BRAZIL Law and Practice Contributed by: Octaviano Duarte, Henrique Forssell and Marcelo Lucidi, Duarte Forssell Advogados
1.2 Causes of Action After Receipt of a Bribe The following causes of action may be available in Brazil to a claimant whose agent has received a bribe. • Civil liability claims – Claimants may pursue civil liability claims under the Brazilian Civil Code, which provides remedies for damages caused by unlaw - ful acts. A claimant whose agent received a bribe can seek compensation for losses suffered as a result of the agent’s actions. • Claims against officers and directors – Brazil - ian entities and shareholders can pursue dam - ages against officers or directors who took bribes or misappropriated company funds. Law No 6,404/1976 (Brazilian Corporations Law) allows companies to bring civil liability actions seeking compensation for losses caused by officers or directors. • Annulment of fraudulent transaction – Transac - tions involving bribery and illicit transfers of assets disguised as legitimate business payments can be challenged through annulment actions under the Brazilian Civil Code. This allows claimants to void fraudulent transactions and recover assets obtained through bribery. • Criminal complaints – Claimants also have the option to file criminal complaints against public officials for bribery-related offences. Brazilian criminal law prohibits public officials from giving and receiving bribes, with individuals found guilty facing imprisonment and fines. Private corruption, which involves bribery of private agents, is current - ly not punishable under Brazilian criminal law. 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts In Brazil, there are several legal claims available against parties who assist or facilitate fraudulent acts of another, such as the following. Accessory Liability Article 942 of the Brazilian Civil Code establishes that the assets of the individual or entity held liable for the offence or violation of another’s rights will guarantee the payment of the losses caused; and, if the offence has more than one perpetrator, they will be jointly and severally liable for the compensation.
Joint Liability With Officers and Directors Article 158 (§5) of the Brazilian Corporations Law imposes joint liability on individuals who concur in acts contrary to the law or by-laws with the intention of obtaining advantages for themselves or third par -
ties, along with officers or directors. Participation in Bankruptcy Fraud
Brazil’s Bankruptcy Law provides that claw-back actions (such as the revocatory actions and objective ineffectiveness actions discussed above) can be filed against all third parties who participated in the trans - action, benefitted from it and/or knew of the debtor’s intention to harm the creditors. Participation in a Crime Under the principle of co-authorship in the Brazilian Criminal Code, individuals who directly participate in the commission of a crime are considered co-authors or co-perpetrators. The penalties for these individuals will depend on their specific role or degree of involve - ment in the crime. 1.4 Limitation Periods In Brazil, there are two distinct legal concepts to con - sider regarding limitation periods: prescrição (which can be translated as “statute of limitations”) and dec- adência (often translated as “lapse” or “forfeiture”). Unlike prescrição , which pertains to the time limit for initiating legal action, decadência typically involves the expiration of a substantive right or entitlement. The prescrição limitation period can be tolled under certain circumstances. The party entitled to a claim may unilaterally interrupt the statute of limitations for actions subject to prescrição , allowing the limitation period to start running again. In contrast, the dec- adência limitation period cannot be tolled and expires irreversibly once it begins, except if otherwise pro - vided by statutory law. Brazilian law establishes several rules that deal with fraud and fraudulent diversion of assets. Depending on who engaged in these fraudulent acts and who was harmed by these fraudulent acts, the limitation period will vary according to the rules of substantive law.
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