Successes in Brazil stem from leniency agreements and cooperation with overseas counterparts. And Mexico strengthens its National Anti-corruption System with a new law.
Leniency agreements and cooperation with foreign authorities play a big part in Brazil’s enforcement operations. In Operation Car Wash, or Operação Lava Jato, which exposed graft at state oil company Petrobras, they resulted in 190 convictions against 113 people for roughly BRL 6.4bn in bribes.
And so far BRL 10.1bn out of BRL 38.1bn made from crimes committed has been returned. That was at November 2017, according to the Brazilian Federal Prosecutor’s Office.
This isn’t a one-off. Operation Weak Meat, an investigation alleging a J&F Investimentos subsidiary, meatpacker JBS, bribed food inspectors to allow rancid meat into the market, has seen J&F pay a BRL 10.3bn fine. But the leniency agreement has been suspended and risks being invalidated because of an alleged breach by J&F shareholders and executives.
And Operation Unfair Play, in which Brazilian and French police are investigating alleged bribery in the bid for the 2016 Olympics in Rio de Janeiro, has so far resulted in the arrest of Carlos Nuzman, the president of Brazil’s Olympics committee, as well as other suspects. Federal prosecutors worked with their counterparts in France, Antigua and Barbuda, the U.S., and the UK.
Beware ill-defined agency functions
The latest leniency agreements allow prosecutors from other agencies and other branches of the Public Prosecutor’s Office to join in. At the same time, to a degree, they protect companies from liability that results from their disclosures.
But because several regulatory agencies’ roles overlap, and not all are defined in the 2014 Clean Company Act, companies looking to remedy wrongs in exchange for leniency need to be aware of the pitfalls.
In August 2017, the Public Prosecutor’s Office issued guidelines to help make cooperating with authorities more predictable for companies. Yet the guide says little about cooperation among enforcement and regulatory agencies. As a result, companies and individuals sometimes come up with contractual ways to mitigate risks when swapping information for leniency. You may want to consider these, too.
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