Criminal offences are divided into two main categories according to the seriousness of the conduct: crimes and misdemeanours. In general, misdemeanours are punished with less severe sanctions. An important difference between the two categories is that, according to Article 4 of Federal Decree-Law No 3,688/41, an attempt to commit a misdemeanour is not criminally punishable.

For an act or omission to be considered a criminal offence (a crime or a misdemeanour), three elements must be present:

• tipicidade (ie, a criminal statute explicitly states the types of conduct that are prohibited and defines all the objective and subjective elements for such conduct to be considered crimes);
• unlawfulness; and
• culpability.

As a general rule, criminal offences are crimes of intent. Reckless offences are not as common and must be expressly provided for in the description of the criminal offence. In general, attempts to commit a crime are punishable under the original criminal offence, although specific statutes may provide exceptions to this rule.

As provided for by Article 109 of the Criminal Code, the limitation periods for crimes range according to the applicable penalty:

• 20 years if the maximum penalty is greater than 12 years;
• 16 years if the maximum penalty is more than eight years but does not exceed 12 years;
• 12 years if the maximum penalty is greater than four years but does not exceed eight years;
• eight years if the maximum penalty is more than two years but does not exceed four years;
• four years if the maximum penalty is one year or, if higher, does not exceed two years; and
• three years if the maximum penalty is less than one year.

The crimes of racism and the action of armed groups against the constitutional order and the democratic state are exceptions to this rule and are not subject to any statute of limitation.

Aside from certain exceptions, the limitation period runs from the day the crime was committed to the time when the charges are confirmed by a judge. After the charges are confirmed, the limitation period is only interrupted when a sentence is handed down by a criminal judge or by a court of appeals. 

In the case of continuing offences, the limitation period starts to run when that course of conduct ceases. For example, the Supreme Court has decided that the concealment of a money-laundering offence is a continuing crime and the limitation period only starts when the concealment ends.

Brazil can claim jurisdiction if either the criminal conduct/omission or the result of the crime took place in Brazil (ubiquity theory). 

Jurisdiction can also be claimed if the crime was committed to the detriment of Brazil’s public assets and in certain cases where Brazil undertook to repress the specific crime committed, either by treaty or convention. 

The rules regarding extraterritorial jurisdiction are regulated by Article 7 of the Brazilian Criminal Code and apply to white-collar offences on the same grounds. 

Legal entities are only subject to criminal liability for environmental crimes; therefore, a legal entity will generally not be criminally liable for white-collar offences. Legal entities may, however, face civil and administrative sanctions for acts conducted by their employees or representatives depending on their conduct.

In the case of environmental crimes, both individuals and companies may be held criminally liable for the same offence. In some cases, prosecutors have decided only to pursue the legal entity since it is sometimes difficult to identify the natural person responsible for the conduct. The Brazilian Supreme Court has ruled that this strategy is legal. 

Managers and directors may not be subject to criminal liability by virtue of their position in the company. The prosecution must demonstrate actual participation in the criminal conduct to establish criminal liability.

Victims of a white-collar offence may claim compensation for their losses in both the criminal and civil courts. 

A criminal sentence may stipulate the minimum compensation amount to be paid to the victim and may determine the forfeiture of goods and assets in favour of the victim.

The victim may also claim compensation before a civil court regardless of the criminal procedure. In general, if the offence involves public officials, it is also possible to commence a public civil action seeking restitution and civil sanctions.

“Operation Car Wash”

In March 2014, the federal police initiated a criminal investigation in the southern state of Paraná (city of Curitiba). This was originally based on contracts with the state-owned oil company, Petrobras – which came to be known as “Operation Car Wash”. It became the biggest anti-corruption investigation in Brazil and has resulted in several developments, both in terms of the legal framework and enforcement.

Operation Car Wash set the background for many of the recent cases and developments regarding white-collar prosecution in Brazil.

In February 2021, after seven years of activity, the Office of the Attorney General dismantled the task force of prosecutors named the “Car Wash Task Force”, which was in charge of the operation. The members of the group were reassigned to the Special Action Group to Combat Organised Crime (Grupo de Ação Especial de Combate ao Crime Organizado – GAECO) or returned to their original positions.

In April 2021, the Supreme Court decided that the 13th Criminal Court in Curitiba – Paraná had no jurisdiction over the alleged crimes committed by former President Lula, as the facts were not related to Petrobras. This decision may also impact other cases that are under the jurisdiction of the Criminal Court in Curitiba. 

The Car Wash Task Force no longer exists, and its operations, which have decreased their intensity in the past years, are now being conducted by smaller groups of specialised Prosecutors in São Paulo, Rio de Janeiro, Brasília and Curitiba. 

Case Law

Plea and co-operation agreements

The Superior Court of Justice has recently issued a relevant rule pertaining to co-operation/plea agreements, extending their application not only in cases involving criminal organisations, as was the position in the past, but finding that such agreements are suitable in all cases where the criminal conduct is committed by multiple agents (Case files HC 582678).

The Superior Court of Justice has also ruled that the prosecution cannot sign co-operation/plea agreements with legal entities, as the criminal legislation in Brazil does not allow such agreements. With this decision, the Superior Court of Justice considered the co-operation agreement signed between the prosecution and a construction company to be null (Case files RHC 154979).

Cryptocurrency

The Federal Police has conducted several operations to investigate criminal activities involving cryptocurrency in 2022. Cases usually involve money laundering, financial crimes, tax evasion and fraud, among other types of conduct.

Recent Legislative Developments

Federal Law No 14,133/2021

In April 2021, Federal Law No 14,133 came into force, revoking all crimes established under Law No 8,666/93 (government contracts and procurement law) and transferring all crimes committed in government contracts and procurements to Chapter II-B of the Brazilian Criminal Code.   

The new Law modified the description of most of the crimes previously outlined in Law No 8,666/93. The changes in the law not only significantly impacted some elements of the criminal conduct, increasing the penalties for such conduct, but also barred the prosecution from offering non-persecution agreements to the defendants.

Finally, a new offence was included in Article 337-O of the Brazilian Criminal Code, criminalising the omission, by a project planner, of relevant data or information that impacts the competitiveness of a bidding proceeding.

Federal Law No 14,230/2021

On 25 October 2021, this law came into force, implementing relevant procedural and substantive changes to Law 8,429/1992 (Administrative Improbity Law ‒ LIA).

Although LIA is not a criminal law as it sets forth civil liability, it impacts the liability of legal entities in conduct involving corruption, with the possibility of applying relevant sanctions on both legal entities and individuals. Considering, as previously indicated, that legal entities are generally not subject to criminal liability in Brazil, it is not uncommon for criminal and civil actions under LIA to be conducted in parallel, including through the sharing of evidence. 

Criminal Investigations

Criminal investigations are conducted by the state or federal police and/or state and federal prosecutors. Prosecutors oversee investigations conducted by the police and have the prerogative to file criminal actions against individuals for white-collar offences. In general, white-collar offences are investigated by specialised police departments and prosecutors. In the scope of Operation Car Wash and other operations, teams of specialised prosecutors (task forces) were assigned to co-ordinate investigations with financial crime police squads. Specialised courts and judges deal with white-collar crime.

Civil Sanctions

Civil and administrative liability may also arise under Law No 8,429/1992 and Law No 14,230/2021 (Administrative Improbity Law) and Law No 12,846/2013 (Clean Company Act). Civil sanctions under these laws may be imposed through Public Civil Actions, usually brought by state and federal prosecutions (depending on the specific conduct) and by the Attorney General’s Office (AGU). 

Administrative sanctions may be imposed by the highest authority of the interested government agency, but the Controller General (CGU) may invoke these administrative proceedings concerning acts against the federal administration. 

Leniency Agreements

Under the Clean Company Act, the CGU is the competent authority to negotiate leniency agreements on behalf of the federal government. Since 2016, through the implementation of a joint regulation, the CGU has worked together with the AGU in the negotiation of leniency agreements regarding cases of corruption involving legal entities and bodies from the executive branch. 

Although some companies have signed leniency agreements with federal prosecutors, the position of the CGU is that the federal prosecution service (MPF) does not have the authority to negotiate leniency agreements. Therefore, companies have to negotiate separate agreements with the MPF, CGU/AGU. 

Recently, the CGU, AGU and the Brazilian audit court signed a technical co-operation agreement seeking to co-ordinate the negotiation of leniency agreements. The MPF has not signed the agreement and continues to negotiate separate agreements.

The implementation of the technical co-operation agreement is in its early stages and has so far shown to be challenging for the different authorities.

In general, white-collar investigations are initiated by the federal police upon suspicion of criminal conduct or receipt of a request from the prosecution service. For the initiation of an investigation, the police or the prosecution must have obtained information about criminal conduct from a legal source. Anonymous tips have been accepted by the courts as valid grounds for initiating an investigation, but the police must first establish that the allegations are based on solid grounds before starting a formal investigation. 

Several investigations were initiated after both the police and prosecution received a suspicious transactions report from the Brazilian Financial Intelligence Unit (Conselho de Controle de Atividades Financeiras– COAF)and the Federal Revenue Service. 

The police and the prosecution may request information and documents from individuals and legal entities. However, individuals have a constitutional right not to self-incriminate and may refuse to provide information or documents. 

Since legal entities cannot be held criminally liable (except for environmental crimes), in theory, companies do not have a constitutional right to refuse to provide information to the police or the prosecution. However, this discussion is incipient in Brazil and, in some cases, the privilege against self-incrimination has been recognised in administrative and civil proceedings that have criminal implications. In general, a company has a legal obligation to maintain and provide the authorities with official documents, such as accounting books, ledgers and invoices. Internal communications and confidential documents, such as emails, internal reports and communications must, in general, be provided if ordered by a judge.

In the course of their investigations, both the federal police and the federal prosecution may request coercive measures before the competent federal court, such as pre-trial detentions, searches and seizures, and the lifting of secrecy on documents (such as telephone and bank records).

A search and seizure warrant must be issued by a competent court and must specify the scope of the investigation. Additionally, all documents seized must be related to the investigation. The court order may also determine whether money, vehicles and other objects are to be seized to guarantee future compensation for the victim.

Investigative authorities may also subpoena employees, officers, directors and third parties to be questioned during an investigation. The status of an individual called to testify (eg, as a witness or target of the investigation) affects the rights of said individual (eg, the right to remain silent).

Brazilian law does not impose any obligation on a company to conduct internal investigations or even to have a compliance programme. However, the existence of an effective compliance programme and internal investigations may mitigate the issuance of fines and penalties as well as support leniency and plea negotiations. 

It should be noted that an obligation to conduct internal investigations has been included as a condition in several leniency agreements negotiated with federal prosecutors. 

Brazil is a party to several multilateral and bilateral mutual legal assistance agreements.

To date, according to the Ministry of Justice, Brazil has entered into bilateral mutual legal assistance agreements in criminal matters with over 20 jurisdictions and is a party to 14 multilateral mutual legal assistance agreements in criminal matters, including the United Nations Convention Against Transnational Organized Crime and the United Nations Convention Against Corruption. 

According to the Ministry of Justice, Brazil has also entered into 30 bilateral and seven multilateral extradition agreements. 

Active and passive cross-border co-operation in Brazil takes place through the International Criminal Police Organization (INTERPOL) and the exchange of financial intelligence information through the Egmont Group. 

In general, the exchange of information and the enforcement of foreign decisions must be conducted through the formal channels of mutual legal assistance. Although it is possible to conduct cross-border co-operation by means of reciprocity, the effectiveness and potential limitations of such reciprocity will depend on the terms of the agreement and the applicable statutes and judicial precedents. 

Extradition is also regulated by way of agreement or reciprocity. There are no limitations on extraditions for white-collar offences per se. Limitations for extraditions are more general, such as a prohibition on the extradition of Brazilian nationals, except for naturalised citizens where the extradition relates to offences conducted before their naturalisation, and a prohibition on extradition based on political crimes, etc.

White-collar prosecutions are initiated after formal charges have been brought by a state or federal prosecutor and are confirmed by a criminal judge. For the charges to be confirmed by the judge, the prosecution must present sufficient evidence to demonstrate the participation of the individuals and the existence of a crime (probable cause). According to Article 41 of the Code of Criminal Procedure, the complaint must specify the conduct of each of the individuals. As explained in 1.4 Corporate Liability and Personal Liability, legal entities cannot be held criminally liable save for environmental crimes, therefore criminal complaints are, in general, directed against individuals.

After criminal charges have been confirmed by the judge, the defendants are summoned to present preliminary defences that could give cause to reject the complaint or to a summary acquittal.

In the case of minor offences which carry up to two years imprisonment, Article 76 of Law No 9,099/95 provides for the possibility of an immediate imposition of fines or a restriction of rights, to avoid prosecution. After the payment of the fines or after the period of restriction of rights, the defendant’s criminal liability is expunged. Such a decision has the same effect as an acquittal.

According to Article 89 of Law No 9,099/95, in the case of offences that carry a minimum penalty of up to one year's imprisonment and provided that the defendant does not have a criminal record, the prosecution may offer an agreement to suspend the prosecution for between two and four years. During this period the defendant must comply with certain obligations, such as monthly court reporting, restitution of damages and other court-imposed conditions. After this period, the defendant’s criminal liability is expunged.

Federal Law No 13,964/19 introduced non-prosecution agreements for crimes subject to under four years of imprisonment that were not committed through violence or major threats. In order to obtain the agreement, the defendant must:

• formally confess;
• repair the damage caused or return the object to the victim;
• renounce the goods and rights indicated by the prosecution as instruments, products or advantages of the crime;
• provide service to the community;
• pay a pecuniary charge to a public or social entity; or
• comply with other conditions established by the prosecution.

In the prosecution of criminal organisations, an individual under investigation may voluntarily reach a plea agreement with the prosecution provided that such co-operation produces one or more of the following results:

• the identification of the other co-participants in the criminal organisation or their criminal offences;
• the revelation of the hierarchical structure and the distribution of tasks within the criminal organisation;
• the prevention of criminal offences stemming from the criminal organisation's activities;
• the complete or partial recovery of the product or the profit stemming from the criminal organisation's activities; and
• the location of the victim, unharmed, if there is one.

The agreement must be approved by the competent judge, responsible for reviewing the legality and regularity of the terms, whether the individual co-operated voluntarily, as well as the adequacy of the benefits and results of the co-operation. 

According to Article 4, paragraph 4 of Law No 12,850/2013, the prosecution may decide not to bring charges against the co-operating individual if the proposal of the co-operation agreement refers to illicit acts that the prosecution was not aware of and if the co-operating individual:

• is not the leader of the criminal organisation; and
• is the first member of the criminal organisation to make a plea agreement with the authorities.

In such cases, the judge may grant a judicial pardon, reduce the term of imprisonment by up to two-thirds, or substitute imprisonment with a restriction of rights. However, the accused must acknowledge their participation in the criminal organisation and renounce the right to non-self-incrimination. The agreement entails that the co-operator ceases practising the crimes reported; otherwise, the prosecution may unilaterally terminate the deal. 

According to the law and recent court decisions, a judge is not bound by the terms of an agreement between the prosecution and the defendant and may choose not to grant the benefits agreed by the parties.

In all other cases, if there is just cause for criminal action, the prosecution must press charges against the individual.

The Superior Court of Justice has recently ruled that co-operation/plea agreements are suitable in all cases in which crimes were committed by multiple agents, not only when the investigations are related to the commitment of the crime of pertaining to a criminal organisation (Case files HC 582678).

The Superior Court of Justice has also ruled that the prosecution cannot sign co-operation/plea agreements with legal entities, as the criminal legislation in Brazil does not allow for such agreements. With this decision, the Superior Court of Justice considered a co-operation agreement between the prosecution and a construction company (Case files RHC 154979) to be null.

Under the Brazilian Criminal Code, it is unlawful to mislead someone through trickery, elusion or fraud to obtain undue advantage, which is punishable by a term of imprisonment ranging from one to five years plus fines.

Article 177 of the Brazilian Criminal Code establishes that it is a crime for a company to be founded on misleading statements about its constitution or by fraudulently concealing facts, which carries a term of imprisonment from one to four years plus fines.

Article 177 further determines that the following actions are also subject to the same penalty:

• where an officer, manager or auditor of a corporation who, in a prospectus, report, opinion, balance sheet, public statement or statement to shareholders, makes a false affirmation about the financial situation of the company or fraudulently conceals, in whole or in part, facts relating to it;
• where an officer, manager or auditor promotes, by any means, false statements about the shares or other equity in the company;
• where an officer or manager borrows from the company or uses company property for their own or another’s benefit, without prior authorisation; and
• where an officer or manager buys or sells, on behalf of the company, shares issued by it, except when authorised to do so by law.

Under Federal Law No 7,492/1986, specific crimes regarding the management of financial institutions, such as fraudulent and negligent administration, may lead to penalties of imprisonment and fines for individuals. 

Bribery

The offence of bribery is described under Article 333 (active corruption) of the Brazilian Criminal Code as “promising, offering or paying undue advantages to government officials to cause them to conduct, omit or delay an official act”, and in Article 317 (passive corruption) as “to request or receive, for themselves or others, directly or indirectly, even outside the office or before holding the office, but by reason of it, improper advantage, or accepting promise of such advantage”. Both crimes are punishable by a term of imprisonment ranging from two to 12 years plus fines.

Corruption of Foreign Government Officials

Article 337-B of the Brazilian Criminal Code punishes the corruption of foreign government officials (an offence of active corruption in an international commercial transaction) – ie, “to promise, offer or give, directly or indirectly, an undue advantage to a foreign government official, or to a third party, to cause him to conduct, moot or delay an official act”. This is punishable by a term of imprisonment ranging from one to eight years, plus fines.

Influence Peddling

Influence peddling is defined under Article 332 of the Brazilian Criminal Code as “to demand, charge or obtain, for oneself or others, advantage or promise of advantage, under the pretext of influencing an act performed by a government official in the exercise of his or her function” (trafficking of influence), which is punishable by a term of imprisonment ranging from two to five years plus fines.

The Brazilian Criminal Code defines influence peddling in international commercial transactions under Article 337-C as “to request, demand, charge or obtain, directly or indirectly, an advantage or promise of advantage under the pretext of influencing an act of a foreign public official in the performance of his duties related to an international business transaction”, which is also punishable by a term of imprisonment ranging from two to five years plus fines.

Private Corruption and Commercial Bribery

Private corruption and commercial bribery are not specifically punishable under Brazilian law. Depending on the specific conduct and acts, private corruption may be interpreted as a different crime under Brazilian law, such as unfair competition, fraud or embezzlement.

Administrative Improbity Law and Clean Company Act

Acts of bribery and influence peddling may lead to administrative and civil sanctions under the Administrative Improbity Law (Law No 8,429/1992) and the Clean Company Act (Law No 12,846/2013).

In October 2021, Federal Law 14,230/2021 came into force. The bill implements relevant procedural and substantive changes to LIA.

Also, in 2022, the federal government issued Decree 11,109/2022 substituting the previous regulatory decree of Law no 12,846/2013 (Clean Company Act).

As previously indicated, the Administrative Improbity Law punishes acts against the public administration that:

• cause the illicit enrichment of government officials or damage to the public coffers;
• arise from the undue concession or application of a financial or tax benefit; or
• are against the principles of public administration.

The civil sanctions provided under this law may include disgorgement of profits and debarment from participating in contracts with government entities for up to ten years. Federal Law 14,230/2021 determined that only intentional/wilful conduct now results in responsibility for acts of improbity. 

The Clean Company Act imposes strict civil and administrative liability against legal entities involved in acts against national and foreign government administrations, including corruption. This law applies only to offences committed after February 2014. 

Federal Law 14,320 sets forth precautions to prevent bis in idem situations. It provides that a company will not be subject to sanctions under both the Administrative Improbity Law and the Clean Company Act for the same facts and that penalties based on these laws must observe the non bis in idem constitutional principle. 

Brazilian law does not provide for a specific obligation to prevent bribery or influence peddling. As previously indicated, both bribery and influence peddling are criminal offences under the Brazilian Criminal Code – Articles 317 and 333, (passive and active corruption) and Article 332 (influence peddling). Individuals involved in such acts may be subject to imprisonment and fines if found guilty. Legal entities may also be subject to strict liability (civil or administrative) for similar conduct under the Clean Company Act (Law No 12,846/2013) and the Administrative Improbity Law (see 3.2 Bribery, Influence Peddling and Related Offences - Administrative Improbity Law and Clean Company Act).

Under the Clean Company Act, “the existence of internal mechanisms and procedures for integrity, auditing and encouraging the reporting of irregularities and the effective application of codes of ethics and conduct within the legal entity” will be considered when calculating the sanctions to be applied.

Federal Decree No 11,129/2022 sets the parameters for an effective compliance programme, indicating that an integrity programme, within the context of a legal entity, consists of the set of internal mechanisms and procedures concerning integrity, audits and incentivised reporting of irregularities as well as the effective enforcement of codes of ethics and conduct, policies and guidelines aimed at:

• preventing, detecting and solving deviation, frauds, irregularities and illicit acts practiced against the national or foreign public administration; and
• fostering and maintaining a culture of integrity in the organisational environment.

In this sense, an integrity programme will be evaluated according to the following parameters:

• the commitment of the senior management of the legal entity, including the councils, to demonstrate their visible and unequivocal support for the programme;
• the standards of conduct, code of ethics, integrity policies and procedures applicable to all employees and administrators regardless of their position or function;
• the standards of conduct, code of ethics and integrity policies extended, where necessary, to third parties such as suppliers, service providers, intermediary agents and associates;
• periodic training and communication actions on the integrity programme;
• adequate risk management, including periodic revaluation for the continuous adaptation of the compliance programme and the efficient allocation of resources;
• accounting records that fully and accurately reflect the transactions of the legal entity;
• internal controls to ensure the prompt preparation and reliability of reports and financial statements of the legal entity;
• specific procedures to prevent fraud and unlawful acts in the context of bidding processes, in the execution of administrative contracts or in any interaction with the public sector, such as payment of taxes, subjection to inspections or obtaining authorisations, licences, permits and certificates;
• the independence, structure and authority of the internal body responsible for implementing the integrity programme and monitoring compliance;
• channels for reporting irregularities openly and widely disseminated to officials and third parties, and mechanisms for the protection of good faith complainants;
• disciplinary measures for breach of an integrity programme;
• procedures that ensure the prompt interruption of irregularities or infractions detected and the timely remediation of the damages caused;
• appropriate procedures for contracting and, as the case may require, supervision of third parties, such as suppliers, service providers, intermediary agents and associates;
• during mergers, acquisitions and corporate restructuring, verification of the commission of irregularities or illegal acts or potential vulnerabilities of the involved legal entities;
• continuous monitoring of the integrity programme aimed at improving the prevention, detection and combat of harmful acts as foreseen in Article 5 of Law No 12,846 of 2013; and
• transparency of the legal entity regarding donations to candidates and political parties.

The regulation also enforces a risk-based approach for hiring, conducting due diligence, and supervising third parties. Moreover, it innovates in imposing these same risk-based approach requirements for hiring and supervising politically exposed persons and for donations and sponsorships.

However, it is not a criminal/administrative/civil offence not to implement such a compliance programme.

Federal Law No 7,492/86 (Crimes Against the National Financial System) and Federal Law No 6,385/76 (Regulations of the Capital Market) list several criminal offences against the banking system and the capital market. The main offences include the following.

Insider Trading

To trade securities while in possession of material non-public information for the purpose of gaining undue advantage or profit (one to five years' imprisonment plus fines of up to three times the undue advantage gained).

Market Manipulation

To carry out simulated or fraudulent transactions aiming to raise, maintain or lower a security’s trading price or negotiated volume for the purpose of gaining undue advantage or profit or causing harm to third parties (one to eight years' imprisonment plus fines of up to three times the undue advantage gained).

Reckless or Fraudulent Management of a Financial Institution

To manage a financial institution either fraudulently (three to 12 years' imprisonment plus fines) or recklessly (two to eight years' imprisonment plus fines).

Investor Misleading

To mislead a shareholder, investor or competent public authority regarding a financial transaction or situation, concealing information or providing it falsely (two to six years' imprisonment plus fines).

Capital Flight

To remit money abroad without authorisation or to keep undeclared deposits abroad (two to five years' imprisonment plus fines). 

Non-authorised Conducting of a Financial Institution

To run a financial institution without due authorisation or with authorisation obtained from a forged document (one to four years' imprisonment plus fines).

Under Federal Law No 8,137 of 27 December 1990 (Law No 8,137), the non-payment of taxes through one of the following conducts may constitute the crime of tax evasion (two to five years' imprisonment plus fines): 

• to omit information or make false declarations to the tax authorities; 
• to adopt fraudulent actions by including inaccurate elements or omitting a transaction of any nature in a tax document or a book of account as required by law; 
• to forge or alter an invoice, inserting inaccurate elements or concealing transactions of any nature in an official document or book required by the tax regulations;
• to produce, distribute, supply, issue or use a document that one knows or should know to be forged or inaccurate; and
• to deny or omit an invoice or equivalent document related to the sale of goods or the provision of services, or to provide it in a manner contrary to the legislation.

The payment of outstanding taxes and fines before a criminal conviction precludes criminal liability for a tax crime. The timing of the payment is still debatable under Brazilian case law, but it should be stressed that such payments of outstanding taxes and fines have no bearing on other offences, such as capital flight or money laundering.

According to Binding Precedent No 24 of the Brazilian Supreme Court (STF), these crimes are only committed upon the effective constitution of a tax obligation – ie, on the date of the final tax assessment by the administrative authority. 

In addition to the crimes established by Law No 8,137, the Brazilian Criminal Code also makes it a crime:

• to evade payment of taxes which fall due as a result of the import, export or consumption of goods (one to four years' imprisonment); and
• not to pass on the social contributions collected from employees (two to five years' imprisonment plus fines).

There is no specific criminal offence for failure to prevent tax evasion.

Financial record-keeping obligations have been established under anti-money laundering laws – eg, Law No 9,613/1998. 

Article 10, III of the Anti-money Laundering Law establishes that legal entities and individuals subject to its terms must “keep a record of every transaction in local or foreign currency, titles and securities, credits, metals, or any asset that can be converted into money, that exceed the limit fixed by the competent authority and in the terms of its issued instructions”.

The specific obligation of compliance with the above general terms varies according to the activities of the legal entity and the individual. Companies and individuals conducting business in the financial, insurance, securities exchange, luxury goods and jewellery markets, for instance, may be subject to different compliance obligations. 

Records must be maintained for five years starting from the date the transaction was concluded. Failure to comply with record-keeping obligations may lead to administrative sanctions but such failure does not constitute a criminal offence. 

Under the Anti-money Laundering Law, administrative penalties may include a warning, the withdrawal or suspension of authorisation to conduct the activity and financial fines not exceeding:

• twice the value of the operation;
• twice the real profit obtained or that which could have been obtained from the operation; or
• BRL20 million.

As previously discussed in 2.3 Powers of Investigation, entities may also be required to disclose financial records upon receipt of a judicial order in a criminal proceeding. Failure to disclose such records may lead to sanctions.

Federal Law No 14,133/21 (bid proceedings and contracting with the Public Administration), Federal Law No 8,137/90, Federal Law No 12,529 (Brazilian Competition System) and the Brazilian Criminal Code all concern crimes against the economic order and competition. 

Crimes against the economic order are defined under Article 4 of Law No 8,137, and are punishable by two to five years' imprisonment plus fines. Article 4, I criminalises the abuse of economic power by dominating the market or eliminating, wholly or in part, market competitiveness by means of any kind of adjustment or agreement between companies. 

Article 4 also determines that agreements, covenants, adjustments or alliances between suppliers are crimes if they aim to:

• artificially fix prices or quantities sold or produced;
• control to the detriment of the market the chains of distribution or suppliers; or
• regionalise control of the market by a company or a group of companies. 

In respect of government bid proceedings and contracting with the public administration, Article 337-F of the Criminal Code makes it a crime to frustrate or defraud the competitive character of the procurement procedure with the intent of obtaining an advantage (four to eight years' imprisonment plus fines). 

Article 87 of Law No 12,529 determines that in the occurrence of crimes against the economic order and other crimes directly related to cartels, legal or natural persons may seek leniency agreements. In the event of an agreement, the limitation period count is suspended and the federal prosecution may not press charges against the individuals concerned. Upon the fulfilment of the terms of the leniency agreement, criminal liability is expunged.

The Brazilian Consumer Protection Code, the Brazilian Criminal Code and Federal Law No 8,137/90 list several criminal offences as being against consumers, for example: 

• the omission of warnings concerning the hazards and dangers of the product and the packaging (six months' to two years' imprisonment plus fines);
• failure to warn the competent authorities and consumers about the hazards or dangers connected to the product in question, knowledge of which comes after its placement in the market (six months' to two years' imprisonment plus fines);
• providing a service with a high level of danger contrary to the determination of the competent authority (six months' to two years' imprisonment plus fines);
• making a false or misleading affirmation or omitting relevant information concerning the nature, characteristic, quality, quantity, security, performance, durability, price or guarantee of products or services (three months' to one year’s imprisonment plus fines);
• making or promoting advertising knowing that it could induce the consumer to behave in a manner that is prejudicial or dangerous to matters of health or safety (six months' to two years' imprisonment plus fines); and
• favouring or preferring without just cause a buyer or a consumer, except for delivery systems through distributors or resellers (two to five years’ imprisonment plus fines).

Under Article 154-A of the Brazilian Criminal Code, it is a crime to unlawfully gain access to a computer device, whether or not connected to the computer network, by improper breach of a security mechanism to obtain, tampering with or destroying data or information without the express or tacit authorisation of the device holder, or to install vulnerabilities to obtain unlawful advantage (three months to one year of imprisonment plus fines).

If the invasion results in the obtaining of private electronic communications content, trade or industrial secrets or confidential information as defined by law, or if unauthorised remote access was used to control the hacked device, the penalties will range from six months' to two years' imprisonment plus fines. Harsher penalties apply if there is disclosure, marketing or transmission of the obtained data to a third party or if the victim is a high-ranked government official.

Additionally, under Article 195, XI of Law No 9,279/96, it is a crime for a person to disclose, exploit or otherwise use without authorisation confidential knowledge, information or data usable in industry, commerce or in the provision of services (excluding information that is already in the public domain or evident to a skilled person) if this knowledge, information or data was obtained through a contractual or employment relationship, even after the termination of that contract. Penalties for this crime range from three months to one year of imprisonment or fines.

Under Brazilian law, there are no specific criminal offences related to financial, trade or customs sanctions. 

Companies that operate internationally must comply with the sanctions imposed by other countries. Also, Brazil may adopt resolutions of international bodies (eg, the UN Security Council) as internal regulations, thus restricting the import/export of goods to and from certain countries.

Under the Brazilian Criminal Code, the import or export of forbidden goods is a crime punishable by two to five years' imprisonment plus fines.

Concealment is an offence related to the crime of money laundering. According to Article 1 of Law 9,613/98, it is a crime to conceal or disguise the true nature, origin, location, disposition, movement or ownership of assets, rights and valuables that result directly or indirectly from a criminal offence. Penalties for this crime range from three to ten years' imprisonment plus fines. 

For concealment to be considered a crime, the existence of a predicate offence is mandatory. Up until 2012, the Brazilian Money Laundering Law (Law No 9,613/98) listed eight predicate offences that could give rise to the crime of money laundering:

• illicit trafficking of narcotic substances or similar drugs;
• terrorism and the financing thereof;
• smuggling and trafficking of weapons and ammunition or materials used for their production;
• extortion through kidnapping;
• acts against the public administration, including corruption;
• acts against the national financial system;
• acts of criminal organisations; and
• acts practised by an individual against a foreign public administration.

However, Law No 12,683/2012 established that any criminal offence (including misdemeanours) could be a predicate offence to the crime of money laundering.

Aside from the regular criminal information that must be demonstrated by the prosecution at the time formal charges are brought, the criminal complaint must also establish the existence of a predicate offence prior to the concealment/money-laundering offences. If the defendant is also accused of the predicate offence, they may be held liable for both criminal acts.

In some cases, acts of concealment are hard to identify and by the time charges are brought the statute of limitations of the predicate offence may have already expired. According to several court decisions based on Article 2, II of the Money Laundering Law, the prosecution of the predicate offence and the money-laundering offence are independent; therefore, the statute of limitations for the primary offence is not relevant for the prosecution of the secondary offence. 

According to Article 29 of the Brazilian Criminal Code, anyone who aids or abets another to commit a crime is culpable. If the participation is less relevant, there may be a reduction of up to ⅓ of the penalty.

In some cases, the conspiracy to commit crimes may be considered a crime of criminal association in itself. 

The crime of money laundering is defined under the Anti-money Laundering Law (Law No 9,613/1998) as the concealment or disguise of the true nature, origin, location, disposition, movement or ownership of assets, rights and values that result directly or indirectly from a criminal offence. 

As indicated in the discussion in 3.11 Concealment, although the crime of money laundering requires a predicate offence, any criminal offence (including misdemeanours) can be a predicate offence.

Furthermore, the prosecution of the predicate offence and the money-laundering offence are independent; therefore, the statute of limitations for the predicate offence is not relevant. Penalties for the crime of money laundering range from three to ten years' imprisonment plus a fine. 

The Anti-money Laundering Law also establishes an administrative obligation to implement specific anti-money laundering measures.

As a member of the Financial Action Task Force (FATF), Brazil follows international standards and imposes obligations of client identification, record-keeping and communication of financial operations to competent authorities, both under objective and subjective standards, in its Anti-money Laundering Law.

Failure to comply with the prevention of money-laundering obligations may subject legal entities and individuals to administrative sanctions that include a warning, the withdrawal or suspension of authorisation of the legal entity or individual to function or to conduct the specific activity, and financial fines not exceeding:

• twice the value of the operation;
• twice the real profit obtained or that could possibly be obtained from the operation; or
• BRL20 million.

Anti-money laundering obligations may differ in respect of different markets, for example:

• the Brazilian Central Bank, for the financial market;
• the Brazilian Securities Commission (CVM) for the securities market; and
• the Superintendence of Private Insurance (SUSEP) for the insurance market, among others.

The competent regulating authorities are also responsible for the enforcement and oversight of anti-money laundering rules. 

COAF is responsible for receiving communications under the Anti-money Laundering Law. COAF is also responsible for regulating and overseeing individuals and legal entities that are subject to the terms of the Anti-money Laundering Law but do not have a specific regulator.

Defences for white-collar offences are assessed on a case-by-case basis. According to the Clean Companies Act, the existence of an effective compliance programme may mitigate a final penalty in an administrative proceeding against a legal entity. However, corporations are not in general subject to criminal liability; therefore, a compliance programme is not relevant.

There are no exempt industries or sectors for white-collar criminal offences. 

As for de minimis exceptions specifically regarding tax crimes, the Brazilian Supreme Court has decided that if the amount of taxes owed together with related fines does not exceed BRL20,000, such tax evasion does not amount to a criminal offence.

As indicated in 2.8 Plea Agreements, individuals may reach plea agreements with the prosecution, co-operating with cases involving criminal organisations. If the agreement meets the necessary standards, a judge may grant a judicial pardon, reduce the prison sentence by up to ⅔ or substitute imprisonment with a restriction-of-rights punishment.

Aside from the possibility of plea agreements, leniency agreements are possible both for antitrust violations and for bribery-related conduct under the Clean Company Act, Law No 12,846/2013.

Leniency agreements under the antitrust law (Law No 12,529/2011) are negotiated with the Brazilian antitrust authority (Economic Defence Council – CADE) and, for criminal purposes, with the federal prosecution. For criminal purposes, a leniency agreement under the antitrust law may result in non-prosecution of the criminal conduct.

If the entity self-discloses and co-operates with the authorities, and the result of such co-operation leads to the identification of others involved in the offences and to documents that prove such illicit conduct, the entity may enter into a leniency agreement that may result in the termination of the administrative action (if CADE was not previously aware of the illicit conduct) or to a reduction from ⅓ to ⅔ of the applicable administrative fine. Leniency agreements and their benefits will depend on whether the company or individual is the first to come forward, although other benefits are also available for those who do not fall into this category.

Similarly, self-disclosure and co-operation may also lead to a leniency agreement under the Clean Company Act if such co-operation results in:

• the identification of others involved in the offence; and
• the timely submission of information and documents that prove the illicit conduct.

The objectives of a leniency agreement are to increase the investigative capacity of the administration, enhance the state's ability to recover assets and foster a culture of integrity within the private sector.

Although the Federal Prosecution and the CGU/AGU negotiate separate agreements, the penalties and the benefits to the lenient companies usually follow the same patterns and may include exemption or mitigation of sanctions if the obligations of the agreement are fulfilled.

Usually, when there is a potential liability, both the company and its employees, plea and leniency agreements are negotiated simultaneously. Even if a leniency agreement is not reached under the Clean Company Act, self-disclosure and co-operation may be considered as mitigating factors in an administrative proceeding against the company.

In situations where leniency agreements are neither possible nor applicable, the authorities have used alternative types of agreements – eg, conduct adjustment agreements (TACs) – to settle cases with less formality. A TAC is a settlement intended as a quick means to end a particular conduct and impose a financial penalty in respect of that conduct. A TAC does not require an admission of guilt. 

Furthermore, Article 17, paragraph 1 of Law No 8,429/92, allows civil non-prosecution agreements to prevent the commencement of an Administrative Improbity Action, upon the acceptance of certain conditions and the application of sanctions to the responsible agents.

The Anti-crime Law, Federal Law No 13,608/2018, modified Federal Law No 13,608, including the protection of bona fide whistle-blowers and providing them with financial incentives to co-operate.

According to Article 4 of Law No 13,608/18, all public bodies must maintain ombudsman units to assure that any person has the right to report information regarding crimes against the public administration or illicit administrative acts. The informant’s identity will be kept private and they will be offered measures of protection, such as immunity, protection against retaliation and a reward of 5% of the recovered amount from the public coffers. Law No 12,846/2013 (Clean Company Act), also creates incentives for entities to implement effective compliance programmes which, under the terms of Article 42 of Federal Decree No 8,240/2015, should include whistle-blowing channels and internal procedures to protect bona fide whistle-blowers. 

Article 156 of the Brazilian Code of Criminal Procedure provides that the burden of proof lies with the person who made the allegation. In the case of charges brought by the prosecution, the burden of proof lies with the accuser. This rule applies to all criminal proceedings, including white-collar proceedings.

According to Article 155 of the Brazilian Code of Criminal Procedure, the judge will make a decision based on the free analysis of the evidence adduced in court and, in general, is not allowed to base a conviction only on elements of the investigation.

Although there is no specific rule regarding the standard of proof the prosecution must satisfy, the courts have found that the standard in criminal proceedings should be proof “beyond a reasonable doubt”.

The assessment of penalties is regulated by Article 68 of the Brazilian Criminal Code, which provides for a three-step process. First, the judge must determine an initial penalty within the limits provided by the sanctions of each crime, taking into consideration the culpability, background, social conduct and personality of the offender; the motives, circumstances and consequences of the crime; and the victim's behaviour. After the initial phase, attenuating and aggravating factors will be considered. Finally, the judge will consider whether there are any reasons to reduce or increase the penalty.

A judge may not consider the same circumstances in more than one phase of the sentencing process so as to increase the penalty imposed on the individual.

In the event of a plea agreement, the judge must follow the guidelines established by Article 68 and then decide upon the application of the benefits provided under Article 4 of Law No 12,850/2013.