LAW N. 12.846, OF AUGUST 1, 2013
CHAPTER I - GENERAL PROVISIONS
CHAPTER II - WRONGFUL ACTS AGAINST NATIONAL OR FOREIGN PUBLIC ADMINISTRATION BODIES
CHAPTER III - ADMINISTRATIVE LIABILITY
CHAPTER IV - ADMINISTRATIVE LIABILITY PROCEEDINGS
CHAPTER V - LENIENCY AGREEMENT
CHAPTER VI - JUDICIAL LIABILITY
CHAPTER VII - FINAL PROVISIONS
LAW N. 12,846, OF AUGUST 1, 2013
Establishes the rules that discipline the civil and administrative liability of legal entities that carry out acts against national or foreign governments, and lays down other provisions.
THE PRESIDENT OF THE REPUBLIC
I hereby make known that the National Congress decrees and I sanction the following Law:
Article 1. This Law provides for the strict civil and administrative liability of legal entities for acts committed against national or foreign public administration.
Sole paragraph. The provisions set forth in this Law shall apply to companies and general partnerships, either incorporated or not, regardless of their business organization or corporate model, as well as to foundations, associations of entities or individuals, or foreign companies that have set up their main office, a branch or representative office in the Brazilian territory, however organized, even if on a temporary basis.
Article 2. Legal entities shall be held strictly liable, in the administrative and civil spheres, for any of the wrongful acts established in this Law performed in their interest or for their benefit, exclusive or not
Article 3. The liability of legal entities does not exclude the individual liability of their directors or officers, or any other individual who is the offender, co-offender or participant of the wrongful act.
Paragraph 1. Legal entities shall be held liable irrespective of the individual liability of the individuals referred to in the head provision of this Article.
Paragraph 2. The directors or officers shall be held liable for illegal acts solely to the extent of their culpability.
Article 4. The liability of legal entities remains in the event of amendments to their articles of incorporation, corporate changes, mergers, acquisitions or spin-offs.
Paragraph 1. In the event of mergers and acquisitions, the liability of the successor shall be restricted to the payment of applicable fines and to the full compensation for occasional damages, within the limit of the transferred assets, not being subject to the application of other sanctions provided for in this Law related to acts and facts that occurred before the date of the said merger or acquisition, except in case of simulation or evident fraud intention, which must be duly proved.
Paragraph 2. Parent, controlled or affiliated companies or consortium members, within the scope of their respective consortium agreement, shall be held jointly liable for the perpetration of acts provided for in this Law, being such liability restricted to the payment of applicable fines and to the full compensation for occasional damages.
Article 5. For the purposes of this Law, wrongful acts against national or foreign public administration bodies are acts performed by the legal entities referred to in the Sole paragraph of Article 1 to the detriment of national or foreign public assets, of public administration principles, or to Brazil´s international commitments, and are defined as follows:
I – to promise, offer or give, directly or indirectly, an undue advantage to a public official or to a third party related to him/her;
II – to demonstrably finance, defray, sponsor or in any way subsidize the performance of the wrongful acts established in this Law;
III – to demonstrably make use of a third party, either an individual or a legal entity, in order to conceal or dissimulate the entities´ actual interests or the identity of those who benefited from the performed acts;
IV – with respect to public bidding and government procurement:
a) to thwart or defraud, through an adjustment, arrangement or any other means, the competitive nature of public bidding processes;
b) to prevent, disturb or defraud the execution of any act related to a public bidding process;
c) to remove or try to remove a bidder by means of fraud or by the offering of any type of advantage;
d) to defraud public bidding processes or bidding-related contracts;
e) to create, in a fraudulent or irregular manner, a legal entity with the purpose of participating in a public bidding process or of entering into a contract with the public administration;
f) to gain undue advantage or benefit, in a fraudulent manner, from amendments or extensions of contracts executed with the public administration without authorization in the Law, in the notice of the public bidding or in the respective contractual instruments; or
g) to manipulate or defraud the economic and financial balance of the contracts executed with the public administration;
V – to hinder investigations or inspections carried out by public agencies, entities or officials, or to interfere with their work, including the activities performed by regulatory agencies and by inspection bodies of the national financial system .
Paragraph 1. Public agencies and entities, or diplomatic representations of a foreign country, at any government level or scope, as well as legal entities directly or indirectly controlled by the government of a foreign country are all considered foreign public administration.
Paragraph 2. For the purposes of this Law, international public organizations will be considered equivalent to foreign public administration bodies.
Paragraph 3. For the purposes of this Law, those who, even transitorily or without compensation, hold a public position, job or office in government agencies and entities, or in diplomatic representations of a foreign country, as well as in legal entities directly or indirectly controlled by the government of a foreign country, or in international public organizations, will be considered foreign public agents.
Article 6. Within the administrative sphere, the sanctions listed below shall apply to legal entities held liable for the wrongful acts provided for in this Law:
I – a fine in the amount of 0.1% (zero point one percent) to 20% (twenty percent) of the gross revenues earned during the fiscal year prior to the filing of administrative proceedings, excluding taxes, which shall never be lower than the obtained advantage, when it is possible to estimate it; and
II – extraordinary publication of the condemnatory decision.
Paragraph 1. The sanctions will be applied on a grounded manner on an isolated or cumulative basis, according to the peculiarities of the concrete case and to the severity and nature of the perpetrated offenses.
Paragraph 2. The application of the sanctions set forth in this Article shall be preceded by a legal opinion prepared by the Public Advocacy Office or the body of legal assistance, or its equivalent, of the public entity..
Paragraph 3. The application of the sanctions set forth in this Article does not exclude, in any case, the obligation of full restitution for the damage caused.
Paragraph 4. In the event of item I of the head provision, in case it is not possible to adopt the criterion regarding the value of the legal entity’s gross earning, the applicable fine will range from BRL 6,000.00 (six thousand Brazilian reais) to BRL 60,000,000.00 (sixty million Brazilian reais).
Paragraph 5. The extraordinary publication of the condemnatory decision will be made as a summary of the decision at the legal entity’s expenses, through a means of communication widely circulated in the area where the violation was committed and the legal entity has business or, in its absence, in a nationally circulated publication, as well as by fixing a public notice, for the minimum term of 30 days, at the establishment or at the place where the activity is conducted, in a manner visible to the public, and at an electronic site in the world wide web.
Paragraph 6. (VETOED).
Article 7. In applying the sanctions, the following will be taken into consideration:
I – the seriousness of the offense;
II – the advantage obtained or intended by the offender;
III – whether the offense was consummated or not;
IV – the degree of damage or risk of damage;
V – the negative effect produced by the offense;
VI – the offender’s economic situation;
VII – the cooperation of the legal entity to the investigations of the offenses;
VIII – the existence of internal mechanisms and procedures of integrity, audit and incentive for the reporting of irregularities, as well as the effective enforcement of codes of ethics and of conduct within the scope of the legal entity;
IX – the value of the contracts held by the legal entity with the damaged public agency or entity; and
X - (VETOED).
Sole paragraph. The parameters of evaluation of the mechanisms and procedures provided for in item VIII of the head provision shall be established in a regulation to be issued by the Federal Executive Branch.
Article 8. The filing and decision of an administrative proceeding to determine the liability of legal entities shall be carried out by the highest authority within each agency or entity of the Executive, Legislative or Judicial Branches, which shall act ex officio or upon request, in compliance with the due process and full defense principles.
Paragraph 1. The jurisdiction to initiate and decide on administrative proceedings to determine the liability of legal entities may be delegated, while sub-delegation is prohibited.
Paragraph 2. Within the scope of the Federal Executive Branch, the Office of the Comptroller General (CGU) has concurrent jurisdiction to commence administrative proceedings to determine the liability of legal entities, or to arrogate the proceedings initiated based on this Law, for the examination of their regularity or to correct their progress.
Article 9. The Office of the Comptroller General (CGU) is responsible for the investigation, the proceeding of and the decision on the wrongful acts provided for in this Law commited against the foreign public administration, subject to the provision set forth in Article 4 of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, enacted by Decree N. 3,678, of November 30, 2000.
Article 10. The administrative proceeding to determine the liability of legal entities will be conducted by a committee appointed by the authority that initiated the proceeding and will be formed by 2 (two) officials with more than 3 years in office.
Paragraph 1. At the request of the committee referred to in the head provision of this Article, public entities may request, through their judicial representative body or equivalent division the necessary judicial measures for the due investigation and prosecution of the wrongdoing, including search and seizure procedures.
Paragraph 2. The committee, in a precautionary manner, may suggest the authority that initiated the proceeding to suspend the effects of acts or process that are the subject of the investigation.
Paragraph 3. The committee shall conclude the proceeding within 180 (one-hundred and eighty) days as of the date of the publication of the act that creates the committee, and shall present reports on the investigated facts and on the possible liability of the legal entity, suggesting, in a motivated manner, the sanctions to be applied.
Paragraph 4. The term provided for in Paragraph 3 may be extended by means of a grounded decision by the authority that initiated the case.
Article 11. With respect to the administrative proceeding to determine the liability of the legal entity, the legal entity will have a term of 30 (thirty) days to present its defense, to be counted from the date of service.
Article 12. The administrative proceeding, together with the committee’s report, will be remitted for judgment to the authority that initiated the proceeding, pursuant to Article ten.
Article 13. The filing of a specific administrative proceeding for the full restitution of damages does not affect the immediate application of the sanctions established in this Law.
Sole paragraph. Once the proceeding is concluded and no payment is made, the appraised credit will be registered at the public treasury as an overdue tax liability.
Article 14. The corporate personality may be disregarded whenever it is used with abuse of right to ease, conceal or dissimulate the performance of the wrongful acts provided for in this Law or to cause property confusion, and all effects of the sanctions applicable to the legal entity shall be extended to its managers and shareholders with management powers, in compliance with the due process and full defense principles.
Article 15. After the administrative proceeding is completed, the committee appointed to determine the liability of the legal entity shall give notice of its existence to the Public Prosecution Office in order for it to proceed with the investigation of possible offenses.
Article 16. The highest authority of each public body or entity may enter into a leniency agreements with the legal entity liable for the performance of the acts provided for in this Law that effectively collaborate with the investigations and with the administrative proceeding provided that such collaboration results in:
I – the identification of the ones involved in the offense, whenever applicable; and
II – rapidly obtaining information and documents that prove the wrongful acts under investigation.
Paragraph 1. The agreement referred to in the head provision of this Article may only be executed if the requirements listed below are fulfilled cumulatively:
I – the legal entity is the first one to come forward and demonstrate its willingness to cooperate with the investigation of the wrongful act;
II – the legal entity completely ceases its involvement in the investigated offense as of the date the agreement is proposed;
III – the legal entity admits its participation in the wrongful act and fully and permanently cooperates with the investigations and administrative proceedings, always attending, at its expense and whenever requested, to all procedural acts until the end of the case.
Paragraph 2. The execution of the leniency agreement will exempt the legal entity from the sanctions provided for in item II of Article 6 and in item IV of Article 19 and will reduce the amount of the applicable fine by up to 2/3 (two-thirds).
Paragraph 3. The leniency agreement does not exempt the legal entity from its obligation to make full restitution for the damages caused.
Paragraph 4. The leniency agreement will establish the necessary conditions to ensure the effectiveness of legal entity´s collaboration and the useful result of the proceeding.
Paragraph 5. The effects of the leniency agreement will be extended to legal entities that are part of the same economic group, in fact or by law, provided that they jointly execute the agreement, respected the conditions therein established.
Paragraph 6. The proposal of the leniency agreement will only become public after the execution of the respective agreement, except if in the best interest of the investigations and of the administrative proceeding.
Paragraph 7. The denial of a proposed leniency agreement will not result in the confession of the wrongful act under investigation.
Paragraph 8. In the event of breach of the leniency agreement, the legal entity will be prohibited from entering into a new agreement for 3 (three) years starting on the date that the public administration becomes aware of the said breach.
Paragraph 9. The execution of a leniency agreement interrupts the statute of limitation of the wrongful acts provided for in this Law.
Paragraph 10. The Office of the Comptroller General (CGU) is the competent authority to enter into leniency agreements in the federal Executive Branch, as well as on cases of wrongful acts committed against the foreign public administration.
Article 17. The public administration may also enter into leniency agreements with legal entities liable for illegal acts under Law n. 8,666, of June 21, 1993, in order to exclude or mitigate the administrative sanctions established in articles 86 to 88.
Article 18. The liability of the legal entity in the administrative sphere does not exclude the possibility of its liability in the judicial sphere.
Article 19. The Federal Government, the States, the Federal District and the Municipalities, through their respective Public Advocacy Offices or legal representation bodies, or their equivalent, and the Public Prosecution Office may file a judicial action in relation to the wrongful acts set forth in Article 5 of this Law, with a view to the application of the following sanctions to the responsible legal entities:
I – loss of the assets, rights or valuables representing the advantage or profit directly or indirectly obtained from the wrongdoing, except for the right of the damaged party or of third parties in good faith;
II – partial suspension or interdiction of its activities;
III – compulsory dissolution of the legal entity;
IV – prohibition from receiving incentives, subsidies, grants, donations or loans from public agencies or entities and from public financial institutions or government-controlled entities from 1 (one) to 5 (five) years.
Paragraph 1. The compulsory dissolution of the legal entity will be established when the following is evidenced:
I – the corporate personality was used on a regular basis to facilitate or promote the performance of wrongful acts; or
II – the legal entity was organized to conceal or dissimulate illegal interests or the identity of the beneficiaries of the acts performed.
Paragraph 2. (VETOED).
Paragraph 3. Sanctions may be applied in an isolated or cumulative manner.
Paragraph 4. The Public Prosecution Office or the judicial representative body of the public entity, or their equivalent, may request the freezing of assets, rights or values necessary to guarantee the payment of the fine or to ensure the full restitution for the damages caused, as provided for in Article 7, except for the right of third parties in good faith.
Article 20. The sanctions set forth in Article 6 may be applied in the lawsuits files by the Public Prosecution Office, without prejudice to the sanctions set forth in this Chapter, provided that an omission of the competent authority to provide the administrative liability is verified.
Article 21. The procedures set forth in Law N. 7,347, of July 24, 1985, will be adopted as the procedure for the judicial action.
Sole paragraph. The condemning judgment shall render certain the obligation to fully repair the damage caused by the wrongful act, which amount is to be determined in a subsequent liquidation process, in case it is not expressly indicated in the issued decision.
Article 22. It is hereby created, in the sphere of the Federal Executive Branch, the National Registry of Punished Companies (CNEP), which will consolidate the sanctions applied based on this Law by agencies or entities from the Executive, Legislative and Judicial Branches of all spheres of government.
Paragraph 1. The agencies and entities referred to in the head provision of this Article shall submit to the CNEP the data related to the applied sanctions and shall keep such data updated.
Paragraph 2. The CNEP shall record, inter alia, the following information on the applied sanctions:
I – corporate name and registration number of the legal person or entity in the Corporate Taxpayer Registry (CNPJ);
II – type of sanction; and
III – date of application of the sanction and end date of the effects of the limiting or impeditive sanctions, when appropriate.
Paragraph 3. The authorities competent to execute the leniency agreements provided for in this Law shall also inform and keep updated in the CNEP the information about the signed leniency agreements, unless such practice affects the interest of ongoing investigations and related administrative proceeding.
Paragraph 4. In the event the legal entity does not comply with the conditions of the leniency agreement, in addition to the information set forth in Paragraph 3, reference to such default shall be included in the CNEP.
Paragraph 5. Upon request of the agency or entity applying the sanctions, the records of the sanctions and leniency agreements will be excluded after the end of the term previously established in the sanctioning act or after full compliance with the leniency agreement and restitution for the damage caused.
Article 23. The agencies or entities of the Executive, Legislative and Judiciary Branches of all spheres of the government shallinform and keep updated in the National Registry of Inapt and Suspended Companies (CEIS), established in the sphere of the federal Executive Branch, information related to the sanctions applied by them, in accordance with articles 87 and 88 of Law 8.666 from 1993.
Article 24. The fine and the loss of assets, rights or valuables applied based on the provisions established in this Law will be allocated preferably to the public bodies or entities damaged.
Article 25. The wrongful acts set forth in this Law are time-barred in 5 (five) years, as of the date of the awareness of the wrongdoing or, in case of permanent or continued violation, as of the date in which it is ceased.
Sole paragraph. The statute of limitation will be interrupted, in the administrative or judicial sphere, by the commencement of the proceeding aimed at investigating the wrongdoing.
Article 26. The legal entity will be represented in the administrative proceeding in accordance with its by-laws or articles of incorporation.
Paragraph 1. Companies with no legal personality will be represented by the person responsible for the management of their assets.
Paragraph 2. Foreign legal entities will be represented by their managers, representatives or officers responsible for administrating their branches, agencies or offices operating or established in Brazil.
Article 27. The competent authority that is aware of the wrongdoings provided for in this Law and does not adopt measures for the investigation of the facts will be subject to criminal, civil and administrative liability in accordance with applicable laws.
Article 28. This Law applies to wrongful acts committed by Brazilian legal entities against foreign public administration, even if such acts were committed overseas.
Article 29. The provisions set forth in this Law do not exclude the jurisdiction of the Administrative Counsel of Economic Defense (CADE), the Ministry of Justice and the Ministry of Finance to prosecute and render judgment on acts that violate the economic order.
Article 30. The application of the sanctions set forth in this Law does not affect the processes of accountability and application of penalties arising out of:
I – an improbity act, pursuant to Law N. 8,429, of 1992; and
II – wrongful acts covered by Law N. 8,666, of June 21, 1993, or other rules regarding public biddings and government procurement, including the Differentiated Regime of Public Contracts (RDC), enacted by Law N. 12,462, of August 4, 2011.
Article 31. This Law comes into force 180 (one hundred and eighty) days after the date of its publication.
Brasília, August 1st, 2013; 192nd year of Independence and 125th of the Republic.