Brazil: Establishing Effective Compliance Regimes

Last Updated: 17 December 2014
Article by Paola Pugliese

In June 2013 Brazil erupted in protests that gathered vast crowds in several cities across the country, with claims that varied in scope. One claim, however, was widely heard in unison: 'stop corruption!' was a mantra insistently repeated by protesters, putting politicians from across the political spectrum under an uncomfortable spotlight.

It was a surprising wake-up call. The matter was subject to heated debates for months during presidential elections in 2014 and climaxed with the Lava Jato operation of the Federal Police, which uncovered a large corruption scandal involving civil construction companies and politicians at the heart of a company which once made Brazilians proud: Petrobras. .

The public desire for ethics and compliance loudly voiced in the streets is certainly not to be understood as confined to politics and public servants. Corporations must hear the call and act accordingly. As senior politicians face jail sentences, detection mechanisms become more sophisticated and legislation becomes more effective and enforceable, a culture of compliance is starting to replace the long-standing perception of impunity that has contaminated the business environment.

One reason in particular must drive this new mindset: it always takes two to tango. If someone was bribed, someone had to pay.

Compliance programmes are not designed to make regulators happy. They make sure people follow the legal rules of a certain jurisdiction while they preserve the company's culture and values no matter where they are doing business. Effective risk management is highly dependent on the company's success in doing both.

A strong compliance programme allows people to identify when boundaries are crossed, alert management and respond to breaches appropriately. This is certainly a challenge in every jurisdiction and no less in a changing environment such as Brazil. Brazilian laws and case law have not provided much guidance so far with respect to the satisfactory content of compliance and ethics programmes.

Antitrust regulators tried unsuccessfully to introduce a certified compliance programme in 2004. More recently, compliance programmes have gained a lot of attention in light of the recent Anti-Bribery Law, enacted in the midst of the protests of 2013 and which came into force on 29 January 2014.

The new Anti-Bribery Law establishes that an effective compliance programme will be taken into account for the purpose of the reducing penalties in the case of convictions. The minimum standards for the compliance programme to be considered eligible for the penalty reduction are subject to further regulation. A draft of the bill regulation is under the analysis in the President's Executive Office and is expected to be enacted soon. The new regulation should establish, pursuant to a public statement made by the Head of the Office of the Comptroller General (CGU), relate both to the structure of the compliance programme and to the effectiveness of its implementation.

With respect to the structure of the programme, the minimum requirements are likely to include, according to the statement of the Head of the CGU: (i) commitment and support of the senior management of the company; (ii) standard policies of behaviour and ethics; (iii) periodic training sessions of employees and executives; (iv) periodic risk assessment; (v) creation of hotlines for reporting breaches; (vi) monitoring and enforcement of internal controls and compliance policies; (vii) enforcement of disciplinary measures in case of breach; (viii) analysis and monitoring of third-party reputation; and (ix) transparency of donations to candidates and political parties.

In regard to the effectiveness of the programme, the minimum requirements are likely to include, according to the statement of the Head of the CGU: (i) prompt and spontaneous communication of the violation to the public administration; (ii) dismissal of the involved employees in the violation before the notification of the public authority; and (iii) evidence of no involvement, awareness or tolerance of the senior management of the violation.

The Head of the CGU reported that the size of the company and number of employees will also be taken into consideration when analysing the compliance programme. The draft bill is reported to include a reduction of two-thirds of the administrative fine.

Until further guidance is provided, companies are left on their own to design, implement and enforce effective compliance programmes in Brazil.

There are several elements that contribute to the success of an effective compliance programme. The first and more important is the commitment and full cooperation of the senior management of the company in its design, implementation, supervising and maintenance.

Another key element is the appointment of the right person or group of people to be accountable for the implementation and monitoring of the compliance programme. It is highly advisable that this job is handed to a senior executive or group of executives (in this case, the compliance committee), with total independence and authority, full access to the senior management and deep knowledge about the internal structure of the company. The executive or group of executives must be in a position to hold confidentiality of the suspicious activities reported to them.

Compliance programmes must be tailored to the specific needs of each company and their business activity. This is particularly true for antitrust compliance programmes, which have to take into account the market structure and, most importantly, common business practices of the industry.

Compliance programmes must, above all, be simple and understandable, to employees across all areas and hierarchy levels of the company.

An effective compliance programme must be capable of educating and training executives and employees about risks that they and the company are exposed to. For that purpose, the programme must rely on presentations and seminars that must include real-life situations instead of only theoretical examples. The materials may include videos, online training sessions, workshops and other activities that trigger the interest of people in the subject matter. Commonly, employees are tested after trainings and grades are considered in their professional evaluations.

Mechanisms of internal communications also must be established to allow the immediate reporting of suspicious activities to the compliance officer or committee. Confidentiality and anonymity is absolutely crucial for the success of the instrument. Disciplinary mechanisms must be created and duly implemented across the entire company, irrespective of the hierarchy level of the individuals involved.

A regular and periodic monitoring of the compliance programme is of vital importance to the programme's success. Identified violations must be immediately fixed. Periodical external audits are helpful for that purpose. The programme must be periodically revised and updated in accordance with the authorities' latest findings.

An effective programme must also establish a document retention policy, which takes into account obligations provided by tax and commercial laws and clearly instructs people not to destroy them.

Last but not least, a strong compliance programme must cover all areas to which the company is exposed, ranging from corporate governance to environmental laws, from tax regulations to money laundering, from bribery and corruption to antitrust.

Compliance and ethical behaviour may be the only adequate response to the local demand for a revised way of doing business in Brazil. When boundaries are crossed, companies have a lot at stake: reputation, brand, stock. But also their values. Compliance programmes can be an alarm bell and give senior management the opportunity to respond properly before things get worse. Companies should be attentive to the message that the regulation is sending and act accordingly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.