DEMING PLLC, with offices in Washington, D.C. and Michigan, is one of the leading law firms specializing in the full range of issues relating to the Foreign Corrupt Practice Act (FCPA), the UK Bribery Act, Canada’s Corruption of Foreign Public Officials Act (CFPOA), and similar legal regimes. DEMING PLLC has extensive experience on issues relating to international law and works with companies, organizations, audit committees, and individuals, and their law firms, to provide advice and assistance relative to complying with a wide range of anti-bribery legal regimes, including developing compliance programs and adequate internal controls, undertaking FCPA, UK Bribery Act, CFPOA, and Brazil’s Clean Company Act compliance audits, addressing Sarbanes-Oxley issues, conducting internal investigations, and representing clients in U.S. Department of Justice and U.S. Securities and Exchange Commission investigations.
Brazil’s Clean Company 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. The Clean Company Act represented a dramatic departure from existing law in that for the first time companies can now be held strictly liable for engaging in bribery either in Brazil or foreign settings.
The conceptual contours of the Clean Company Act are similar to the anti-bribery provisions of the FCPA and the UK Bribery Act. Yet there are differences. Even though the Clean Company Act is like the UK Bribery Act in making companies strictly liable and for not permitting facilitation payments, no complete defense is provided for an effective compliance program. Unlike the UK Bribery Act, the Clean Company Act does not apply to private bribery. But like the FCPA, the Clean Company Act provides significant credit for an effective compliance program in reducing the amount of a fine for a violation.
Effective Compliance Programs
As part of the decree implementing the Clean Company Act, the existence of an effective compliance program is made a significant factor in reducing the amount of a penalty that may be imposed. DEMING PLLC has extensive experience designing and implementing the key elements identified by the decree as being necessary for an effective compliance program:
- Commitment must be evidenced from top management, including the board of directors;
- Ethical standards must be applicable to all officers, directors, and employees as well as third parties acting on behalf of the company;
- Training must be an ongoing practice;
- Risk-assessment procedures must be regularly applied;
- Internal controls must ensure the fairness of financial reports and the accuracy of records;
- Procedures must be implemented to deter fraud in the bidding process as well as in interactions with public entities;
- Company compliance officials must have sufficient independence and authority to carry out their responsibilities;
- 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 and remediated;
- Appropriate due diligence procedures must be applied 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 and remediate violations; and
- Procedures must be implemented to ensure transparency with regard to political donations.
The Clean Company Act has strengthened the debarment system in Brazil by providing a basis for companies to be subject to debarment for violations of its provisions. At the same time, companies subject to debarment may avoid the severe consequences of department by entering into a leniency agreement. Timely disclosure and full cooperation are among the critical factors as to whether the leniency agreements will be accepted. These leniency agreements may also bear on whether a company may be debarred in jurisdictions outside of Brazil.