August 1, 2013 marked a significant change in Brazil’s legal framework for corporate misconduct involving the public sector. On that date, Brazil enacted Law No. 12,846, widely known as the Anti-Corruption Law or Clean Companies Law.
The statute established civil and administrative liability for legal entities that commit harmful acts against Brazilian or foreign public administration. Its central feature is objective liability: companies can be held responsible under the law without the need to establish fault by the legal entity itself.
The law did not take effect immediately. It entered into force 180 days after its official publication, in February 2014. The distinction matters because August 1, 2013 is the date of enactment, while February 2014 is when its provisions became legally effective.
What happened
Law No. 12,846 extended Brazil’s corporate accountability framework to harmful conduct involving both domestic and foreign public administration. Articles 1 and 2 set out the law’s application to legal entities and provide for their objective administrative and civil liability.
Its scope includes conduct associated with bribery and public procurement. Article 5 addresses, among other acts, offering an undue advantage to a public agent or to a person connected to that agent. It also covers using intermediaries to conceal interests or the identity of beneficiaries, as well as fraud involving public tenders and contracts.
For international businesses, the inclusion of acts against foreign public administration is a notable element. The law therefore addresses corporate conduct beyond dealings with Brazilian authorities alone.
Why it matters
The legislation created a defined system of corporate sanctions in Brazil for offenses against public administration. Under its administrative provisions, penalties can include fines ranging from 0.1% to 20% of a company’s gross revenue in the year before the administrative proceeding began.
The law also permits the publication of a condemnatory decision as an administrative sanction. In judicial proceedings, further sanctions may apply under the statute.
By focusing liability on legal entities, the framework made corporate structures directly relevant to cases involving prohibited dealings with public officials, procurement processes and public contracts. The law’s coverage of foreign public administration also gave it relevance for companies operating across borders.
By the numbers
- Law No. 12,846: the statute enacted on August 1, 2013.
- 180 days: the period between publication and the law entering into force.
- February 2014: when the statute became effective.
- 0.1% to 20%: the range for administrative fines calculated from prior-year gross revenue.
The bigger picture
Brazil’s Anti-Corruption Law paired penalties with a mechanism for cooperation. It created the possibility of leniency agreements, under which legal entities can enter arrangements provided for by the statute.
At the federal executive level, and in cases involving harmful acts against foreign public administration, Brazil’s Office of the Comptroller General, known by its Portuguese initials CGU, has authority to conclude leniency agreements.
This combination of administrative enforcement, possible judicial measures and leniency arrangements forms the core of the law’s approach. It addresses both sanctioning conduct and creating a legal route for companies to cooperate under the framework established by the statute.
What happens next
The law has been in force since February 2014. Its ongoing significance lies in the legal standards it set for companies dealing with public administration in Brazil and abroad: prohibited conduct is defined in the statute, legal entities may face civil and administrative liability, and enforcement can include financial penalties, publication of decisions and leniency agreements.
More than a decade after its enactment, the August 1, 2013 measure remains a key reference point for understanding Brazil’s corporate anti-corruption rules.