Brazil’s Central Bank requires an independent channel for fraud and corruption whistleblowing
Article 2 minute read

Brazil’s Central Bank requires an independent channel for fraud and corruption whistleblowing

02 June 2017

The Central Bank of Brazil (BACEN) published a resolution in May, requiring all institutions that operate under its guidelines to make available to any user an independent channel for whistleblowing of fraud or unlawful actions.

Possibly motivated by the recent corruption scandals and concerns about the financial health and the corporate image, Resolution BCB number 4.567 imposes an improvement to the existing compliance standards. The rules will go into effect on 31 July, 2017.

What’s new?

The resolution requires the creation of a single and independent channel to inform any unlawful actions. This channel will need to be available for all users, whether they are employees, collaborators, clients, users, partners or suppliers. In practice, this means that the internal ombudsman channels and attention to users alone are not enough.

But there’s more. The resolution also says the whistleblowing channels must have their own regulation. This means the procedures for the use of these channels must be duly documented, correctly associated to the company’s code of conduct and must be properly informed to all parties involved with the business. To add to the new channel’s documentation requirements, the new BACEN rules require that controlled institutions send semiannual reports of incidents, recognized by its Board of Directors. If complaints are received, they must inform the Central Bank within 10 days, a hard deadline to meet if there is no governance behind the receipt, documentation and directing of complaints process.

Staying in compliance

Good corporate governance practices suggest that independent structures are those maintained outside of their facilities by professionals that are not employed by the organization or that do not directly communicate with them. Considering these characteristics, institutions authorized to operate through BACEN should engage an external provider to manage the new channel.

Compliance with the Central Bank may represent the strengthening of the company’s business, brand and image protection. Well managed anti-corruption channel services generate relevant information for strategic decision-making, the prevention of potential crises and the early identification of fraud. In short, it is an excellent compliance tool.

Get expert help

Business services providers specialized in solutions related to ethical, legal and regulatory issues, already offer services capable of meeting this new Central Bank requirement. If your company operates under the Central Bank of Brazil’s authorization and rules, this is the moment to invest resources in an independent anti-corruption communication channel. And the deadline is approaching.

Get in touch with our experts if you need further information about the new resolution or would like to know how we can help your business. 

Written by

Vanessa Mello

Director Legal and Compliance

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