The FCPA Report

The definitive source of actionable intelligence covering the Foreign Corrupt Practices Act

Articles By Topic

By Topic: Brazil

  • From Vol. 6 No.5 (Mar. 15, 2017)

    Rolls Settlement Illuminates SFO Expectations for Cooperation and Compliance

    Rolls-Royce’s recent settlement with U.K., U.S. and Brazilian authorities was a key development in global anti-corruption enforcement. The case opens a window into what the SFO, now a major player on the field of anti-corruption enforcement, expects from companies both in terms of cooperation and remediation. That information may prove crucial for many multinational companies as U.K. enforcement continues to assert its dominance on the anti-corruption stage. See “Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption” (Feb. 15, 2017) and “SFO Arrives in the Anti-Corruption Premier League With Rolls-Royce Settlement” (Mar. 1, 2017).

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  • From Vol. 6 No.5 (Mar. 15, 2017)

    Repeat FCPA Offender Orthofix Settles Brazilian Bribery Charges With the SEC 

    Medical device company Orthofix has settled FCPA charges again, this time based on its Brazilian subsidiary’s use of commercial representatives and distributors to bribe doctors at state-owned hospitals. Pursuant to an SEC order, Orthofix has agreed to pay $6.25 million and retain an independent consultant. Unlike its previous 2012 FCPA settlement, which involved bribery at its Mexican subsidiary, there is no accompanying DOJ enforcement action. We dissect Orthofix’s FCPA resolution and provide enforcement and compliance lessons, including a comparison to Biomet, another repeat offender in the same industry, whose second FCPA resolution came in 2017. See “After Two Extensions of Its DPA, Zimmer Biomet Settles Further FCPA Charges for $30M” (Feb. 1, 2017).

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  • From Vol. 6 No.4 (Mar. 1, 2017)

    SFO Arrives in the Anti-Corruption Premier League With Rolls-Royce Settlement

    The U.K.’s Serious Fraud Office has struggled for legitimacy in recent years, with a limited number of enforcement actions under its belt and a shrinking budget. But its recent settlement with Rolls-Royce has established it as a force to be reckoned with in global anti-corruption enforcement. “The settlement catapults the SFO into the Premier League of global anti-bribery law enforcement,” said London-based Barry Vitou, head of Pinsent Masons’ corporate crime team. But is it sending mixed messages about the value of cooperation and self-reporting? For more on the settlement, see “Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption” (Feb. 15, 2017).

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  • From Vol. 6 No.3 (Feb. 15, 2017)

    Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption

    Rolls-Royce’s recent massive settlement with U.S., U.K. and Brazilian authorities is a stark reminder of the anti-corruption risks associated with intermediaries, agents and fixers when negotiating contracts with state-owned entities. Commissions paid by Rolls-Royce to its agents – including notorious oil-and-gas “solutions” provider Unaoil – often were eventually passed on to foreign officials to close deals, netting Rolls-Royce a global settlement for hundreds of millions of dollars. In this first article discussing the case, we look at the bribes Rolls-Royce paid, how its compliance program failed to prevent them and what companies can do to make sure that commissions paid to agents are not used improperly. In a second article, we will look at the implications for cooperative U.S. and U.K. enforcement and what the SFO is looking for in terms of cooperation and remediation. See “Bribery Act Experts Discuss the Impact of Brexit, DPAs and Other U.K. Developments” (Jul. 13, 2016).

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  • From Vol. 6 No.2 (Feb. 1, 2017)

    Brazilian Enforcers Are MVPs in Odebrecht and Braskem Settlements (Part Two of Two)

    Brazil’s years-long Operation Car Wash investigation has shaken its political and economic foundations, but the recent guilty pleas of Odebrecht, a privately held Brazilian holding company, and Braskem, its wholly owned petrochemical subsidiary, have moved the country closer to a resolution. The companies settled with Brazilian, U.S. and Swiss authorities simultaneously, as discussed in the first article in this series. Brazil initiated the investigation and will receive the majority of the multibillion-dollar settlement. The case illustrates that anti-corruption enforcement is a global game and that the U.S. is not always the most valuable player. See “Embraer Global Settlement Presages a New Paradigm in International Enforcement and Next-Level Compliance” (Dec. 7, 2016).

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  • From Vol. 6 No.2 (Feb. 1, 2017)

    After Two Extensions of Its DPA, Zimmer Biomet Settles Further FCPA Charges for $30M

    Biomet’s continued misconduct during the term of its 2012 deferred prosecution agreement, including its bribery of Mexican customs agents and persistent use of a third-party distributor known to have paid bribes in Brazil has led to a new resolution with the DOJ and SEC. The DOJ extended Biomet’s 2012 deferred prosecution agreement twice while the investigation was pending, and now the company (purchased in 2015 by Zimmer, which also bought the DPA obligations) will pay $30 million dollars to resolve the claim in a new settlement, and will take on another monitor for three years. See also “Dan Newcomb Discusses the Unusual Second Extension of Biomet’s DPA” (Apr. 20, 2016).

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  • From Vol. 6 No.1 (Jan. 18, 2017)

    Odebrecht and Braskem: Myriad Bribes, Two Companies and One Multibillion Dollar Global Settlement (Part One of Two)

    While it is unsurprising that the years-long Operation Car Wash investigation in Brazil is resulting in big penalties, the means by which the bribes were paid by Brazilian holding company Odebrecht and its petrochemical subsidiary Braskem are a bit beyond the pale. In this first article in a two-part series dissecting Odebrecht and Braskem’s $3.5 billion-plus historic settlements with U.S., Brazilian and Swiss authorities, we look at the bribes the companies paid and how Odebrecht’s so-called “department of bribes” made those corrupt payments possible. In the second article, we will look at the role international cooperation played in both the investigations and the terms of the settlement. See “Embraer Uses Sleight-of-Hand Payments to Third-Party Agents to Sell Planes Around the World, Landing It More Than $200M in U.S. Fines” (Nov. 9, 2016).

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  • From Vol. 5 No.24 (Dec. 7, 2016)

    Embraer Global Settlement Presages a New Paradigm in International Enforcement and Next-Level Compliance

    Embraer, the world’s largest manufacturer of mid-size jets, recently settled FCPA allegations. The settlement is a striking example of how the SEC and DOJ are working with foreign governments all over the world to investigate and prosecute corruption in a coordinated manner. The case also illustrates how companies need a next level of compliance beyond basic policies and procedures to prevent individuals from finding ways around internal controls. In this, our second article analyzing Embraer’s historic settlement, we discuss the enforcement implications as well as the compliance takeaways of the case. For details on the facts underlying the case and the terms of the settlement see our companion article “Embraer Uses Sleight-of-Hand Payments to Third-Party Agents to Sell Planes Around the World, Landing It More Than $200M in U.S. Fines” (Nov. 9, 2016).

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  • From Vol. 5 No.23 (Nov. 23, 2016)

    Brazilian Attorneys Discuss How High-Profile Corruption Investigations Are Changing Compliance in South America

    Brazil has taken the lead in anti-corruption enforcement in South America, but the risks in the region remain high. During a recent program hosted by the Society of Corporate Compliance and Ethics, panelists Shin Jae Kim and Renata Muzzi Gomes de Almeida, partners at TozziniFreire Advogados, and Fernanda Beraldi, an ethics and compliance director and corporate counsel at Fortune 500 manufacturing company Cummins, Inc., examined the current corruption climate in South America, the continuing impact of the Petrobras corruption scandal, the use of cooperation and leniency agreements in Brazil and the Brazilian government’s guidance on effective compliance programs. Beraldi also discussed how Cummins has designed its compliance program to mitigate South American corruption risks. For more from Kim and Muzzi, see “Addressing Five Major Compliance Issues Posed by Brazil’s 2016 Olympic Games” (Jun. 15, 2016).

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  • From Vol. 5 No.22 (Nov. 9, 2016)

    Embraer Uses Sleight-of-Hand Payments to Third-Party Agents to Sell Planes Around the World, Landing It More Than $200M in U.S. Fines

    Embraer, one of Brazil’s leading exporters and the world’s largest manufacturer of mid-size jets, has settled bribery allegations with both the SEC and DOJ related to its use of third-party agents in transactions spanning the globe. According to Karlis Novickis, a regional compliance officer at Whirlpool LatAm based in São Paolo, the fines in this case show that compliance “is one of the best investments” a company can make. In this article, we synthesize the SEC and DOJ’s divergent papers to provide a coherent narrative of how Embraer employees skirted the company’s internal controls. In a companion article in a future issue, we will look at the compliance and enforcement implications of the settlement. See “Regional Risk Spotlight: Giovanni Falcetta of TozziniFreire Talks Anti-Corruption in Brazil Beyond the Petrobras Scandal” (Mar. 23, 2016). 

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  • From Vol. 5 No.20 (Oct. 12, 2016)

    Mayer Brown Attorneys Discuss Continuing Fallout From Petrobras Scandal

    The Petrobras bribery scandal continues to broaden. A recent program presented by Mayer Brown provided an update on the scandal, focusing on its impact on senior Brazilian officials and related anti-corruption legislation. The program featured Kelly B. Kramer, a partner at Mayer Brown, and Bernardo Weaver, a partner at Mayer Brown’s Sao Paulo affiliate Tauil & Chequer Advogados. This article summarizes the speakers’ key insights. For more insights from Mayer Brown on Petrobras, see “How the Expanding Petrobras Scandal May Spark a New Era of Multi-Lateral Enforcement” (Dec. 2, 2015).

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  • From Vol. 5 No.13 (Jun. 29, 2016)

    Foreign Attorneys Share Insight on Data Privacy and Privilege in Multinational Investigations

    Multi-jurisdictional anti-corruption investigations are proliferating and subject companies must manage competing requests and competing legal regimes. At the recent White Collar Crime Institute presented by the New York City Bar Association, a panel of foreign lawyers delved into the challenges faced by counsel confronting multinational regulatory actions, including coordinating requests from multiple jurisdictions, preserving attorney-client privilege, conducting witness interviews and navigating data privacy laws. The panel featured attorneys based in London, Geneva, Hong Kong and Sao Paulo. See “How the Expanding Petrobras Scandal May Spark a New Era of Multi-Lateral Enforcement” (Dec. 2, 2015).

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  • From Vol. 5 No.12 (Jun. 15, 2016)

    Addressing Five Major Compliance Issues Posed by Brazil’s 2016 Olympic Games

    Brazil’s president has been stripped of authority and faces impeachment proceedings. High-ranking politicians and major companies stand accused of far-reaching corruption as a result of Operation “Car Wash.” The country is experiencing an economic crisis that enlarges as fast as the political panorama shifts. It is in the midst of this turmoil that Brazil will host the Games of the XXXI Olympiad, the first ever hosted in South America. In a guest article, Giovanni Falcetta, Thaísa Toledo Longo, Shin Jae Kim and Renata Muzzi of Brazilian law firm TozziniFreire outline the five largest corruption risks facing companies that seek economic opportunities connected to the Games and detail the laws and regulations governing Olympic-related anti-corruption compliance. For more insight from TozziniFreire, see “Regional Risk Spotlight: Giovanni Falcetta of TozziniFreire Talks Anti-Corruption in Brazil Beyond the Petrobras Scandal” (Mar. 23, 2016). 

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  • From Vol. 5 No.6 (Mar. 23, 2016)

    Regional Risk Spotlight: Giovanni Falcetta of TozziniFreire Talks Anti-Corruption in Brazil Beyond the Petrobras Scandal

    Corruption in Brazil has been all over the news recently with the fallout from the Operation Car Wash investigation affecting all levels of government. Former President Lula da Silva is facing possible jail time and current President Dilma Rousseff is facing possible impeachment related to corruption. While Petrobras, Brazil’s state-controlled oil company and the main target of the investigation, grabs most of the headlines, there is more to Brazil’s corruption landscape than the current scandal. In recent years the government has reformed the country’s anti-corruption laws, and enforcement is on the rise, making compliance a hot topic at many Brazilian companies. The FCPA Report recently spoke with Giovanni Paolo Falcetta, a partner at TozziniFreire based in São Paulo, about the corruption climate in Brazil today and what companies need to know when operating there. See “Operation Car Wash: Examining the History and Consequences of the Petrobras Scandal” (Mar. 18, 2015).

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  • From Vol. 4 No.25 (Dec. 2, 2015)

    How the Expanding Petrobras Scandal May Spark a New Era of Multi-Lateral Enforcement

    More than two years after Brazilian authorities launched their investigation into Petrobras, the consequences of the scandal continue to grow, stretching beyond the borders of Brazil and potentially encompassing other state-owned or operated entities.  In a recent webinar, attorneys from Mayer Brown and its Brazilian affiliate, Tauil & Chequer Advogados, describe the latest developments, including a Peruvian investigation into construction companies allegedly involved in the Petrobras scandal and what they say may be a potential U.S. “sweep” of companies with ties to state-owned entities, illustrated by an investigation of the Venezuelan state-owned oil company.  They also offered advice on how companies can avoid the fallout from these investigations.  See “Operation Car Wash: Examining the History and Consequences of the Petrobras Scandal,” The FCPA Report, Vol. 4, No. 6 (Mar. 18, 2015); and “Experts on Brazilian Law Explain the Latest Fallout from the Petrobras Scandal,” The FCPA Report, Vol. 4, No. 11 (May 27, 2015).

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  • From Vol. 4 No.18 (Sep. 9, 2015)

    Mayer Brown Attorneys Discuss Tax Court Corruption Scandal in Brazil

    Despite recent initiatives to curb bribery, corruption remains endemic in Brazil.  The evolving Petrobras scandal exposed extensive corruption in the petroleum industry and now another multi-billion dollar corruption scandal has come to light involving one of Brazil’s tax tribunals.  Taxpayer intermediaries appear to have bribed judges on Brazil’s Administrative Council of Tax Appeals (known as CARF) to secure favorable outcomes.  Dozens of CARF decisions from 2005 through 2013 are being investigated.  A recent program presented by Mayer Brown offered valuable insights into the corruption scheme, the pending investigations and potential liabilities for participants in the scheme under both Brazil’s Clean Companies Act and the FCPA.  The program featured Mayer Brown partner Kelly Kramer, who moderated the discussion, and Salim J. Saud Neto and Eduardo Telles, partners at Tauil & Chequer Advogados, Mayer Brown’s Brazil affiliate.  This article summarizes the key takeaways from the program.  See also “Experts on Brazilian Law Explain the Latest Fallout from the Petrobras Scandal,” The FCPA Report, Vol. 4, No. 11 (May 27, 2015); and “Operation Car Wash: Examining the History and Consequences of the Petrobras Scandal,” The FCPA Report, Vol. 4, No. 6 (Mar. 18, 2015).

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  • From Vol. 4 No.11 (May 27, 2015)

    Experts on Brazilian Law Explain the Latest Fallout from the Petrobras Scandal

    The fallout from the Petrobras bribery scandal, which has been brewing since mid-2013, continues to grow.  In April, Petrobras finally released its 2014 financial statements, which included significant corruption-related write-downs and impairments.  A recent program presented by Mayer Brown and its Brazilian affiliate, Tauil & Chequer Advogados, offered a look at the history of the Petrobras scandal, including developments since the release of the 2014 financials.  The panelists also reviewed enforcement actions being taken by Brazil’s securities regulators; economic ramifications of the scandal; and the risks and opportunities arising out of that scandal.  See also “Operation Car Wash: Examining the History and Consequences of the Petrobras Scandal,” The FCPA Report, Vol. 4, No. 6 (Mar. 18, 2015); “Brazil’s Evolving Anti-Corruption Environment,” The FCPA Report, Vol. 4, No. 9 (Apr. 29, 2015).

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  • From Vol. 4 No.9 (Apr. 29, 2015)

    Brazil’s Evolving Anti-Corruption Environment

    It has been over a year since the landmark Brazilian Anti-Corruption Act (BAA) has taken effect, and as the widespread investigation into Petrobras reveals, there is both official and grassroots disgust with the corruption that has historically plagued Brazil.  How have these current developments (which also include investigations into bribery involving the recent World Cup, the upcoming Olympics, and the aerospace conglomerate Embraer) affected the Brazilian corruption landscape and the risks of doing business there?  During a recent program presented by The Network, Matteson Ellis, a member of Miller & Chevalier, discussed those risks in the current anti-corruption environment in Brazil, detailed the new BAA regulations and offered strategies for assuring compliance with the FCPA and the BAA when doing business in Brazil.  See also “Corruption Risk and the Changing Legal Climate in Latin America,” The FCPA Report, Vol. 3, No. 4 (Feb. 19, 2014).

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  • From Vol. 4 No.6 (Mar. 18, 2015)

    Operation Car Wash: Examining the History and Consequences of the Petrobras Scandal

    As the Petrobras investigation continues to unfold, consequences for companies and individuals, both in Brazil and worldwide, grow.  Raids have been conducted; hundreds of subpoenas issued; and the number of guilty pleas is already in the double digits.  Companies involved with Petrobras face a variety of consequences including potential FCPA charges.  In a recent webinar, Mayer Brown partner Kelly Kramer, and Tauil & Chequer Advogados partners Salim Jorge Saud Neto and Leonardo Morato discussed the history of the Petrobras investigation, the economic consequences for Petrobras suppliers and the international consequences of the scandal.  See also “The Changing Dynamics of Anti-Corruption Enforcement in Brazil,” The FCPA Report, Vol. 2, No. 23 (Nov. 20, 2013).

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  • From Vol. 3 No.6 (Mar. 19, 2014)

    Siemens’ Debarment Highlights the Crux of the Brazilian Business Challenge: Corruption Is Clear, But Anti-Corruption Law Is Ambiguous

    A Brazilian federal court has ruled that Siemens A.G., Europe’s largest engineering firm and FCPA enforcement action veteran, is prohibited from participating in public auctions and signing government contracts in Brazil for five years.  Some of the conduct at issue appears to be related to the bribery charges Siemens resolved in the U.S. and Germany in 2008.  Determining the impact of this ruling for companies doing business in Brazil, and for Siemens itself, is difficult, Mayer Brown’s Kelly B. Kramer told The FCPA Report.  This is because of the country’s protracted appellate process, its decentralized enforcement system, its new and largely untested anti-corruption law and other country-specific factors.  See also “Lessons Learned on Crafting Compliance Programs from the Largest FCPA Case in History,” The FCPA Report, Vol. 1, No. 3 (Jul. 11, 2012); “The Changing Dynamics of Anti-Corruption Enforcement in Brazil,” The FCPA Report, Vol. 2, No. 23 (Nov. 20, 2103).  Despite the challenge of pinpointing the precise impact of this ruling, the development nonetheless offers useful lessons for companies operating in Brazil.

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  • From Vol. 3 No.4 (Feb. 19, 2014)

    Corruption Risk and the Changing Legal Climate in Latin America

    Although Latin American countries offer a tremendous wealth of business opportunities, the region is a potential minefield of corruption risks, perilous to navigate.  A recent webinar hosted by Strafford Publications discussed the dynamic enforcement climate, risks endemic to the region, an overview of recent and pending changes in local anti-corruption laws (including the newly-enacted law in Brazil) and provided advice on how to optimize compliance programs for the region.  The program featured Jay Holtmeier, a partner at WilmerHale; Matteson Ellis, Special Counsel at Miller & Chevalier; and Matthew J. Feeley, a Shareholder in Buchanan Ingersoll & Rooney.  See also “Gibson Dunn Attorneys Take the Pulse of Anti-Corruption Risks in Emerging Markets,” The FCPA Report, Vol. 3, No. 3 (Feb. 5, 2014).

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    Navigating Compliance Challenges After the Debut of Brazil’s Anti-Corruption Law

    Brazil’s new anti-corruption law, with extensive anti-corruption provisions and strict penalties for non-compliance, is now in force.  Signed in August 2013 and effective as of January 29, 2014, the new law debuts at a time when international business and development in Brazil is booming.  In a recent webinar hosted by Strafford Publications, experts on the Brazilian Act shared detailed advice on the key provisions of the Act, risks of doing business in Brazil and how companies can comply with the Act’s provisions.  The panelists included Thaddeus R. McBride, Partner at Sheppard, Mullin, Richter & Hampton and Roberto di Cillo, Partner at Di Cillo Advogados, a Brazilian firm.  For other coverage on Brazil’s landmark law in The FCPA Report, see “Understanding and Acting on Brazil’s New Anti-Corruption Law,” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014); “How the New Brazilian Anti-Corruption Law Impacts U.S. Corporations,” The FCPA Report, Vol. 2, No. 21 (Oct. 23, 2013); and “The Essentials of the New Brazilian Anti-Corruption Legislation,” The FCPA Report, Vol. 2, No. 17 (Aug. 21, 2013).

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  • From Vol. 3 No.1 (Jan. 8, 2014)

    Understanding and Acting on Brazil’s New Anti-Corruption Law

    At the end of January 2014, Brazil’s new anti-corruption legislation, aimed at combating bribery and bid-rigging, is set to take effect.  The law contains broad anti-corruption provisions, including strict liability for some misconduct, that have serious implications for companies that do business in Brazil, whether through subsidiaries, agents or joint ventures.  A recent program presented by international law firm Mayer Brown provided a comprehensive overview of the new law and insights on how anti-corruption compliance programs may be tailored to provide the greatest protection under that law.  This article provides the key takeaways from that program.  See also “The Essentials of the New Brazilian Anti-Corruption Legislation,” The FCPA Report, Vol. 2, No. 17 (Aug. 21, 2013); “How the New Brazilian Anti-Corruption Law Impacts U.S. Corporations,” The FCPA Report, Vol. 2, No. 21 (Oct. 23, 2013); and “The Changing Dynamics of Anti-Corruption Enforcement in Brazil,” The FCPA Report, Vol. 2, No. 23 (Nov. 20, 2013).

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  • From Vol. 2 No.23 (Nov. 20, 2013)

    The Changing Dynamics of Anti-Corruption Enforcement in Brazil

    The spotlight is shining brightly on Brazilian corruption: One of Brazil’s highest-profile companies, Embraer, is being investigated by both Brazilian and American authorities in connection with alleged bribes paid to officials in the Dominican Republic and Argentina in exchange for business.  This joint investigation, the Brazilian aspect of which was uncovered by Reuters and the Wall Street Journal earlier this month, coincides with the passage and enactment of the Brazilian Anti-Corruption Act of 2013.  Recently, Robert Di Cillo, a partner at Di Cillo Advogados in Sao Paolo, and Thad McBride, a partner at Sheppard Mullin in Washington, D.C., discussed the details of the new law and its potential ramifications at a webinar sponsored by the Practising Law Institute.  See also “How the New Brazilian Corruption Law Impacts U.S. Corporations,” The FCPA Report, Vol. 2, No. 21 (Oct. 23, 2013).

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    K&L Gates Panel Reviews Anti-Corruption Enforcement in the U.S., the U.K., China, Australia, Latin America, Africa, Southeast Asia and Russia

    With the spate of new anti-corruption laws around the globe, and the evolution of laws already on the books, “it is critical for a company to have on-the-ground information and local support” in structuring an effective anti-bribery and anti-corruption (ABAC) program and responding to regulatory action in all of the regions in which it operates.  So said Dick Thornburgh, former Attorney General of the United States and former Governor of Pennsylvania, introducing a recent webinar presented by K&L Gates LLP, where Thornburgh is now of counsel.  The K&L Gates speakers who followed Thornburgh shared their direct local experiences and examined the state of the ABAC laws in their regions of speciality.

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    How the New Brazilian Anti-Corruption Law Impacts U.S. Corporations

    Brazil is the world’s seventh largest economy, with a GDP of over $2 trillion.  The country is considered an emerging global market, has a large domestic consumer market and is attractive to foreign direct investments.  Alongside this enormous growth, however, is the problem of corruption.  A large body of regulation governs the interaction between the public and private sectors in Brazil.  As a result, doing business in regulated sectors means that business will fall within a complex regulatory regime marked by uncertainty and burdensome bureaucratic requirements.  See “A Seven-Step Process for Mitigating Corruption Risk When Engaging Third-Party Consultants in Brazil,” The FCPA Report, Vol. 1, No. 7 (Sep. 5, 2012).  Brazil has now responded to global demands that it play a more active role in combating corruption on a domestic level – as well as the demands of the Brazilian public who have protested the lack of anti-corruption laws – with the enactment of a groundbreaking anti-corruption law that is aimed at changing the business culture in Brazil.  In a guest article, Adriana Dantas and Luiz Eduardo Alcântara, attorneys at Barbosa, Müssnich & Aragão in São Paulo, Brazil, present an overview of the Brazilian Anti-Corruption Law and explore the potential impact on U.S. companies doing business in Brazil.  See also “The Essentials of the New Brazilian Anti-Corruption Legislation,” The FCPA Report, Vol. 2, No. 17 (Aug. 21, 2013).

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  • From Vol. 2 No.17 (Aug. 21, 2013)

    The Essentials of the New Brazilian Anti-Corruption Legislation

    Spurred on by international pressure and massive street protests against corruption, the President of Brazil has signed sweeping new anti-bribery legislation.  The law has been a long time in coming – Brazil has been a party to the Anti-Bribery Convention of the OECD since 2000 and the United Nations Convention against Corruption since 2005; and this legislation was proposed three years ago.  Brazil, the planned site of the 2016 Olympics and the 2014 World Cup, holds enormous business potential for global companies because of its wealth of natural resources, growing middle class, relatively stable currency and other pro-development economic dynamics.  However, the country has notoriously Byzantine tax and regulatory systems, and corruption is endemic, making the business environment there difficult to navigate.  See “A Seven-Step Process for Mitigating Corruption Risk When Engaging Third-Party Consultants in Brazil,” The FCPA Report, Vol. 1, No. 7 (Sep. 5, 2012).  How will this new law change the risk landscape there?  In an interview with The FCPA Report, Andrew M. Levine, a partner with Debevoise & Plimpton LLP, explained in detail the salient points of the new law and its implications for companies doing business in Brazil.

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  • From Vol. 2 No.17 (Aug. 21, 2013)

    Unforeseen Corruption Liability: How to Avoid a Post-Acquisition “Oh My!” Moment

    In the “Wizard of Oz,” when Dorothy, the Scarecrow and the Tin Man are already deep in the haunted forest, Dorothy asks her guides what dangers could be present.  “Oh my!” she exclaims when she is told of the perils around her.  It is too late to turn back.  Such is the plight of many public companies when they acquire or merge with entities doing business in countries with a high corruption risk.  Without proper anti-corruption guidance, many companies discover too late that they have placed themselves – and their shareholders – in great potential danger by effectively buying a target’s legal liability for past FCPA violations.  The legal liability extends well beyond the U.S., as many countries such as the U.K. and, recently, Brazil, have enacted their own anti-corruption laws.  In a guest article, John Carney and Christina Tsesmelis, partner and senior associate, respecitvely, at BakerHostetler LLP, discuss best practices for merger and acquisition due diligence in light of U.S. precedent and the newly-passed Brazilian law.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    Lessons from the Latest Anti-Corruption Developments in the U.K., Brazil and China

    A single-minded focus on the FCPA with a passing nod to other countries’ regulatory regimes is not enough to make a company’s compliance program first-in-class today; multinational companies must fully address an array of global anti-bribery laws in an environment of growing global enforcement and increased prosecutorial vigor.  Regulatory regimes in other countries may not be consistent with existing company compliance programs.  In a recent webinar, partners from Hogan Lovells shared their insight and experience on navigating the latest global developments in anti-bribery and corruption regulation and enforcement.  This article conveys the highlights from the discussion, focusing primarily on the anti-corruption regimes in China, the U.K. and Brazil.

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  • From Vol. 2 No.1 (Jan. 9, 2013)

    Pharma Giant Eli Lilly Agrees to $29.4 Million Consent Judgment to Settle SEC Charges of FCPA Violations Arising Out of Its Operations in Russia, China, Brazil and Poland

    Eli Lilly and Company (Lilly), a major pharmaceutical company, has consented to the entry of a final judgment against it to settle SEC charges that Lilly subsidiaries violated the FCPA in connection with their operations in China, Brazil, Poland and Russia.  The consent judgment, which includes an injunction against future FCPA violations, calls for an independent review of Lilly’s internal controls and requires Lilly to pay disgorgement, interest and civil penalties of almost $29.4 million.  In its Complaint, the SEC provides insight into its expectations for internal controls.  The Lilly settlement resolves another case in what has been considered an “industry sweep” of pharmaceutical companies by the SEC.  See also “LeClairRyan Webinar Highlights Ten Anti-Corruption Risks for Pharmaceutical and Medical Device Companies and Outlines the Elements of an Effective FCPA Compliance Program,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).

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  • From Vol. 1 No.7 (Sep. 5, 2012)

    A Seven-Step Process for Mitigating Corruption Risk When Engaging Third-Party Consultants in Brazil

    Brazil is a country with tremendous business promise, but considerable corruption risk.  On the upside, Brazil is the world’s sixth largest economy; will host the upcoming 2014 World Cup and the 2016 Summer Olympics; has a largely internally focused economy (and thus does not rely on exports to the same extent as China, for example); was relatively unscathed by the 2008-2009 financial crisis; is making a concerted push to upgrade its infrastructure (ports, roads, utilities, sporting venues, etc.); has a wealth of natural resources (including oil) and a growing ability to commercialize them; and more.  The Brazilian government recently estimated that its economy will grow 4.5 percent in 2013.  On the downside, however, corruption has been a drag on Brazil’s economy for as long as anyone can remember, and adversely affects other aspects of life in Brazil (notably, the uneven and sporadic administration of justice).  Brazil’s regulatory regime is infamously – many would say, unnecessarily – complicated, in particular with respect to tax.  (Avon’s internal FCPA investigation reportedly has uncovered, among other things, millions of dollars of payments made by Avon to tax consultants in Brazil.)  Accordingly, doing business effectively in Brazil requires navigating a highly complex regulatory regime.  In turn, navigating that regime often requires on the ground expertise, color and connections.  In short, it requires hiring local, third-party consultants, or despachantes, as they are called in Brazil.  A big business opportunity, a complex regulatory regime and third-party agents that are ubiquitous and virtually inevitable – anti-corruption professionals will recognize the current landscape in Brazil as a classic recipe for FCPA violations.  The key business question is how to avoid such violations while taking advantage of the considerable business opportunities that Brazil offers.  This article seeks to answer that question.  In particular, this article discusses: relevant precedent regarding third-party consultants in Brazil, including completed enforcement actions and ongoing investigations; industries in Brazil in which corruption risk is salient; specific corruption risks in Brazil; the rationale for the use of third-party consultants in Brazil; three “red flags” to be aware of when evaluating third-party consultants in Brazil; seven steps to take when retaining third-party consultants in Brazil (steps that were originally distilled by Navigant Consulting for Tyco International Ltd.); and suggestions for monitoring third-party consultants once they are hired.

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