On March 12, 2024, the Public Security Committee of the Senate approved the Bill No. 4.436/2020, which aims to amend the Criminal Code to include private corruption in the Brazilian legal system. The proposal has been sent to the Committee on Constitutionality, Justice and Citizenship and is awaiting the appointment of a rapporteur to analyze its constitutionality and other requirements. If approved, the proposal will be examined by the House of Representatives, which will be the reviewing body under Brazil’s bicameral legislative process. Subsequently, if approved by the House of Representatives, the text will be submitted to the President of the Republic for approval.

Legislative Bill No. 4.436/2020 was reviewed by the Public Security Committee of the Senate jointly with Legislative Bill No. 4.628/2020, as they address the same subject. The purpose of Bill No. 4.436/2020 is to criminalize the act of demanding, requesting or receiving an undue advantage, conducted by employees and/or representatives of companies or private institutions to favor themselves or third parties, directly or indirectly, or accepting a promise of such an advantage, in order to perform or omit an act inherent to their duties, at the expense of the company.

The proposal provides for a penalty of two to five years of imprisonment and a fine for the crime of private corruption. If the proposal is approved, individuals who offer, promise, provide or pay an undue advantage, directly or indirectly, to an employee or representative of a private company or institution will also be subject to punishment.

The grounds for presenting the proposal are based on the fact that in December 2003, Brazil acceded to the United Nations Convention against Corruption (“Merida Convention”), which was adopted by the United Nations General Assembly in October 2003, which recommends the criminalization of private corruption. In addition, Bill No. 4.436/2020 is based on the experience of other countries that have already criminalized private corruption in their legal systems. In particular, the United Kingdom’s legislation, the United Kingdom Bribery Act (“UKBA”) of 2010, and the French legislation, the Sapin II Act of 2016, are globally recognized legislations for explicitly defining corruption as a crime, regardless of the involvement of public officials in the conduct.

In Brazil, the criminalization of private corruption is a topic that has been widely discussed and has shown that it may soon be applied to the country’s reality. As an example of this development, in June 2023, Law No. 14,597/2023 (“General Sports Act”) innovated by providing for the criminalization of private corruption when the conduct involves representatives of sports organizations, constituting a crime against the sports economic order. This was a measure that sought to put an end to the various sports betting scandals in the country and which may serve as an incentive to criminalize private corruption in the private business environment as well.

Companies should consider in their Compliance Programs the potential implications of the approval of this Bill of Law, as well as the applicability of foreign law that deal with private corruption. For more information, please contact us.