The context of social instability which happened on June of this year had a positive contribution over the Legislative Power in order to accelerate the creation of a new mechanism in the fight against the corruption system in Brazil. Law No. 12.846/13 that will be in force on March 2014 as a result of Bill No. 39/13 which intended to regulate the civil and administrative liability of legal persons in the private area, fills a gap in legislation which, until then, only provided punishments for individuals.
Comparing this law with what is in place in other jurisdictions, this proves to be quite similar to the “Foreign Corrupt Act” (FCPA), North American law in force since 1977, which prohibits bribery of foreign officials by North American companies, as well as has several aspects in common with the “Bribery Act”, British law created in 2011.
This new law addresses to the legal entities a wide responsibility, since it attributes liability to the company, regardless acknowledgment of guilt for an act committed in their interest or benefit, exclusive or not, both in the administrative and civil levels. Thus, the company will have to indemnify, independent of fault, damages described in the law.
On the other hand, despite this responsibility does not exclude individual liability of its directors or officers or any person who has been the author or participated in the unlawful act, this fact will occur only to the extent of his guilt, which means that it is necessary not only the proof of guilt but also sentencing according to damages.
Moreover, in case of contractual change, transformation, merger or acquisition of corporations, still stand the responsibility of the legal entity. However, in specific case of merger and acquisition, the responsibility of the successor company will be restricted to the obligation to pay fines and full compensation for damages to the limit of the transferred assets.
In turn, the parent companies, subsidiaries, affiliates or those under the respective contract, the consortium will also be jointly and severally liable for the performance of acts, which are restricted to the obligation to pay fines and full compensation of damages.
Among the acts considered as harmful to the public or foreign administration, we have: (i) assignment of improper advantage to the public servant, (ii) costing of illicit behavior and (iii) use of an intermediary to conceal or disguise the real interests or identity of beneficiaries. Similarly, in case of tenders and contracts, it appears that the preventing or fraud of biddings or even the manipulation or fraud of the economic and financial balance of contracts celebrated with the public administration are also punishable.
The configuration of one or more of the foregoing hypothesis, among others provided in the mentioned Law, shall be subject to a fine which shall be applied from 0.1 % to 20 % of the gross revenues of the financial year that precedes the initiation of the procedure or, if not possible the measurement of income, it shall be stipulated a fine between R$ 6,000.00 (six thousand reais) and R$ 6,000,000.00 (six million dollars).
Furthermore, the application of the penalty does not exclude the obligation of full compensation for damages. Moreover, it is important to note that good corporate governance practices, internal procedures of transparency, auditing and encouraging of accusation of irregularities, application of codes of ethics and conduct, as well as the company’s collaboration with investigations by agreement with the public administration, are very welcomed by that law which allows such measures as a contribution for the reduction of the penalty to be applied.
Rules of Compliance
The possibility of piercing the corporate veil in case of abuse of rights is more a form of constraint of the leaders of corporations so that they comply strictly with all the rules of operation of the company, also known as “compliance rules”, otherwise administrators and managing partners will suffer all the effects of the sanctions applied to legal person.
It is also important that these “compliance rules” encourage the adoption of behaviors in accordance with the standards and internal and external policies of the company, besides promoting an ethical and transparent environment according to the notions of good corporate practice. Thus, it is possible to prevent the occurrence of any deviations from the rules of the company’s policy bringing more safety to the management and conduct of the company that will be better structured and organized when it is based on detailed rules of procedure and conduct of their employees.
The enactment of the law in question represents a major breakthrough in the fight against corrupt practices contributing for the reduction of dissipation of heritage both public and private properties enhancing behaviors based on ethics and morality that not only brings greater transparency, credibility and safety to business practices but also protects public property.
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Ana Lucia Villela was an associate at Pacheco Neto Sanden Teisseire Law Firm.