Brazil's New Abuse of Authority Law

Practical Law UK Articles w-023-5387 (Approx. 11 pages)

Brazil's New Abuse of Authority Law

by Vilmar Luiz Graça Gonçalves, Luiz Santiago Filho and Louise Dias Portes, Tauil & Chequer Advogados

Law No. 13,869/2019: New Abuse of Authority Law

Introduction

Law No. 4,898/1965, also known as the Abuse of Authority Law, dates from 1965 and has not been updated since December 1989. The significant increase in enforcement action and publicity given to the acts of public authorities in recent years, especially in connection with the high-profile police investigations and the adoption of new investigative and coercive methods and tools, raised questions about the sufficiency of that statute in responding to alleged excesses in the performance of authorities in charge of criminal and civil enforcement.

The National Congress identified the need to update the current Abuse of Authority Law and adjust it to Brazil's existing legal and political framework. On 5 September 2019, the Senate Bill No. 85/2017 and House of Representatives' Bill No. 7,596-A/2017 received the presidential approval with 33 vetoes, becoming Law No. 13,869/2019 (New Abuse of Authority Law).

On 27 September 2019, a joint session of the National Congress (with members of the House of Representatives and the Senate) was convened to review the presidential vetoes. As a result, 18 of the 33 vetoes were overturned. The New Abuse of Authority Law will enter into force on 3 January 2020. The current Abuse of Authority Law will remain valid until then.

Legal definition of Abuse of Authority

The New Abuse of Authority Law establishes several conducts that are depicted as abuse of authority. However, generally speaking, the Law defines abuse of authority as acts that are performed with one of the following purposes:

With the specific intent of harming third parties.
With the specific intent of benefiting the agent who carries out the act, or a third party.
For the agent's mere whim or personal satisfaction.

Therefore, abuse of authority occurs when a public official acts beyond its legal competence or with misuse of purpose. Consequently, liability requires the presence of a deliberate intent.

The New Abuse of Authority Law expressly sets out that differences in the interpretation of the Law or in the assessment of facts and/or evidence will not constitute abuse of authority. The justification section of the Bill establishes that the draft sought to avoid the criminalisation of hermeneutics. This is because law enforcement by public officials and the evaluation of facts and evidence, in the exercise of their functional independence, cannot be confused with abuse of authority (if it is done in a justified manner).

This is consistent with the Brazilian Supreme Court's traditional case law on criminal prosecutions against mere dissenting interpretations of Law, vetting criminal liability based on good-faith divergent readings and opinions of statutes and legal rules.

Subject of the new Abuse of Authority Law

The New Abuse of Authority Law establishes that any public official of either direct or indirect public administration of the Federal Government, states, federal district and municipalities will be subject to its provisions (Article 2).

The scope of the act covers:

Civil and military servants, or equivalent officials.
Members of the Legislative Branch.
Members of the Judiciary Branch.
Members of the Executive Branch.
Members of the Public Prosecutor's Office.
Members of the Courts and of the Audit Courts.

This is also consistent with the current legal definition of public officials for the purposes of criminal law. Anyone who has a position, employment or function in any body of the public administration by election, appointment, contracting or by any other type of investment, even if temporarily or without remuneration, is considered a public official (Article 327, Criminal Code).

Types of liability in the new Abuse of Authority Law

Criminal liability. The New Abuse of Authority Law defines more than 30 acts as crime of abuse of authority. Each has specific penalties that, in some cases, may lead up to four years of imprisonment (Articles 9 to 38). Additionally, it also determines the following civil effects of a final criminal conviction:

The obligation to compensate the offended for damages caused by the violation.
The declaration of disqualification for the exercise of the public position, mandate or function for a period of one to five years (similar to a debarment).
The loss of the public position, mandate or function.

(Article 4).

The last two points above will only apply on recurrence of abuse of authority and are not automatic (they must be imposed and reasonably justified in a criminal award).

Civil and administrative liability. The New Abuse of Authority Law also determines that criminal liability will exist regardless of the effective enforcement of the applicable civil and administrative sanctions (Article 6).

Therefore, administrative, civil and criminal action against acts that constitute abuse of authority can take place concurrently and simultaneously. One path of enforcement does not prevent the others from following their regular courses.

As a rule, the outcome of an enforcement action in one legal sphere does not bind the others, unless it affects the criminal sphere, which cannot then be re-disputed in the civil and administrative arenas with regard to fact finding.

Penalties

The acts listed in the new Abuse of Authority Law attract the following penalties:

Ordering and maintaining the deprivation of liberty in clear non-compliance with the pertinent legal requirements: one to four years of imprisonment and a fine (Article 9).
Ordering a clearly undue forceful questioning of a witness or an investigated person with prior summoning: one to four years of imprisonment and a fine (Article 10).
Unjustifiably refraining from timely reporting an in flagrante delicto arrest to the judicial authority: six months to two years of imprisonment and a fine (Article 12).
Forcing the prisoner to show part of their body, submit them to an unlawful constraint or embarrassment or adduce evidence against themselves or against a third party, through violence, serious threat or reducing their capability to resist: one to 4 years of imprisonment and a fine (Article 13).
Forcing someone to give a statement under threat of arrest, when such person is required to keep information confidentially, by reason of function, ministry, occupation or profession: one to four years of imprisonment and a fine (Article 15). The same penalty is applicable to those who proceed with the interrogation of:
- someone who has decided to remain silent; and
- someone who has decided to be assisted by an attorney or a public defender, without the presence of their counsel.
Not identifying or falsely identifying as a public official to the prisoner during an arrest: six months to two years of imprisonment and a fine (Article 16).
Subjecting the prisoner to police interrogation during the night, unless the prisoner was arrested in flagrante delicto at night or he/she is duly assisted and consents to testify: six months to two years of imprisonment and a fine (Article 18).
Unjustifiably preventing or delaying the submission of a prisoner's claim to the competent judicial authority to assess the legality of the arrest or the circumstances of custody: one to four years of imprisonment and a fine (Article 19).
Unduly preventing a prisoner from having a personal and reserved interview with his/her lawyer: six months to two years of imprisonment and a fine (Article 20).
Keeping prisoners of different genders confined together: one to four years of imprisonment and a fine (Article 21).
Illegally trespassing or remaining in another person's property without judicial authorisation or in non-compliance with the required legal conditions to do so:one to four years of imprisonment and a fine (Article 22).
Inventing or changing, in the course of an investigation or prosecution, the state of a person, a thing or a place to avoid liability or hold someone else liable for an offence or otherwise aggravate their liability: one to four years of imprisonment and a fine (Article 23).
Forcing, through violence or serious threat, an employee of a public or private hospital to admit a patient who has already died, to change the place or moment of the crime, impairing its investigation: one to four years of imprisonment and a fine (Article 24).
Obtaining evidence, in the course of an investigation of inspection, through unlawful means: one to four years of imprisonment and a fine (Article 25).
Initiating a criminal or administrative investigation or requesting its commencement, without any evidence of a crime or an administrative infraction: one to four years of imprisonment and a fine (Article 27).
Disseminating a recording or an excerpt of the recording unrelated to the evidence intended to be produced, exposing the investigated or the defendant's privacy or harming their reputation or image: one to four years of imprisonment and a fine (Article 28).
Providing false information about judicial, police, tax or administrative proceedings to harm the interests of the investigated individual or entity: six months to two years of imprisonment and a fine (Article 29).
Unreasonably commencing or to proceeding with a criminal prosecution, civil or administrative action, or doing so against a person known to be innocent: one to four years of imprisonment and a fine (Article 30).
Unreasonably extending the investigation to the detriment of the investigated or inspected person: six months to two years of imprisonment and a fine (Article 31).
Denying to the interested party, to its attorney or public defender the access to the records of any criminal, civil or administrative proceeding, as well as preventing the attainment of copies, except in the case of access to pieces related to ongoing investigative activities or related to future activities, whose confidentiality is deemed essential: six months to two years of imprisonment and a fine (Article 32).
Requiring information or the fulfilment of an obligation, including the duty of doing or not doing something, without legal basis: six months to two years of imprisonment and a fine (Article 33).
Ordering in the scope of a judicial proceeding, the attachment of assets in an amount that excessively exceeds the estimated value for the satisfaction of the debt and to not rectify it following the party's demonstration of the excess of the asset freeze order: one to four years of imprisonment and a fine (Article 36).
Unjustifiably taking too long in the examination of a proceeding judged by a panel of judges, which has already been the object of a request for more time for review, aiming to prolong its progress or to delay its judgement: six months to two years of imprisonment and a fine (Article 37).
As the person in charge of an investigation, disclosing an indictment by any means of communication including social media, before the end of the investigation and the formalisation of the complaint: six months to two years of imprisonment and a fine (Article 38).
Article 41 introduces a crime for a judge to order the interception of communication for purposes not authorised by the Law. This is penalised by two to four years of imprisonment and a fine.
Article 43 introduces a crime for a public authority to assume the prerogatives of lawyers, such as the inviolability of the office/workplace, the possibility of communicating with arrested clients even without power of attorney and so on. This is penalised by three months to one year of imprisonment and a fine.

Article 40 determines that:

The prison warrant will expressly state the duration of the temporary prison and the date the prisoner must be released.
The authority must release the prisoner unless there is an express order of a judicial authority regarding the conversion of the temporary custody into a preventive custody or the renewal of the temporary custody.
The day of the accomplishment with the prison warrant is now included in the calculation of the period of temporary custody.

Articles 11, 14, 17, 26, 34 and 35 have been vetoed.

Article 44 revokes Law No. 4,898/1965 (current Abuse of Authority Law) and articles of the Criminal Code that were reproduced in the Law.

Criminal procedure of the New Abuse of Authority Law

Under Article 3 of the New Abuse of Authority Law, only the Public Prosecutor's Office can file a criminal complaint against the perpetrator of an act of abuse of authority.

As a general rule, all public officials are required by law to immediately report criminal conduct they become aware of, including acts that could constitute abuse of authority), to the competent authority. Private parties (legal entities and individuals) can also report an act of abuse of authority performed against them to commence an investigation or even a criminal proceeding against its perpetrator.

To seek action against the perpetrator, the victim of abuse of authority can report the crime to the:

Civil (if it regards a state or municipal public official) or the federal police (if it regards a federal public official).
Public Prosecutor's Office.

In the first scenario, if the victim reports a potential crime to the police, it can open a criminal investigation which would render a final report to be sent to the Public Prosecutor's Office. Such report will either:

Suggest the indictment if there is evidence of a criminal conduct.
Request the closure of the investigation if there is no such evidence that the conduct is not a crime.

On the other hand, if the victim reports a potential crime to the Public Prosecutor's Office through a notitia criminis, the Public Prosecutor's Office can:

Immediately file a criminal complaint against the violating public official, if there is sufficient evidence of a criminal conduct.
Open a criminal investigation or order the police to do so, if there is not enough evidence of criminal conduct.
Reject the criminal notice, if there is no evidence whatsoever of criminal conduct or if the reported act is not a crime under Brazilian Law.

Because the police has the discretion to decide whether to open a criminal investigation or not, it is usually more convenient to report a criminal offence directly to the Public Prosecutor's Office. Even if the evidence present is not sufficiently convincing to result in immediate criminal action, the police must comply with an order to open an investigation coming from the Public Prosecutor's Office.

If the police carries out an investigation and presents a final report to the Public Prosecutor's Office, the Public Prosecutor's Office will have 15 days to decide whether to file a complaint or to order the closure of the investigation. If this does not occur within such period, the victim can file a private criminal complaint instead within the next six months.

Several Brazilian public officials are entitled to special jurisdiction and therefore can only be investigated and prosecuted for alleged crimes perpetrated in the performance of the public office by a specific court. The particularities of the special jurisdiction vary depending on the public official. For example, a Federal Public Prosecutor can only be prosecuted before the respective Federal Appellate Court, state judges usually can only be prosecuted before the respective State Appellate Court, appellate judges can only be prosecuted before the Superior Court of Justice and justices of the Superior Court of Justice can only face prosecution before the Supreme Court. It is, therefore, important to properly identify the competent authority to investigate and potentially prosecute an act of abuse of authority subject to special jurisdiction.

The new and the current regime: comparison

This section highlights the key conceptual and procedural changes proposed by the New Abuse of Authority Law in comparison with Law No. 4,898/1965 (the current Abuse of Authority Law).

Expansion of the Definition of Conducts that Constitute Abuse of Authority. The current Abuse of Authority Law was enacted in 1965 and only contains two articles that broadly describe the conduct that is classified as abuse of authority. The superficiality of the definition of abuse of authority in the current Abuse of Authority Law is one of the main contributors to the criticism the statute has suffered due to its ineffectiveness.

In this sense, the New Abuse of Authority Law describes approximately 30 acts or omissions that would fall under the definition of abuse of authority in detail. This new approach to abuse of authority facilitates the legal framing of a possible violation, therefore providing more legal security and foreseeability on the potential exposure a violator would be subject to.

Significant increase in criminal penalties. Under the current Abuse of Authority Law, offenders are subject to criminal penalties, including:

Imprisonment for a term of between ten days and six months.
A fine.
A loss of public office and debarment to exert another public office for up to three years.

The New Abuse of Authority Law provides the same types of possible penalties to any and all acts that may constitute abuse of authority. In addition to providing a detailed description of the acts and omissions that may be interpreted as abuse of authority, the New Abuse of Authority Law also proposes a significant increase in the penalties for the criminal conducts.

The lowest penalty provided by the new legislation ranges from three months to one year (Article 43), with most of the criminal sanctions set at six months to two years, or one to four years of imprisonment.

This increase illustrates the new perception of the severity of abuse of authority but, most importantly, it greatly affects enforcement action and execution of convictions.

For instance, the Brazilian Criminal Procedure Code (Decree-Law No. 3,689/1941) allows preventive arrests if an alleged crime can be punished with a maximum penalty of at least four years, therefore, certain acts pertaining to abuse of authority could be the subject of preventive arrest warrants against the violating public officials.

Also, establishing higher minimum and maximum penalties directly affects the possibility of settling criminal charges. For instance, a defendant charged with an act of abuse of authority whose maximum penalty exceeds three years of imprisonment will not be entitled to a "criminal transaction", a settlement mechanism provided by Law No. 9,099/1995 for crimes with less offensive potential. Although other settlement tools may be available, a defendant would automatically lose one alternative to end a criminal prosecution without admitting the crime.

Finally, higher penalties also result in higher statutes of limitations. For instance, crimes punished with penalties of up to one year of imprisonment (as provided by the current Abuse of Authority Law) become time-barred in three years (subject to time resets following certain criminal procedural occurrences, such as the acceptance of a criminal complaint and the issuance of an award). Crimes punished with penalties varying from more than two to four years of imprisonment (such as many crimes set out by the New Abuse of Authority Law) only become time-barred in eight years.

Express inclusion of judges' exposure to the New Abuse of Authority Law. Judges are already subject to the current Abuse of Authority Law, even though it only makes general reference to public officials and not specifically to them. However, the New Abuse of Authority Law not only explicitly mentions judges and members of the courts as the possible targets of criminal, civil and administrative enforcement but also sets out certain crimes that can only be performed by judges. For example, unduly ordering an interception of communication for purposes not authorised by the law (Article 10, Law No. 9,296/1996, as provided for in Article 41 of the new legislation).

End of the current special criminal procedure. The current Abuse of Authority Law sets out a simplified procedure to report incidents corresponding to abuse of authority to the Public Prosecutor's Office. From a practical standpoint, the most important feature of such procedure is that under the current regime the Public Prosecutor's Office has only 48 hours to decide whether to file a complaint or close the investigations from when it is approached by the victim to report a violation.

If the Public Prosecutor's Office fails to act, the victim can then file the criminal complaint against the offender. The New Abuse of Authority Law will only allow direct action by the victim after 15 days of the Public Prosecutor's Office's inertia (see above).

Practical impact of the new Abuse of Authority Law

The New Abuse of Authority Law will come into force on 3 January 2020. Until then, the current Abuse of Authority Law remains valid. However, in spite of the vacatio period, the mere perspective of the entry into force of the new Abuse of Authority Law has already affected certain aspects of law enforcement throughout Brazil.

Illustratively, some judges have been denying requests for asset freeze orders and attachment of assets or values in civil cases claiming that such orders could be perceived as a violation of Article 36 of the New Abuse of Authority Law if the legal requirements to grant such requests are not clear.

Similarly, some criminal judges have denied requests for preventive arrests or revoked previous arrest orders in fear that their arrest warrants could be regarded as a violation of Article 9 of the New Abuse of Authority Law. This is because the vagueness of the expression "in clear non-compliance" used in Article 9 does not provide legal certainty to sustain some arrest orders.

Contributor profiles

Vilmar Luiz Graça Gonçalves, Partner

Tauil & Chequer Advogados (in association with Mayer Brown)

T +55 21 2127 4227

F +55 21 2127 4211

E [email protected]

W tauilchequer.com.br

Professional qualifications. Rio de Janeiro, Brazil, Attorney, 2000

Areas of practice. Environmental law, particularly legal and administrative proceedings involving solid waste, shipping oil companies and mining.

Non-professional qualifications. Universidade Gama Filho – UGF/RJ, LL.M. in Public Law, 2009; Escola da Magistratura do Estado do Rio de Janeiro – EMERJ, Post Graduate degree in Consumer Law, 2003; Universidade Veiga de Almeida – UVA/RJ, Bachelor in Law (JD equivalent), 2000

Recent transactions

Represents one of the largest oil shipping companies in the world on environmental legal issues.
Co-ordination of litigation and environmental strategy within an environmental crisis following an incident in Barcarena-PA.

Languages. Portuguese, English

Professional associations/memberships. First Vice-President of Brazilian Center of Mediation and Arbitration – BCMA for the mandate of 2014/2017; Director of Arbitration (mandate 2017-2020); Member of the Arbitration Commission of the Brazilian Bar Association – Rio de Janeiro Section – biennium 2019/2021; Member of the Brazilian Association of Environmental Lawyers (UBAA – União Brasileira da Advocacia Ambiental).

Publications.

“Teoria e Prática do Mandado de Segurança”, book published by Editora Águia Dourada, 2011.
“Coexistência entre a Lei de Falências e a de Licitações” article, Brasil Econômico, 4 March 2015.
“Crime e Arbitragem: a posição do Tribunal Arbitral”. Article published in Revista dos Tribunais. Year 108, April 2019, Volume 1002.
“Interpretação da Lei de Improbidade Administrativa no Âmbito do Licenciamento Ambiental”. Article published in Revista Síntese Direito Administrativo. Year XII – No 141. September 2017. Special Edition.
“Inversão do ônus da prova judicial e danos ambientais” by Paulo de Bessa Antunes and Vilmar Luiz Graça Gonçalves. Article published in Revista Brasileira de Direito Processual. Belo Horizonte, year 27, No. 107, Jul/Sept. 2019.
Direito administrativo e avanços tecnológicos: desafios e conquistas”, article published in book “Regulação 4.0” by Revista dos Tribunais, 2019.

Luiz Santiago Filho, Associate Attorney

Tauil & Chequer Advogados (in association with Mayer Brown)

T +55 21 2127 4245

F +55 21 2127 4211

E [email protected]

W tauilchequer.com.br

Professional qualifications. Rio de Janeiro, Brazil, Attorney, 2015

Areas of practice. Litigation; Arbitration and Anti-Corruption & Compliance; Administrative, civil and criminal proceedings and local and cross-border investigations and enforcement action.

Non-professional qualifications. Bachelor in Law (magna cum laude), Fundação Getúlio Vargas (FGV), 2014

Recent transactions

Represents one of the largest financial institutions in Brazil in an administrative enforcement action of the Brazilian anti-corruption law within a large-scale corruption investigation.
Co-ordinated the pre-acquisition Anti-corruption and compliance due diligence in connection with an USD8.6 billion acquisition of assets owned by a state-owned company with FCPA exposure.
Advises a foreign drillship company in an administrative improbity action within operation Car Wash involving unprecedented use of international co-operation in civil matters.
Represents an engineering and construction company in judicial and administrative proceedings in the context of a large-scale corruption investigation.

Languages. Portuguese, English, Spanish

Publications.

"Panorama da aplicação da Lei Anticorrupção nos estados brasileiros". Legal Ethics Compliance in LEC News, 2018.
"Surprise: Federal, state and local agencies enforce Brazil's anti-corruption law". FCPA Blog, 13 November 2018.
"Crime e Sociedade: anseios sociais num contexto de criminalidade corporativa". JOTA, 8 May 2018.
"Compliance na relação com sindicatos". Correio Braziliense, 3 December 2018.
"Desafios na apuração e remediação do passivo de integridade em operações societárias". JOTA, 2 May 2016.
"O Desenvolvimento Constitucional da Pena de Morte nos Estados Unidos". Fundação Getúlio Vargas, November 2014.

Louise Dias Portes, Associate Attorney

Tauil & Chequer Advogados (in association with Mayer Brown)

T +55 61 3221 4373

F +55 61 3221 4311

E [email protected]

W tauilchequer.com.br

Professional qualifications. Rio de Janeiro, Brazil, Attorney, 2016

Areas of practice. Litigation & Arbitration and Anti-Corruption & Compliance; judicial proceedings before the Superior Courts and administrative proceedings before the Federal Audit Court and the Regulatory Agencies.

Non-professional qualifications. Bachelor in Law (magna cum laude), Fundação Getúlio Vargas (FGV), 2014; Compliance Extension Course, Pontifícia Universidade Católica (PUC), 2017

Recent transactions

Acts for former Directors of a state-owned financial institution in administrative proceedings to investigate damage to the treasury before the Federal Audit Court.
Represents an engineering and construction company in judicial and administrative proceedings in the context of a large-scale corruption investigation.
Acts for a civil association in several direct actions of unconstitutionality before the Supreme Federal Court.

Languages. Portuguese, English, Spanish, French

Publications.

"Panorama da aplicação da Lei Anticorrupção nos estados brasileiros". Legal Ethics Compliance in LEC News, 2018.
"A Guerra Fiscal do ICMS e a consequente incerteza jurídica". Fundação Getúlio Vargas, November 2014.

Brazil's New Abuse of Authority Law | Practical Law