Compliance and Investigations Newsletter No. 22

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.

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Compliance and Investigations Team

In response to OECD, STF informs that Odebrecht leniency agreement remains valid

The Federal Supreme Court of Brazil (“STF”) informed that the leniency agreement of Novonor (formerly Odebrecht) remains “valid and effective”.

The statement came after the Organization for Economic Cooperation and Development (“OECD”) expressed concern about the effects of the decision handed down on September 6, 2023, by Justice Dias Toffoli, which suppressed evidence resulting from the Odebrecht agreement.

The OECD report, published on October 19, 2023, highlights that media reports raised uncertainty among Brazilian lawyers in regard to the validity of the leniency agreement, and concerned OECD Working Groups in other countries.

According to the STF, the decision in question had already been confirmed last year in a case involving President Luiz Inácio Lula da Silva, which led to the suppression of evidence from the Odebrecht leniency against the politician. Justice Toffoli therefore applied this ruling to requests for extension of interpretation filed by other parties in a similar situation.

Access the news regarding STF’s statement.
Access the OCDE report.

Arrival of interim Attorney General results in revocation of billionaire deduction to J&F

The decision to reduce J&F’s billion-dollar fine from BRL 10.3 billion to BRL 3.5 billion was once again overturned after the arrival of interim Attorney-General, Elizeta Ramos.

Following a decision issued on September 13, 2023, by the Institutional Board of the Federal Public Prosecutor’s Office (“Institutional Board”), which repealed the deduction, the national ombudsman of the Public Prosecutor’s Office, Oswaldo D’Albuquerque, suspended the Institutional Board’s decision and ordered the opening of a disciplinary complaint to “investigate the potential disciplinary infraction due to non-compliance with the decision handed down by the National Ombudsman’s Office”, which had sent the case to the National Council of the Public Prosecutor’s Office (“CNMP”) for ruling.

However, with the arrival of the interim Attorney-Geral, Oswaldo D’Albuquerque backed down and returned the case to the Institutional Board. In practice, the ruling of the board that overturned the deduction to J&F was reinstated.

Access the news report from O Globo.

DOJ updates requirements for an effective compliance program

The U.S. Department of Justice (“DOJ”) updated requirements for an effective compliance program set forth in “Attachment C”, in which the DOJ specifies a company’s obligations regarding their compliance program.

We highlight the following amendments:

• Commitment to compliance: The document previously referred to the commitment of senior management, but has now been expanded to address the engagement of other levels of company management, demonstrated by actions and words that effectively establish and foster a culture of ethics and compliance;

• Training: The DOJ now reinforces the need for metrics to measure knowledge retention and effectiveness of compliance training, which must be tailor-made for specific audiences in the company;

• Third-party management: The DOJ recommends that companies keep a record of the rationale that led to the selection of a third party in a transaction. In addition, the scope of the work to be carried out by the third party must be thoroughly described in the contract, and the company must implement mechanisms to verify that the work is in fact being carried out as planned and that the compensation is compatible with the industry and geographical region;

• Monitoring and testing: The DOJ added that, in the case of mergers and acquisitions, companies should promote the integration of their Enterprise Resource Planning (ERP) systems as soon as possible. In addition, compliance officers should have access to relevant data sources for monitoring of transactions;

• Monitoramento e testes: o DOJ acrescentou que, no caso de fusões e aquisições, as empresas deverão promover a integração dos seus sistemas ERP (Enterprise Resource Planning) o quanto antes. Além disso, os responsáveis pelo compliance deverão ter acesso às fontes de dados das transações para monitoramento;

• Incentives and disincentives: companies should add compliance-related criteria to their remuneration and bonus payment systems in order to stimulate compliance.

Access the updates to “Attachment C”.

CGU seeks cooperation with state-owned banks and Brazilian anti-corruption authorities

The private integrity secretary of the Brazilian Office of the Comptroller-General (“CGU”) stated during his participation in the Global Investigations Summit, on October 5, 2023, that the entity will keep a close eye on new public infrastructure projects in the coming years, in order to verify if public money is being spent properly.

As part of the new trend, Vianna highlighted the cooperation agreement signed with the Brazilian National Bank for Economic and Social Development (“BNDES”) in August 2023, according to which the CGU will assist the bank in creating compliance requirements that must be met by companies with revenues of more than BRL 300 million/year that wish to receive loans.

The CGU has also been negotiating with Banco do Nordeste do Brasil (BNB) to establish a similar agreement, and has initiated discussions with Banco do Brasil and Caixa Econômica Federal in this regard. According to the secretary, the CGU wants to make sure that large companies implement high standards of conduct and disseminate such standards among their supply chain.

CGU has also prioritized the coordination among authorities, especially the Federal Public Prosecutor’s Office (MPF) and the Administrative Council for Economic Defense (CADE).

Finally, Vianna stressed that the CGU’s goal is to establish a safe environment in which companies choose to self-disclose not just because it is the right thing to do, but because it is the rational thing to do.

Access the article from Global Investigations Review.