Compliance and Investigations Newsletter – July 2024

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 legal team.

Enjoy reading!

Compliance and Investigations Team

Ministry of Finance establishes rules to prevent money laundering within the scope of fixed-odds betting operations

On July 12, 2024, the Secretariat of Prizes and Betting of the Ministry of Finance (“SPA/MF”) published SPA/MF Ordinance No. 1,143, outlining the rules to combat and prevent money laundering, terrorist financing and the proliferation of weapons of mass destruction (“AML/CFT “) to be adopted by fixed-odds betting operators.

Companies interested in obtaining authorization to operate fixed-odds betting must now implement AML/CFT policies, procedures, and internal controls to identify, monitor, record and report suspicious operations to the Council for Financial Activities Control (“COAF”).  

The ordinance, while similar to the regulations of the Brazilian AML/CFT System, also aligns with international standards. It requires fixed-odds betting operators to implement an integrity program that fosters an organizational culture of integrity, good governance, and an ESG (environmental, social and governance) agenda, under the terms of the Brazilian Anti-Corruption Law (Law No. 12,846/2013).

The ordinance entered into force on the date of its publication. Operating agents are required to comply with its rules by December 31, 2024. 

For more details on the new AML/CFT guidelines, see the article published by Demarest’s Banking and Finance and Criminal teams here.

Petrobras and CGU sign agreement to prevent and combat corruption

On July 29, 2024, Petrobras and the Brazilian Office of the Comptroller-General (“CGU”) signed a Technical Cooperation Agreement to prevent and combat corruption. The agreement was an initiative of Petrobras itself, which seeks to improve its control mechanisms and integrity risk management.

The agreement provides for a number of measures to exchange information, tools and technologies aimed at increasing transparency and social control of the state-owned company, as well as joint training. 

Petrobras joined the Brazil Pact for Business Integrity on the same day the agreement was signed. The company received the highest score in the self-assessment of integrity measures, such as those to prevent, detect, and remedy fraud and acts harmful to public administration and to disseminate an organizational culture of integrity.

For more information, see the article published by CGU here.

TCU launches website to publicize corruption prevention practices

In July 2024, the official website of the National Corruption Prevention Program (“PNPC”) was launched, an initiative of the Federal Court of Accounts (“TCU”), the Brazilian Office of the Comptroller-General (“CGU”) and the National Strategy to Combat Corruption and Money Laundering (“ENCCLA”).

Created in 2021, the PNPC is aimed at managers of public entities and aims to reduce fraud and corruption in Brazil. Through an on-line self-service platform, users can input their entity’s information and receive a comprehensive diagnosis of its main vulnerabilities. This diagnosis is then used to generate a specific action plan, complete with appropriate suggestions and proposals to reduce the entity’s susceptibility to acts of fraud and corruption.

The new website brings together the PNPC’s digital collection, which includes reports, news, publications, courses and records of meetings held since 2022. The website also features an interactive map that shows the consolidated situation of public organizations in all spheres of government. 

For more information, see the article published by TCU here. 

Term extension for renegotiating Lava-Jato Operation leniency agreements

On July 10, 2024, Justice André Mendonça of the Federal Supreme Court (“STF”) granted an additional 30-day term to conclude the renegotiation of leniency agreements signed within the scope of the Lava-Jato Operation.

The renegotiation process was initiated in February 2024, and this is the second term extension granted by the justice. The initial term expired on April 26, but since no consensus could be reached, it was extended for another 60 days.

By the end of June, the Federal Office of the Attorney-General (“AGU”) and the Brazilian Office of the Comptroller-General (“CGU”) reported that the companies and the federal government had finally reached a consensus on the main aspects of the agreements and requested additional time to define some ancillary clauses, such as the due date and amount of each installment. The renegotiation instruments are expected to be submitted for ratification by the STF at the end of this new term.

It is important to note that the renegotiation was specifically limited to the financial aspects of the leniency agreements. Therefore, there was no reassessment of whether or not the crimes investigated by the Lava-Jato Operation were committed.

For more information, access the article published by the STF here.