the organisation and equipment employed elsewhere, such as by the US Department of Justice or Securities and Exchange Commission, and also suffer from a lack of communication between state and federal agencies. There is no obligation in practice for individuals to report situations of noncompliance. Insufficient resources and inadequate complaints mechanisms and whistleblower protection also hamper enforcement efforts. Staff of the public prosecutor’s office often still lack understanding of the foreign bribery offence.
Recent Developments Bill No. 6826/10, which was being sanctioned by the president end of July 2013 (Law No. 12846/13) and will be in effect from January 2014, penalises companies through civil and administrative means for acts of corruption. Still pending is the Bill No. 4.895/12, which establishes criminal liability for companies for acts of corruption but may have been superseded by the recent enactement of Law 12846/13. Law No. 12846/13 provides for fines of 0.1 per cent to 20 per cent of the company’s gross revenues in the preceding year. Other noteworthy sanctions provided for the new law are debarment from public contracts and the prohibition of receiving incentives, subsidies, grants, donations or loans from public bodies or entities and public financial institutions for one to five years. Another major concept in the bill is the definition of a “public official” and, consequently, of a “foreign public official”, which is consistent with the Convention. Brazilian law already contains a broad definition of public official and the new law reinforces this by widely defining a public official as any individual who holds a position in any public agency or entity and also in companies owned or controlled directly or indirectly by the government. The definition also includes any international public organisation, diplomatic representations, agencies and government entities. The new law also encourages effective compliance programmes, which still are not common in Brazil.
THE “MENSALAO CASE” The case of Action No. 470 (the “Mensalão Case”) was a milestone in Brazil for the trial and punishment of government officials and businessmen responsible for crimes of corruption. Mensalão was a scheme that involved the embezzlement of public funds to buy support amongst coalition parties for the administration of former president Luiz Inacio “Lula” da Silva and his Workers' Party (PT).80 The 37 defendants included officials and politicians from the PT, as well as executives from private businesses, who were charged with embezzlement, corruption, conspiracy, money laundering and misuse of public funds. Prosecutors accused the defendants of having formed a “criminal organisation” to buy political favours. Twenty-five of them were convicted, including Lula’s chief of staff who was sentenced to 10 years and 10 months’ imprisonment81 but procedures are still underway. The precedents established by the Supreme Court in this case will have an impact for many years on investigations and prosecutions of corruption arising in the country. According to reports in the Portuguese press, Portugal Telecom provided the Workers Party with €2.6 million (US$3.4 million) in campaign finance.82
Recommendations for Priority Actions Adopt implemention of the regulation of Law No. 12846/13 as a top priority. Improve the organisation and prosecution of foreign bribery, provide more investment in equipment for the Federal Police and Public Attorney’s Office and establish incentives for reporting violations.
80
BBC, 21 November 2012, “Q&A: Brazil's 'big monthly' corruption trial”, www.bbc.co.uk/news/world-latin-america19081519. 81 Ibid. 82 Jornal das Noticias, 11 December 2012, “Executor do ‘mensalão’ diz que Portugal Telecom financiou partido de Lula”, www.jn.pt/PaginaInicial/Mundo/Brasil/Interior.aspx?content_id=2940097.
EXPORTING CORRUPTION – OECD PROGRESS REPORT 2013
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