Anti-Corruption Regulation

Brazil has signed and ratified the OECD Anti-Bribery Convention, the United Nations Convention against Corruption and the OAS Convention, the former two with no reservations and the latter with one reservation, of article XIc, where the signatory undertakes to criminalise acts or omissions by which one seeks to illicitly obtain a beneficial decision from a public authority, regardless of harm to state property.

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The Brazilian statute that criminalises bribery of both foreign and domestic public officials is the Criminal Code, amended in 2002 to include foreign public officials, in compliance with the OECD Convention. There are no implementing regulations for this statute.

The provisions define as active corruption any act of offering or giving undue advantages to a foreign public official to influence acts related to an international commercial transaction (article 337-B), as well as influence peddling, defined as asking, demanding or receiving consideration for influencing an act by a foreign official on duty, if related to an international commercial transaction (article 337-C). In harmony with the non-interference principle, the provisions do not allow for prosecution of foreign officials.

Domestic bribery is prohibited in articles 316 (graft or extortion), 317 (passive corruption), 332 (influence peddling) and 333 (active corruption). Under these rules, domestic public officials can be criminally prosecuted.

There is also strict civil and administrative corporate liability for bribery of foreign and domestic public officials, under Federal Law No. 12,846 of 2014 (the Clean Companies Act). The statute broadly defines acts harmful to public administration and the applicable fines, introduces leniency agreements in Brazilian law, and creates the National Registry of Sanctioned Companies (the CEIP) and the National Registry of Disreputable and Suspended Companies (the CEIS).

This Act was regulated by Presidential Decree No. 8,420 of 2015, establishing criteria and proceedings for determining strict liability, entering into leniency agreements, and internal compliance programmes to avoid acts of corruption and encourage whistle-blowing. It also regulates the CEIS.

The Office of the Comptroller General (CGU) issued Rules 1 and 2 and Ordinances 909 and 910 to regulate the Clean Companies Act on 2015. These rules regulate:

• the methodology for calculating the gross turnover of the corporate entity, upon which the fines are set under article 6 of the Clean Companies Act;
• registering of information in the CEIS and in the CEIP;
• the CGU’s assessment of legal entities’ compliance programmes; and
• proceedings for finding administrative liability of legal entities and entering into leniency agreements.

Finally, there are two regulations about leniency agreements:

• Rule 74 of 2015, enacted by the Federal Audit Court (TCU), establishing how the negotiation and execution of leniency agreements should be overseen by the TCU; and
• Inter-ministerial Ordinance 2,278 of 2016, enacted by the CGU and the Federal Attorney General Office (AGU), regulating the participation of the AGU in the leniency agreements.

Several states and municipalities have issued local rules to regulate the Clean Companies Act within their jurisdictions.

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The Criminal Code prohibits:

• an ‘act of promising, offering or granting, directly or indirectly, any improper advantage to a foreign public official or to a third party, to lead the official in practicing, omitting or delaying an official act related to an international business transaction’, defined as the crime of ‘active corruption in international business transactions’ (article 337-B); or
• an ‘act of requesting, demanding, imposing or obtaining, for the agent or a third party, directly or indirectly, any improper advantage or promise of advantage, with the intent to influence a foreign public official in the performance of his or her duties, related to an international business transaction’, defined as the crime of ‘influence peddling in international business transactions’ (article 337-C).

The Clean Companies Act prohibits:

• acts under the same description as in the crime of active corruption in international business transactions (Clean Companies Act, article 5I);
• financing or sponsoring in any way the acts prohibited in the act;
• using an intermediary (person or legal entity) to conceal the company’s real intentions or ultimate beneficiaries of the acts;
• defrauding public procurements; and
• obstructing investigations or audits by public officials.

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A foreign public official is defined as a person having, temporarily or permanently, remunerated or not, a public office, job or position in administrative bodies or entities of a foreign country, in diplomatic representations, in companies directly or indirectly controlled by the government of a foreign country, or in international public organisations. The definition is identical in the Criminal Code (article 337-D) and the Clean Companies Act (article 5, section 3).

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The Criminal Code and the Clean Companies Act prohibit any ‘improper advantage’ to foreign public officials or any third party related to them. There is no clear-cut threshold for what constitutes an ‘improper advantage’. There are criteria for domestic public officials of the Executive and Judiciary branches, limiting the value of any such gifts to 100 reais, which could, on a case-by-case basis, be used as a reference.

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The Criminal Code and the Clean Companies Act do not exclude facilitating payments from the ‘improper advantage’ broadly prohibited, nor does any other law. However, as the concept of improper advantage is broad, it could be construed that if the foreign public official is from a country where such payments are permitted, a facilitating or ‘grease’ payment should not be considered improper.

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The Criminal Code and the Clean Companies Act expressly establish that domestic or foreign bribery can be committed directly or indirectly. Also, under the Clean Companies Act, the use of intermediaries is illegal by itself.

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Individuals can be held liable for the crimes defined in the Criminal Code, whereas companies can be held strictly liable under civil and administrative law, under the Clean Companies Act.

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Successors are liable for the target’s bribery acts. The Clean Companies Act states that the liability of a legal entity subsists in cases of amendments to its articles of incorporation and by-laws, transformations, mergers and spin-offs (article 4).

In mergers and consolidations, liability of the successor is restricted to the fines and the full compensation for damages caused by the target, up to the limit of the transferred assets. Thus, the other possible penalties derived from acts prior to the merger are not applicable to the successor, except in case of fraud or simulation (see question 16 for other possible sanctions).

Finally, the Act also covers the piercing of the corporate veil, allowing liability of managing or controlling equity holders or the managers of the entity, if there is abuse of the legal entity.

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There is civil and criminal enforcement of Brazilian foreign bribery laws. Under the Criminal Code, enforcement can be sought against the individual involved in foreign bribery. Legal entities involved in such illegal acts can also face civil and administrative enforcement measures, under the Clean Companies Act.

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The Federal Prosecutors Office and the Federal Police enforce foreign bribery crimes. Enforcement of the Clean Companies Act against a Brazilian legal entity suspected of foreign bribery is to be carried out exclusively by the CGU. Jurisdiction belongs to federal courts in either case.

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Companies can obtain lesser penalties via leniency agreements, in exchange for disclosing violations and adopting compliance programmes. Such agreements are regulated by Chapter V of the Clean Companies Act, Presidential Decree No. 8,420, CGU Ordinance 910, TCU Rule 74, and the CGU’s and the AGU’s Inter-ministerial Ordinance 2,278.

To enter into a leniency agreement, the legal entity must meet three requirements:

• be the first to approach the CGU to cooperate in the investigations;
• completely stop its participation in the foreign bribery after proposing the leniency agreement; and
• admit its participation in the illegal acts and cooperate fully and permanently in the investigations and in the enforcement to be brought by the CGU against other participants, having its legal representatives attend to any events of the investigation when required.

The agreement must establish conditions for full cooperation by the signatory and achievement of effective results of the enforcement.

The leniency agreement will not exempt the signatory from the obligation of completely repairing the damage caused by the foreign bribery. On the other hand, it can:

• reduce fines by up to two-thirds;
• exempt the signatory of bearing the costs of broad publicising of the final decision on the enforcement proceeding; and
• exempt the signatory from the prohibition of receiving subsidies and loans by public entities or government-owned financial institutions.

Effects of the leniency agreement may extend to the signatory’s economic group.

Rejected proposals of an agreement do not imply admission of illegal conduct.

Breach of the agreement bars the company from entering into a new one for three months.

Approval of the agreement interrupts the statute of limitations of five years established in the Act.

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Since 2013, Brazilian prosecutors have been able to negotiate agreements with offenders to prevent trial, provided that the crimes are committed by or in the context of a criminal organisation.

The Criminal Organisations Act (Federal Law No. 12,850 of 2013) introduced the possibility of declining prosecution in exchange for full cooperation into Brazilian Law. This is only possible if the offender:

• is not the leader of the criminal organisation (defined as the gathering of at least four individuals with intent to obtain advantages by committing crimes punishable with over four years of imprisonment or involving transnational crimes); and
• is the first to effectively cooperate with the authorities. The cooperation must also result in at least one of the goals provided in law, such as identification of co-offenders and their crimes, or recovery of proceeds.

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Foreign bribery rules are still recent in Brazil. Nevertheless, the introduction of plea bargains by the Criminal Organisations Act in 2013 (see question 13) has formed an essential part of an unprecedented level of effective investigations, prosecuting and sentencing of participants in corruption schemes, allowing Brazilian authorities to exhibit a strong willingness to effectively cooperate with foreign authorities.

Corruption cases typically extend to foreign jurisdictions on two grounds: either the proceeds of corruption are concealed in offshore structures, or the companies involved have branches or issue securities in other countries, thereby attracting their jurisdiction and creating a favourable setting for cooperation between authorities.

The previous lack of tradition in fighting corruption, added to a history of extreme bureaucracy and ineffective coordination between different enforcement authorities, can still slow down investigations and prosecutions. However, in the past four years the country has been through a major institutional and even cultural shift, represented in large part by Operation Car Wash (Lava Jato), which has sent and is still sending shock waves across society, fueling anti-corruption enforcement at all levels. Enforcement has been more intense, more agile and especially harsher in its penalties. The Car Wash prison sentences have been considerably longer than the previously prevailing standards and have been met with massive public support that tends to establish them as the new standards.

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Under the Clean Companies Act, foreign companies may be prosecuted in Brazil for foreign bribery if they have (formally or de facto) a registered office, branch or representation in Brazil.

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Penalties for bribery of foreign public officials in international business transactions (Criminal Code, article 337-B Criminal Code, see question 3) include imprisonment from one to eight years plus a fine, both being increased by one-third if the foreign public official delays or omits the official act, or acts with violation of an official duty. For influence peddling in international business transactions (Criminal Code, article 337-C, see question 3), penalties include imprisonment from two to five years plus a fine, both being raised by 50 per cent if the defendant alleges or insinuates that the gains are to be distributed to a foreign official.

Companies, as well as any other legal entities, are subject to administrative and civil sanctions for foreign bribery under the Clean Companies Act.

Administrative sanctions include:

• fines of up to 20 per cent of the entity’s gross revenue in the year prior to when administrative proceeding is initiated;
• fines of up to 60 million reais if it is not possible to calculate gross revenues; or
• publicising the decision through the media.

Civil sanctions include loss of assets and rights, suspension or partial interdiction of company activities, and prohibition to receive subsidies or financing from public entities and state-owned or controlled financial institutions, for a period of one to five years.

None of the above sanctions exclude the personal liability of the entity’s directors, officers or any other individual who has directly contributed to the illegal act.

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On an Operation Car Wash probe, Odebrecht SA, a global construction company based in Brazil, and one of its subsidiaries, Braskem SA, a petrochemical company, were found to have payed corrupt government officials in 12 countries (totalling around US$788 million in bribes). Both companies have pleaded guilty and entered into leniency agreements in December 2016, in US and Swiss courts, and have agreed to pay a combined total penalty of US$3.6 billion to settle the cases in the two countries (receiving 10 per cent each) and Brazil (80 per cent), making the resolution with Odebrecht and Braskem one of, if not the, largest ever global foreign bribery resolutions.

On another Car Wash Probe, also in 2016, Dutch company SBM Offshore entered into a leniency agreement with Brazilian authorities, agreeing to pay US$340 million to settle allegations that it had won contracts with Petrobras because of bribery. However, in September 2016, the Fifth Chamber of Coordination and Review of the Federal Public Prosecutors’ Office rejected the leniency agreement, based on lack of material evidence, imprecise information and excessively low penalties.

On 16 January 2017, British company Rolls Royce entered into leniency agreements with UK, US and Brazilian authorities, for having been involved in corruption schemes. Rolls Royce was mentioned in a Car Wash probe by a former Petrobras officer’s plea agreement, in which he stated the British company paid bribes to secure a US$100 million contract by which it would supply turbines for Petrobras’s oil rigs. The total fines amount to £671 million, of which Brazil is entitled to around £20 billion.

Another landmark case, and the only one so far to have been really centred in foreign corruption, involved Brazilian aviation company Embraer SA. The Brazilian aviation company was investigated for corrupt practices in four countries, the Dominican Republic, India, Mozambique and Saudi Arabia, totalling US$9.5 million in bribes to public officials and obtaining US$83 million in irregular profits arising from the purchase of aircraft by the local governments. In December 2016, Embraer agreed to pay US$206 million to US and Brazilian authorities. A few months later the company entered into an agreement with Brazilian and Mozambican authorities. This has been the first multilateral leniency agreement entered into by the Brazilian Attorney General Office.

In December 2017, offshore and marine operator Keppel FELS Brasil entered into a leniency agreement with the Brazil, US and Singapore authorities, to settle investigations also derived from the Car Wash Operation, which identified the company’s involvement in the Petrobras corruption schemes. The company agreed to pay a total of 1.4 billion reais in fines.

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Typically, Brazilian business associations fall into one of two categories: corporations and limited liability companies. The former are identified by Companhia or its abbreviated form Cia, or SA (for sociedade anônima); the latter, by Ltda. Corporations are governed by Law 6,404 of 1976 (the Corporations Act); Ltdas are governed by the Brazilian Civil Code as the primary source of law, with the Corporations Act providing rules for matters not addressed in the Civil Code.

Public corporations are also governed by Law 6,385 of 1976 (the Capital Markets Act), which regulates the Brazilian Securities Commission (CVM). The CVM also issues regulations for public corporations. Law 11,638 of 2007 imposes the publishing and external auditing of financial statements for large-scale companies, defined therein by a minimum of 240 million reais in assets or 300 million reais in gross revenues. Finally, there are special provisions for different listing segments offered in the Brazilian-only stock exchange, B3, to which public corporations may voluntarily adhere.

All kinds of business associations must keep periodic financial statements. Corporations (except small-scale ones) and large-scale companies must also publish them in the Official Gazette and a widely circulated newspaper. Public corporations and large-scale companies’ statements must be externally audited.

To review and approve financial statements and management accounts, there is a mandatory annual shareholders’ or partners’ meeting.

Internal company controls and governance mechanisms are divided between the shareholders’ assembly, the board of directors, mandatory in public corporations but optional in privately owned ones, the executive officers, and the audit committee. The latter, while optional in Ltdas, is mandatory in corporations, although it may not be permanent, becoming operational upon shareholder request.

Most Brazilian corporations historically have a clearly identifiable majority shareholder, which tends to absorb a significant part of a typical board’s roles and relevance.

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There is no rule specifically requiring a company to disclose violations of anti-bribery or accounting rules. All companies must report suspect transactions regarding anti-money laundering rules, which are broader than, and may include, anti-bribery violations. The anti-money laundering statute is Law 9,613 of 1998 (Money Laundering Act).

Additionally, under the Capital Markets Act and the related CVM Instruction 358, public companies must disclose any ‘material fact’, defined as any event that may influence the price of the securities issued or the investor’s decision about negotiating the securities or exercising any rights arising therefrom. Therefore, to the extent violations of anti-bribery laws and accounting irregularities fit the concept of a ‘material fact’, they must be disclosed.

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Even though Brazilian financial record legislation does not directly apply to domestic or foreign bribery, such practice typically spawns violations of such rules, as a bribe obviously cannot be legally accounted for. Financial record legislation is thus ultimately used to prosecute the bribery-generated violations of financial records, as part of the prosecution of the several crimes resulting from the acts related to the bribery.

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There is no provision for accounting violations specific to bribery.

Sanctions for violations of financial statement rules in public companies include:

• public warnings; and
• fines of up to the largest of:
• 50 million reais;
• double the amount of the irregular act;
• triple the amount of the profits generated or losses prevented by the act; and
• double the amount of the losses imposed to investors.

Such sanctions are applicable to directors and officers according to the degree to which they are found to have violated their fiduciary duties to the company and its investors.

Accounting violations in financial institutions are crimes under Law 7,492 of 1986 (the White-Collar Act), sanctionable with imprisonment from one to five years (articles 10 and 11).

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Under the Brazilian Income Tax Law, expenses are deductible if related and necessary to the company’s operational activities. Although the prohibition is not express, fiscal authorities and courts do not allow for any illegal payment to be deducted, therefore clearly prohibiting the deductibility of bribes.

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Graft (article 316 of the Criminal Code) requires:

• a direct or indirect demand;
• to oneself or a third party;
• of an undue advantage; and
• because of a public office, even if outside of it or before taking office.

Graft is sanctionable with imprisonment from three to eight years plus fines.

Passive corruption (article 317 of the Criminal Code) requires:

• a direct or indirect request or acceptance, or the acceptance of a promise thereof;
• to oneself or a third party;
• of an undue advantage; and
• because of a public office, even if outside of it or before taking office.

Passive corruption is sanctionable with imprisonment from two to 12 years plus fines, increased by one-third if the official refrains from or delays practising an official act, or acts infringing an applicable duty.

Influence peddling (article 332 of the Criminal Code) requires:

• a request, demand, collection or obtainment;
• to oneself or a third party;
• of an advantage or promise thereof; and
• with the intent of influencing an act by a public official in the exercise of office.

Influence peddling is sanctionable with imprisonment from two to five years plus fines, increased by one half if the agent alleges or implies the advantage is also for the public official.

Active corruption (article 333 of the Criminal Code) requires:

• an offer or promise;
• to a public official;
• of an undue advantage; and
• in exchange for the official’s practice, omission or delay of an official act.

Active corruption is sanctionable in identical terms to passive corruption.

The Clean Companies Act’s definitions of bribery and sanctions are the same for domestic and foreign officials. See question 3.

Finally, Law 8,429 of 1992 (the Administrative Improbity Act) prohibits the obtainment of any undue patrimonial advantage because of the exercise of a public office (article 9). The sanctions include:

• loss of any gains illicitly obtained;
• full compensation of damages caused;
• loss of public office;
• suspension of political rights for a period of eight to 10 years;
• fines of up to triple the gains illicitly obtained;
• prohibition of contracting with the government; and
• prohibition from receiving subsidies or loans from state-controlled financial institutions or other entities, for a period of 10 years.

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Paying of foreign and domestic bribes, as well as receiving of domestic bribes, is prohibited under Brazilian law (foreign officials are not subject to prosecution in Brazil, as explained in question 2). See question 23 for further details.

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Brazilian law has a broad concept of a public official. It includes employees from all bodies and entities of any branches of the government, in municipal, state and federal levels (including elected officials). The public office does not need to be permanent nor remunerated. It does include employees of state-owned and state-controlled companies and, for criminal matters, even employees of private companies hired to perform a typically state-performed activity (article 327 of the Criminal Code).

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On the federal level, a public official may only participate in commercial activities as non-managing equity holders of companies. Under the Code of Conduct for Federal High Management, high-level public officials cannot undertake commercial activities, or any other activities in conflict with their public duties. They must also publicly disclose equity interest over 5 per cent in a financial institution, a state-controlled company or a company that carries business with the government.

Outside of the federal level, regulation is sparse and considerably different throughout the various states and municipalities.

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Rules about travel expenses, meals and entertainment are very specific to the government body, agency or company to which the public official belongs.

In general, public officials are not allowed to receive financial aid, awards, gratifications, commissions, donations or other advantages.

On the federal level, the Public Ethics Commission issues regulations about gifts, hospitalities, accommodation, transportation, invitations for events, meals, etc. Federal rules are not applicable to state and municipal public officials, but states and municipalities commonly echo federal regulations within their jurisdictions.

The Code of Conduct for Federal High Management prohibits a high-level public official from receiving any remuneration, travel and accommodation expenses, or other favours from a private source.

Law 12,813 of 2013 (the Conflict of Interests Act) broadly defines the concept of conflict of interest. It applies to federal officials of the executive branch, and public officials who have access to privileged information usable for personal or third parties’ gain. Under the act, such public officials may not accept gifts from any party with interests in acts to be performed by them or the government body to which they belong (including having commercial relationships with such government body).

The Conflict of Interests Act is to be further regulated by a presidential decree, yet to be enacted as of December 2018.

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There is no individual category of gift or gratuity permissible under Brazilian domestic bribery laws. What exists is a general limit of 100 reais to the value of any gifts or gratuities granted to public officials of the federal executive and judiciary branches, mirrored in several states and municipalities, thus permitting courtesies of up to that amount.

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Private commercial bribery is not a crime in itself. From a civil perspective, however, the receiving of private bribery is not permitted, as under commercial law, any such payments would constitute a breach of the duty of loyalty to the company to which the receiver of the bribe works, and thus basis for damages, as well as just cause for employment termination.

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See question 23.

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Despite facilitating and grease payments being nominally prohibited, the fact is that enforcement level against such practices is still low. This is because of various factors, such as a lenient culture, excessive dependence of governmental authorisations, as well as excessively burdensome bureaucracy, and lack of enforcement resources, which unfortunately still tends to make facilitating payments a more cost-effective ‘solution’ to overcome state hindrances to develop business.

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The most important decision involving domestic bribery laws was the Supreme Court’s ruling on 4 April 2018 denying the habeas corpus filed on behalf of former president Lula da Silva. Lula had been sentenced to nine years in prison by the trial court for receiving bribery from the construction company OAS, and the penalty was increased by the appellate court, to 12 years, in January 2018. The writ claimed a defendant could only be imprisoned after final decision of the Supreme Court, according to a lax interpretation of the presumption of innocence constitutional clause. The precedent had been set in 2016 only allowing imprisonment after the final, unappealable decision, thus allowing well-off defendants to defer their arrests by numerous appeals before the High Court of Justice and the Supreme Court, which, burdened by the immense amount of cases to consider, would rarely judge them before statute of limitations went by.

Even though this applies to all types of crimes, the impacts of this decision are more palpable in anti-corruption and white-collar crimes in general, where defendants have the ability to afford the legal costs to litigate for years.

It is worth noting, though, that this was a very close majority vote of six against five. This is still an indefinite matter in Brazilian criminal procedure, as the frequent changes of prevailing standards show: more recently, the imprisonment was authorised after the appellate court’s decision until 2016, when a majority of six to five changed the standard to require the Supreme Court’s final unappealable decision before imprisonment. Moreover, the matter will be once again reviewed by the Supreme Court in 2019, in another lawsuit specifically challenging the constitutionality of the imprisonment before a final unappealable decision, and there is an intense debate whether there will be yet another reversal.

On the side of enforcement, by far the most important investigation of Brazil’s recent years is Operation Car Wash. It started in March 2014 as a dawn raid at a gas station to investigate money laundering by black-market dollar dealers and grew to engulf Petrobras, the national oil company, as the centre of a bid-rigging scheme by a cartel of the largest construction companies in Brazil, sustained on bribes to Petrobras officers and government officials. It became a task force, then expanded to other task forces in different states, also identifying corruption in other large-scale contracts such as the construction of the nuclear plant ‘Angra 3’ among many others. Car Wash has been continuously spreading its reach and has grown out of its original concept to become a movement and even the name of an era. The task forces named ‘Lava Jato’ have worked on an impressively long list of corruption cases involving more than 280 politicians, business titans and others, and recovered more than US$3 billion.

An investigation of Car Wash overthrew Eduardo Cunha, the former House speaker, who was sentenced to 15 years in prison. In July 2018, his wife Cláudia Cruz was sentenced by the Federal Regional Court to two years and six months in prison for keeping undeclared assets abroad.

It was also a Car Wash probe that resulted in former president Lula da Silva’s sentence in the case mentioned above. Lula is currently a defendant in seven more cases arising from Car Wash investigations.

The investigations involve many public authorities, such as the Administrative Council of Economic Defence, Congress, the Federal Police, the CVM, the CGU and the Federal Prosecutors Office. They have generated more than 962 search and warrant orders, 513 requests of foreign collaboration with over 45 countries, 175 plea-bargain agreements, 11 leniency agreements, criminal charges against more than 328 individuals, penalties of 1983 years in prison, and recovery of about 13 billion reais. Furthermore, 415 politicians from 26 parties were mentioned in the leniency agreements.

Last year’s efforts by the federal government to end the Car Wash task force notwithstanding, investigations are still being conducted and charges levelled at a fast pace. In November 2018, for example, the Federal Police began the 56th stage of Car Wash, which led to the arrest of 22 investigators in the states of São Paulo, Minas Gerais, Rio de Janeiro and Bahia.

Three former Rio de Janeiro state governors were sentenced to prison, Sergio Cabral, Anthony Garotinho, and Rosinha Garotinho. Sergio Cabral has been convicted on seven charges so far, with another 15 pending, all related to corruption, in several cases of receiving bribery for passive corruption and also for money laundering. Cabral is identified as one of the largest receivers of corruption, at least 78 million reais. Considering his last conviction (September 2018), the imprisonment sentences have already exceeded 183 years. Anthony Garotinho and Rosinha were convicted of passive corruption in 2017.

Also resulting from Car Wash probes, former governor of Paraná Beto Richa was arrested in September 2018. Former governor of Goiás Marconi Perillo was arrested in October 2018. He is facing charges for receiving over 12 million reais in bribes from the Odebrecht construction company, in undeclared donations for his and his allies’ campaigns. Both former governors were released a few days later, but are still facing charges.

On 29 November 2018, the current governor of Rio de Janeiro, Luiz Fernando Pezão, was arrested under charges of having received bribes amounting to over 39 million reais, also from Odebrecht.

In January 2018, Petrobras settled a US class action brought by investors claiming losses because of the corruption scandals, agreeing to pay US$2.95 billion, days after securities regulator CVM accused eight former Petrobras executives of corruption.

Finally, the most famous leniency agreement affair in Brazil was J&F Investimentos’s. J&F controls the world’s largest meat processor, JBS SA. Chairman Joesley Batista taped a conversation with President Michel Temer in March 2017, in which Temer seemed to assent to Batista’s bribing imprisoned lawmaker Eduardo Cunha. Batista signed a plea agreement acknowledging having distributed payments to around 2,000 politicians over the past 10 years, including the equivalent of US$30 million to former President Dilma Rousseff in exchange of state banks loans, that secured the group’s stellar growth in recent years. J&F agreed to pay 10.3 billion reais (around US$3.2 billion at the time). The agreement secured no jail time for any of the accused. However, the federal police later found the brothers had accidentally recorded many conversations the contents of which they omitted from their testimony, having tried but failed to erase them. The J&F agreement was revoked on 26 February 2018, and the Batista Brothers are still in prison.

For other cases involving foreign companies, see question 17.

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In recent years, Brazil has seen an enormous growth of compliance, anti-corruption and enforcement practices. This is a very clearly identifiable trend that can be seen throughout the market and society in general.

The most recent trend related to Brazil’s anti-corruption fight is a political shift made evident in the general elections that ended in November 2018, when Congress and the states’ legislatures were substantially renewed, drastically reducing the number of seats held by the traditional parties, because of their involvement in corruption scandals. The President-elect and Governors-elect also represent the general dissatisfaction of the public with traditional politicians. Besides having emphasised the fight against corruption during the campaign, the President-elect has been showing evidence of an actual aggressive stance against corruption before taking office, mainly by appointing names to certain key-positions but also by his declarations. The posture is met by public support and is echoed by many Governors-elect and newly elected members of the legislatures.

Confirming the trend to avoid and fight corruption, the President-elect has announced that Sérgio Moro will be Minister of Justice and Public Security as of January 2019. Mr Moro became a symbol of corruption fighting in Brazil, as the main judge overseeing Operation Car Wash until his acceptance of the nomination by the President-elect.

In the opposite direction, there is a constitutional review lawsuit pending in the Supreme Court challenging the current standard of allowing imprisonment of a defendant before a final unappealable judgment has been issued by the Supreme Court, as mentioned in question 32. The current standard increases incentives for offenders to cooperate in exchange for lesser punishments. Otherwise, there would hardly be any interest in disclosing sensible information, returning substantial amounts of money, or being subject to any prison sentences if punishment can be avoided altogether through the almost unending appeals available in Brazilian criminal procedure law. Public opinion and authorities with an anti-corruption mindset will put pressure on the Supreme Court to reaffirm the current standard.

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