06/05/2016

BrazilIssuesNewRegulationsontheCleanCompaniesAct|GlobalComplianceNews

GlobalComplianceNews

BrazilIssuesNewRegulationsontheCleanCompaniesAct
By:CarlosAyresApril23http://globalcompliancenews.com/brazilissuesnewregulations20150423/

OnMarch18,2015,PresidentDilmaRoussefsignedDecree8.420/2015,whichregulatescertain
featuresoftheCleanCompaniesAct.ThehighlightsofDecree8.420/2015areavailablehere.
OnApril7,2015,theOfficeoftheFederalComptrollerGeneral(CGU),thebodywithauthorityto
investigateandsanctionillegalactsprohibitedbytheCleanCompaniesActthatarecommitted
againstforeignPublicAdministrations(CGUalsohasconcurrentauthoritytoinvestigatelocalbribery
attheFederalExecutivelevel),issuedfournewregulationsrelatedtotheCleanCompaniesAct.The
regulationsarealreadyinforce.
Belowaretheirmainhighlights.
Ordinance909/2015.ThisOrdinancesetsforththeprocedureforevaluationofcomplianceprograms
(theelementsofthecomplianceprogramarelistedinDecree8.420/2015).Itestablishesthat,aspart
oftheevaluationprocess,legalentitieswillhavetopresentaprofilereportandacompliancereport.
Intheprofilereport,thelegalentitywillhaveto:i)indicatethesectorsandcountriesinwhichithas
businessii)presentitsorganizationalstructure,describingitsinternalhierarchy,aswellasthe
decisionmakingprocessandcompetencesofOfficers,BoardMembers,departmentsandsectorsiii)
providethenumberofemployeesiv)specifyandcontextualizetheinteractionswithpublicand
foreignadministration(e.g.,numberandamountofcontractswithpublicentities,percentageofthe
revenuefromcontractswithpublicentitiesuseofthirdpartiestointeractwithpublicsector)v)
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BrazilIssuesNewRegulationsontheCleanCompaniesAct|GlobalComplianceNews

describeitscorporatestructure(parentcompany,controlledcompanies,consortiums,etc.)andvi)
informifitisasmallsizecompany.
Inthecompliancereport,thelegalentitywillhaveto:i)informthestructureofthecompliance
program,indicatingwhichandhowtheparameterssetforthinDecree8.420/2015havebeen
implemented,aswellasdescribingtheimportanceofeachoftheparameterstakingintoconsideration
thespecificitiesofthelegalentityii)demonstratehowthecomplianceprogramsoperationsare
integratedintotheactivitiesofthelegalentitywithhistoricaldata,statisticsandconcretecasesand
iii)demonstratehowthecomplianceprogramworkedintheprevention,detectionandremediationof
theviolationunderinvestigation.
TheOrdinancefurtherestablishesthat,aspartoftheevaluationprocess,authoritiescancarryout
interviewsandrequestdocuments.Further,theOrdinanceclarifiesthatlegalentitiesthatimplement
complianceprogramsafterthewrongdoingwillnotreceivethemaximumcreditforsuchprograms
(thoughtheywouldstillgetsomecreditforit).Companiesmaywanttoconsiderpreparingsuch
reportsinadvance.Inadditiontoavoidingtimeconstrainsduringtheadministrativeproceeding,they
mayhelpcompaniesidentifyweaknessintheirprograms(whenpenmeetspaper,loopholesinthe
programsmaybecomemoveobvious).
Ordinance910/2015.ThisOrdinancefurtherclarifiestherulesaroundadministrativeproceedingsand
leniencyagreements.Itclarifies,forexample,thatCGUwillexerciseitsconcurrentauthorityincases
wheretheauthoritythatisoriginallycompetenthasnotactedincomplex,relevantorhigh
repercussioncasesandincasesinvolvingmorethanonebodyorentityofthefederalpublic
administration,amongothers.
RegulatoryInstruction1/2015.ThisRegulatoryInstructionsetsforthamethodologyforthe
calculationofgrossrevenueandtaxestobeexcludedforpurposesofcalculatingthefineestablished
intheCleanCompaniesAct.Insummary,itreferstoothertaxregulationsthatsetforththatthegross
revenueincludes:i)theproceedsfromthesaleofgoodsinthecompanysownoperationsii)theprice
oftheservicesiii)theresultsearnedinthirdpartyaccountoperationsandiv)profitsfromthemain
activityorobjectiveofthelegalentitiesnotincludedinthepreviousitems.Thetaxesdueonsuch
activitiesareexcludedforpurposesofcalculatingthefines.Smallbusinessesaresubjecttoadifferent
methodology.Giventhedifficultiesindefiningtheexactcontoursofgrossrevenueandtaxdeduction,
onemayexpectthatsuchcalculationwillresultintimeconsuminglitigation,complicating
enforcement.
RegulatoryInstruction2/2015.ThisRegulatoryInstructionaddressesissuesrelatedtotheoperations
oftheNationalRegistryofDebarredandSuspendedEntities(CEIS)andtheNationalRegistryof
SanctionedEntities(CNEP).ThesecondoneisforentitiessanctionedundertheCleanCompaniesAct
only.InformationaboutbothregistrieswillbekeptintheTransparencyPortal.Aspartoftheirthird
partyduediligencevettingprocess,companiesoperatinginBrazilshouldconsiderincorporatingsuch
listsintotheirvettingprocesses.
ThisarticlewasoriginallypublishedonFCPAmricas.

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BrazilIssuesNewRegulationsontheCleanCompaniesAct|GlobalComplianceNews

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