Brazil - 9-CorruptionBrazil - Corruption
Brazil has laws, regulations and penalties to combat corruption, but their effectiveness is inconsistent. Several bills to revise the country's regulation of the lobbying/government relations industry are pending before Congress. Bribery is illegal, and a bribe by a local company to a foreign official can result in criminal penalties for individuals and administrative penalties, including fines and potential disqualification from government contracts, for companies. A company cannot deduct a bribe to a foreign official from its taxes. While federal government authorities generally investigate allegations of corruption, there are inconsistencies in the level of enforcement among individual states. Corruption is reported to be problematic in business dealings with some authorities, particularly at the municipal level. U.S. companies operating in Brazil are subject to the U.S. Foreign Corrupt Practices Act (FCPA).
In 2016, Brazil dropped from 76th (in 2015) to 79th out of 176 countries in Transparency International's Corruption Perceptions Index. The full report can be found at: Transparency
Since 2014, the criminal investigation, “Operation Carwash” (Lava Jato), uncovered a complex web of public sector corruption, contract fraud, money laundering, and tax evasion stemming from systematic overcharging for government contracts, particularly at parastatal oil company Petrobras. The ongoing investigation led to the arrests of Petrobras executives, oil industry suppliers including executives from Brazil’s largest construction companies, money launderers, former politicians, and political party operatives. Many sitting Brazilian politicians are currently under investigation.
In December 2016, Brazilian construction conglomerate Odebrecht and its chemical manufacturing arm Braskem agreed to pay a penalty and plead guilty to charges filed in the United States, Brazil, and Switzerland that alleged the companies paid hundreds of millions of dollars in bribes to government officials around the world. The U.S. Department of Justice case stemmed directly from the Lava Jato investigation and focused on violations of the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). Details on the case can be found here: https://www.justice.gov/opa/pr/odebrecht-and-braskem-plead-guilty-and-agree-pay-least-35-billion-global-penalties-resolve.
In 2015, GOB prosecutors also announced “Operation Zealots” (Operacao Zelotes), in which both domestic and foreign firms are alleged to have bribed tax officials to reduce their assessments.
UN Anticorruption Convention, OECD Convention on Combatting Bribery
Brazil is a signatory to the OECD Anti-Bribery Convention and a participating member of the OECD Working Group on bribery. It was one of the founders, along with the United States, of the intergovernmental Open Government Partnership, which seeks to help governments increase transparency.
Resources to Report Corruption
International Affairs Advisor
Brazilian Federal Public Ministry
R. Bela Cintra, 409; Sao Paulo, Brasil
+55 (11) 3259-6986
Brazil Economic Development and Investment Market Access