Compliance in Brazil
Article 3 minute read

Compliance in Brazil

04 May 2018

Brazilian states are following the recommendations of the CGU and implementing compliance programs.

Historically, there have not been any centralized laws surrounding compliance in Brazil, which has led to problems with corruption. That is now changing due to recommendations from The Comptroller General of the Union (Portuguese: Controladoria-Geral da União). Although the CGU, is not a governing body for specific compliance matters, it has put into place recommendations for states in Brazil to implement compliance programs.

Companies in Brazil that want to do business with state governments are taking the suggestion of the CGU to set up compliance programs. While this is not mandatory, there have been a trend of states creating compliance programs in which they set rules for a whistleblowing program, an ethics code and clearly defined policies.

History of compliance

In August of 2013, the Anti-Corruption Law, Law No. 12,846, was enacted but was not fully enforced until March of 2015 when a decree established the regulation of the Anti-Corruption Law which highlighted the administrative liability, rules for leniency agreement and established a national register of disreputable companies.

In 2015, the CGU published an integrity guide that was written to help companies and businesses learn how to behave when facing corruption and bribery problems. In 2017, the CGU published a guide for private companies and this manual explained every policy that a company must follow to be in compliance and how to interact with the public.

Since then, both Rio de Janeiro and the Federal District have created state laws that makes it mandatory for companies to establish integrity programs. Other states are sure to follow suit and create their own compliance laws.

Requirements of integrity programs

The main requirements of these integrity programs have many policies that must be enacted, such as:

Policies for:

  1. relationships with the public bodies
  2. acceptance or offering of gifts and hospitality from/to national or foreign public agents
  3. accounting records and control
  4. third party contracting
  5. mergers, acquisitions and corporate restructurings
  6. sponsorships and donations

In addition to these policies, the compliance programs must also include:

  • Disciplinary measures as a result of a breach of rules
  • Remedial actions to investigate and take appropriate action, with a view to non-occurrence
  • Continuous monitoring to verify the effective implementation of the program
  • Whistleblower channel with disclosure and easy access

This is the start of a new era in Brazil with companies choosing to be compliant. Companies know that if they do not implement these programs that they may not be able to get contracts with the public and will lose support and therefore businesses.

TMF Brazil

TMF Group has the local knowledge to help you navigate these new compliance programs in Brazil. Learn more about TMF Group in Brazil.

Whether you want to set up a new venture in Brazil, or just want to understand how these new programs will affect your current business in Brazil, talk to us.

Written by

Claudia Diniz

Client Legal Compliance Operations Manager

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