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Posted 16 August 2013
Brazilian President Dilma Rousseff has signed the Brazilian Clean Companies Act (BCCA), which for the first time subjects Brazilian and foreign entities having a registered office in Brazil to civil and administrative sanctions for bribing either Brazilian or foreign public officials. Though not specifically targeted as the life sciences sector, the new law will have implications for all companies doing business in that Brazil.
The BCCA prohibits the bribery of domestic and foreign public officials. Bribery is defined in the Act to include promoting, offering or giving, "directly or indirectly, an improper benefit to a public agent or a third person related to him [or her]."
Unlike the US Foreign Corrupt Practices Act but in line with legislation in many other countries, the BCCA prohibits the offering or making of so-called "facilitation" payments, as well as the use "of a natural or legal third party to hide or cover up the real interests or the identities of the beneficiaries of the acts performed." Sanctions for violations are not dependent on a finding or criminal or corrupt intent - rather, the BCCA provides that the "legal persons [subject to the Act] shall be held strictly liable, administratively or civilly, for the injurious acts stipulated [in the Act] performed in their interest or benefit, exclusive or not."
The fines imposed for violations of the Act are significant - up to 20% of the entity's gross billings from the fiscal year prior to the initiation of administrative proceedings or, if the prior fiscal year's revenue cannot be calculated, of 60 million reals (about $26 million).
Entities violating the Act are also liable to being dissolved or suspended, and are subject to forfeiture and debarment as well as the loss of public "incentives, subsidies, subventions, donations, or loans from public bodies or entities and public financial institutions or those controlled by the public authorities for a minimum period of [one] year and a maximum of [five] years."
India is now the only BRICS (Brazil, Russia, India, China and South Africa) country that has not enacted legislation to prohibit the bribery of public officials by entities operating within the country. South Africa was first, with a law enacted in 2004, China and Russia followed in 2011.
Tags: brazil
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