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21 January 2019
In Brazil, the new year has started with a new government taking office. Naturally, this has led many to speculate over what the government's priorities and policies will be.
While the government changes every four years, enforcement policies are receiving more attention than during previous inaugurations. This is largely attributable to two factors:
The Ministry of Justice encompasses a broad range of competences. For example, it not only leads international efforts to establish cooperation between law enforcement agencies, but also enforces mutual legal assistance treaties through its Department of Asset Recovery and International Cooperation.
Further, the following agencies fall under the auspices of the Ministry of Justice:
It has important legislative competences which are executed by its secretariat of legislative affairs. It also carries out competences relating to public security, drug policy, youth protection, consumer regulations and others. However, as opposed to the United States and a several other countries' institutional framework, it does not govern the Federal Prosecution Service, which is formally part of the executive branch. Instead, the Federal Prosecution Service is independently governed, despite the fact that the president appoints the chief federal prosecutor every two years.
The minister of justice has a significant amount of power, typically serving as the president's main adviser for legal and enforcement purposes. Further, the president normally hears the minister's opinion when appointing new justices for federal and superior courts or the chief federal prosecutor.
In Moro's case, the symbolic power created by the enormous popularity that he achieved as the main judge overseeing Operation Car Wash is notable, despite the legal community's criticism regarding the appointment of a judge who has just overseen such politically sensitive proceedings. Moro's significant influence alongside the political force that any newly elected government attracts means that the minister will have all of the necessary means to complete his agenda.
According to Moro's public declarations, a broad legislative package is expected to be sent to Congress. It focuses on toughening the legal approach to corruption, money laundering and organised crime. However, the main features and relevant legal tools are still unclear. What it evident is that a tougher anti-money laundering (AML) policy will be a crucial part of the government's approach towards corruption as well as corporate and organised crime.
Moro, who has completed academic work on AML policies and dedicated much of his judicial career to this subject, had agreed with the new president that their first political measure should be – and in fact was – to reallocate the Council for Controlling Financial Activity to the Ministry of Justice. The council fell under the auspices of the Ministry of Economy for 20 years, since the first edition of Brazil's Anti-money Laundering Law (9,613/98).
In addition, those who have examined Moro's legal views in his decisions relating to Operation Car Wash will remember that one of his most meaningful judicial acts was on 2 April 2018, whereby he ordered the administrative agencies not to penalise individuals and companies that had formally cooperated with the investigations, either by means of plea bargains or corporate leniency agreements.(1)
As the current Brazilian legislation clearly lacks the mechanisms to provide enough legal certainty to the recent policy of plea deals and leniency agreements in the anti-corruption enforcement space,(2) the new minister of justice will likely dedicate special efforts to providing more stability and certainty to individuals and companies willing to cooperate with enforcement authorities (for further details see "Use of settlements and plea deals in wake of new enforcement landscape").
Finally, Moro's appointment to the Ministry of Justice should not significantly affect the way in which federal prosecutors work. As stated above, prosecutorial services are independent from the federal administration's policies and priorities. In this regard, federal prosecutors will undoubtedly continue to provide the high-intensity enforcement activities that they have put into practice over the past few years – particularly since the launch of the Operation Car Wash investigations and other ongoing high-profile investigations.
For further information of this topic please contact Rogério Fernando Taffarello at Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados by telephone (+55 11 3147 7600) or email (firstname.lastname@example.org). The Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados website can be accessed at www.mattosfilho.com.br.
(2) See more at https://economia.estadao.com.br/noticias/geral,mp-precisa-observar-principio-da-boa-fe,70002421425 (in Portuguese).
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Rogério Fernando Taffarello