3 rd Latin America Summit on Anti-Corruption

1. 3rd Latin America Summit onAnti-Corruption Bill of Law 6.826/2010 – “Clean Company Act” June 24, 2013 São Paulo – Brazil Carlos Ayres Co-Chair of the Anti-corruption and Compliance Committee, IBRADEMP (São Paulo) Trench Rossi e Watanabe Advogados – Associated with Baker & McKenzie

2. I. Context and overviewCarlos Ayres

3. Context and legislative process • Ratification of OECD Anti-Bribery Convention: August, 2000 • 2002: Brazilian Criminal Code amended to prohibit corruption of foreign public officials • No conviction • Phase 1: September 2004 • Phase 2: December 2007 (examining countries - Chile, Portugal) • recommends that Brazil “take urgent steps to establish the direct liability of legal persons for the bribery of a foreign public official” • Phase 3: 2014(examining countries - Belgium, Portugal) • Concentrates on the following pillars: • progress made by on weaknesses identified in Phase 2 • changes in domestic legislative since Phase 2 • enforcement efforts and results • Approved by the Brazilian House of Representatives on April 24, 2013 • Pending approval by the Senate

4. Draft Bill: Key Features • SubjectedPersons • Brazilian legal entities • Foreign legal entitieswith “office, branchorrepresentation in theBrazilianterritory” • ProhibitedActs • Relatedto local andforeignpublicadministration • Bribeofpublicofficials • “to promise, offer or give, directly or indirectly, an undue advantage to a public agent, or to third person related to him”; • “Fraud” in publicprocurement settings • Bidrigging • Other • Strict Liability • Should be more easily applied than current laws • Government need only to show that bribes were paid

5. Draft Bill: Key Features • AdministrativeSanctions • Fine of 0,1% to 20% of the gross revenue of the previous year • R$ 6,000 to R$ 60,000,000 (if not possible to use gross revenue criteria) • limited the amount of the fine to the total amount of the goods or services contracted or sought • Publication of the condemnatory decision • Judicial Sanctions • Prohibition to receive incentives and public financing from 1 to 5 years • Seizure and confiscation of assets and gains • Partial suspension or interdiction of its activities • Compulsory dissolution of the legal entity

6. Draft Bill: Key Features • Factorstobetakenintoconsideration in applyingsanctions • SimilaritieswiththefactorsoftheU.S. Principles of Federal Prosecution of Business Organizations • New features in theBrazilianAnti-corruption arena • credit for complianceprogram • guidelines to be issued by Federal Government • credit for cooperationwithgovernmentinvestigations • Amountofcreditnotdetermined • LeniencyProgram • Fines can be reduced up to 2/3 • All the other sanctions (excluding restitution) are excluded • SuccessorLiability • Paymentof fines andrestitution • Uptothelimitoftheassetstransferred

7. Draft Bill: Flaws • Extraordinary number of enforcement authorities • Cases of involving foreign public administration: CGU • Other cases: • “maximumauthorityofthebodyorentityoftheExecutive, LegislativeandJudiciaryBranches” • lack of specialized expertise • excessive fragmentation of efforts • potential conflict of interest • Overlap of laws • Public tender law • Improbity law • Antitrust law • Impact on leniency program • Will Brazil’s anti-bribery bill meet OECD standards?

8. Comparison: FCPA x UKBA x Brazil’s Draft-Bill Prepared by Carlos Ayres and Bruno Maeda - Trench, Rossi e WatanabeAdvogados (associatedwith Baker & McKenzie International) in São Paulo

9. Q&A Thank you!