The main novelties of Law of 25 October 2021 No. 14.230 “On Amendments to Law of 2 June 1992 No. 8.429 “On Liability of Civil Servants for Illicit Enrichment” (Lie № 14.230, de 25 de outubro de 2021 «Altera a Lei nº 8.429, de 2 de junho de 1992, que dispõe sobre improbidade administrativa») concern the following areas: 

1.  Elements of offences

The Law introduces administrative liability for:

1) offences leading to illicit enrichment – the receipt of any kind of undue advantage with respect to the exercise of official duties, mandate, functions, work or activities in a body (organisation);

2) offences damaging the State budget – actions or omissions that in fact or by reasonable assumption lead to the loss of assets, dissipation, embezzlement, misappropriation of or damage to assets or property of bodies (organisations);

3) offences against the principles of public administration – deliberate actions or omissions that are against the principles of integrity, impartiality and legality;

4) aiding and abetting the commission of the abovementioned offences.

Whereas previously the Law provided a list of offences related to the aforementioned categories only as examples, the updated version of the act establishes an exhaustive list of actions for each category recognised as offences.

In particular, the following will be considered as illicit enrichment: 

• receipt of money, movable or immovable property, any other direct or indirect economic advantage in the form of a commission, interest, bonus or gift for oneself or for third parties from any person having direct or indirect interest that may be affected or supported by an action or omission by the official in the exercise of his/her duties;
• receipt of an economic advantage of any kind, directly or indirectly, in order to provide false information about works conducted, services provided, number, weight, parameters, quality or other characteristics of the goods provided to the body (organisation) etc.

The offences that cause damage to the State budget include, in particular:

• granting permission or providing assistance to a natural or legal person in using property, revenue, funds or valuables belonging to the assets of a body (organisation) without respecting legal or regulatory formalities;
• granting permission or providing assistance in acquiring, exchanging or renting an asset or a service at a price higher than the market one;
• granting undue administrative or tax waivers etc.

The offences against the principles of public administration will be, in particular, the following:

• disclosure of confidential information if it creates privileges for the person to whom such information was provided or threatens public safety and security of the State;
• violation of the competitive nature of public bidding with the aim to gain direct or indirect advantage for oneself or for third parties;
• nepotism – the appointment of the spouse, partner or a lineal, collateral or blood relative within the third degree of affinity to a position in the same body (organisation) and to a position or with the aim to fulfill paid functions in the bodies (organisations) that are directly or indirectly governed by federal, regional or municipal authorities, if the body or the official that made the appointment carries out management, leadership or consulting functions with respect to this body (organisation). It should be highlighted that these elements of the offence are provided for by the respective legislation for the first time.

Furthermore, an important novelty of the updated Law is the change of the evidence of the elements of all the offences listed above: whereas previously a person could be held liable for committing an offence as a result of recklessness or negligence, now it is necessary to prove that there was direct intent in his/her actions in order to prosecute him/her.

Moreover, the Law has granted prosecuting authorities the exclusive right to file lawsuits against administrative offences, whereas any State (municipal) bodies and organisations had had these powers before the respective amendments were introduced. 

2.  List of subjects of law enforcement

The Law specifies the list of persons that can be held liable for the abovementioned offences by including in it:

• persons holding political positions;
• civil servants;
• other persons holding a mandate, a position, performing work or a function also temporarily or free of charge, to which they were elected, appointed or that they received by concluding contracts or any other form of receipt of public funding, in State executive, legislative or judicial bodies, and in other bodies (organisations) that are directly or indirectly managed by the State, regions or municipalities;
• natural or legal persons that conclude a contract, concession agreement, management contract, partnership agreement, cooperation agreement or an equivalent administrative agreement with the public administration. 

3.  Statute of limitations and duration of investigation

The adopted legal act changes the terms for potentially holding persons liable: whereas previously the statute of limitations started from the date when the suspect left the office and amounted to five years, from now on it will be possible to indict him/her within eight years since the offence is committed or since the date when its commission ends, if the offence had a continuing character.

Under the Law, the duration of investigations increases to one year that can be extended once. The legal act also stipulates that prosecuting authorities should express their interest in continuing the investigation of ongoing cases within a year since the Law is adopted; otherwise relevant cases will be dismissed. 

4.  Non-prosecution agreement

The Law provides for the possibility to conclude civilly a non-prosecution agreement between the accused and the prosecuting authorities. This agreement can be concluded in the event that the accused has totally repaired the damage and refused the advantage unduly received.

If the accused does not comply with the terms of the agreement, he/she will be deprived of the right to conclude a non-prosecution agreement for the next five years.  

5.  Liability measures

The updated Law increases the penalties for administrative offences.

In particular, according to the act, the terms of disqualification for officials increase: 

• if they are convicted of illicit enrichment – from ten to 14 years;
• if they are convicted of an offence that damages the State budget – from eight to 12 years.

At the same time the abovementioned restrictions are applicable only to the positions identical in terms of their functions and other characteristics to the position that the person held when he/she committed a crime: for instance, if a federal MP is convicted of misconduct related to his/her position of deputy of a state, he/she will not lose his/her current mandate. However, in exceptional cases, where the circumstances of the case and the gravity of the offence committed require, courts may disregard this restriction. 

The perpetrator who committed offences against the principles of public administration is liable to a fine of up to 24 times the size of the undue advantage received and the prohibition to conclude public contracts for up to four years.