note - the george washington international law review...in nations like brazil, corruption...

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NOTE

ALL BARK, NO BITE? PROPOSALS TO TRANSFORM THECLEAN COMPANY ACT INTO AN EFFECTIVE

ANTI-CORRUPTION TOOL

CARINA TENAGLIA*

ABSTRACT

Brazil has joined the fight against corruption by enacting the CleanCompany Act (CCA) in 2014. However, the Act is not yet comprehen-sive enough to deter companies from engaging in corrupt conduct.

The CCA has incorporated several key features of two of the frontrun-ners in anti-corruption laws: the United States’ Foreign Corrupt Prac-tices Act (FCPA) and the United Kingdom’s Bribery Act 2010 (BriberyAct). Although various cultural, political, economic, and legal consider-ations factor into the success of each law, gaps remain in the CCA thatextend beyond these elements.

This Note advocates for the Brazilian Legislature to adopt several keychanges to the CCA framework, ranging from the implementation ofcriminal penalties to the adoption of an advisory opinion program.Incorporation of such programs have aided in the enforcement of theFCPA and Bribery Act, and may enable Brazil to more comprehensivelyand effectively prosecute corruption-related violations.

I. INTRODUCTION

The history underlying bribery and corruption is a tale as old astime.1 Many individuals and institutions are competitive in nature,which results in a desire to rise to the top of any given class—to beat the top of the wealth bracket, the top seller or the top revenue-producing company, for example. For many, there is an idealisticexpectation that companies will compete on a level playing field,where society will give everyone equal opportunity and considera-tion to compete—free from bias or outside influence.

* J.D. 2019, The George Washington University Law School; B.S. Business Manage-ment and International Affairs 2016, Florida State University.

1. See, e.g., Athena Cao, The 8 Greatest Political Money Scandals in American History,TIME (Nov. 4, 2016), http://time.com/money/4550043/political-money-scandals-history-presidential-campaign/ [https://perma.cc/9W2D-DKJL]; Laura French, A History of Brib-ery, WORLD FIN. (Mar. 6, 2015), https://www.worldfinance.com/comment/a-history-of-bribery [https://perma.cc/BVD2-3EZC].

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556 The Geo. Wash. Int’l L. Rev. [Vol. 51

So, what happens when there is a clash between competition andthe “f” word—fairness? Sometimes, participants play by the rules.In other instances, some individuals’ desires drive them, and theentities they represent, to take immoral or illegal shortcuts toemerge at the top.2 One of the most common forms of corruptionin most countries, third-world countries3 in particular, is bribery.4Transparency International defines bribery as “the offering, prom-ising, giving, accepting or soliciting of an advantage as an induce-ment for an action which is illegal, unethical or a breach of trust.”5

Bribes may constitute a variety of benefits, including “gifts, loans,fees, rewards or other advantages.”6

This Note explores the cultural backgrounds of the UnitedStates, United Kingdom, and Brazil, the effect of culture on politi-cal, economic, and legal activity within each nation, and the legalframeworks of the Foreign Corrupt Practices Act (FCPA), U.K.Bribery Act 2010 (Bribery Act), and the Clean Company Act(CCA). It recommends changes to the CCA that will enhance pros-ecution and enforcement of bribery-based corruption crimes.

The Note proposes that the Brazil legislature do the following:(i) broaden coverage of the CCA to make the bribery in the privatecontext illegal; (ii) expand the language of the CCA to apply toindividuals; (iii) expand the scope of the CCA to permit the impo-sition of criminal penalties upon individuals and business entities;(iv) incorporate affirmative defenses for payments made legallyunder the laws of the foreign country, and for reasonable bona fideexpenditures; (v) clearly define when companies are required toself-disclose misconduct or forego eligibility for leniency agree-ment benefits; (vi) establish an opinion procedure program analo-gous to the United States Department of Justice’s program; and

2. See Roberto A. Ferdman, How the World’s Biggest Companies Bribe Foreign Governments– In 11 Charts, WASH. POST (Dec. 3, 2014), https://www.washingtonpost.com/news/wonk/wp/2014/12/03/how-the-worlds-biggest-companies-bribe-foreign-governments-in-11-charts/ [https://perma.cc/MC92-ABTX].

3. See Benjamin A. Olken & Rohini Pande, Corruption in Developing Countries, 4 ANN.REV. ECON. 479 (2012).

4. See, e.g., Esteban Ortiz-Ospina & Max Roser, Corruption, OUR WORLD DATA (Oct.10, 2016), https://ourworldindata.org/corruption [https://perma.cc/7UZU-NS84]; 20Countries Where Bribery in Business Is Common Practice, WORLD ATLAS (Apr. 25, 2017), http://www.worldatlas.com/articles/20-countries-where-bribery-in-business-is-common-practice.html [https://perma.cc/A6Z6-QMRP]; Helping Countries Combat Corruption: The Role of theWorld Bank, WORLD BANK GROUP, http://www1.worldbank.org/publicsector/anticorrupt/corruptn/cor08.htm (last visited Apr. 8, 2018) [https://perma.cc/4QC3-B8C7].

5. Anti-Corruption Glossary: Bribery, TRANSPARENCY INT’L, https://www.transparency.org/glossary/term/bribery (last visited Feb. 20, 2019) [ https://perma.cc/3XBA-MDG7].

6. Id.



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2019] All Bark, No Bite? 557

(vii) retain the provisions borrowed from the Bribery Act that pro-hibit facilitation payments, and permit penalties for the bribery oflocal officials.

Through these changes, the Brazilian government will be able tomore effectively combat corruption via the CCA. These modifica-tions will facilitate successful enforcement of the law, which mayeventually rival the successes of the FCPA and Bribery Act.

II. BACKGROUND

Nations from around the world are working to implement legalmechanisms to tackle the ever-growing epidemic of corruption-based crimes.7 Some of these nations merely adopted global agree-ments, such as the OECD Convention on Combatting Bribery ofForeign Public Officials (OECD Anti-Bribery Convention).8Others enacted their own domestic independent legal frameworksto combat these crimes.9 The United States and the United King-dom serve as the frontrunners in tackling corruption by institutingthe FCPA10 and the Bribery Act,11 respectively.

This Section first provides background on the effects of corrup-tion worldwide, and subsequently introduces information regard-ing the importance of strict anti-corruption laws and robustenforcement designed to curb the detrimental effects of corrup-tion. The Note provides an overview of barriers to corruption inBrazil, corruption investigations that gave rise to the enactment ofthe CCA. Finally, this Note provides a comparison of factors thatcontribute to the culture of corruption in Brazil, United States,and the United Kingdom, and compares the existing anti-corrup-tion frameworks of the CCA, FCPA, and the Bribery Act.

7. See NICOLA EHLERMANN-CACHE, OECD, THE IMPACT OF THE OECD ANTI-BRIBERY

CONVENTION, https://www.oecd.org/mena/competitiveness/41054440.pdf (last visitedApr. 8, 2018) [https://perma.cc/P6VR-LVS6].

8. See Convention on Combating Bribery of Foreign Public Officials in InternationalBusiness Transactions, Dec. 17, 1997, S. TREATY DOC. No. 105-43 (1998), http://www.oecd.org/daf/anti-bribery/ConvCombatBribery_ENG.pdf [hereinafter OECD Anti-BriberyConvention] [ https://perma.cc/VRL4-SHLT].

9. See, e.g., Foreign Corrupt Practices Act: An Overview, U.S. DEP’T JUST., https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act (last visited Apr. 8, 2018); BriberyAct 2010, c. 23 §§ 1 et seq [https://perma.cc/6E9M-U9KG].

10. See Bribery Act 2010 §§ 1 et seq.11. See, e.g., id.; The United Kingdom Bribery Act 2010 – Anti-Corruption Legislation with

Significant Jurisdictional Reach, LIBR. CONGRESS, https://www.loc.gov/law/help/uk-bribery-act/uk-bribery-act.php (last visited Apr. 8, 2018) [https://perma.cc/259V-QT9V].



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A. Will A Few Dollars Hurt Anyone?

The consequences of bribery are far-reaching and devastating.In nations like Brazil, corruption contributes to decreased confi-dence in the politico-economic climate12 and reduced foreigndirect investment.13 Corruption also undermines the efficacy ofdemocratic systems and national institutions.14 Today, these fac-tors hinder countries like Brazil from maximizing their fullestpotential as prosperous industrializing nations.15

Bribery results in higher premiums for lower quality products toaccount for bribery costs and “facilitation payments,” which act likean additional tax on businesses, and are passed down to consum-ers.16 Some individuals and corporations manipulate political sys-tems by placing facilitators of their behavior in positions of powerthrough “cash for votes” operations which perpetuate and normal-ize corrupt behavior.17

Ultimately, resources are wasted, income disparity is increased,individuals are trapped in cycles of poverty, the integrity of politicalinstitutions are degraded, officials sacrifice infrastructure, educa-tion, and health programs for the sake of financial gain, and trade

12. See, e.g., Corruption Perceptions Index 2016, TRANSPARENCY INT’L, https://www.trans-parency.org/news/feature/corruption_perceptions_index_2016 (last visited Apr. 8, 2018)[https://perma.cc/ZK63-KJXQ]; Silvio Cascione & Brad Haynes, Brazil Recession Deepens,Worst Annual Drop on Record, REUTERS (Dec 1, 2015), https://www.reuters.com/article/us-brazil-economy-gdp/brazil-recession-deepens-worst-annual-drop-on-record-idUSKBN0TK48E20151201 [https://perma.cc/SG9T-5CDC].

13. See Brazil: Foreign Investment, SANTANDER, https://en.portal.santandertrade.com/establish-overseas/brazil/foreign-investment (last visited Apr. 8, 2018) [https://perma.cc/9WPA-SX2Y].

14. See What Is Corruption?, TRANSPARENCY INT’L, https://www.transparency.org/what-is-corruption (last visited Apr. 8, 2018) [https://perma.cc/3BUW-YQEY].

15. See, e.g., Jessica Ebrard, Americas: Sometimes Bad News is Good News, TRANSPARENCY

INT’L (Jan 25, 2017), https://www.transparency.org/news/feature/americas_sometimes_bad_news_is_good_news [https://perma.cc/Q73Y-MYK5]; Peter Hakim, Commentary: Here’sWhat Really Went Wrong With Brazil’s Economy, REUTERS (May 25, 2016), https://www.reuters.com/article/us-latinamerica-brazil-economy-commentar/commentary-heres-what-really-went-wrong-with-brazils-economy-idUSKCN0YH08D [https://perma.cc/7VQS-SGEZ].

16. See, e.g., OECD, PUTTING AN END TO CORRUPTION 4 (2016), https://www.oecd.org/corruption/putting-an-end-to-corruption.pdf [https://perma.cc/TMM3-QVD2]; TRACE,THE HIGH COST OF SMALL BRIBES 3 (2015), https://www.traceinternational.org/Uploads/PublicationFiles/TheHighCostofSmallBribes2015.pdf [https://perma.cc/ZAY8-4TUF].

17. See, e.g., Anderson Antunes, The Cost of Corruption in Brazil Could Be Up To $53Billion Just This Year Alone, FORBES (Nov. 28, 2013), https://www.forbes.com/sites/anderso-nantunes/2013/11/28/the-cost-of-corruption-in-brazil-could-be-up-to-53-billion-just-this-year-alone/ [https://perma.cc/6KAV-48BF].



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and development stagnate.18 With effects as grave as these, sud-denly, bribes no longer seem so harmless.

B. The Importance of Enacting and Enforcing Anti-Corruption Laws

The implementation and enforcement of anti-corruption regula-tory schemes impose legal frameworks for conducting business,guidelines for compliance programs, methods for reporting cor-rupt dealings via whistleblowers, and legal enforcement mecha-nisms to tackle corruption after-the-fact.19 These measures imposeobligations on both corporate and public officials to act in aresponsible manner.20 The enactment of the FCPA, the OECDAnti-Bribery Convention,21 and surmounting pressure from theglobal community spurred an onslaught of legislation worldwide22

geared at combatting domestic and international corruption.It is not sufficient to merely pass legislation—countries must also

devote sufficient resources to enforce these laws to deter individu-als and companies from engaging in corrupt activity.23 Trans-parency International’s assessment reveals that only four out of thethirty-five OECD and eight non-OECD signatory countries activelyenforce these laws as of 2014,24 leaving a large gap in enforcement

18. See, e.g., Bribery and Corruption Risk: The Unseen Cost, DELOITTE (Oct. 2013), https://www2.deloitte.com/au/en/pages/risk/articles/bribery-corruption-risk.html [https://perma.cc/WN2G-JBJQ]; What Is Corruption?, supra note 14; OECD, CLEANGOVBIZ, THE RATIO- RNALE FOR FIGHTING CORRUPTION (2014), https://www.oecd.org/cleangovbiz/49693613.pdf[https://perma.cc/G53A-YY4N]; OECD, supra note 16. R

19. See, e.g., OECD, UNODC, WORLD BANK, ANTI-CORRUPTION ETHICS AND COMPLI-

ANCE HANDBOOK FOR BUSINESS 1, 8, 15, 60 (2013), https://www.oecd.org/corruption/Anti-CorruptionEthicsComplianceHandbook.pdf [https://perma.cc/5S4P-QC5N]; MARIE

CHENE & ROBIN HODESS, U4 EXPERT ANSWER: INTERNATIONAL GOOD PRACTICE IN ANTI-COR-

RUPTION LEGISLATION 1, 2–4 (2010), http://unpan1.un.org/intradoc/groups/public/doc-uments/apcity/unpan047856.pdf [https://perma.cc/55K6-FJSJ].

20. See ERNST & YOUNG, CORRUPTION OR COMPLIANCE, WEIGHING THE COSTS: 10TH

GLOBAL FRAUD SURVEY 1, 13 (2008), http://www.ey.com/Publication/vwLUAssets/global_fraud_survey_2008/$FILE/EY_10TH_GLOBAL_FRAUD_SURVEY_2008.pdf [https://perma.cc/A5SW-SNP3].

21. See OECD Anti-Bribery Convention, supra note 8. R22. See, e.g., Ludovic Malgrain, Update on Sapin II Law, WHITE & CASE (Jan. 10, 2017),

https://www.whitecase.com/publications/alert/update-sapin-ii-law [https://perma.cc/3CUF-6Q8X]; Details of Treaty No. 173: Criminal Law Convention on Corruption, COUNCIL

EUR., https://www.coe.int/en/web/conventions/full-list/-/conventions/treaty/173 (lastvisited Apr. 8, 2018) [https://perma.cc/G8XN-ZVPA]; Bribery Act 2010 §§ 1 et seq.; GRANT

THORNTON, CANADA’S ANTI-CORRUPTION LAWS ARE GROWING TEETH 1 (2013), https://www.bwaa.ca/insights/reports?serviceFilterBy=service_forensics.

23. See Rachel Brewster, The Domestic and International Enforcement of the OECD Anti-Bribery Convention, 15 CHICAGO J. INT’L L. 84, 87–88 (2014).

24. Transparency International is a global organization operating in over 100 coun-tries. It fosters cooperation between governments, businesses, and people, in efforts to



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measures for the remaining signatories.25 The OECD has con-cluded as of 2016 that there are twenty-one countries which haveenacted or adopted anti-corruption measures, yet have neverbrought charges against any person or entity.26 Countries thathave vigorously enforced these mechanisms have benefitted frompositive results, including new protections for whistleblowers, miti-gation credit incentives for organizations to self-report corruptconduct, credit for institutionalizing compliance programs, andthe removal of corrupt officials from public office.27

C. Overcoming Challenges: Corruption Does Not Discriminate

Corruption occurs in nations of wealth and nations of poverty,those heavily shaped by colonization and those that were not, andboth in democracies and autocracies.28 However, the culture of anation, the history behind it, and various other factors such as eco-nomic disparity, availability of natural resources, the form of gov-ernance, and the strength of the legal system, play a role in theprevalence of and reaction to corruption in a nation. This Sectionexplores the roles that culture, economics, politics, and the confi-dence in the rule of law in Brazil, the United States, and theUnited Kingdom, the impact these considerations have on the effi-

combat corruption worldwide. See What is Transparency International?, TRANSPARENCY INT’L,https://www.transparency.org/about (last visited Apr. 8, 2018) [ https://perma.cc/67ZR-KJZ9].

25. See Business Ethics and Anti-Corruption World, NORTON ROSE FULBRIGHT, https://www.nortonrosefulbright.com/en/knowledge/publications/2649845d/business-ethics-and-anti-corruption-world (last visited Apr. 8, 2018) [https://perma.cc/6MEA-A9JH].

26. OECD, WORKING GROUP ON BRIBERY, 2016 DATA ON ENFORCEMENT OF THE OECDANTI-BRIBERY CONVENTION: SPECIAL FOCUS ON INTERNATIONAL CO-OPERATION 3 (Nov. 2017),https://www.oecd.org/daf/anti-bribery/Anti-Bribery-Convention-Enforcement-Data-2016.pdf [https://perma.cc/5JZP-2LQP].

27. See, e.g., U.S. DEP’T OF JUSTICE, U.S. ATTORNEY’S MANUAL INSERT § 9-47.120 – FCPACORPORATE ENFORCEMENT POLICY, https://www.justice.gov/criminal-fraud/file/838416/download [hereinafter USAM INSERT] (last visited April 8, 2018) [https://perma.cc/WY83-3PC6]; SEC Spotlight: Enforcement Cooperation Program, SEC, https://www.sec.gov/spotlight/enforcement-cooperation-initiative.shtml (last visited April 8, 2018) [https://perma.cc/RDM4-537H ]; Morgan Miller et al., Latin America’s Headline: Anti-Corruption, PAUL HAS-

TINGS (Dec. 5, 2016), http://www.paulhastings.com/publication-items/details/?id=e801eb69-2334-6428-811c-ff00004cbded [https://perma.cc/8ZT9-BPYT]; Brazil Corruption Scan-dals: All You Need to Know, BBC (Apr. 8, 2018), http://www.bbc.com/news/world-latin-america-35810578 [https://perma.cc/D66B-B84B].

28. See, e.g., JAMES HOLLYER & LEONARD WANTCHEKON, CORRUPTION IN AUTOCRACIES

1, 5 (Sept. 2011), https://www.princeton.edu/~lwantche/Corruption_in_Autocracies[https://perma.cc/BN3E-4CDE]; Corruption Perceptions Index 2016, TRANSPARENCY INT’L(Jan. 25, 2017), https://www.transparency.org/news/feature/corruption_perceptions_index_2016 [https://perma.cc/JFK2-D8BF].



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cacy of anti-corruption schemes, and the ability of these countriesto enforce such laws.

1. Brazil: Cultural, Political, Economic, and Legal Barriers toCorruption, and the Rise of Operation Car Wash(Operacao Lava Jato)

Like the United States, Brazil has a complex colonial history.29

Natural resources such as sugarcane and cotton were exploited,and the slave trade made its way through the country.30 After Por-tuguese colonizers retreated to Europe, those remaining in pre-sent-day Brazil struggled to develop a governing body and achieveeconomic prosperity.31

Though the levels of income disparity in the United States andthe United Kingdom are slightly greater than in Brazil, this differ-ence is more visible in Brazil than it is in its Anglo counterparts.32

Brazil’s colonial history, political strife, and economic strugglescontributed to an astounding level of socio-economic disparity thatpermeates Brazilian society today.33 Impoverished residents findthemselves living in favelas, poverty-stricken slums, sprinkledthroughout the nation.34

Corruption is deeply ingrained in the culture of Brazil—anindustrializing nation.35 Most notably, corruption spans across the

29. See The Colonial Era, HARV. DIVINITY SCHOOL, https://rlp.hds.harvard.edu/for-edu-cators/country-profiles/brazil/colonial-era (last visited Apr. 8, 2018) [ https://perma.cc/7AB4-GFMS].

30. See id.31. See, e.g., id.; Modern Political Rule, HARV. DIVINITY SCHOOL, https://rlp.hds.harvard

.edu/modern-political-rule-1 (last visited Apr. 8, 2018).32. See OECD Income Distribution Database (IDD): Gini, Poverty, Income, Methods and Con-

cepts, http://www.oecd.org/social/income-distribution-database.htm (last visited Apr. 8,2018) [https://perma.cc/7TYY-77S2].

33. See Erik Sherman, America is the Richest, and Most Unequal, Country (Sept. 30, 2015),http://fortune.com/2015/09/30/america-wealth-inequality/ [https://perma.cc/DJ3Y-4HAL].

34. See, e.g., id.; Brazil: Extreme Inequality in Numbers, OXFAM INT’L, https://www.oxfam.org/en/even-it-brazil/brazil-extreme-inequality-numbers (last visited Apr. 8, 2018)(“Extreme inequality breeds conflict, violence, and instability.”) [https://perma.cc/R78Z-JQHJ]; GINI Index (World Bank Estimate), WORLD BANK GROUP, https://data.worldbank.org/indicator/SI.POV.GINI?locations=BR (last visited Apr. 8, 2018) [ https://perma.cc/4CDP-RSYE; Jing Xu, Economic Inequality in Brazil, BORGEN PROJECT, https://borgenproject.org/economic-inequality-brazil/ (last visited Apr. 8, 2018) [ https://perma.cc/4RLA-VCQF].

35. See Marina Lopes & Nick Miroff, A Corruption Scandal Wrecked Brazil’s Economy. Now,Workers Face the Consequences, WASH. POST (June 19, 2017), https://www.washingtonpost.com/world/the_americas/a-corruption-scandal-wrecked-brazils-economy-now-workers-face-the-consequences/2017/06/16/a2be0faa-505b-11e7-b74e-0d2785d3083d_story.html?utm_term=.93c99987e0dc [https://perma.cc/7N26-3Z4D]; Brazil Corruption Report, GAN



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infrastructure, construction, petroleum, and meat industries.36

Public procurement contracts and customs are two of the main are-nas through which corruption occurs in Brazil.37 Companies com-monly pay bribes in the form of “grease” payments, customarilytreated as the cost of doing business.38 Furthermore, the rule oflaw is not uniformly or effectively enforced in Brazil. The Brazilianpolice force and political officials including various presidents havebecome mired in corruption scandals, and the judicial branch con-tinues to face relentless extrinsic pressure from powerfulcoalitions.39

Brazil, plagued by countless corruption scandals, recentlyenacted legislation to combat corruption.40 The Brazilian legisla-ture created the CCA in 2014 as a formal response to the corrup-tion-related upheaval in Brazil, which would later give rise toOperation Car Wash (Operacao Lava Jato)41—the nation’s mostextensive investigation into widespread corruption to date.42 TheCCA successfully passed through the Brazilian Legislature and wassigned into law by Dilma Rouseff on August 1, 2013.43 The CCAprohibits the bribery of foreign public officials, subjecting violatorsto civil and administrative liability.44

BUS. ANTI-CORRUPTION PORTAL, https://www.business-anti-corruption.com/country-profiles/brazil (last visited Apr. 8, 2018) [https://perma.cc/SHP7-RXA3].

36. See Lopes & Miroff, supra note 35. R

37. See id.38. See U.S. DEP’T OF JUSTICE & SEC, FCPA: A RESOURCE GUIDE TO THE U.S. FOREIGN

CORRUPT PRACTICES ACT 26 (2012), https://www.sec.gov/spotlight/fcpa/fcpa-resource-guide.pdf [hereinafter FCPA RESOURCE GUIDE] [https://perma.cc/ZUZ9-QTJX].

39. See Brad Brooks, Brazil Police Officer, Symbol of Corruption Crackdown, Arrested,REUTERS (June 8, 2016), https://www.reuters.com/article/us-brazil-corruption-agent-idUSKCN0YU275 [https://perma.cc/9Z47-QW7C]; Brazil: Freedom in the World 2016, FREE-

DOM HOUSE, https://freedomhouse.org/report/freedom-world/2016/brazil (last visitedApr. 8, 2018) [https://perma.cc/QR3X-VHKU].

40. See Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.41. See, e.g., Anderson Cooper, Brazil’s “Operation Car Wash” Involves Billions in Bribes,

Scores of Politicians, CBS NEWS (May 21, 2017), https://www.cbsnews.com/news/brazil-oper-ation-car-wash-involves-billions-in-bribes-scores-of-politicians/ [https://perma.cc/844G-TA4N]; Michael Smith et al., The Betrayal of Brazil, BLOOMBERG (May 8, 2015), https://www.bloomberg.com/news/features/2015-05-08/brazil-s-massive-corruption-scandal-has-bitter-ness-replacing-hope [https://perma.cc/E9YF-MCMR].

42. See Tim Padgett, Brazil’s Car Wash Scandal Reveals a Country Soaked in Corruption,BLOOMBERG (May 25, 2017), https://www.bloomberg.com/news/articles/2017-05-25/bra-zil-s-car-wash-scandal-reveals-a-country-soaked-in-corruption [https://perma.cc/2VQW-YSVJ].

43. See Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.44. See id.



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Operation Car Wash is an ongoing investigation that began inMarch 2017.45 This inquiry revealed widespread corruption ofhundreds46 of corrupt officials and over a dozen companies, result-ing in billions of reais’ worth of misappropriated funds,47 over 200arrests, and nearly 100 convictions to date.48 The main companyimplicated in the scandal was Petrobras, a government-ownedpetroleum producer.49 Many engineering and construction-basedcompanies such as Odebrecht, UTC Engenharia, OAS, andCamargo Correa were also implicated.50

The convictions of top-level officials shook the nation as some ofBrazil’s most prominent individuals were arrested. Among thosearrested, include former President Luiz Inacio Lula da Silva(Lula),51 his former chief of staff,52 the former treasurer of theWorker’s Party Joao Vaccaro Neto,53 two former governors of Riode Janeiro,54 the CEO of Odebrecht, Marcelo Odebrecht,55 formerpresident of Petrobras and Brazilian Bank (Banco de Brasil)Aldemire Bendine,56 and several other senior executives ofPetrobras.57 The Federal Police (Policia Federal) of Brazil vigorously

45. See Esther Fuentes, Understanding the Petrobras Scandal, COUNCIL ON HEMISPHERIC

AFF. (Apr. 7, 2016), http://www.coha.org/understanding-the-petrobras-scandal/ [https://perma.cc/Z2L5-F58Q].

46. See, e.g., Brazil Corruption Probe: Key Words and Names, BBC (July 12, 2017), http://www.bbc.com/news/world-latin-america-39576896 [https://perma.cc/CMZ8-M3HA];Kenneth Rapoza, Brazil’s Elite Have Fallen to Pieces, FORBES (Sept. 14, 2017), https://www.forbes.com/sites/kenrapoza/2017/09/14/brazils-elite-have-fallen-to-pieces/#4ef14a2f67ac [https://perma.cc/JRK8-M5RP]; Smith et al., supra note 41. R

47. Reais are the form of currency used in Brazil. One United States Dollar equalsapproximately three dollars and seventy-seven cents worth of reais in Brazil, as of January2019. See USDBRL Spot Exchange Rate, BLOOMBERG, https://www.bloomberg.com/quote/USDBRL:CUR (last visited Jan. 25, 2019) [ https://perma.cc/5RTD-JC4F ].

48. See A Lava Jato em Numeros no Parana: Resultados da Operacao Lava Jato, MINISTRIO

PUBLICO FEDERAL (Oct. 18, 2018), http://www.mpf.mp.br/para-o-cidadao/caso-lava-jato/atuacao-na-1a-instancia/parana/resultado [https://perma.cc/TRK5-TWQM]; Caso LavaJato: Linha do Tempo, MINISTRIO PUBLICO FEDERAL, http://www.mpf.mp.br/para-o-cidadao/caso-lava-jato/atuacao-na-1a-instancia/linha-do-tempo (last visited Apr. 8, 2018) [https://perma.cc/GWR9-XG96]; Smith et al., supra note 41. R

49. See Smith et al., supra note 41. R50. See id.51. See, e.g., Brazil Corruption Probe: Key Words and Names, supra note 46; Ernesto R

Londono, Ex-President of Brazil Sentenced to Nearly 10 Years in Prison for Corruption, N.Y. TIMES

(July 12, 2017), https://www.nytimes.com/2017/07/12/world/americas/brazil-lula-da-silva-corruption.html [https://perma.cc/TD2Z-A9LP].

52. Rapoza, supra note 46. R53. Caso Lava Jato, supra note 48. R54. Rapoza, supra note 46. R55. Caso Lava Jato, supra note 48; Brazil Corruption Probe, supra note 46. R56. See Caso Lava Jato, supra note 48. R57. See id.



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investigated top officials including former President Dilma Rous-seff,58 sitting President Michel Temer,59 and eight members ofPresident Temer’s executive cabinet.60

2. The United States and the United Kingdom: OvercomingAnti-Corruption Challenges in the Modern Era

The United States and United Kingdom, two of the world’s mostindustrialized nations, have successfully implemented stringentanti-corruption schemes—the FCPA and the Bribery Act, respec-tively.61 These nations, like Brazil, are also signatories to theOECD Anti-Bribery Convention.62 With the FCPA in effect since1977 and the Bribery Act in effect since 2011, both laws have beenin effect for longer than the CCA.63

The United States has remained the longest-standing modern-day democracy since its independence, and the United Kingdomoperates as a constitutional monarchy.64 Neither nation has facedthe same level of political or economic strife as Brazil in recentyears, which serve as additional obstacles to overcoming corrup-tion.65 The success of the U.S. and U.K. laws also seems to be aresult of relative socio-political stability and public confidence in

58. See Brazil Corruption Probe, supra note 46. R59. See Bruce Douglas, A Timeline of Brazil’s Latest Political Crisis, BLOOMBERG (June 2,

2017), https://www.bloomberg.com/news/articles/2017-06-01/brazil-s-latest-political-cri-sis-a-timeline-of-events [https://perma.cc/T59Z-JEQ8].

60. See Tim Padgett, supra note 42. R61. See, e.g., Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1 et seq. (2012);

Bribery Act 2010 §§ 1 et seq.; Zachary Laub, The Group of Eight (G8) Industrialized Nations,COUNCIL ON FOREIGN RELATIONS, https://www.cfr.org/backgrounder/group-eight-g8-industrialized-nations (last updated Mar. 3, 2014) [https://perma.cc/TLG3-828T].

62. See OECD Anti-Bribery Convention, supra note 8. R63. See, e.g., Enforcing the UK Bribery Act – the UK Serious Fraud Office’s Perspective, SERIOUS

FRAUD OFFICE (Nov. 17, 2014), https://www.sfo.gov.uk/2014/11/17/stuart-alford-qc-enforcing-uk-bribery-act-uk-serious-fraud-offices-perspective/ [https://perma.cc/SD6U-D9WT]; FCPA: Related Enforcement Actions, U.S. DEP’T JUST., https://www.justice.gov/crimi-nal-fraud/related-enforcement-actions/a (last visited Apr. 8, 2018) [https://perma.cc/HZ7A-GZ2J].

64. See, e.g., Nate Barksdale, What is the World’s Oldest Democracy?, HISTORY (Dec. 2,2014), https://www.history.com/news/ask-history/what-is-the-worlds-oldest-democracy[https://perma.cc/4CBH-BF9D]; United Kingdom: Constitution and Politics, COMMON-

WEALTH, http://thecommonwealth.org/our-member-countries/united-kingdom/constitu-tion-politics (last visited Apr. 8, 2018) [https://perma.cc/5NKG-MYB6].

65. See, e.g., Amanda Taub, Brazil’s Crisis: How Fighting Corruption Could Imperil PoliticalStability, N.Y. TIMES (May 27, 2017), https://www.nytimes.com/2017/05/27/world/ameri-cas/brazil-political-crisis-explanation.html [https://perma.cc/2RSP-4UJZ]; KennethRapoza, Brazil’s Unemployment Crisis is the Worst in 20 Years, FORBES (May 1, 2017), https://www.forbes.com/sites/kenrapoza/2017/05/01/brazil-economy-struggles-with-unemploy-ment-reforms/ [https://perma.cc/3X8R-N8HK].



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the rule of law in each country. Since the enactment of thesepieces of legislation, both countries have seen a steady flow of pros-ecutions and improved corporate compliance.66

Overall, the cultural, political, economic, and legal considera-tions that the United States and United Kingdom face are differentthan those faced by Brazil, and residents’ attitude towards the ruleof law and legal institutions differ tremendously.67 These factorsplay a role in the climate of corruption in these countries, but thechallenges they pose may be overcome through the robust enforce-ment of anti-corruption legislation.

D. Comparing the FCPA, Bribery Act, and the CCA

This Section highlights the key provisions of the FCPA, BriberyAct, and the CCA. It pinpoints the bodies governed by these laws,the entities responsible for bringing enforcement actions againstthose who violate the laws, whether the penalties are rooted incriminal, civil or administrative law, and other essential features ofeach framework.

1. The United States’ FCPA

Enacted in 1977, the FCPA was the world’s first comprehensivelegal framework targeted at curbing corrupt practices of domesticentities with foreign officials.68 The U.S. Congress passed theFCPA in response to investigations that uncovered numerous casesof falsified corporate records. The U.S. Department of Justice(DOJ) traced these to questionable foreign payments, stemmingfrom investigations related to the Watergate Scandal.69 The FCPAprohibits the following: the payment of bribes, promises to paybribes, authorization to pay bribes, and offers of anything of mate-

66. See, e.g., Enforcing the UK Bribery Act, supra note 63; FCPA: Related Enforcement Actions, Rsupra note 63. R

67. See, e.g., Lulu Garcia-Navarro, Brazil: The Land of Many Lawyers and Very Slow Justice,NPR (Nov. 5, 2014), https://www.npr.org/sections/parallels/2014/11/05/359830235/brazil-the-land-of-many-lawyers-and-very-slow-justice [https://perma.cc/LXW8-TSUV];Luciana Gross Cunha et al., Indice de Confianza en la Justicia en Brasil. Midiendo la PercepcionPublica Acerca de la Administracion de Justicia en Brasil., 25 INT’L L. REV. COLOMBIANA DE

DERECHO INT’L, 445, 445–67 (2014); Shawnette Rochelle & Jay Loschky, Confidence in Judi-cial Systems Varies Worldwide, GALLUP (Oct. 22, 2014), http://news.gallup.com/poll/178757/confidence-judicial-systems-varies-worldwide.aspx [https://perma.cc/D5SM-XQ7Z]; Public Governance: A Matter of Trust, OECD, http://www.oecd.org/governance/public-governance-a-matter-of-trust.htm (last visited April 8, 2018) [https://perma.cc/S3CA-KEFH].

68. See Mike Koehler, The Story of the Foreign Corrupt Practices Act, 73 OHIO ST. L.J. 929,930 (2012).

69. See id.



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rial value to foreign officials proposed in exchange for the official’sinfluence, inducement or promise to secure an improper advan-tage for any person or business operating from within the UnitedStates.70

The DOJ’s Fraud Section and the U.S. Securities and ExchangeCommission (SEC) governs the enforcement of the FCPA. TheFCPA governs (i) issuers – both American and foreign companieswith securities publicly traded on the U.S. stock market that arerequired to file annual reports with the SEC; (ii) domestic con-cerns including U.S. persons and businesses; and (iii) people otherthan issuers or domestic concerns, including foreign people andentities acting while within the jurisdiction of the United States.71

The FCPA only governs bribery of foreign government officials inthe public context.72 In its present form, it does not cover corrup-tion locally or in the private context.73 Business-to-businessexchanges that do not concern foreign public government officialsare outside of the scope of the FCPA.74

The FCPA prescribes penalties through civil, administrative, andcriminal means.75 The SEC may find individuals and business enti-ties civilly and administratively liable for violating FCPA provi-sions.76 Criminally, the DOJ may charge both individuals andbusiness entities, and criminal liability may attach to companiesthat combine with the company or assume its liabilities throughagreements relating to mergers and acquisitions, in the form ofsuccessor liability.77

The provisions of the FCPA are broken down into two sets ofrules: anti-bribery and accounting.78 Anti-bribery provisions con-cern the actual act of bribing foreign government officials eitherinside or outside of the United States.79 The accounting provisionsconcern falsification of records and failure to implement or adhereto internal safeguards against corruption.80

70. See Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1 et seq. (2012).71. See, e.g., id.; FCPA RESOURCE GUIDE, supra note 38. R72. See Foreign Corrupt Practices Act of 1977 (f)(1).73. See id.74. See id.75. See id.76. See, e.g., Foreign Corrupt Practices Act of 1977; FCPA RESOURCE GUIDE, supra note

38 at 42. R77. See FCPA RESOURCE GUIDE, supra note 38 at 28. R78. See id.79. See id. at 11.80. See id. at 39–40.



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Businesses are liable for up to two-million dollars per anti-brib-ery violation, whereas individual persons, including those workingon behalf of the company such as directors, officers or otheragents, are liable for up to 250 thousand dollars and, or up to, fiveyears imprisonment.81 Business entities may be penalized underthe accounting sections to the tune of twenty-five million dollars,and individuals are subject to five million dollars and twenty yearsof imprisonment for each violation.82

Individuals who engage in corrupt practices on behalf of theiremployers and seek indemnification are not eligible to receiveindemnification for fines by employers or others who directed suchactivity.83 Additionally, companies in violation of the FCPA may berequired to disgorge profits84 obtained through these illicit activi-ties.85 The DOJ also publicizes information about successful FCPAconvictions on its website, which may harm the reputation of com-panies and individuals.86

For criminal violations, there is no strict liability component forcriminal, civil or administrative violations.87 The prosecutingauthority must show that the defendant had the requisite mens reato sustain an FCPA conviction, which the prosecution may demon-strate through a showing of “willful blindness.”88 There are twoaffirmative defenses available for anti-bribery offenses: (i) “the pay-ment, gift, offer, or promise of anything of value that was made[which] was lawful under the written laws and regulations of theforeign official’s, political party’s, party official’s or candidate’scountry”; and (ii) reasonable bona fide expenditures.89 The FCPAalso has an express exception that permits facilitation payments,otherwise termed “grease payments,” which are designed to facili-

81. See, e.g., id. at 68; Foreign Corrupt Practices Act of 1977 (g)(1)–(3).82. See FCPA RESOURCE GUIDE, supra note 38, at 68. R83. See, e.g., id.; Foreign Corrupt Practices Act of 1977.84. Disgorging profits entails relinquishing illegally obtained profits. In this context,

these funds would be the fruits of bribery and corruption-related behavior in violation ofthe FCPA. This only applies if the corporate defendant has also violated applicable securi-ties laws, and that suit is brought against the organization within the five-year statute oflimitations, per the Supreme Court’s decision in Kokesh v. SEC, 137 S.Ct. 1635 (2017).

85. See id.86. See FCPA: Related Enforcement Actions, supra note 63. R87. See Foreign Corrupt Practices Act of 1977.88. See, e.g., id.; R. CHRISTOPHER COOK & STEPHANIE CONNOR, JONES DAY, THE FOREIGN

CORRUPT PRACTICES ACT: AN OVERVIEW 3 (2010), http://www.jonesday.com/files/Publication/3325b9a8-b3b6-40ff-8bc8-0c10c119c649/Presentation/PublicationAttachment/d375c9ee-6a11-4d25-9c30-0d797661b5ff/FCPA%20Overview.pdf.

89. See Foreign Corrupt Practices Act of 1977 (c).



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tate or expedite the performance of a “routine governmentalaction” by a foreign public official.90

The use of settlement resolutions via joint prosecution of FCPAcases by the DOJ and the SEC has been increasing in recentyears.91 The framework of the FCPA and the FCPA guide outlinedby the DOJ and SEC provide clear guidelines for companies to fol-low, and summarize the incentives that organizations have forcooperating both voluntarily via self-reporting mechanisms and byfollowing formal inquiry.92 Companies that voluntarily self-reportFCPA violations, cooperate completely with the government’sinvestigation, and provide “timely and appropriate mediation” willbe entitled to a rebuttable presumption of declination, or non-prosecution by the government.93 Companies that voluntarily self-report violations will receive a recommendation of a fifty percentreduction of their financial penalty according to the “low end ofU.S. Sentencing Guidelines (U.S.S.G.) fine range” if they are notrepeat offenders.94 Non-recidivist companies that cooperate withinvestigations after-the-fact will receive a similar recommendation,but for a twenty-five percent reduction.95

Both the DOJ and SEC have the authority to enter into deferredprosecution agreements (DPAs) or non-prosecution agreementsunder the Speedy Trial Act of 1974.96 These agreements enablethe government to either decline to prosecute the entity or discre-tionarily postpone prosecution to afford the company an opportu-nity to cooperate and “demonstrate its good conduct.”97 ThroughDPAs, companies often agree to “pay a monetary penalty, waive thestatute of limitations, cooperate with the government, admit therelevant facts, and enter into certain compliance and remediationcommitments . . . .”98

90. See id (f)(4)(A).91. See Cook & Connor, supra note 88, at 2. R

92. See FCPA RESOURCE GUIDE, supra note 38, at 54. R

93. Rod Rosenstein, Deputy Attorney General, Remarks at the 34th InternationalConference on the Foreign Corrupt Practices Act (Nov. 29, 2017), https://www.justice.gov/opa/speech/deputy-attorney-general-rosenstein-delivers-remarks-34th-international-conference-foreign [https://perma.cc/UQ7C-PJT9].

94. USAM INSERT, supra note 27.95. See id.96. See, e.g., FCPA RESOURCE GUIDE, supra note 38, at 74–77; WASHINGTON LEGAL R

FOUNDATION, CHAPTER SIX: DEFERRED PROSECUTION AND NON-PROSECUTION AGREEMENTS 6-1(2007), http://www.wlf.org/upload/chapter6DPAs.pdf [https://perma.cc/VT6G-PDRT].

97. FCPA RESOURCE GUIDE, supra note 38, at 75. R

98. Id. at 74.



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One of the most distinguishing features of the FCPA was the cre-ation of the DOJ’s advisory opinion program.99 The programenables individuals and companies to request formal opinionsfrom the Attorney General regarding whether certain proposedconduct, not merely hypothetical actions, would conform to theparameters set forth by the FCPA.100 The DOJ publishes theseopinions on its website. Although the opinions are not binding onother entities, they serve as useful parameters for other companiesto follow.101

The following two laws were in part modeled after the FCPA, yetreflect several pointedly different approaches.

2. The United Kingdom’s Bribery Act

The Parliament of the United Kingdom introduced the BriberyAct in 2010 as the first major piece of legislation worldwide follow-ing the FCPA that imposed similar restrictions on foreign briberyin the United Kingdom.102 Parliament enacted the Bribery Act as aresponse to the OECD Anti-Bribery Convention’s reports, whichurged the United Kingdom to improve its anti-corruption legallandscape.103 The Bribery Act prohibits the offering, promising, orgiving of a bribe to any person, including foreign public officials,and the acceptance of a bribe by any person or business within oroutside the United Kingdom with close ties to the region, which isdesigned to give the bribing party an improper advantage.104

Enforcement of this law is primarily governed by the SeriousFraud Office (SFO), although the Crown Prosecution Service inthe United Kingdom has concurrent authority.105 However, theSFO has taken charge of these prosecutions.106 The law applies toboth individuals and businesses, either incorporated or unincorpo-

99. See Foreign Corrupt Practices Act Opinion Procedure, 28 C.F.R. part 80 (1999).100. See id.101. See id.102. See Differences Between the UK Bribery Act and US Foreign Corrupt Practices Act, NORTON

ROSE FULBRIGHT, http://www.nortonrosefulbright.com/knowledge/publications/52195/differences-between-the-uk-bribery-act-and-the-us-foreign-corrupt-practices-act (last visitedApr. 8, 2018).

103. The United Kingdom Bribery Act 2010 – Anti-Corruption Legislation with Significant Juris-dictional Reach, supra note 11. R

104. See Bribery Act 2010 §§ 1 et seq.105. See, e.g., id.; MINISTRY OF JUSTICE, BRIBERY ACT 2010: JOINT PROSECUTION GUIDANCE

OF THE DIRECTOR OF THE SERIOUS FRAUD OFFICE AND THE DIRECTOR OF PUBLIC PROSECU-

TIONS (2011), https://www.sfo.gov.uk/publications/guidance-policy-and-protocols/brib-ery-act-guidance/ [hereinafter JOINT GUIDANCE FOR PROSECUTORS] [https://perma.cc/3FG5-XFE8].

106. See JOINT GUIDANCE FOR PROSECUTORS, supra note 105. R



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rated, while they are within the United Kingdom.107 It applies bothin the public and private contexts, unlike the FCPA which onlyapplies in the public context.108 It also prohibits local officialsfrom accepting bribes, which goes beyond the coverage of its FCPAcounterpart that does not cover bribery of domestic parties,although other legislation may govern such conduct.109

The law breaks down the various types of violations stemmingfrom giving or receiving of bribes into six cases.110 The first twocases occur when a person “offers, promises, or gives a financial orother advantage to another person” and either (i) anticipates thatsuch advantage will lead one to improperly perform their job, or toreward someone for this improper behavior, or (ii) the personknows or intends that someone’s acceptance of this advantagewould itself amount to “improper performance of a relevant func-tion or activity.”111

Scenarios three through five occur when a person “requests,agrees to receive or accepts a financial or other advantage,” (iii)intending for the activity to be performed improperly; (iv) “therequest, agreement, or acceptance itself constitutes the improperperformance by [such person] of a relevant function or activity”;and (v) that advantage serves as compensation for such improperperformance of a “relevant function or activity.”112

The sixth violation governed by the Bribery Act occurs (vi)“where, in anticipation of or in consequence of [a person] request-ing, agreeing to receive or accepting a financial or other advan-tage, a relevant function or activity is performed improperly by[that person], or by another person at [the requesting person’s]request or with [the requesting person’s] assent or acquies-cence.”113 In another section, the crime of bribing a foreign publicofficial is specifically prohibited.114

The Bribery Act only authorizes criminal penalties for violationsby individuals and companies.115 The Bribery Act permits the SFOto recover civil penalties from the companies for profits earned

107. See Bribery Act 2010 § (3)(2)(d).108. Compare id. § (7)(1) with Foreign Corrupt Practices Act of 1977, 15 U.S.C.

§§ 78dd-1 et seq. (2012).109. See, e.g., Bribery Act 2010 § 2(2).110. See Bribery Act 2010 c. 23, §§ 1, 2111. Id. at 1(2)–(3).112. Id. at 2(2)–(4).113. Id. at 2(5).114. See id. at 6.115. See id. at 11, 14, 15.



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from the bribery, under the Proceeds of Crime Act 2002.116 Forviolations resulting from an individual bribing another person,accepting a bribe, or bribing foreign public officials, penaltiesinclude up to a year of imprisonment, a fine of up to the statutorymaximum upon summary conviction, or both.117 Such persons aresubject to up to ten years imprisonment and/or a fine upon convic-tion on indictment.118 Strict liability applies under the Bribery Actto each “commercial organization” that fails to prevent bribery,unless it can be shown that the organization had adequate anti-bribery mechanisms in place.119 Successor liability is also a possiblecollateral form of corporate criminal liability for corporate entitiesseeking to combine with or retain responsibility for liabilities of theentity found responsible for Bribery Act violations.120

Additional consequences may include disgorging funds obtainedfrom the bribery, pursuant to a cooperative agreement with thegovernment, and suffering reputational harm via the publicationof wrongdoing.121 The SFO publishes information about formalcriminal investigations of organizations and announces informa-tion related to formal decisions to charge individuals andcompanies.122

Although it is possible for courts in the United Kingdom to findcommercial organizations strictly liable for failing to prevent brib-ery, there are no strict liability provisions that apply to individu-als.123 The prosecuting authority adheres to the “expectation test”which governs function, activity or improper performance to whichthe bribe relates.124 This requires individuals and commercial

116. See JENNER & BLOCK, BUSINESS GUIDE TO ANTI-CORRUPTION LAWS 2017: A GUIDE TO

THE FCPA AND UK BRIBERY ACT 62 (2017), https://jenner.com/system/assets/assets/9974/original/BusinessGuideToAntiCorruptionLaws2017.pdf [https://perma.cc/SA45-9TAX].

117. See Bribery Act 2010 c. 23, §§ 1 et seq.118. See id.119. See, e.g., id.; The Bribery Act, TRANSPARENCY INT’L, http://www.transparency.org.uk/

our-work/business-integrity/bribery-act/ (last visited Apr. 8, 2018) [https://perma.cc/5FLK-Z984].

120. See Recent Developments in Successor Liability Under the FCPA and UK Bribery Act, ROPES

& GRAY (Dec. 4, 2014), https://www.ropesgray.com/en/newsroom/alerts/2014/Decem-ber/Recent-Developments-in-Successor-Liability-under-the-FCPA-and-UK-Bribery-Act[https://perma.cc/AX55-9RHR].

121. See Our Cases, SERIOUS FRAUD OFFICE, https://www.sfo.gov.uk/our-cases/ (last vis-ited Feb. 20, 2019) [https://perma.cc/Z67Y-ANAJ]; Bribery and Corruption: What Now for2017?, ASHURST (Jan. 20, 2017), https://www.ashurst.com/en/news-and-insights/legal-updates/bribery-and-corruption-what-now-for-2017/ [https://perma.cc/QR9E-FE6G].

122. See Our Cases, supra note 121. R123. See Bribery Act 2010 §§ 1 et seq.124. See id.



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organizations to disregard “any local custom or practice . . . unless[the bribe] is permitted or required by the written law applicableto the country or territory concerned.”125 As for the knowledgerequirement, general offenses not related to the bribery of a for-eign public official do require some form of “corrupt or improperintent.”126

The Bribery Act does not allow for exceptions for facilitation of“grease” payments.127 The general defense for a company chargedwith violating the bribery provisions is to assert that it had “ade-quate procedures” instituted to prevent bribery in their organiza-tion.128 There are also two affirmative defenses for specific briberyoffenses.129 A charged person may successfully assert a defense bydemonstrating that his or her “conduct was necessary for” either(i) “the proper exercise of any function of an intelligence service”or (ii) “the proper exercise of any function of the armed forceswhen engaged on active service.”130

The United Kingdom has passed legislation allowing prosecu-tion authorities to enter into DPAs with commercial entities underthe Crime and Courts Act of 2013, which gives the SFO permissionto use DPAs when prosecuting entities under the Bribery Act.131

The Director of the SFO and Director of Public Prosecutions havereleased a guiding framework for prosecutors to adhere to enforce-ment actions under the Bribery Act, and the SFO has released aDPA “Code of Practice” which was written in response to publicquestions about the use and procedure of DPAs.132 Through theseagreements, organizations have an incentive to cooperate with thecriminal investigation as they may avoid a criminal corporate con-

125. See id. at 5(2).126. See Differences Between the UK Bribery Act and US Foreign Corrupt Practices Act, supra

note 102. R127. See, e.g., Bribery Act 2010 §§ 1 et seq.; Differences Between the UK Bribery Act and US

Foreign Corrupt Practices Act, supra note 102. R128. See, e.g., Bribery Act 2010 § 7(2); Adequate Bribery Procedures – Guidance to the UK

Bribery Act 2010, TRANSPARENCY INT’L, http://www.transparency.org.uk/our-work/business-integrity/bribery-act/adequate-procedures-guidance/#.Wso5gJPwa8o (last visited Apr. 8,2018) [https://perma.cc/2K5L-4FH4].

129. See Bribery Act 2010 § 13(1).130. See id.131. See Deferred Prosecution Agreements, SERIOUS FRAUD OFFICE, https://www.sfo.gov.uk/

publications/guidance-policy-and-protocols/deferred-prosecution-agreements/ (last vis-ited Apr. 8, 2018) [https://perma.cc/6MJL-VRKT].

132. See Bribery Act Guidance, SERIOUS FRAUD OFFICE, https://www.sfo.gov.uk/publica-tions/guidance-policy-and-protocols/bribery-act-guidance/ (last visited Apr. 8, 2018)[https://perma.cc/658T-HVDX]; Deferred Prosecution Agreements, supra note 131. R



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viction.133 These arrangements typically require organizations topay a significant penalty and cooperate with future related investi-gations, and may demand other obligations such as instituting acompliance program.134 The benefit of these agreements is thatthe prosecuting authority may not continue to take legal actionunless the organization has violated the terms of the DPA, andcourt authorities accordingly terminate the agreement.135

Although the DPAs are a strong tool to promote cooperation,neither the Bribery Act nor the SFO or other prosecuting authori-ties have transparently indicated the benefit organizations willenjoy in return for either voluntary initial cooperation with author-ities or cooperation after-the-fact.136 The SFO has emphasized that“cooperation [is] essential to favorable settlement” for organiza-tions, but has not created a clear system to reflect this.137 Addition-ally, the Bribery Act has not established any mechanism similar tothe DOJ’s advisory opinion program to date.138

3. Brazil’s CCA

The Brazilian Legislature signed the CCA into law in 2013 and ittook effect in 2014.139 Global pressure for OECD nations andother signatories to the OECD Anti-Bribery Convention called formember nations and non-member countries to implement laws tofight corruption.140 Passage of the CCA also stemmed from public

133. See ESTHER M. FLESCH ET AL., BRAZIL’S CLEAN COMPANY ACT: HOW U.S., U.K., AND

GLOBAL MODELS MAY INFLUENCE ENFORCEMENT 5 (2014), http://www.bakermckenzie.com/-/media/files/insight/publications/2015/10/global-issue-spotting-for-automotive-parts/brazilcleancompanyact.pdf?la=en [https://perma.cc/J3W7-ACWD].

134. See id; News Release, Serious Fraud Office, Deferred Prosecution Agreements:New Guidance for Prosecutors (Feb. 14, 2014), https://www.sfo.gov.uk/2014/02/14/deferred-prosecution-agreements-new-guidance-prosecutors/ [hereinafter DPAs: New Gui-dance] [https://perma.cc/WK7J-TG4D].

135. See DPAs: New Guidance, supra note 134. R136. See Bribery Act 2010 §§ 1 et seq.137. See JENNER & BLOCK, supra note 116. R138. Jay G. Martin & D. Marie Wagner, The U.S. FCPA, UK Bribery Act and Building

an Effective Compliance Program, Presentation at the SCCE Southwest Regional Compli-ance & Ethics Conference, at 22 (Nov. 4, 2011), https://www.corporatecompliance.org/Portals/1/PDF/Resources/past_handouts/Regional/2011/Houston/FCPA_2.pdf [https://perma.cc/4E8X-D7G3].

139. See Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.140. See, e.g., JONES DAY, BRAZIL’S CLEAN COMPANY LAW: NEW RISKS FOR COMPANIES

DOING BUSINESS IN BRAZIL 1 (2013), http://www.jonesday.com/files/Publication/3c9b0192-a812-4849-b9fb-96fc1e520f70/Presentation/PublicationAttachment/ec9bf444-80c0-4892-af4a-9731b3d3c57c/Brazil%20Clean%20Company%20Law.pdf [https://perma.cc/U235-7CXR]; Berkeley Research Group, Impact of Brazil’s Clean Companies Act, RISK & COM-

PLIANCE MAG, July–Sept. 2014, at 1, 6, https://riskandcompliancemagazine.com/impact-of-brazils-clean-companies-act [https://perma.cc/4TWV-MVX6].



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outrage following the high profile case “Mensalao,” which resultedin a series of convictions of prominent Brazilian officials who tookpart in an enormous vote-buying scandal.141

a. Scope and Enforcement of the CCA

The CCA applies to (i) business organizations in Brazil, whetherincorporated or not; (ii) any Brazil-based foundations or associa-tions; or (iii) foreign corporations in Brazil, including temporaryones.142 It is a crime under the CCA for any of the aforementionedentities to promise, offer, or give bribes or an undue advantage,directly or indirectly, to foreign public officials and Brazilian pub-lic officials.143 The CCA does not cover acts committed by individ-uals outside of their organizational capacities.144 Brazilianauthorities may still prosecute individuals who pay bribes underother Brazilian laws such as the Public Tender Law145 and the Pub-lic Probity Law.146 These laws do not cover the acts of individualsin the private sphere; they only pertain to the public sector.147

The CCA is enforced by the highest entity in any of thebranches—legislative, judicial or executive—that is harmed byanother organization’s violations under this Act.148 Through therelease of Decree No. 8,420 of March 2015 (2015 Decree), the Bra-zilian government has clarified that the Comptroller General ofthe Union (CGU), in some situations, is to have concurrent juris-diction for administrative liability proceedings called “PAR pro-

141. See, e.g., JONES DAY, supra note 140, at 2; Berkeley Research Group, supra note 140, Rat 5.

142. See Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.143. See, e.g., id.; JONES DAY, supra note 140, at 2. R

144. See Lei No. 12.846.145. The Public Tender Law (Brazilian Law No. 8,666/1993) prohibits individuals

from obtaining undue advantages or fraudulently manipulating the public procurementbidding process. See Lei No. 8.666, de 21 de Junio de 1993, Rep. Fed. Brasil.

146. The Public Probity Law (Brazilian Law No. 8,429/1992) proscribes civil penaltiesfor individuals whose involvement in corruption negatively impacts Brazilian “public enti-ties.” See, e.g., Lei No. 8.429/1992, de 2 de Junio de 1992, Rep. Fed. Brasil; MarianaTavares de Araujo et al., Latin Lawyer Reference: Anti-Corruption 2017, LEVY & SALOMAO (Oct.19, 2016), http://www.levysalomao.com.br/publicacoes/Artigo/latin-lawyer-reference-anti-corruption-2017 [https://perma.cc/37WP-SNLK]; ESTHER M. FLESCH ET AL., supranote 133; MARIANA TAVARES DE ARAUJO ET AL., LEVY & SOLOMAO, ANTI-CORRUPTION 2017: RBRAZIL 2–3 (2016), http://www.levysalomao.com.br/publications/Article/latin-lawyer-ref-erence-anti-corruption-2017 [https://perma.cc/V7X4-36SR].

147. See TAVARES DE ARAUJO ET AL., ANTI-CORRUPTION 2017: BRAZIL, supra note 146. R

148. See JONES DAY, supra note 140, at 4. R



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ceedings.”149 The CGU shall also have jurisdiction in casesinvolving prohibited conduct involving foreign governments.150

This jurisdictional provision has been the subject of criticismfrom experts who believe the decentralized enforcement modelwill not efficiently or effectively serve prosecutorial interest in thecountry.151 Brazil’s Public Prosecutor’s Office (Ministerio Publico)typically carries out these enforcement actions.152 The law governsbribery of foreign officials in the public context and does notencompass acts in the private sector.153 However, its coverageincludes the bribery of local public officials within Brazil.154

Distinguishing itself from the FCPA and Bribery Act, the CCAonly allows civil and administrative enforcement actions to bebrought against commercial organizations.155 There are no appli-cable criminal penalties under the CCA.156 Such organizationsthat are found liable for violating the CCA are subject to be fined apenalty ranging from one-tenth of a percent to twenty percent ofgross sales from the previous fiscal year, absent mitigating creditsunder the new decree.157 In the event that Brazilian enforcementauthority cannot use gross sales estimates, companies are then sub-ject to a fine ranging from 6,000 to sixty million reais—approxi-mately equivalent to U.S.$1,856.72 to U.S.$18,567,228.84.158 The2015 Decree has set forth a schedule regarding penalties and appli-cable mitigating credits.159

Secondary punishments may include the following as a result ofa civil suit against the commercial entities by the government: dis-gorgement funds or assets obtained through corrupt conduct, sus-pension of certain activities, inability to obtain public incentives,subsidies or loans for up to five years, and in extreme cases, thedissolution of the company.160 They may also include the inabilityto compete for government contracts or receive public subsidies,

149. See COVINGTON & BURLING, BRAZIL’S MUCH ANTICIPATED DECREE TO FURTHER COM-

BAT CORRUPTION TAKES EFFECT 2 (Apr. 22, 2015), https://www.cov.com/~/media/files/corporate/publications/2015/04/brazils_much_anticipated_decree_to_further_combat_corruption_takes_effect.pdf [https://perma.cc/GFB8-LAWA].

150. See id.151. See Berkeley Research Group, supra note 140, at 12. R152. See Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.153. See, e.g., id.; FLESCH ET AL., supra note 133, at 2. R154. See, e.g., Lei No. 12.846; FLESCH ET AL., supra note 133, at 2. R155. See Lei No. 12.846.156. See id.157. See id.158. See id.159. See id.160. See Berkeley Research Group, supra note 140. R



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grants or loans for up to five years—a punishment that may effec-tively blacklist and bankrupt government contractors.161 Successorliability may also apply, but only in the civil and administrative con-texts, unlike the FCPA and Bribery Act.162 Another key repercus-sion enumerated in the CCA is the widespread publication of theorganization’s violations and the penalties associated with it: theBrazilian enforcement agency shall circulate the organization’s vio-lations within the field the organization belongs to, or in the formof a public notice, for at least thirty days.163

b. Strict Liability under the CCA

Brazilian authorities may hold companies strictly liable for violat-ing the CCA, so long as prosecuting authorities can demonstratethat the organization committed a prohibited act.164 Factors con-sidered in calculation of the penalty include the gravity of the viola-tion, the degree the violator benefitted from such transgressions,the negative ramifications of the violations, the organization’s eco-nomic position, cooperation with the investigation, and institution-alized compliance programs.165 The 2015 Decree provides aschedule that outlines the calculation of the penalties based on fac-tors such as the size of the contract if applicable, the economicsituation of the offender, whether the offender was a recidivist,whether top executives were aware of or tolerated the prohibitedconduct, whether such behavior was continuous, and whether pub-lic service was interrupted.166

Because of the strict liability standard, there are no affirmativedefenses available to companies.167 Likewise, there are no excep-tions made in the law to permit facilitation “grease” paymentsunder the CCA, similar to the Bribery Act.168 The only benefit thatcompanies may enjoy, outside of a cooperative agreement, is the

161. See Lei No. 12.846.162. See JONES DAY, supra note 140. R163. See Lei No. 12.846.164. See, e.g., id.; JONES DAY, supra note 140, at 2–4. R165. See Lei No. 12.846.166. See, e.g., Decreto No. 8,420 de 18 Marco de 2015, Rep. Fed. Brasil; Salim Jorge

Saud Neto & Kelly Kramer, Brazil’s Clean Companies Act: Implementing Regulations, Pres-entation Slides, at 1, 8 (Apr. 5, 2015), https://m.mayerbrown.com/files/Event/1000f691-eb7f-4b2e-8f0e-ba0254f2246b/Presentation/EventAttachment/218cee18-7a23-485c-bd1e-f232065779bb/150415-CHI-WEBINAR-Anti-Corruption-Brazil-CCA-Slides.pdf [https://perma.cc/8EBP-HCAB].

167. See Lei No. 12.846; JONES DAY, supra note 140, at 3. R168. See, e.g., Lei No. 12.846; Bribery Act 2010 §§ 1 et seq.; Differences Between the UK

Bribery Act and US Foreign Corrupt Practices Act, supra note 102. R



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reduction of fines.169 This depends on the presence of mitigatingfactors.170 The following factors may entitle a company to finereductions: (i) voluntary self-disclosure, two percent reduction; (ii)effectiveness of an already-existing compliance program, one tofour percent reduction; (iii) restitution made prior to the investiga-tion, one-and-a-half percent reduction; (iv) the extent to which theorganization cooperated with the investigation, one to one-and-a-half percent reduction; and (v) non-consummation of the injuri-ous act, one percent reduction.171

c. Brazilian Leniency Agreements

The CCA permits the CGU to enter into leniency agreementswith organizations that have allegedly violated provisions of thelaw.172 The Court of Auditors in Brazil must ratify such agree-ments.173 Substantial cooperation may entitle an organization tothe opportunity to petition for consideration of such an agree-ment.174 The 2015 Decree outlined the requirements for a com-pany to be eligible to negotiate such an agreement.175 Thecompany must (i) initiate self-reporting to authorities when rele-vant; (ii) have discontinued such illicit conduct; (iii) admit theextent and involvement of prohibited behavior; (iv) “fully and per-manently” assist officials with the investigation; and (v) provide evi-dence of the organization’s misconduct.176

Leniency agreements encourage organizations to collaboratethrough the investigative and administrative processes in exchangefor favorable benefits to the offending party.177 Successful execu-

169. See COVINGTON & BURLING, supra note 149, at 4. R170. Id. at 3.171. Decreto No. 8,420 art. 18; Saud Neto & Kramer, supra note 166. R172. See Lei No. 12.846 art. 16, § 10; Leonardo Ruiz Machado & Andy Spalding, More

Details on Brazil’s Clean Company Act Regulations, FCPA BLOG (Mar. 25, 2015), http://www.fcpablog.com/blog/2015/3/25/more-details-on-brazils-clean-company-act-regulations.html [https://perma.cc/7JEE-BR9Q].

173. See Mayer Brown, Operation Car Wash: Navigating the Expanding Investigationand Realizing Emerging Investment Opportunities, Presentation Slides, at 10 (Apr. 5,2016), https://www.mayerbrown.com/files/Event/ed5226e0-7fc7-4e43-99c0-47b6c454c8a3/Presentation/EventAttachment/23acecbd-b313-4da9-8d30-6983831222cf/160405-HOU-SEMINAR-Anti-Corruption-Car-Wash-Slides.pdf [https://perma.cc/X3UB-N8TK].

174. See Lei No. 12.846 art. 16; Decreto No. 8,420 art. 28.175. See DEBEVOISE & PLIMPTON, CLIENT UPDATE: BRAZIL ISSUES LONG-AWAITED DECREE

IMPLEMENTING THE CLEAN COMPANY ACT 4 (Mar. 23, 2015), https://www.debevoise.com/~/media/files/insights/publications/2015/03/client_updatebrazil_issues_longawaited_decree_implementing_the_clean_company_act.pdf [https://perma.cc/X3UB-N8TK].

176. Decreto No. 8,420 art. 30.177. See DEBEVOISE & PLIMPTON, supra note 175, at 4. R



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tion of the agreement may reduce the applicable fine by two-thirds.178 The leniency agreement program was originally onlyaccessible to entities that voluntarily self-reported violations beforethe government launched an investigation into their conduct.179

Since the 2015 Decree, the government has insinuated that suffi-cient cooperation, absent the need to self-report misconduct, maywarrant an offer to enter into such agreement.180 Individual actorsinvolved in prohibited conduct, however, will not be protectedfrom liability under such agreements.181

The government proposed a provision that was not passed,which would have allowed the Brazilian government to retroac-tively apply the CCA charges for offenses throughout the Opera-tion Car Wash investigations, as well as leniency agreements.182

Nonetheless, Brazilian officials entered into these agreements withcompanies that did not self-report their conduct under this frame-work for the first time. Following a plea agreement with aPetrobras executive, officials investigated the alleged misconductof several other companies.183 Brazilian authorities ultimately pro-vided leniency agreements to companies Camargo Correa andSBM Offshore—entities that did not self-disclose their miscon-duct.184 The combination of these events and the lack of clarity inthe CCA and subsequent decree make it unclear exactly how coop-eration and self-reporting will benefit companies moving forward.

Brazilian authorities have not launched an advisory opinion pro-gram like that of the DOJ for the FCPA, which would provide anextended set of guidelines for entities to ensure compliance withthe CCA. As the legislation is still only a few years old, thereremain various questions about how certain facets of the law willapply in practice when alleged violations arise, particularly con-

178. Lei No. 12.846 art. 16 § 2.179. See, e.g., id.; JONES DAY, supra note 140. R180. See Decreto No. 8,420.181. See JONES DAY, supra note 140. R182. See Benito Romano et. al, The Investigations Review of the Americas 2017: Anti-Corrup-

tion Enforcement in Latin America, GLOBAL INVESTIGATIONS REV. (Aug. 8, 2016), https://globalinvestigationsreview.com/benchmarking/the-investigations-review-of-the-americas-2017/1067464/anti-corruption-enforcement-in-latin-america [https://perma.cc/CWG7-85WB].

183. See, e.g., id.; Update 1 – Brazil’s Camargo Correa to return $202 Mln to State Firms –Prosecutors, REUTERS (Aug. 21, 2015), https://www.reuters.com/article/brazil-petrobras-camargo-correa/update-1-brazils-camargo-corra-to-return-202-mln-to-state-firms-prosecu-tors-idUSL1N10W2L420150821?src=ilaw [hereinafter Update 1] [https://perma.cc/7UT3-MPLP].

184. See, e.g., Update 1, supra note 183; Romano et al., supra note 182. R



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cerning sanctions.185 It also has left companies uncertain as to howthey may ensure that they are properly adhering to the new compli-ance standards set by the CCA.186

III. ANALYSIS

The CCA, modeled in part after the FCPA and Bribery Act, hasreflected Brazil’s commitment to combatting corruption. Thereare various gaps within the legal framework of the CCA that maynot render it quite as effective as its American and Englishcounterparts.

The CCA in its current form does not encompass bribery of pri-vate officials, only public officials. It also only covers acts by com-mercial organizations, not by individuals. Penalty-wise, the onlyavenues for recourse exist through civil and administrative means,rather than criminal liability. The CCA’s strict liability measures,which leave no room for exceptions for legal payments madeunder the laws of foreign countries or reasonable bona fideexpenditures, may also chill commercial activity abroad. Moreo-ver, the benefits of organizational compliance with Brazilian offi-cials during investigations is not transparently and clearlycommunicated to companies, and therefore there is no incentiveto maximize cooperation. The Brazilian government also does nothave an advisory opinion program at this time.

This Note proposes the following changes to the CCA regime:(i) expanding the scope of the CCA to encompass bribery of pri-vate officials; (ii) expanding the language of the Act to cover actscommitted by individuals; (iii) expanding the scope of penalties topermit the imposition of criminal penalties upon commercial enti-ties and individuals; (iv) amending the Act to incorporate affirma-tive defenses for payments made legally under laws of foreigncountries and for reasonable bona fide expenditures; (v) clearlyoutlining the benefits of cooperation for companies after officialsbegin investigating their alleged corrupt conduct; and (vi) devisinga a program analogous to the DOJ’s advisory opinion program.Additionally, the CCA should retain certain components within itsframework, borrowed from the Bribery Act, which will help pro-mote optimum deterrence and enforcement.

Establishing a strong foundation for combatting corruption isimperative for countries to enjoy long-term growth as well as socio-

185. See JONES DAY, supra note 140. R186. See Berkeley Research Group, supra note 140. R



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economic and political stability in the future. While the FCPA andthe Bribery Act are more advanced, and these regions’ experienceare influenced by factors such as heightened faith in the legal sys-tem and stronger public trust, the CCA can be improved to rivalthese successes. By incorporating existing elements of the FCPAand Bribery Act into the CCA, the amended CCA will providebroader protections against the malignant effects of corruption.187

A. Proposals

1. The Scope of the CCA Should Be Expanded to EncompassBribery of Private Officials

The CCA only covers the acts committed in the public context,and does not permit enforcement against those who bribe othersin the private context.188 This diverges from the Bribery Act, whichgoverns corruption in the private as well as public contexts.189

Although other laws, such as the Public Tender Law and thePublic Probity Law, may, on occasion, cover the actions of thoseoperating in a private capacity, coverage is not always possible orenforced.190 Those laws only pertain to corruption in the publicsector and the former law is construed narrowly, only applying toparties acting contrary to the law within the scope of public pro-curement.191 This omission in the law provides a loophole that pri-vate individuals engaging in corrupt behavior with non-publicentities may exploit.

Although the focus of anti-corruption efforts worldwide haslargely been aimed at curbing the bribery of foreign public offi-

187. See, e.g., DAVID KENNEDY & DAN DANIELSEN, OPEN SOC’Y FOUND., BUSTING BRIBERY:SUSTAINING THE GLOBAL MOMENTUM OF THE FOREIGN CORRUPT PRACTICES ACT 12 (Sept.2011), http://iglp.law.harvard.edu/wp-content/uploads/The-Foreign-Corrupt-Practices-FINAL.pdf (defending the value of anti-corruption legislation generally, as well as specificcomponents of the FCPA, in improving the global business climate) [https://perma.cc/VAM9-W7Z8]; HM GOV’T, UNITED KINGDOM ANTI-CORRUPTION STRATEGY 2017-2022, at13–17 (2017), https://www.gov.uk/government/uploads/system/uploads/attach-ment_data/file/667020/6.3323_Anti-Corruption_Strategy_PRINT.pdf (describing thevarious threats posed and exacerbated by corruption) [https://perma.cc/6ALP-DE7U].

188. Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.189. See Bribery Act 2010 §§ 1 et seq.190. See, e.g., Lei No. 8.429/1992, de 2 de Junio de 1992, Rep. Fed. Brasil; Tavares de

Araujo et al., Latin Lawyer Reference: Anti-Corruption 2017, supra note 146; FLESCH ET AL., Rsupra note 133, at 1–2; TAVARES DE ARAUJO ET AL., ANTI-CORRUPTION 2017: BRAZIL, supra Rnote 146. R

191. See, e.g., Lei No. 8.429/1992, de 2 de Junio de 1992, Rep. Fed. Brasil; Tavares deAraujo et al., Latin Lawyer Reference: Anti-Corruption 2017, supra note 146; FLESCH ET AL., Rsupra note 133, at 1–2; TAVARES DE ARAUJO ET AL., ANTI-CORRUPTION 2017: BRAZIL, supra Rnote 146. R



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cials, the CCA and other anti-corruption laws would carry moreweight by encompassing corrupt behavior in both the private andpublic contexts. At the very least, inclusion of private activity wouldoperate as a safety net, and serve as a deterrence mechanism. Atbest, it would enable prosecuting authorities to bring actionsagainst those who operate in the private context in contraventionto the CCA.

By expanding the coverage of the CCA to prohibit corruption inthe private context, the law will be tightened and enable stream-lined prosecution. By putting all relevant prohibitions in one legalframework, it will minimize the possibility of having violators slipthrough the cracks of prosecuting authorities who are unaware ofthe alternatives through which they may prosecute these entities.Additionally, it will enhance transparency of the law and benefitorganizations that abide by the CCA for guidance to implementcomprehensive compliance programs.

2. The Language of the CCA Should be Expanded to CoverActs by Individuals

The CCA only covers acts committed on behalf of commercialorganizations, not those carried out by individuals operating ontheir own behalf outside of the organizational context.192 This is astriking divergence from the U.S. and U.K. frameworks, which bothgovern the acts of individuals in addition to the acts of commercialentities.193

Although it is possible for Brazilian authorities to charge individ-uals for corruption-based crimes under independent laws such asthe Public Probity Law, determining which laws may apply in theanti-corruption context may require virtual acrobatics from prose-cuting authorities. Undoubtedly, it is the prosecuting body’sresponsibility to charge individuals with the appropriate, corre-sponding violation of law. When a prosecuting authority chargesan organization under the CCA, however, and not the individualswhose conduct led to the corrupt behavior, this results in ineffi-cient use of government time and resources.

Allowing for prosecution of individuals and organizations jointlywill also serve to streamline the process of prosecuting responsiblebodies and individuals under a uniform framework. It will thenallow authorities to continue prosecution of individuals even when

192. See Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.193. See, e.g., Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1(a), 78dd-2(a)

(2012); Bribery Act 2010 §§ 1 et seq.



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organizations enter into leniency agreements with the government.This process would also allow authorities to discretionarily chargeindividuals with other independent violations if applicable.

3. The Penalties of the CCA Should be Expanded to Permit theImposition of Criminal Penalties for CommercialEntities and Individuals

In its current form, the CCA only permits civil and administra-tive enforcement for violations of the law.194 This runs contrary tothe FCPA, which allows for criminal, civil, and administrativeactions, and contrary to the Bribery Act, which permits criminalsanctions.195 The CCA does not have as strong of a deterrent effectas the FCPA or Bribery Act as prosecutors do not have the ability tocharge violators of the CCA with criminal penalties.

Applying criminal penalties to both individuals and companiesunder the CCA would deter parties from engaging in this conduct,more significantly than the existing civil and administrative penal-ties do. Organizations with deep pockets can factor paying penal-ties into the cost of doing business. For them, this may beanalogous to taking out an insurance policy. For nations thatthrive off bribery payments, the corporate giants with endlessfinancial resources will continue to compete in the pay-to-play pro-cess for government contracts and other lucrative deals. Mediumand small-sized entities suffer from lost revenue due to their inabil-ity to compete in the market since they cannot withstand the impo-sition of hefty fines as a large corporation would.

Adding the prospect of corporate criminal culpability changeshow company officials conduct business. While companies mayendure various tribulations such as paying steep fines, corporatecriminal liability is not as easy to factor into the cost of business.Criminal liability attaches to a company and can result in lost reve-nue from lost deals, and can complicate the merger and acquisi-tion process for such companies due to the prospect of successorliability. Both the FCPA and Bribery Act allow for successor liabil-ity in the criminal context, whereas the CCA only adopts this mech-anism in the civil and administrative contexts. By enablingcriminal liability to extend to companies’ acquirers or mergercounterparts, companies will have an additional incentive to avoidillegal behavior punishable by criminal sanctions. Corporate crimi-

194. See Lei No. 12.846.195. See, e.g., Foreign Corrupt Practices Act of 1977; Bribery Act 2010 §§ 1 et seq.



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nal liability renders a company an unattractive partner or target forcommercial deals such as mergers and acquisitions, and will there-fore serve as an additional deterrent against behavior prohibited bythe CCA.

Criminal liability for individuals would similarly serve as a deter-rent. Although it may be possible for companies to enter into aleniency agreement in exchange for declining to prosecute thecompany for criminal conduct, individuals do not benefit fromthese prosecutorial arrangements. If an individual within the com-pany has sanctioned or engaged in such behavior, his or her actsare not shielded from liability the way the actions of a commercialentity may be. Therefore, applying criminal sanctions to individu-als will act as a secondary restraint against engaging in corruptbehavior contrary to the limitations set forth in the CCA.

It would not be prudent for the Brazilian government to extendits current application of strict liability to criminal penalties. Forexample, the FCPA requires a showing of “willful” conduct orintent for criminal liability, and the Bribery Act requires someshowing of corrupt intent.196 Requiring such an element will strikea delicate balance between the severe ramifications of corporatecriminal liability and its collateral effects, and force the prosecu-tion to put forth a non-frivolous case before the court.

Ultimately, the ability to charge individuals and companies withcriminal violations will enable the Brazilian government to lever-age its bargaining power and encourage cooperation. The goal ofthe CCA is to curb anti-competitive, corrupt behavior. By engagingin these negotiations, entities and individuals may be able to workwith the government to help prosecute those responsible for suchcriminal activity, and ultimately reshape the competitive landscapein the country. The culmination of these changes can aid Brazil inits goal of eradicating bribery and corrupt activity both from withinits borders, and outside of the nation as a result of Brazilian-basedpeople and entities transplanting this behavior into other foreignnations.

196. See FCPA RESOURCE GUIDE, supra note 38. R



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4. The CCA Should be Amended to Incorporate AffirmativeDefenses for Payment Made Legally Under Laws of theForeign Country and Reasonable Bona FideExpenditures

Under the current form of the CCA, there are no exceptions oraffirmative defenses for paying what some companies may classifyas reasonable bon fide expenditures. As long as the governmentcan prove the prohibited acts or payments took place, organiza-tions are held strictly liable for these offenses. This approach,although theoretically a strong motivator for companies to abideby the confines of the law, is suffocating in reality, because it doesnot allow for any flexibility that may otherwise be a necessary andlegal part of business negotiations.

The FCPA outlines as affirmative defenses payments legallymade under the laws of the foreign country where the actions tookplace and reasonable bona fide expenditures. The Bribery Actapproach is more restrictive, only allowing companies to defendthemselves by affirmatively demonstrating that they had reasonablemeasures in place to combat this behavior.197 Adopting the FCPAapproach, but not going as far to allow for exceptions in the formof “grease” payments, would be a way for the CCA to adapt to thepragmatic nature of how business may be conducted within thelegal parameters of another country, while still requiring them toadhere to the other obligations imposed by the CCA.198

Prohibiting reasonable bona fide expenditures such as payingfor another’s meal over which business is conducted, or lodgingexpenses for a foreign government official related to legitimatebusiness activities, may cause organizations to chill such activitiesand impede business transactions. That is not consistent with thegoals of the CCA.199 Therefore, by instituting these changes andallowing for these acts to be governed as affirmative defenses, com-mercial organizations may continue to engage in proper, legiti-mate, and legal business activity without fear of reprisal forapproving these oftentimes necessary expenditures. Rendering theacts as defenses rather than exceptions means that the organiza-tions would still have the burden of showing that these actions werereasonable and legal, and not presumably acceptable. However, inpractice, it would serve as a reasonable middle ground between

197. See Bribery Act 2010 §§ 1 et seq.198. See OECD Calls for an End to Facilitating Payments Exception, JONES DAY (Dec. 2009),

http://www.jonesday.com/oecd_calls/ [https://perma.cc/FP4R-R2E8].199. See FLESCH ET AL., supra note 133. R



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prohibiting such activity and creating a presumption that all suchactivity is acceptable.

5. The CCA Should Clearly Outline the Benefits ofCooperation for Companies After Officials BeginInvestigating Their Alleged Corrupt Conduct

Companies that cooperate with Brazilian officials may be enti-tled to the benefit of a leniency agreement under the current formof the CCA. However, this is not a guarantee. Additionally, suchcooperation does not protect individuals themselves against liabil-ity. There are certain concrete benefits outlined in the 2015Decree that may entitle organizations to mitigation credits forcooperation. Otherwise, however, it remains unclear what a com-mercial organization may have to gain from cooperating with offi-cials after it becomes the subject of an ongoing investigation. Thisis a particularly tricky issue for organizations to navigate since therequirement for self-disclosure is only required when relevant.Such a subjective requirement does not promote clarity of the law,or uniformity in its application.

The FCPA clearly outlines that organizations who cooperate vol-untarily from the outset will receive a recommendation of a fiftypercent reduction from the applicable penalty, as per the U.S. Sen-tencing Guidelines.200 Entities that cooperate after-the-fact will stillbe entitled to a twenty-five percent reduction recommendation.201

Although the Bribery Act does not clearly outline such benefits, itdoes not necessarily limit the applicability of deferred prosecutionagreements only to those who self-report violations toauthorities.202

Clearer language from Brazilian authorities that distinctly out-lines instances that require an organization to self-report to remaineligible to enter into a leniency agreement would reduce uncer-tainty. As a result, this would encourage businesses to cooperatewith officials if they are able to discern that they would benefitfrom a leniency agreement and have a strong likelihood of the

200. See USAM INSERT, supra note 27.201. See id.202. See GIBSON, DUNN & CRUTCHER, 2017 YEAR-END UPDATE ON CORPORATE NON-PROSE-

CUTION AGREEMENTS (NPAS) AND DEFERRED PROSECUTION AGREEMENTS (DPAS) 8 (2018),https://www.gibsondunn.com/wp-content/uploads/2018/01/2017-year-end-NPA-DPA-update.pdf (“Rolls Royce was afforded the opportunity to resolve the investigation througha DPA even though a whistleblower’s anonymous blog post, rather than the company’s self-reporting, initially alerted the SFO to certain elements of the relevant conduct.”) [https://perma.cc/5HY7-YWBT].



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agreement being ratified by the Court of Auditors. Particularlywhere the level of corruption is so significant and an organizationhas a considerable amount of financial resources and a strong rep-utation to lose, affording the entity with the opportunity to enterinto a leniency agreement in exchange for increased penalties andother exchanges could still aid the government in its goal of weed-ing out corrupt officials from within the organization.

Rewarding cooperative efforts is not synonymous with allowingperpetrators to bypass criminal laws without reprisal. Cooperationincentives will serve as positive reinforcement for organizations tobenefit tangibly to a degree for their cooperative efforts, even if itis to a lesser extent because they did not initiate the disclosure.Cooperation can result in less time and resources expended by thegovernment in efforts to unearth the culpable actors within theorganization. In turn, the government will still be able to extractfines from such organizations and require them to institute morestringent compliance safeguards. The government will be able tocontinue sending a strong message to those who violate the CCA,and an entire organization may avoid suffering from long-term det-riments of criminal culpability and depletion of financial resourcesdue to the actions of a few actors.

6. Brazilian Authorities Should Devise a Program Analogous tothe DOJ’s FCPA Opinion Procedure Program

Part of the complexity of enforcement of the CCA stems from itsde-centralized prosecutorial approach. There is not one bodysolely responsible for these enforcement actions, but rather thehighest authority in whichever branch that has been affected by anorganization’s actions may seek to prosecute the responsibleentity.203 This may lead to applications and interpretations of thelaw that are not uniform, and accordingly, confusion regardingwhat may constitute permissible or impermissible activity under theCCA.204

The DOJ, which shares concurrent responsibility with the SECfor enforcing the FCPA in the United States, has enacted an advi-sory opinion program.205 Although the SFO in the United King-dom does not have the same type of program, it has responded tovarious questions presented by various organizations and releasedpublications about prosecutor guidelines for enforcing the Bribery

203. See Lei No. 12.846, de 1 Agosto de 2013, Rep. Fed. Brasil.204. See JONES DAY, supra note 140. R205. See Foreign Corrupt Practices Act Opinion Procedure, 28 C.F.R. part 80 (1999).



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Act.206 The Brazilian government has not enacted any programsimilar to either of these, which could clarify misconceptions andambiguities in the law itself as well as its application in practice.

By enacting an advisory opinion program analogous to the DOJ’sprogram, at least for these first few years following the passage ofthe law, the Brazilian government would be able to set a uniformprecedent in enforcement of these actions. This could alleviateconfusion from prosecutorial authorities and organizationsattempting to implement compliance programs in adherence tothe CCA. Such an investment on the part of Brazilian authoritieswould result in a more efficient and transparent mode of govern-ance and enforcement of the law. This would also send a messagethat the government is not merely an enforcer against companiesbut also a guide for organizations to utilize. The purpose of theCCA is to incentivize legal behavior and eradicate corruption.207

Encouraging organizations to submit queries and provide proce-dures by which Brazilian authorities would respond and publicizesuch information could serve as a powerful tool in changing theperception of the government, and encouraging compliance withthe CCA.

7. Overall, the CCA Should Retain Certain Elements BorrowedFrom the Bribery Act to Promote Optimum Deterrenceand Enforcement

In its current form, the CCA possesses various elements that havebeen borrowed from the Bribery Act.208 These features includeadministering penalties for the bribery of local government offi-cials and not carving out an exception for facilitation payments.209

These provisions are instrumental for the CCA to operate as acomprehensive legal deterrent against corruption. One of theadopted provisions which prohibits bribery of local officials will aidwith the country’s national corruption crisis. This rule coupledwith the law’s clear prohibition on bribery of foreign public offi-cials sends a message that corruption is not tolerated whatsoever inBrazil. This principle is ultimately strengthened by the Braziliangovernment’s clear refusal to adopt an exception for facilitationpayments. Brazil is broadcasting their message loud and clear: a

206. See Bribery Act Guidance, supra note 132. R207. See JONES DAY, supra note 140. R208. See, e.g., Lei No. 12.846; Bribery Act 2010 §§ 1 et seq.209. See FLESCH ET AL., supra note 133. R



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bribe is a bribe, and all violators will be prosecuted, whether theprohibited conduct takes place at home or abroad.

B. Counterarguments: Are These Proposals Practical?

The Brazilian legal system presents unique challenges that mayrender implementing these proposals slightly challenging. Makingthese modifications to the CCA could create tension in Brazil’sexisting decentralized system of criminal enforcement andprosecution.210

Currently, various agencies can bring civil and administrativeenforcement actions against entities that violate the CCA.211 Ena-bling the government to bring criminal actions against violators ofthe CCA would require the cooperation of various bodies of gov-ernment. The Brazilian entity primarily responsible for investigat-ing and enforcing criminal laws is the Department of FederalPolice (Departamento de Policia Federal).212 The Public Prosecutor’sOffice (Ministerio Publico) also initiates criminal prosecutions.213

These prosecutors are traditionally more independent than police,and less susceptible to corruption.214 The Financial IntelligenceUnit (Unidade de Inteligencia Financiera do Brazil) (FIU) is an entitythat peripherally investigates corruption-related offenses.215 How-ever, although the FIU investigates criminal offenses that it discov-ers during its operations, it does not primarily function as acriminal investigative body.216

Other agencies in Brazil are only able to bring forth actions forcivil or administrative law violations. By expanding the scope ofthe CCA to permit criminal enforcement actions, the agencies thatare responsible for only civil and administrative enforcementrather than criminal actions will need to cooperate with authoritiessuch as the Federal Police (Policia Federal) and Public Prosecutor’sOffice to achieve maximum enforcement of the CCA.

210. See The Legal System of Brazil, LIBR. CONGRESS, https://www.loc.gov/law/help/legal-research-guide/brazil-legal.php (last visited Apr. 8, 2018) [https://perma.cc/RUR7-F3SW].

211. See Lei No. 12.846.212. See Andrey Borges de Mendonca, The Criminal Justice System in Brazil: A Brief

Account 64–65, https://www.unafei.or.jp/publications/pdf/RS_No92/No92_07PA_Andrey2.pdf (last visited Apr. 8, 2018) [https://perma.cc/ACX9-VMGT].

213. Id. at 65.214. Id. at 65–66.215. Id. at 65.216. See id.



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Another criticism related the proposal to implement a programcomparable to the advisory opinion program is the concern thatcompanies may abuse this mechanism. There is an argument to bemade about companies seeking out loopholes in the CCA that willpermit them to continue engaging in corrupt conduct with theassurance that they will not face liability. Although this is a validapprehension, it may be designed in such a way to make it clearthat these opinions, like those in the United States, are not to beused for hypothetical situations. Additionally, if the enforcementagencies become aware of loopholes in the law, there is an incen-tive for them to make these discrepancies known to legislators whomay be able to subsequently amend the laws as well. Furthermore,it provides the enforcement agencies with an opportunity to pro-vide a uniform message to those they govern concerning howstrictly the language of the CCA will be interpreted.

Although difficulties may exist when administering the law andbringing forth enforcement actions, the nation will benefit fromthese changes. These proposals will enhance the CCA’s goal ofcurbing corruption, and will provide additional guidance for thoseseeking to conduct business in compliance with the CCA. Potentialchallenges, without more, are not sufficient excuses to impede pro-gress against anti-corruption in this context. Furthermore, it is theoptimal time for Brazilian authorities to begin coordinating investi-gations and prosecutions with one another. The enactment of thislaw marked the beginning of a serious shift concerning corruption,and the nation has continued with this trend through the impeach-ment of a former president involved with corruption, and the crim-inal conviction of another former president.217 After over twelveyears of trying to enact anti-corruption legislation, the Brazilianlegislature was finally able to pass the CCA.218 If there was ever aperfect time to make modifications to this Act with the strong sup-port of the public, that time is now.

217. See, e.g., Simon Romero, Dilma Rousseff is Ousted as Brazil’s President in ImpeachmentVote, N.Y. TIMES (Aug. 1, 2016), https://www.nytimes.com/2016/09/01/world/americas/brazil-dilma-rousseff-impeached-removed-president.html [https://perma.cc/D5MG-3FN8]; Peter Prengaman & Mauricio Savarese, Arrest Warrant Issued for Former Brazilian Presi-dent ‘Lula’, ASSOCIATED PRESS (Apr. 5, 2018), https://www.apnews.com/c22ca238d32a4267bd17e59cc6e21896 [https://perma.cc/PTZ7-Z6KP].

218. See COVINGTON & BURLING, NEW BRAZILIAN ANTI-BRIBERY STATUTE (2013), https://www.cov.com/files/Publication/83260639-b097-4908-843c-1434efafca9e/Presentation/PublicationAttachment/8c7a9c35-5f0c-4e2f-9e12-168b79085722/New_Brazilian_Anti-Brib-ery_Statute.pdf [https://perma.cc/PF4Z-JPKF].



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IV. CONCLUSION

The CCA breathed hope into a nation mired by corruption scan-dals in the modern era. Although Brazil has different cultural,political, economic, and legal factors to consider than the UnitedStates and the United Kingdom did while they were implementingtheir anti-corruption legal frameworks, it would benefit fromadopting various approaches that the FCPA and Bribery Actenacted. These key changes to the CCA could render the law asone of the most robust anti-corruption laws in the world.

Expanding the scope of the CCA to encompass bribery of privateofficials may seem like a minor adjustment, but it could allow forthe prosecution of entities acting in a private capacity. In its cur-rent state, the CCA primarily targets those who corrupt the publicprocurement process, but not other facets of private competition.Enacting this change would curb some of the unethical, anti-com-petitive behavior of private organizations and acceptance of bribesby private organizations as well.

The combination of these changes will serve to make the CCA amore effective and efficient tool for anti-corruption prosecution inBrazil. Implementing these changes will also signal to other coun-tries that Brazil is serious about reshaping its culture of corruptionand is taking strides towards making these changes in practice.These modifications will serve as the tools that the Act needs totangibly effectuate the change the Brazilian government has prom-ised since the enactment of the CCA.

note - the george washington international law review...in nations like brazil, corruption...

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