Bribery has been considered a criminal offense in Brazil since 1940. Since then, several other corruption-related practices also have been criminalized. Over the years, countless individuals in the public and private sectors have faced criminal charges for bribery and corruption, many of which individuals were sentenced to imprisonment. One perceived shortcoming in Brazil’s anti-corruption laws, however, is that only individuals, and not entities, can be held criminally liable for the conduct in question. As a result, even if a company is the ultimate beneficiary of the bribery, the company itself cannot be held criminally liable and, thus, it has little incentive to alter its business practices in connection with the crime.
Corporations are not subject to criminal prosecution or liability in Brazil, except in case of certain few environmental crimes. Therefore, there is no criminal liability or exposure to a company with respect to corruption. In the case of criminal activities involving a corporate entity, only the directors, managers, employees or representatives of a company can be held criminally liable, for the activities personally taken by them as representatives of the company. Thus, companies in Brazil may implicitly foster an attitude that engaging in corruption is an acceptable way of doing business, because the companies themselves do not have to worry about facing any criminal charges if anyone gets caught.
Even with respect to the few crimes for which a company may be held liable (e.g., environmental crimes), it is important to highlight that there have been virtually no criminal prosecutions of companies based on such crimes, and the few criminal prosecutions that are pursued against companies do not seem to result in any substantial penalties being assessed against the companies. The criminal justice system in Brazil is focused on enforcing crimes for which individuals may be sentence to prison. Criminal fines, which may be levied in only a few limited situations, are usually imposed only when an individual is also being sentenced to prison. Brazil’s procedural code does not provide for assessing specific penalties against corporations or proper enforcement of existing penalties.
As a result of the Brazilian criminal system being run this way, even the most aggressive Prosecutors consistently shy away from trying to hold companies criminally liable for violations of anti-corruption laws that were committed by the companies’ representatives specifically for the benefit of the corporation. Many times, Prosecutors do not even try to prosecute the individuals themselves. The problems inherent with Brazil’s antiquated anti-corruption laws has resulted in the dismissal of several key cases, such as Operação Satiagraha, in which most of the claims were dismissed.
Satiagraha was a criminal investigation of the Brazilian Federal Police in connection with several alleged acts of corruption involving important figures in both the public and private sectors. In the end, largely as a result of the antiquated anti-corruption laws, the Federal Deputy that was the head of the investigation was the only one held criminally liable. He was sentenced near the end of 2010 for the crime of “procedural fraud,” based on the fact that he asked ABIN (Agência Brasileira de Informação, the Brazilian intelligence agency) for help, and this fact was considered fraud with respect to the due process of law. The Deputy is currently appealing his conviction.
Many profound changes are necessary to modernize Brazilian criminal laws, criminal procedure, prosecutions and enforcement. Considering the difficulty—and some would even say, impracticality—of such a deep restructuring, the recent proposal presented by the Brazilian government for a new anticorruption law is an innovative and interesting approach. The proposed anticorruption law would not provide for any new criminal offenses, but it would permit a company to be held liable, civil and administratively, for all the illicit conduct described in the law that is perpetrated by the company’s representatives either for the benefit of the company or for which the company receives a benefit. Thus, if this new law is enacted, all companies may be held strictly liable for corrupt acts committed by their representatives, which may result in a strong increase of corruption enforcement in Brazil. The proposal for the new Brazilian anti-corruption law was accepted and converted into project of law # 6,826 of 2010, and is still under discussion in the Chamber of Representatives before it can be formally enacted.
The new Brazilian law, if enacted, would be a step in the right direction to hold companies accountable for their involvement in corrupt practices, but Brazil needs to keep moving forward in this regard. Eventually, and hopefully sooner rather than later, Brazil will take further steps to bring its anti-corruption laws in line with those of other leading countries in the developed world. For all the criticism that is being leveled at the United Kingdom’s Ministry of Justice for trying to weaken the version of the Bribery Act that was approved by Parliament last year, if and when the Bribery Act finally goes into effect, it may serve as a model for how other countries, including Brazil, can overhaul their own anti-corruption laws.