Corporate Investigations and White Collar-Crime Newsletter – December 2024

The Corporate Investigations and White Collar-Crime newsletter aims to provide information on the main media news, trends, cases and legislation concerning compliance and white-collar crime matters, in Brazil and abroad. This newsletter is for informative purposes only, and should not be used for decision making. Specific legal counseling may be provided by our legal team.

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Corporate Investigations and White Collar-Crime

Decree published regulations governing integrity programs within bids and public contracts

On December 09, Decree No. 12,304/2024 was published, establishing the parameters for evaluating integrity programs under the circumstances provided for by the Bidding Law (Law No. 14,133/2021). The circumstances encompassed by the decree are as follows: the mandatory implementation of an integrity program by the winning bidder in large-scale contracts; the submission of an integrity program as a criterion for tying-off proposals, and the submission of an integrity program as a requirement for submitting a rehabilitation application.

In compliance with Law 12,846/2013 and the guidelines published by the Brazilian Office of the Comptroller General (“CGU”), the decree describes “integrity program” as a set of mechanisms aimed at: (i) preventing, detecting, and correcting deviations, fraud, and any misconduct that can harm the public administration; (ii) mitigating the social and environmental risks arising from the activities of the organization, with an emphasis on protecting human rights; and (iii) fostering a culture of integrity within the corporate environment.

Within the Federal Executive Branch, the CGU will be responsible for evaluating adherence of the integrity program to the parameters established by the decree. To this end, the CGU must publish the evaluation methodology and the minimum criteria to consider the integrity program as implemented, developed, or improved. The CGU will also be responsible for the administrative liability of bidders or contractors that violate the regulations established by the decree.

For more information, please access the article in full.

CGU launches Integrity and Anti-Corruption Plan

On December 13, the CGU launched a strategic plan aimed at fostering integrity and fighting corruption within the context of Brazil’s Public Administration. The plan was drafted by numerous public bodies and regulatory agencies, as well as experts and entities operating in the private sector.

The plan was structured around five themes that are expected to guide the activities of the Federal Public Administration from 2025 to 2027, such as:

• Quality control of government expenditure;
• Integrity regarding the relationship between the State and the private sector;
• Transparency and open government;
• Institutional strength to foster integrity; and
• Fight against corruption.

Altogether, 262 measures have been formulated and distributed across the 53 agencies of the Federal Public Administration integrating the plan. Of these measures, 49 are dedicated exclusively to fighting corruption, including improving articulation mechanisms between authorities in investigative and sanctioning activities.  

The CGU will be responsible for monitoring and publishing regular reports on the implementation status of the measures under the plan. 

For more information, please access the article in full.

CGU publishes updated guide against harassment and discrimination in the Brazilian Federal Government

On December 05, 2024, the CGU launched an updated version of the Lilac Guide (“Guia Lilás”) – a document containing guidelines for preventing and handling moral and sexual harassment and discrimination within the scope of the Brazilian Federal Public Administration.

The Lilac Guide has been updated based on contributions from civil society, experts, and other public bodies, such as the Ministry of Racial Equality – allowing a more profound debate on racism and other forms of discrimination. In addition, the document provides a framework for assessing any misconduct of this nature, thus ensuring more proportionate enforcement measures. 

Although directed to the Brazilian Federal Government, the Lilac Guide is an essential source for private companies seeking to improve their measures towards preventing harassment and discrimination.

For more information, please access the article in full.

CGU, PF, MPF and the Brazilian Federal Revenue Office investigate alleged scheme that embezzled BRL 1.4 billion from the Brazilian National Department for Works Against Droughts

On December 10, 2024, the CGU, the Brazilian Federal Police (“PF”), the Brazilian Federal Public Ministry (“MPF”), and the Brazilian Federal Revenue Office (“RFB”) – with the support of the American Agency for Homeland Security Investigations (HSI) – initiated Operation Overclean, aimed at dismantling a criminal organization involved in embezzling approximately BRL 1.4 billion in public funds.

The alleged scheme involved bid rigging and overpricing of public works, embezzlement of public funds from parliamentary amendments and agreements, as well as corruption and money laundering. According to the investigations, the main public bodies affected were the Brazilian National Department for Works Against Droughts (“DNOCS”) and the State Coordination of Bahia (“CESTBA”).

For more information, please access the article in full.

Businessman acquitted of tax evasion for lack of intent

On December 13, 2024, a businessman was acquitted of an accusation of tax evasion. The proceeding involved the incorrect application of tax rates involving the Accident Prevention Factor (“FAP”) and the Work-related Accident Hazard (“RAT”) in a tax return submitted to the Brazilian Federal Revenue Office (“RFB”).

According to the judge’s decision, a tax crime requires proven intent, which is the deliberate intention to engage in the violation. According to her, “there is insufficient evidence indicating that the accused perpetrated the typical fraud” and that delegating the accounting activities to the accountant, in fact, precluded its intentional nature.

The accusation indicated that the businessman had unlawfully reduced taxes by providing incorrect data in tax returns submitted in 2010, while he was responsible for a chain of snack franchises. Conversely, the defense argued that the businessman had delegated the accounting to a specialized company and that he fully trusted the instructions provided by the accountant in charge, with no intention of defrauding the tax authorities.

Finally, the judge concluded that, although there had been an accounting error, there was no evidence of intent in the defendant’s conduct, and he was acquitted for lack of sufficient evidence for conviction.

Third Section approves precedent converting detention in flagrante delicto through ex-officio act

On December 11, 2024, the Third Section of the Brazilian Superior Court of Justice (“STJ”) approved Precedent 676, which addresses the conversion of in flagrante delicto detention into pre-trial detention, in compliance with Law No. 13,964 (known as the “Anti-crime Package”).

According to the precedent, “Under Law No. 13,964/2019, it is no longer possible for the judge, on their own initiative, to enact or convert a detention in flagrante delicto into pre-trial detention”. That is, there must be a prior provocation by another party – usually the Public Prosecutor’s – so that the detention in flagrante delicto (which lasts 24 hours) is converted into pre-trial detention (which has no maximum term and is subject to mandatory requirements by law for being enacted).

House approves bill on new kind of in flagrante delicto

On December 10, 2024, the House of Representatives approved Bill No. 373/2015, which introduces another kind of in flagrante delicto, referred to as “proven in flagrante delicto”. This is the case when the suspect is traced within 24 hours of the act and recognized by the victim or a third party, either through a video or photo of the offense perpetrated.

The bill’s author, Chief of Police Éder Mauro, stated that the “proven in flagrante delicto” enables detention after witnesses recognize the perpetrator, either through photos or videos. “We cannot accept that they force police officers to resort to their cameras if they cannot use the videos and photos to identify criminals and indict them in flagrante delicto,” he said.

The bill in question, authored by Reporting Officer and Congressman Aluisio Mendes,  was approved and will be submitted to the Brazilian Senate. If approved, item V of Article 302 of the Code of Criminal Procedure (“CPC”) will be supplemented, thus indicating the circumstances for in flagrante delicto.

Brazilian Civil Rights Framework for the Internet: Justice Luís Roberto Barroso supports the need for platforms to reduce the risks of criminal posts

On December 18, 2024, the president of the Brazilian Federal Supreme Court (“STF”), Luís Roberto Barroso, argued that digital platforms must be held liable for third-party content if they fail to take the necessary steps to remove posts, including criminal content. The discussion takes place in the context of two appeals debating the civil liability of internet platforms for third-party content and the possibility of removing offensive or hateful content without the need for a court order.

For the president, Article 19 of the Brazilian Civil Rights Framework for the Internet (Law No. 12,965/2014), which addresses the liability of digital platforms for third-party content, does not provide sufficient protection for fundamental rights, such as the dignity of individuals as well as important values for democracy. Barroso considers that if the platform is notified that something represents a crime, such as a new fake profile (i.e., identity fraud), a court order is not required for its removal.  He believes that there are exceptions, such as in cases of libel (i.e., crime against one’s honor), in which content removal must only occur after a court order. According to him, even if one alleges libel, slander, or defamation, the post must be maintained, under penalty of infringing the freedom of expression principle.

The trial has been suspended at the request of Justice André Mendonça. The concrete cases that gave rise to the trial are Extraordinary Appeal (“RE”) 1037396 (Matter 987 of the general repercussion), involving Facebook –, which challenges the decision to delete a fake profile from the social network – and RE 1057258 (Matter 533), involving Google –, which challenges the decision that holds the platform liable for not having deleted an Orkut community created to offend an individual, in addition to ordering the payment of moral damages.