by Christian Fernandes Rosa and Marília Sodré Siviero
Although it was a milestone in combating misconduct in public-private relations, the 2013 Anti-Corruption Law did not make the implementation of compliance programs in companies mandatory. It merely provided that the existence of an Integrity Program would reduce sanctions, something valuable if the organization were to commit acts of bribery or acts harmful to the Public Administration.
Under the New General Procurement Law, Integrity Programs become practically mandatory for companies wishing to bid for and contract with the Government. With the enactment of the new Law, companies contracting with the Public Administration must prove the implementation of an Integrity Program within up to six months from the signing of the contract, whenever the case involves a large-scale contract, defined in the national law as those exceeding BRL 200 million. But anyone who thinks the scope of the requirement will remain limited is mistaken.
This is because this amount can be — and it is advisable that it be — revised by states and municipalities to suit the size of their own contracts, classifying contracts as large-scale from amounts lower than those in the national rule.
The Federal District, for example, determined in 2018 that companies entering into contracts worth BRL 5 million or more must have an Integrity Program. In 2021, the Municipality of Porto Alegre passed a similar law.
The time at which implementation of the program must be proven may also vary depending on the legislation. While the New General Procurement Law grants up to six months for compliance, in the Federal District the requirement applies from the signing of the contract.
Indeed, the trend is that public contracts of even minimally significant value will require interested private parties to have a robust anti-corruption compliance system, capable of being assessed through objective and verifiable evidence.
One thing is therefore certain: from December 2023, with the entry into force of the New Procurement Law, companies will have to comply with the new requirements, or risk losing access to public contracting demand, a strategic market for many sectors.
Article originally published on the LegisCompliance website (in Portuguese), on 10.19.2023.
