BRAZIL Law and Practice Contributed by: Octaviano Duarte, Henrique Forssell and Marcelo Lucidi, Duarte Forssell Advogados
Objective ineffectiveness claim This action is grounded on acts considered fraudulent per se regardless of the parties’ intention. Examples include: • payment of debts before the maturity date within the look-back period; • payment of debts in conditions not contractually agreed also within the look-back period; and • performance of gratuitous acts two years before the bankruptcy. Criminal Offences The Brazilian Criminal Code addresses fraud through various provisions that criminalise deceptive or fraud - ulent conduct in different contexts. Corruption offences The Brazilian Criminal Code contains provisions addressing corruption offences, including active cor - ruption (Article 333), passive corruption (Article 317) and influence-peddling (Article 332). These offences involve actions that affect public interest and involve individuals vested with public authority. Fraudulent appropriation Article 168 of the Criminal Code criminalises fraudu - lent appropriation, which includes the act of mis - appropriating someone else’s property or money entrusted to the offender for a specific purpose. This provision aims to protect against wrongful deprivation of property. Fraudulent misrepresentation Article 171 of the Criminal Code covers fraudulent mis - representation or deceitful conduct aimed at obtain - ing an unjust advantage or causing a financial loss to another person. This offence encompasses actions such as using false pretences or deceit to deceive others into transferring money or property. Anti-Corruption Law Under the Anti-Corruption Law in Brazil, companies can be held liable for bribery and corruption offences committed by their shareholders, directors, officers and employees. The law imposes civil and adminis - trative sanctions, some of which can be severe, for a wide range of prohibited conducts.
These prohibited conducts include offering or giving undue advantages to government officials or related third parties, financing or sponsoring harmful acts under the law, and using third parties to conceal the real interests or beneficiaries of the conduct. Any such conduct deemed harmful under the law may lead to administrative or civil liability for the company involved. Companies may face individual or cumulative penal - ties, such as fines of up to 20% of their revenues, confiscation of assets gained from illegal acts, partial suspension or prohibition from business activities, and the prohibition from receiving benefits or credit from government entities. The Anti-Corruption Law applies to bribery offences committed against both Brazilian and foreign gov - ernments and establishes a strict liability regime for companies involved in such offences. Only the Brazil - ian government has the authority to pursue civil and administrative sanctions against companies and indi - viduals that violate the Anti-Corruption Law. Administrative Improbity Law A fraud claim may also be brought by means of an administrative improbity lawsuit, as provided for in Law No 8,429/1992, which enforces wrongful behav - iour by public officials and private entities. This Law aims to protect the integrity of public assets and the principles applicable to public administration. Claims based on administrative improbity may refer inter alia to causing damages to the public treasury, unlawful enrichment of public officials or third parties, as well as violations of the principles applicable to public administration. Under Article 12 of Law No 8,429/1992, the impro - bity acts may be punished through several penalties, such as fines, prohibition from entering into contracts with the public administration, prohibition from ben - efiting from special tax treatments and loss of pub - lic function, without prejudice to claims seeking to obtain compensation for damage caused to the public administration.
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