Compliance and Investigations Newsletter No. 24

The Compliance and Investigations Newsletter aims to provide information on the main media news, trends, cases and legislation concerning compliance matters, in Brazil and abroad. This material is for informational purposes and should not be used for decision making. Specific legal advice can be provided by our lawyers.

Enjoy reading!

Compliance and Investigations Team

CGU and AGU enter into first-ever leniency agreement with a small business

In December 2023, the Brazilian Office of the Comptroller-General (“CGU”) and the Brazilian Office of the General Counsel for the Federal Government (“AGU”) jointly entered into the first-ever leniency agreement with a small company, based on the provisions of the Brazilian Clean Company Act (Law No. 12,846/2013).

The agreement was entered into with a company specialized in selling agricultural machinery and equipment that actively and effectively collaborated with the investigations during the negotiation process, which began in 2022. This collaboration resulted in the mitigation of the sanctions imposed on the company. Therefore, the company undertook the responsibility to implement internal integrity measures as well as to pay the total amount of BRL 196,179.57, of which BRL 130,721.05 will be paid as reimbursement for illegally obtained amounts and BRL 65,458.52 will be paid as a fine.

According to the CGU’s Secretary of Private Integrity, Marcelo Pontes Vianna, this case will serve as an example that leniency agreements can be an effective solution for both large corruption schemes and specific irregularities committed by small companies.

Access the full CGU article and the full agreement.

CGU launches “Pró-Ética” Panel

On December 07, 2023, the CGU launched the “Pró-Ética” Panel, a topic we had already covered on our last newsletter, when the CGU first announced its launch on the “Business Integrity Day” event.

Now effectively in operation, the panel was created to enable simple and intuitive access to key information related to the “Empresa Pró-Ética” program.

The CGU created this program in 2010 with Instituto Ethos to award companies that adopt internal integrity practices with publicity and recognition, through a badge that can be used at the discretion of the companies that received it. This badge, named “Selo Pró-Ética”, is offered to companies that meet the evaluation criteria established by the program.

In this regard, the “Pró-Ética” Panel provides analytical and quantitative data related to the history of updates, the profile of the participating companies and the analysis of each criterion used in the evaluation of these companies, in an unspecified manner, in order to preserve the confidentiality of the participating companies. As such, the panel is aimed at strengthening transparency in the process of obtaining the Selo Pró-Ética, facilitating access to relevant information for companies that wish to obtain the badge as well as for the general public to monitor the process.

For more information, access the full CGU article and the Pró-Ética Panel.

Conference of the States Parties to the United Nations Convention against Corruption approves resolution presented by Brazilian delegation

On December 18, 2023, the Conference of States Parties to the United Nations Convention against Corruption (“CoSP-UNCAC”) approved a resolution presented by the CGU, as coordinator of the Brazilian delegation, that proposes incentives for the private sector to adopt integrity measures aimed at preventing and combating corruption.

The resolution was drawn up with the aim of fostering the dialogue between governments, the private sector and society, through a series of effective government incentives for private entities to adopt measures aimed at preventing and combating corruption. The resolution extends beyond Brazilian borders, as it proposes that all UNCAC States Parties develop their own normative and regulatory framework to encourage the implementation of integrity, governance, and risk management systems in private companies.

The resolution covers a wide range of topics, including female empowerment within the corporate context and the responsibility of companies for sustainable development, in addition to proposing solutions in terms of public policies related to the granting of subsidies; licensing; public bids and contracts; public financing; export credits and legal enforcement through negotiation efforts, such as leniency agreements.

For more information, access the full CGU article.

MPF’s Anti-Corruption Chamber approves leniency agreement with Honeywell

On December 18, 2023, the leniency agreement entered into with UOP LLC (now known as Honeywell UOP) was approved.

The company, the CGU and the AGU entered into this agreement in December 2022, while the Brazilian Federal Public Prosecutor´s Office (“MPF”), the U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission (“SEC”) also took part in the negotiations. The agreement provides for illicit practices that Honeywell UOP committed against Petrobras and has now been approved by the MPF’s Anti-Corruption Chamber.

After negotiations with Brazilian and U.S. authorities, the company undertook the obligation to pay BRL 638 million exclusively to Brazil. Of this amount, BRL 456 million will be awarded as damages to Petrobras, and the remaining BRL 181 million will be paid exclusively to the Brazilian Government, as a fine.

In addition to the financial sanction, Honeywell UOP must submit a detailed description of the irregularities that are subject to the agreement, including the identification of all individuals involved in the infractions and illicit acts, which include politicians, government employees, partners, directors, or employees of other companies.

Access the full MPF article.