In the last few years, news of corruption scandals have been making constant headlines in Brazil, allegedly tainting all
levels of the federal, state, and local public
administrations, throughout the country,
involving many political parties and politicians.
After three years of Operation
Car Wash, as a compliance
professional, I can testify that the
enforcement wave is still very active,
affecting, among others, banking,
healthcare, and food industries, but
more companies are adopting or
enhancing compliance programs.
Indeed, the research
“2017 Outlook for Legal Issues in Brazil,”
conducted by LatinFinance and Management
& Excellence at the request of TozziniFreire,
announced that compliance is to be a priority
subject for 74% of the survey participants.
Nevertheless, there is still a discouraging
belief that corruption is unavoidable to do
business with the government. And would
public entities endeavor to recover general
trust and join the fight against corruption,
particularly in public procurements and
On this connected matter, there is a new
law known as the “Government-controlled
Companies Law,” which, among other
provisions, provides strict rules for public
procurement proceedings as deterrence to
corruption. This law mandates government-
controlled companies effectively implement
and improve their compliance programs and
establishes provisions that should reduce
political leverage when the administration fills
technical positions, reducing undue political
influence in the selection and appointment
process. Furthermore, there is an increase of
oversight of internal and external control bodies.
To assist public companies, the government
has issued “Guidelines for implementing
integrity programs in public entities,” bringing
a sign of optimism, but time will tell if
government-controlled companies will indeed
adopt necessary changes.
In addition, Operation Car Wash has also
brought repercussions in some countries of Latin
America. In countries like Argentina, Peru, and
Mexico, Operation Car Wash is the most relevant
recent case against corruption.
New anticorruption legislation has been
issued by Peru (Ley de Responsabilidad de
Personas Jurídicas por El Delito de Cohecho
Activo Transnacional), Colombia (Ley de
Responsabilidad de las Personas Jurídicas por
Actos de Corrupción Transnacional), Chile (
Anti-crime Agenda), and also Mexico (Ley General de
Responsabilidades Administrativas—parte del
Sistema Nacional Anticorrupción). The Argentine
Congress has just approved the corporate
criminal liability law in November 2017.
These legislations provide for a clear incentive
to implement an effective compliance program as
a mitigating factor in the assessment of corporate
liability in alleged corrupt practices.
The enforcement of these new legislations
will have to be seen, but one cannot deny that this
is an important step and deserves our applause.
Shin Jae Kim ( Skim@tozzinifreire.com.br) Head of the Compliance &
Investigation practice at TozziniFreire Advogados in São Paulo, Brazil.
by Shin Jae Kim, CCEP, CCEP‑I
Whatś the compliance news in
Latin America and Mexico
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