Russia or India - the other three BRIC countries - Transparency International often brands Brazil as a corrupt country. In Transparency International's Corruption Perceptions Index (CPI),* 1 which measures the perceived levels of public sector corruption worldwide on a scale from 0 (highly corrupt) to 100 (very clean), Brazil scored 43 in 2014. This score places Brazil in 69th position among 175 countries surveyed by the non-governmental organisation. For compliance officers, this is a red flag to watch out for and some would say this is a significant obstacle to the development of the private sector in the country.

In relation to anti-corruption policy, an important change took place in 2013, when Law No 12,846 (the 'new Anti-Corruption Law ) was passed. Even though it had been in force since 29 January 2014, it lacked the decree to regulate and provide guidelines on its application. Decree No 8,420 (the 'Anti-Corruption Decree') was issued on 18 March 2015.

The passing of the new regulation does not mean that previously there were no rules against corruption. On the contrary, there was robust legislation that has been streamlined over the last 20 years. This has been reflected in the growing level of enforcement, which has led to several anti-corruption investigations. The purpose of this article is to review the operation of Brazil's anti-corruption policy.

The article is divided into seven sections:

1. Corruption in Brazil: how serious is it?

2. A brief overview of the Brazilian anti-corruption legislation prior to the reform.

3. The 2013 reform of the anti-corruption legislation.

4. The new Anti-Corruption Taw: severe fines for legal entities, whistleblowing provisions and compliance defence.

5. The 2015 anti-corruption decree and its context.

6. Guidelines for the application of the new Anti-Corruption Taw.

7. Conclusion.

Corruption in Brazil: how serious is it?

It is possible that the reader has already heard about the corruption problem in Brazil. The country's reputation is not very good when it comes to corruption - one common mistake is the idea that corruption is a widespread, culturally accepted practice. In reality, the free press continuously denounces several corruption-related scandals and, according to some experts, it gives the impression that the problem of corruption is more serious than it really is.

Undeniably, measuring the perception of corruption is complicated, because people may be influenced by prejudice and by the overflow of corruption-related news. Even so, several indexes have been created and streamlined to measure the perception of corruption.

As discussed above, the most famous of these indexes is Transparency International's CPI, which ranges from 0 (the most corrupt) to 100 (the least corrupt), with Brazil scoring 43 in 2014 (making it the 69th most corrupt country). This looks bad, especially when compared with Japan (score 76 - 15th place), the United States (score 74 - 17th place) or Denmark, New Zealand or Finland (scores 92, 91 and 89 - 1st, 2nd and 3rd places, respectively). At the other extreme, Somalia and North Korea both scored 8, a score that makes them the most corrupt countries in the world (sharing 174th pi ace). …

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