The ABCs Of Anti-Corruption And Bribery Law: What Preceded Brazil's "Operation Car Wash" And What Comes Next?

• Published date: 10 May 2021
• Subject Matter: Government, Public Sector, Criminal Law, Money Laundering, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Tauil & Chequer
• Author: Mr Norman Nadorff and Michel Sancovski

BACKGROUND

No one knows when a government official was first bribed, but as far back as 1754 B.C. the Code of Hammurabi prohibited the practice. As for the U.S., the first Congress passed the Federal Crimes Act which prohibited some forms of Bribery. Traditionally bribery laws around the globe looked inward - at the subordination of domestic officials. Virtually no attention was paid to another form of bribery - the citizens of one country bribing the officials of another to obtain business or other improper benefit. Indeed, such practice was not only ignored, but often condoned by granting tax deductions for such payments.

Fast forward to 1977, when the U.S. Congress, in the wake of embarrassing revelations during the Watergate hearings, enacted the Foreign Corrupt Practices Act ("FCPA"). In essence, the FCPA prohibits U.S. Persons from corruptly giving or promising anything of value to foreign governmental officials (broadly defined) in order to obtain business or other unfair advantage. It casts a wider enforcement net by requiring covered Persons to keep accurate books and records and reliable auditing systems. At first, there was a great wailing and gnashing of teeth by U.S. companies who claimed the FCPA would place them at a great disadvantage against less scrupulous foreign competitors. Over time, however, many such critics learned to live with its provisions and even laud its purpose and cite its benefits.

For decades, the U.S. fought its anti-corruption and bribery ("ABC") crusade alone. Through pressure from the U.S., the OECD adopted the Anti-Bribery Convention in 1999 ("OECD Convention"), which requires member states to enact laws prohibiting bribery of foreign officials by their nationals ("ABC Laws"). The Convention spawned ABC Laws, most notably the U.K. Bribery Law. This Law goes beyond the FCPA by (i) prohibiting private bribery; (ii) extending vicarious liability, and (iii) specifically prohibiting "facilitating payments". Not to be outshined, many non-OECD countries significantly revamped their domestic corruption laws.¹

BRAZIL

Like its global counterparts, Brazil has, since the turn of the century, significantly modified its ABC Laws and more significantly, dramatically enhanced their enforcement. To understand where she is, we must understand how she got there.

Operation Car Wash (Operação Lava Jato)

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