Compliance and Investigations Newsletter no. 7 – July 2022

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.

Enjoy your reading!

Compliance and Investigations Team

 

 


Attorney-General of the Republic defended to the Federal Supreme Court that the new Improbity Law should not retroact to benefit convicted public agents

On July 07, 2022, the Attorney-General of the Republic, Augusto Aras, defended before the Brazilian Federal Supreme Court (“STF”) that amendments introduced by the new Administrative Improbity Law (Law 14,230/2021), do not apply retroactively in benefit of government agents found guilty according to rules that were previously in force (Law 8,429/1992).

On August 03, the STF will rule whether or not the new law will apply retroactively in favor of parties that carried out acts of administrative improbity at the time that the previous law was still in force-especially regarding the need to prove intent in order to constitute improbity conduct and also regarding the application of the new statute of limitations.

The case under analysis resulted from a lawsuit filed by the National Institute of Social Security (“INSS”), which sought reimbursement to the treasury from public agent hired by the agency and accused of “negligent conduct”. The STF recognized the widespread public impact of the matter and, consequently, determined the suspension of all legal proceedings on the matter until a decision is reached.

For more information, access the PGR release here.

The PGR’s full opinion can be accessed here.

FIFA to receive approximately USD 92 million in compensation for corruption

On June 30, 2022, the U.S. Department of Justice (“DOJ”) announced that FIFA will receive more than USD 92 million due to losses resulted from the corruption scheme known as FIFAGATE.

According to the article published in Brazilian news outlet “UOL”, following the initiation of the investigation regarding the corruption scheme, FIFA implemented governance and compliance measures. Such period is now considered a turning point for the implementation of measures aimed at mitigating risks of corruption within the soccer sector.

The amount announced by the DOJ was confiscated from bank accounts of approximately 50 former officers and businesspersons from 20 different countries, allegedly involved in the corruption scheme.

For more information, access UOL’s article here.

France’s National Financial Prosecutor’s Office enters into two corporate settlements with companies accused of bribing foreign officials

On July 7, France’s National Financial Prosecutor’s Office (“PNF”) announced that the Paris Court of Justice (“Court”) sanctioned a settlement agreement resolving allegations stating that French digital security company IDEMIA had bribed foreign officials between 2015 and 2017. The facts addressed in the agreement are the same as those addressed in a previous settlement reached with the World Bank in 2017 for “corrupt and collusive practices” in Bangladesh.

On the same date, the PNF announced that the Court had also sanctioned a settlement agreement with French oil and gas engineering company Doris Group for bribing a foreign official.

The investigation was opened in November 2019, the same month when it was revealed that the FBI was investigating Doris Group’s U.S. subsidiary for allegations of corruption in Angola.

In August 2021, Brazilian prosecutors also charged two executives in Doris Group’s Brazilian subsidiary for allegedly bribing government officials at state energy company Petrobras, in order to secure engineering contracts worth more than USD 200 million.

For more information, access GIR’s article here.

Brazilian Office of the Comptroller-General detects overpricing in Codevasf bidding in Bahia 

A report published by the Brazilian Office of the Comptroller-General (“CGU”) on May 25 concluded that there was a lack of planning, along with overpricing, in a bidding process carried out by Companhia de Desenvolvimento dos Vales do São Francisco and Parnaíba (“Codevasf”) for the purchase of PVC pipes in the state of Bahia. According to the document, “there was an average increase of 92% in prices”. The potential loss in public funds is estimated at BRL 3.4 million.

The CGU report also highlighted that the public policy enforcement system applied by Codevasf – in which the proposer of amendments unilaterally establishes the priorities of demands and their beneficiaries – does not privilege coordinated actions or structured projects.

The article published by Brazilian news outlet “G1” also highlighted the operation carried out by the Brazilian Federal Police in the previous week to investigate allegations of in Codevasf’s biddings in the state of Maranhão.

For more information, access G1’s article here.