In the decree recently issued in Brazil in March in implementing what is commonly referred to as the Clean Companies Act, the existence of an effectively enforced compliance program is listed as a significant factor in reducing the amount of a penalty that may be imposed for a violation of the Clean Companies Act. The following elements were identitied as being necessary to an effective compliance program:
- Commitment from top management, including the board of directors, must exist and must be evidenced by their clear support;
- Ethical standards and codes of conduct must be instituted that are applicable to all officers, directors, and employees as well as any third parties acting on behalf of the company;
- Regular training must be an ongoing practice;
- Risk-assessment procedures must be implemented and regularly applied;
- Internal controls must be adequate to ensure the fairness of the accounting and the accuracy of records;
- Procedures must be implemented to detect and deter fraud in the bidding process as well as in the process of interacting with public entities;
- Company officials assigned to enforce the compliance program must have sufficient independence and authority to carryout their responsibilities;
- Effective whistleblower mechanisms must be implemented for employees and third parties acting on behalf of the company;
- Discipline must be meted out for violations of the compliance program;
- Procedures must be implemented to ensure that improper conduct is detected, discontinued, and remediated;
- Appropriate due diligence procedures must be imlemented and followed relative to the hiring and supervision of third parties;
- Adequate due diligence must be conducted as part of mergers or acquisitions of third parties;
- Continuous monitoring must take place to deter, detect, and remediate violations; and
- Procedures must be implemented that are designed to ensure transparency with regard to political donations.
The components of an effective compliance program under the Clean Companies Act closely resemble those being promoted by enforcement officials in the United States and in the United Kingdom in conjunction with the FCPA and UK Bribery Act. For purposes of global anti-bribery compliance, companies doing business in Brazil need to ensure that the scope of their anti-bribery compliance programs are equally applicable to what is now being required in Brazil.