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On October 29, the OECD Working Group on Bribery (WGB) published its Phase 3 report on Brazil’s implementation of the OECD Anti-Bribery Convention (Convention). The WGB previously evaluated Brazil in a Phase 1 (September 2004), a Phase 2 (December 2007) and a Phase 2 Written Follow-up report (June 2010). Phase 3 addresses enforcement of the Convention, focusing on three pillars:

  1.  the progress made by Parties to the Convention with respect to weaknesses identified in Phase 2;
  2.  issues raised by changes in the domestic legislation or institutional framework of the Parties; and
  3. enforcement efforts and results.

While the report noted positive developments, like the enactment of the Clean Companies Act, broad awareness-raising efforts, and increased used of mutual legal assistance in foreign bribery cases, it also identified other areas for improvement. Below is a summary of some key aspects of the report.

Responsibility of legal persons

A key concern of the WGB during Brazil`s Phase 2 review was the lack of legislative provisions for liability of legal persons for foreign bribery offences. The WGB urged Brazil to “take urgent steps to establish the direct liability of legal persons for the bribery of a foreign public official”. The Phase 3 report acknowledges that the Clean Companies Act, which came into force in January 2014, puts an end to over 14 years of non-compliance with Article 2 of the Convention. The examiners commend Brazil for adopting a strict administrative and civil liability regime. Credit for cooperation with investigations and leniency agreements are also considered positive developments introduced by the law. At the same time, the WGB raises concerns about certain features of the law, like the lack of debarment as a possible sanction and the vagueness of some provisions.

Low level of enforcement of foreign bribery

One of the main criticisms (if not the main one) of the WGB is the low level of enforcement of foreign bribery in Brazil. According to the WGB, despite Brazil`s large economy, there have been only 5 cases opened (3 are ongoing) since Brazil joined the Convention. The report also notes that “none of Brazil`s ongoing investigations has been opened on the basis of Brazilian authorities’ discovery of alleged foreign bribery”.

Lack of regulation

The Clean Companies Act requires the Federal Government to issue a regulation on compliance programs. Brazilian authorities have mentioned in different public forums that the regulation will not be limited only to describing the criteria for evaluating compliance programs. More than 15 months after the law was passed and more than 10 months after it came into force, the regulation has still not been published (at the time of the on-site visits, May 2014, the Decree had already been submitted to the Presidency and was awaiting final clearance). The WGB expresses concern that a number of questions remain outstanding and without the regulation. It is also important to note that the Clean Companies Act is applicable, despite the current lack of regulation.


The WGB presents 16 recommendations for Brazil to adopt and to be followed up. They include i) to “issue, as matter or priority” the Federal Regulation, with a specific request that Brazil provide a written self- assessment report in six months (i.e. by March 2015) on the enactment and content of the Federal Regulation; ii) to re-consider debarment as a possible sanction; iii) to implement measures to protect private sector whistleblowers; and iv) to consider, as appropriate, compliance programs in decisions to grant public procurement contracts. This blog post was originally published at the FCPAméricas Blog.


Carlos Ayres is an attorney with the law firm Trench, Rossi e Watanabe Advogados (associated with Baker McKenzie) in São Paulo, Brazil. He focuses on anti-corruption and compliance issues, with a particular emphasis on Brazil and other regions of Latin America. Mr. Ayres co-chairs the Anti-Corruption and Compliance Committee of IBRADEMP (The Brazilian Institute of Business Law) and teaches FCPA and Compliance as a visiting professor at the Post-Graduate Program of GVLaw, School of Law, in São Paulo. He is also a visiting professor at the Post-Graduate Program in Risk Management and Fraud Prevention of FIA (Fundação Instituto de Administração) Business School in São Paulo

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