Although not contained in one wide-encompassing piece of legislation like the US’s Foreign Corrupt Practices Act (“FCPA”) and the UK’s Bribery Act 2010 (“Bribery Act”), Brazil has various rules intended to prevent the corruption of public officials.
On 10 December 2021, the Regulations (Decree 10,889/2021) for giving gifts and providing hospitality to public officials who work in the Federal executive were published. As required under article 5(VI) of Law 12,813/2013, the Regulations set out specific rules about the giving gifts and providing hospitality to those who have an interest in that official’s decisions. The Regulations come into force on 9 February 2022.
Who is a “public official” under the Regulations?
The Regulations define “public official” as the “political agent, the public servant and everyone who exercises, even if temporarily or without remuneration, via election, by appointment, by designation, by hiring or by any other form of investiture or bond, mandate, position, job or function in the Federal executive power”.
What constitutes a “gift”, a “small gift” and “hospitality” under the Regulations?
The Regulations define a “gift” as an “asset, service or advantage of any kind” given to a public official or group of officials and that is not a “small gift” (“brinde”) or “hospitality”.
“Small gift” (“brinde”) is defined as “an item of low economic value and distributed in a general manner, as a courtesy, advertisement or habitual promotion”.
“Hospitality” is defined as the “offer of services or expenses with transport, food, accommodation, courses, seminars, congresses, events, fairs or entertainment activities […]”.
Can you give a “gift” to a Brazilian “public official”? What about a “small gift”?
You can only give a “gift” to a Brazilian “public official”if either:
- you have no interest whatsoever in a decision to be made by that official (or group of officials that includes that official); or
- the “gift” is registered on Brazil’s new public services scheduling system called “e-Agenda” (this requirement will come into force on 9 October 2022).
You can, however, give a Brazilian “public official” a “small gift” (“brinde”).
Can you provide “hospitality” to Brazilian public officials?
You are allowed to provide “hospitality” to a Brazilian “public official”if the “hospitality” is authorised by the body where the official works. When considering whether the authorisation should be given, the body must take into account:
- the “institutional interests” of the body; and
- the “potential risks to the integrity and image” of the body.
The “hospitality” items must be directly related to legitimate purposes for representing interests and in circumstances that are appropriate for professional relationships.
Moreover, the “hospitality” items must be compatible with standards adopted by the Federal administration in similar services or with “hospitalities” offered to “other participants in the same conditions”.
Finally, the “hospitality” items must not amount to a “personal benefit”.
The “hospitality” can only be provided via direct payments to the “hospitality” service provider or via direct payments to the public officer for per diems “for as long as authorised by the competent authority”.
Contact me if you would like further information. My firm is ready to assist you.
Brazil Bribery Bribery Act Compliance FCPA Foreign Corrupt Practices Act Foreign Direct Investment Foreign Officials
Last modified: October 20, 2022