Decree of 9 December 2024 No. 12.304/2024 “On Regulating Paragraph 4 of Article 25, Section 4 of Article 60 and Only Paragraph of Article 163 of Law of 1 April 2021 No. 14.133 “On Public Procurement and Public Contracts” on Matters of Implementation of Integrity Programmes in Major Public Contracting on Provision of Goods, Works, Services and in Defining the Winners of Public Procurement Tenders under Equal Terms and to Restore Status of Participant of Public Procurement Tender or Contract Performer” (Decreto No. 12.304, de 9 de Dezembro de 2024 Regulamenta o art. 25, § 4º, o art. 60, caput, inciso IV, e o art. 163, parágrafo único, da Lei nº 14.133, de 1º de abril de 2021, para dispor sobre os parâmetros e a avaliação dos programas de integridade, nas hipóteses de contratação de obras, serviços e fornecimentos de grande vulto, de desempate de propostas e de reabilitação de licitante ou contratado, no âmbito da administração pública federal direta, autárquica e fundacional) enters into force on 7 February 2025 and obliges organisations to implement (improve) their compliance programmes in case of:

• a major public contract of over BRL 200,000,000 (roughly USD 33,700,000) to provide goods, works, services;
• participation in a tender procedure under equal terms;
• application to restore the status of participant/performer after having been held liable for 1) provision of forged documents and/or knowingly inaccurate information in tenders and/or execution of public contracts and/or 3) offences damaging public resources, public administration and/or international obligations of the country.

Under the Decree, the compliance programmes can cover such areas as:

• Commitment of top management, including the board of governors, to the promotion of the principles of integrity, which is proven by evident and unequivocal support of the compliance programme and allocation of sufficient resources to its implementation;
• Development and implementation of the standards of conduct, codes of ethics and other policies and procedures for promoting the principles of integrity applicable to all employees and managers regardless of their position or role in the company and, where necessary, to the counterparties;
• Adequate risk management, including periodic assessment of risks aimed at detecting necessary changes in compliance programmes and ensuring effective distribution of resources;
• Internal controls, particularly, with regard to financial reporting, completeness and reliability of the accounting records;
• Reporting channels and protection of whistleblowers;
• Regular training and awareness-raising activities on how to implement compliance programmes;
• Implementation of specific procedures for preventing corruption, fraud and other offences in any interaction with public bodies and organisations also in public procurement;
• Creation of divisions responsible for the implementation of compliance programmes and assessment of their effectiveness, enjoying sufficient independence;
• Adoption of disciplinary measures in case of violations of provisions of compliance programmes and procedures ensuring prompt disruption of detected offences and timely elimination of the inflicted damage;
• Due diligence also in contacts with politically exposed persons in sponsorships and donations, as well as in mergers and acquisitions and other corporate restructuring processes;
• Transparency of corporate activities;
• Constant monitoring of compliance programmes with a view to improving them to prevent, detect and disrupt corruption, fraud and other offences in public procurement, as well as to putting them in line with the characteristics of the company and risks in its activities in case of change.

The powers to control the implementation of compliance programmes are entrusted with the Controller-General’s Office of the Union (Controladoria-Geral da União). Specifically, the Office will fulfill the following functions:

• Verify compliance with the requirements to implement compliance programmes upon request of public bodies and organisations or at its own initiative, inter alia, by sending requests for the information necessary to this end, holding technical visits and interviews and subsequently reporting on the findings, in particular, formulating recommendations on how to eliminate flaws in compliance programmes.
• Hold perpetrators liable in case failures to comply with the requirements to implement a compliance programme are detected;
• Develop and adopt assessment methodology and minimum criteria for recognising the fact of presence (improvement) of a compliance programme; relevant criteria should take into account: 1) size of the company, 2) its turnover; 3) structure of corporate governance, 4) number and location of the legal persons making up the economic group, 5) economic sectors and countries where the company undertakes its activities, 6) involvement of counterparties in operations, 7) interaction with public bodies and organisations.

The Law also provides for the liability measures for failure to comply with the established requirements, in particular, for:

• Failure to provide and/or provision of forged documents and/or knowingly inaccurate information on implementation or improvements of compliance programmes;
• Refusal to provide documents and/or information on implementation or improvement of compliance programmes;
• Failure to respect the requirements to implement or improve compliance programmes;
• Obstruction of assessment of compliance programmes and/or investigation of fulfillment of requirements to implement compliance programmes by the Controller-General of the Union;
• Other illegal activities related to the documents and/or information provided for proving the implementation or improvement of compliance programmes.

Commission of these violations can entail:

• Warning;
• Fine between 1% and 5% of the price of the public contract;
• Annulment of the public contract;
• Deprivation of the right to participate in public procurement and conclude public contracts.