Over twelve months after the enactment of the Brazilian Clean Company Act or BCCA, the guidelines explaining a number of its provisions have been released by the Brazilian government via a decree, news which will intrigue many of those using or contemplating risk and compliance services both here and abroad.

The 8,420/15 decree became law on 19th March following public demonstrations in various Brazilian cities. The public have regularly expressed their feelings over the administration’s biggest corruption scandals, such as ‘Petrolao’, the controversy over state-controlled oil and gas firm Petrobras, which was regarded as one of the biggest corruption scandals in recent years.

Recent demonstrations have mirrored those that took place in 2013, when Brazilians hit the streets to demonstrate over political corruption and the economic crisis that some say resulted from Government incompetence. In that year, the Government decided to take action over this year’s public demonstrations, bringing in Decree 8,420/15 just three days after the protestors hit the streets.

The decree has been awaited anxiously by compliance experts, and it encourages organisations to adopt compliance programmes, explaining ways to make such a scheme effective. The BCCA itself is somewhat vague about compliance measures., however the latest decree is much more specific.

The guidelines now urge companies to implement codes of ethics and conduct for employees, including third parties and equity holders. The decree also includes a provision about keeping books and records as part of robust compliance programmes. This provision took experts by surprise, the BCCA had not mentioned books or records. Companies must now keep all of their books, accounts and records accurate, and up to date ensuring they fairly reflect the transactions and dispositions of the company’s assets.

Also stated in the decree are details concerning legal entities’ administrative liability with regard to acts against directly or indirectly, Brazilian or foreign public bodies. General parameters are outlined in relation to the administrative sanctions that may be applied, with many firms providing risk and compliance services likely to take an interest in the rules on the controversial leniency agreements.

In addition, the guidelines introduce rules on the publication of lists of companies that are debarred (Cadastro Nacional de Empresas Inidoneas e Suspensas (CEIS)) and punished by corruption (Cadastro Nacional de Empresas Punidas (CNEP)). Such public lists are sure to be drawn upon by compliance experts carrying out research into company backgrounds when undertaking due diligence in relation to mergers, spin-offs and acquisitions.

Those hiring third party service providers, agents and suppliers are also likely to take an interest in the new Decree 8,420/15 – and sure enough, the vetting of third parties is another one of its stipulated requirements.