By Giuseppe Giamundo Neto and Fernanda Leoni

With the institutional strengthening brought about by the current Federal Constitution and the systematic focus on the fight against corruption, the sanctioning system has become more complex, especially regarding the number of bodies and entities entitled to exercise the State’s jus puniendi and the statutes governing their own subsystems for investigating infractions and applying administrative sanctions [1].

This organic growth is also, to some extent, responsible for the instability and legal uncertainty often felt by those subject to administrative authority. The challenge arising from this scenario is to devise ways of harmonizing these different powers more effectively.

How can the enforcement of penalties be balanced?

Along the lines of what was sought with Provisional Measure 703, one could envisage a kind of “one-stop shop” for solutions, in which those subject to sanctions could negotiate a broader agreement with different authorized entities [2]. However, in our view, a more effective and less conflictive path — since it would involve less waiver of powers — would be, through legislative reform, to consider this balancing at the time the imposed penalty is enforced, opening fertile ground for institutional coordination.

To this end, a first step would be to adopt the distinction commonly used in legal scholarship between pecuniary or property-based sanctions, which directly affect the assets of the sanctioned party — such as fines and the prohibition on receiving tax and credit benefits and incentives — and personal sanctions, which affect the very personality or existence of the sanctioned party — such as a declaration of unfitness, suspension of activities and compulsory dissolution [3].

In this context, one cannot overlook measures of liability for reimbursing the public treasury or compensating for damages caused by the infraction, which, although not sanctioning in nature, have a notable financial impact, being comparable, to some degree, to property-based sanctions.

This distinction may lay the groundwork for an initial proposal for debate on institutional coordination at the time penalties are enforced. Thus, rather than considering the tortuous path of such coordination when the penalty is imposed, the enforcement phase may open up a more viable space, also consistent with the main concerns of the sanctioned party.

Pecuniary sanctions

Along these lines, for pecuniary sanctions, one could consider a plan to harmonize the different penalties that would work similarly to what leniency agreements already establish, but with the effective collaboration of technical bodies, mainly to enable payment of amounts that actually take into account the sanctioned party’s ability to pay. This would also mitigate a very recurrent discussion about certain bodies’ lack of competence to set the amounts of fines and reimbursement, leaving this aspect to more technical entities, for example.

It would also be reasonable to consider the possibility of paying the debt in installments according to the certified capacity, so that the conditions of such installments take into account the party’s specific situation. Such an analysis would even make it possible to provide benefits to the sanctioned party as an incentive to fulfill its obligations more quickly.

In this regard, one may cite the already recognized benefit of order in the collection of joint and several debts, the cessation of default interest, and the deduction from the total debt of amounts already paid as pecuniary sanctions relating to the same facts or imposed by the same authority.

Also with a view to enabling coordination, it would be appropriate for the authority responsible for enforcing the sanction, before taking any restrictive or collection measure, to give other potentially authorized entities the opportunity to express their intention to participate in the approval of this negotiation procedure, whose main premise would be administrative consensuality itself.

Thus, any “ratification” of this negotiation would bind the parties to the agreed conditions and deadlines, also allowing that any supervening situation hindering or preventing compliance with the conditions established between the parties be duly reported to the competent authority, with a possible renegotiation of the agreement assessed jointly.

Personal sanctions

For personal sanctions, one could consider enforcing penalties under different conditions, with the possibility of the competent authority suspending their effects in a manner very similar to what occurs in the criminal sphere, with the conditional suspension of sentence (sursis).

The conditions of such suspension could also resemble the criminal law institution, providing, for example, for a prohibition on reoffending within a given period; an analysis of culpability and prior record; compliance with the conditions set by the competent authority during the suspension period; etc.

In our view, this mechanism could have positive results. On the one hand, the sanctioned party is relieved of the fear of concurrent penalties and of the drastic effects of this type of sanction; on the other hand, the competent authority in no way relinquishes its sanctioning power, and may revoke the suspension at any time if, during the period, the beneficiary is sentenced to a new penalty of suspension from tendering, prohibition from contracting or declaration of unfitness for facts subsequent to the conviction whose enforcement was suspended. Otherwise, that is, once the conditions are met, the penalty is extinguished without any risk of harm to the public interest.

The proposed debate, therefore, rather than considering the creation of new powers or, even more challenging, a legal requirement for bodies or entities to harmonize their own sanctioning powers among themselves, aims to preserve these functions through institutional dialogue, and the field of penalty enforcement appears far less prone to conflict among the authorized bodies and entities.

[1] By way of example, at the federal level alone, a single infraction may mobilize the Office of the Comptroller General, the Federal Court of Accounts, the Office of the Attorney General, the Administrative Council for Economic Defense, the Federal Prosecution Service and the Judiciary itself. In the same context, this conduct, depending on how it is characterized, may be investigated under the Anti-Corruption Law, the Administrative Improbity Law, the Competition Law, the Public Procurement and Administrative Contracts Law, the State-Owned Companies Law, the Organic Law of the Federal Court of Accounts, the Law of Introduction to the Norms of Brazilian Law, among others.

[2] In this regard: VARELLA, Marcelo Dias, ALENCAR, Carlos Higino Ribeiro de, VIANNA, Marcelo Pontes. Quando mais é menos: Arranjos institucionais e acordos de leniência anticorrupção no Brasil. Revista de Informação Legislativa: RIL, Brasília, DF, v. 59, n. 233, p. 35‑59, Jan./Mar. 2022.

[3] Among the many references that use this distinction, see BANDEIRA DE MELLO, Celso Antônio. Sanções administrativas transmissíveis e sanções intransmissíveis. In BANDEIRA DE MELLO, Celso Antônio. Grandes Temas de Direito Administrativo. São Paulo: Malheiros, 2009.

Originally published on ConJur (in Portuguese)