Compliance and Investigations Newsletter No. 18 – June 2023

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.

CGU disciplines the supply of information for the CEIS, CNEP and CEAF registers

As of June 1, 2023, the Sanctions Database System became the source of information on sanctions applied to companies that are listed in the National Registry of Debarred and Suspended Companies (“CEIS”), the National Registry of Sanctioned Companies (“CNEP”), and the Registry of Expulsions from the Federal Administration (CEAF).

The Sanctions Database System was introduced by Normative Ordinance No. 75, published by the Brazilian Office of the Comptroller-General (CGU) on May 11, 2023. This system enables all agencies and entities of the Executive, Legislative, and Judiciary branches at all government levels to keep records of sanctions applied to government agents or private entities.

The purpose of concentrating the information in a unique source is to optimize queries regarding these sanctions and to make this information more accessible to the general public via the Federal Government’s Transparency Portal.

Access: CGU’s press release.

CGU launches Brazilian Network for the Promotion of Private Integrity

The CGU launched, on June 14, 2023, the Brazilian Network for the Promotion of Private Integrity, an initiative that aims to foster and standardize the enforcement of the Brazilian Clean Company Act (Law No. 12,846/2013) at the three levels of the federation: Federal, state and municipal.

The launch of the network was attended by representatives of the Comptroller’s Offices from 19 states and 13 state capitals. This network aims to establish an environment of integrated communication and technical cooperation, so that the authorities can operate in an aligned and synergetic manner, and consequently conciliate the entry into leniency agreements involving different federative entities; standardize evaluation rules for integrity programs; and avoid duplicated administrative liability proceedings (PAR) regarding the same case.

Access: CGU’s press release.

House of Representatives approves bill that criminalizes discrimination against politicians

On June 14, 2023, the House of Representatives approved Bill No. 2,720A/2023, which criminalizes discrimination against politically exposed persons, people who are under investigative proceedings for criminal, civil, or administrative offenses, or against defendants in ongoing legal proceedings.

The bill aims to penalize those who deny the opening or maintenance of a checking account and the granting of credit or other services to a politically exposed person or under any other conditions mentioned above. The bill also provides for legal entities controlled by a politically exposed person and establishes the penalty of imprisonment from two to four years and a fine.

After having been approved by the House of Representatives, Bill No. 2,720A/2023 is pending before the Federal Senate.

Access:

House of Representatives press release

Bill No. 2,720/2023 in full.

New study by Conaci and the World Bank assesses the capacity of municipalities to foster transparency and combat corruption

On June 18, 2023, Brazil’s National Council for Internal Control (Conaci) and the World Bank published a study regarding the structuring level of municipal Central Units for Internal Control (UCCIs) in Brazil. A total of 1,807 Brazilian municipalities participated in the study, which amounts to around 32% of all municipalities in Brazil.

The UCCIs that were evaluated by the study are those linked to the executive branch of the municipalities and, ideally, fall under the Municipal Office of the Comptroller-General. Their functions include ombudsman, correction, internal audit and controllership, thus ensuring the transparency and governance of the municipality.

Among numerous other, the study found that the Brazilian Clean Company Act (Law No. 12,846/2013) has still not been regulated in nearly 60% of Brazil’s municipalities. In addition, around 25% of Brazil’s municipalities do not have a structured UCCI; and only 20.6% of Brazilian municipalities have conflict of interest regulations. According to the study, structured UCCIs are increasingly more common in proportion to the size of each municipality, its tax collection, urbanization rates and GDP.

Access:

Conaci’s press release

National Diagnosis of Internal Control in full