Foreign visitors attending the FIFA Confederations Cup soccer tournament, which took place throughout Brazil in June, must have been surprised when, instead of finding a festive ambiance and welcoming fans from this soccer-crazed nation, they were greeted by massive and oftentimes violent street protests. What started out as a relatively small street protest against a bus fare hike in the city of São Paulo quickly spread throughout all of Brazil’s major cities, and one of the principal targets of the protests was Brazil’s perceived culture of corruption and impunity. An early, unexpected victory in late June for the anti-corruption movement was the defeat of a proposed constitutional amendment, which, if enacted, would have severely limited the power of the Brazilian federal Public Ministry to investigate violations of Brazil’s anti-corruption laws. So intense was the popular anger directed at the legislatorsthat the measure was defeated 430 to 9 in the Brazilian lower house of Congress.
It is within this context that the Aug.1 signing into law of Brazil’s Law No. 12.846/13 is poised to become a watershed moment in Brazil’s fight against corruption. The law, which will be in effect starting in early 2014, is similar to the U.S. Foreign Corruption Practices Act and the U.K. Bribery Act, but is even more robust in certain respects and contains a series of draconian penalties for corporate violators. Existing penal provisions continue applying to individual offenders. This law will most definitely have an impact in South Florida, a region with strong business ties to Brazil. Those South Florida companies doing business in Brazil will need to be very careful in their compliance strategy, as it is not out of the realm of possibility that the Brazilian authorities will target U.S.-based companies doing business in Brazil as a way of sending a message to the rest of the world regarding its new anti-corruption law.
