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18 March 2019
Despite having taken steps to fight corruption in recent years, according to widely used corruption metrics, it remains one of Brazil's main challenges. Brazil ranked 105 out of 180 countries assessed in Transparency International's 2018 Corruption Perceptions Index, with a score of 35 out of 100 on a zero (highly corrupt) to 100 (largely law abiding) scale. Brazil has fallen five points since 2016, when it scored 40 points, reaching its lowest mark since 2012. The World Bank's Worldwide Governance Indicator for the control of corruption has also shown a decline in the past few years. This metric ranges from zero (lowest control over corruption) to 100 (highest control over corruption). Brazil scored 36.06% in 2017, its lowest score since 1996 (when the assessment was first conducted). Findings from the 2017 Global Corruption Barometer are no different:
Mindful of the fact that corruption is a central concern for the Brazilian electorate, the new government – which came into power in 2018 on the back of its vow to fight corruption – has promised a series of measures to tackle the issue. Justice Minister Sergio Moro, a former judge who earned worldwide fame after leading the Operation Car Wash investigation (for further details please see "Use of settlements and plea deals in wake of new enforcement landscape"), recently sent proposed legislative reforms to Congress. He endorsed a set of anti-corruption measures which were proposed by federal prosecutors in 2016 but shelved by Congress. Now, as minister of justice, Moro has presented a set of proposals aimed at combating corruption, organised crime and violent crime, which in part revisit the aspects presented two-and-a-half years ago.
The measures are part of the first major anti-crime plan set out by President Jair Bolsonaro's administration and include:
In addition to the proposed legislation reform, the new government has also enhanced the Ministry of Justice's powers. For example, the ministry is now in charge of the anti-money laundering agency which previously sat under the Ministry of Finance.
Passing the above measures will certainly test the new government. Although some of the measures are controversial among the legal community, a partially renovated Congress is likely to approve them, at least in large part. If those plans are approved, there will likely be an increase in Brazil's overall level of enforcement and bribery investigations will continue to occupy the headlines.
Two major loopholes in the Brazilian anti-corruption framework that have not been contemplated by the inaugural measures are the lack of:
While the House of Representatives has been considering a proposal on those issues for some time, the recently announced government-sponsored reforms are likely to dominate Congress's attention and thus impede the development of any other proposals.
It remains to be seen the extent to which these measures will help to address the systemic causes of corruption and provide long-term solutions.
For further information of this topic please contact Renato Tastardi Portella at Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados by telephone (+55 11 3147 7600) or email (email@example.com). The Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados website can be accessed at www.mattosfilho.com.br.
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