By Compliance and Investigation Area

Federal Decree No. 11.129/2022 (“Decree”), which will replace Federal Decree No. 8.420/2015 as of July 18th, 2022, brings important changes to the regulation of Federal Law No. 12.846/2013 (“Brazilian Anti-Corruption Law”), such as in calculating the administrative fine and evaluating integrity programs, as well as in procedures for the investigation and accountability of legal entities and in the execution of leniency agreements.

Criteria for calculating the administrative fine

One of the most relevant points of the Decree was the change in the dosimetry of the fine. As of the new regulation, the percentage of the administrative fine to be applied may be:

• Increased by up to four percent (4%), when the liability arises from more than one unlawful act;
• Increased by up to three percent (3%), when there is tolerance or awareness from the board of directors or management;
• Increased by three percent (3%), in case of recidivism;
• Increased by one percent (1%) to five percent (5%), according to the amounts of the contracts affected by the unlawful acts;
• Reduced by up to five tenths percent (0.5%), when the unlawful act is not consummated;
• Reduced by up to one percent (1%), when there is spontaneous reimbursement of the damages or when there are no damages; and
• Reduced by up to five percent (5%), in the case of the existence and application of a robust integrity program at the moment of the violation.

Criteria for evaluating the integrity program

The evaluation of the effectiveness of integrity programs was also amended by the Decree. As of the new regulation, it will be evaluated:

• Proper allocation of resources to the integrity program, as a way of evidencing the commitment of the top management;
• Proper risk management, including carrying out periodic risk analysis;
• Proper due diligence for the hiring and supervision of third parties, especially with regard to brokers, consultants, and sales representatives, as well as politically exposed persons and their relatives; and
• Proper due diligence for carrying out and supervising donations and sponsorships.

Procedures for investigation and accountability of the legal entity

The Decree also stipulated new rules for the investigation and accountability of legal entities for the unlawful acts set out in the LAB. As of the new regulation:

• The Administrative Accountability Process (“PAR”) shall necessarily be preceded by a preliminary investigation; and
• The preliminary investigation can be performed directly by the internal affairs department or the unit responsible for the investigation, which will have powers to carry out investigation measures such as requesting the sharing of tax information and banking information on the movement of public funds, even if confidential.

Regarding the procedure applicable to the PAR, the Decree only incorporated provisions already provided for in Normative Instruction No. 13/2019, of the Comptroller-General's Office, such as the obligation to indicate, in the indictment of the legal entity, information such as the unlawful act under investigation, evidence that supports the thesis of the occurrence of the unlawful act, and the legal framework applicable to the case.

Execution of the leniency agreement

The Decree establishes monitoring as a condition for the execution of leniency agreements, which can be waived in cases of less serious harmful acts, in the public interest, and in the remedy measures adopted by the legal entity.

Moreover, as of the new regulation, it will also be possible to offset the amounts paid as compensation for damages with other amounts determined in possible sanctions or accountability proceedings, provided they are related to the same facts comprising the leniency agreement.