Innovations in Administrative Laws: Legal Entities – Anti-Corruption Act and New Antidumping Decree
- Brazil
- 09/16/2013
- Azevedo Sette Advogados
At the end of July and at the beginning of August in the year 2013, there was the publication of two important normative texts: the Anti-corruption Act (Act # 12,846, of August 1, 2013) and the new Antidumping Decree (Decree # 8,058, of July 29, 2013). The first refers to the liability of legal entities, in the civil and administrative spheres, for performing acts against the government, while the second improves the regulation on prevention of unfair prices (dumping) in the international trade.
Anti-corruption Act is innovative in the Brazilian legal system when it provides for the strict liability, whether administrative or civil of legal entities for performing acts that adversely affect the Brazilian government or governments of other countries. The liability is strict by virtue of the fact that it does not depend on bad faith or fault. The companies, as well as their managers, may answer for corruption acts performed in their interest or benefit, such as offering or granting undue advantages to a Brazilian or foreign governmental agent, and performing fraud in relation to bidding processes or governmental agreements.
According to the legal text, the institutions that receive adverse judgment shall have to pay a fine from 0.1% to 20% of the annual gross revenue from sales, excluding taxes and regardless of the obligation to fully redress for damage caused. Furthermore, such institutions shall be subject to losing assets, rights or values, to having their activities suspended or partially forbidden, to being mandatorily dissolved as a legal entity, and to being forbidden to receive incentives, subsidies, allowances, gifts or loans from the government, for the minimum term of one and maximum term of five years. The said act also creates the Brazilian Register of Legal Entities that Sustained Punishment, of public nature, comprised by data provided by all governmental entities of Brazil.
Act # 12,846/2013, which shall be effective on January 29, 2014, also provides for the reduction of penalties applied to breaching companies that shall cooperate with the assessment of violations or that adopt corporate codes of ethics and of conduct and integrity internal procedures that conduct audits or encourage the report of irregularities.
Concerning the new Antidumping Decree (Decree # 8,058/2013), it is a law that shall replace Decree # 1,602, of August 23, 1995, introducing modifications intended for providing greater celerity and efficiency in the antidumping investigation as a whole.
The new Decree set forth several reductions of procedural terms. Among the main modifications, there is the term of 15 days for analyzing the complaint (5 days less in comparison to the term provided for in the previous Decree) and the reduction of 12 to 10 months (extendable to, at most, 18 months, in full, under exceptional circumstances) for completing the investigation. Furthermore, the obligation to perform a final hearing with the parties was waived; however, the parties may request hearings with the investigative authority at any time, in compliance with the term of 5 months as from the time in which the investigation began.
It is also important to point out the rule that sets forth the obligation to prepare a Preliminary Determination – a previous conclusion of the authorities concerning the existence of dumping, damage and causation investigated – up to 120 days (exceptionally extendable to, at most, 200 days) as from the date on which the investigation began. Such obligation strengthens the regime for enforcing provisional measures, which must be preceded by a Preliminary Determination and essential for preventing the damage to the domestic industry in the course of the antidumping investigation.
Adopting new modalities for reviewing antidumping measures, in addition to greater detailing the discipline of the revisions that already exist, helped achieving greater efficiency that was expected with the new regulations. Another relevant innovation of Decree # 8,058/2013, demanded for a long time by the private sector, is the expectation of electronic access of the investigation record. Currently, there is a draft of a regulatory Ordinance of the electronic administrative procedure for public consultation.
The new Antidumping Decree shall be effective on October 1, 2013. The actions commenced until such date shall continue to be governed by the previous Decree.
