Newsletter – September/20 | White Collar

THE BRAZILIAN CHAMBER OF DEPUTIES APPOINTS A COMMITTEE OF JURISTS TO REFORM THE MONEY LAUNDERING LAW
The President of the Brazilian Chamber of Deputies, Rodrigo Maia, appointed a committee of Jurists to reform the Law n. 9.613/98, also known as “Money Laundering Law”. Among the jurists appointed there are Lawyers, Public Prosecutors, Judges and academics that have expertise in Corporate Crimes. The committee should send the bill to the National Congress in 90 days.

The reform is important for at least three fundamental reasons. The first one regards the problem of the crime of money laundering being too broad. The law allows for the interpretation that any destination of funds could be considered money laundering. Thus, if someone stores cash that was not declared in order not to pay taxes, it is possible, under the law, for the Authorities to interpret as a crime of money laundering, instead of only the tax evasion.

Another point that should be covered involves the electoral slush funds crime, provided by article 350 of the Electoral Code. This crime is committed when a politician receives funds as donations to electoral campaign but does not declare them. In this situation, the donation may not be illegal, but any destination given to the funds by the politician could be considered money laundering just because the amount was not declared, even if the politician did not follow the other money laundering steps such as placement or layering. In addition, the situation is more complicated when the donation, in reality, is an undue advantage. In this case, there is the discussion if the politician committed corruption and electoral slush fund crimes or corruption and money laundering.

Moreover, it is expected that the reform of the Money Laundering Law approaches the question on whether the money laundering crime is instantaneous or continuous. If the crime is considered instantaneous, the money laundering crime occurs only at the moment of the placement of the dirty money, that is, with the simple movement of cash from the illegal source to another place. On the other side, if the crime is continuous it may be committed during the whole period the dirty money is maintained out of sight of the authorities. The definition of the nature of this crime may have serious consequences related to the period of statute of limitations and the possibility of flagrante delicto. It is important to mention that the Brazilian Supreme Federal Court has decided that the money laundering crime is of continuous nature in the judgment of the Criminal Lawsuit n. 863.

Lastly, it is important to make clear that the reform’s goal is not to decrease the law’s effectiveness, as noticed by part of Brazilian press. The reform’s goal is to provide legal certainty to controversial matters that the current law and the courts have not fully solved.

THE BRAZILIAN SUPREME FEDERAL COURT SUSPENDED A CRIMINAL CONVICTION BECAUSE THE JUDGE DETERMINED THE PRODUCTION OF EVIDENCE AGAINST THE DEFENDANT
The Justice of the Brazilian Supreme Federal Court, Marco Aurélio, suspended a criminal conviction of a man for the crimes of using a false document and smuggling because the Judge of the trial court required the hearing of a witness that had not been called upon by the defense or the public prosecutor’s office. In sequence, the Judge convicted the defendant based on the statement of the witness. This case decision was rendered in the judgment of a request for injunction of a habeas corpus. The final decision regarding the habeas corpus will be given by the Supreme Federal Court, which will have decided on whether to cancel the conviction from the trial court. So far, the General Public Prosecutor’s Office presented an opinion for the Supreme Federal court to maintain the conviction.

Although the decision is provisional, it is significant because it reaffirms the legal provision by the Criminal Procedure Code and the Federal Constitution in the sense that each part in a lawsuit has its role. Which means that if the Judge judges, he cannot also investigate the defendant nor determine the production of evidence. It is necessary for the Public Prosecutor or the lawyer to request the production of the evidence.

In addition, although there are some articles in the Criminal Procedure Code that enable the Judge to determine the production of evidence during the lawsuit without any party requesting, these provisions are exceptional and may only be used in order to clear questions of the Court. Thus, the Judge could determine by himself the subpoena of some witness to, e.g., understand the circumstances of facts, but he is not authorized to subpoena a witness that he knows that he may use to base a conviction. Therefore, if there is a doubt on whether the defendant is or not guilty, the Judge cannot determine the production of evidence because he cannot investigate. Thus, when in doubt he should acquit the individual based on the principle of in dubio pro reo.

This situation was reaffirmed by the article 3rd-A of the Criminal Procedure Code. Such article was included by the Law n. 13.964/2019, also known as “Anticrime Law”.

THE BRAZILIAN SUPERIOR COURT OF JUSTICE COURT FIXES CONDITIONS FOR INTERNATIONAL LEGAL COOPERATION IN THE GATHERING OF EVIDENCE
The Brazilian Superior Court of Justice (STJ) kept a conviction of a man accused of drug dealing. In his appeal, the defense underpinned the illegality of the evidence obtained through wiretapping performed by foreign-based phone company. The results of the wiretapping were then shared with the Brazilian authorities without requirement for international legal cooperation.

According to the lawyers of the defendant, considering the information tapped was stored in the headquarters of a company situated in Canada, obtaining this information would only be legal if performed through requirement from the Brazilian authorities as provided by the Agreement of International Legal Cooperation in Criminal Matters signed by Brazil and Canada (Decree nº 6.747/2009). However, that was not what the Court decided.

According to the Justice Sebastião Reis Júnior, the crimes were committed in Brazil by Brazilian residents who exchanged messages in national territory. For this reason, international legal cooperation would not be necessary, even if the phone company was based in other country. The cooperation only would be necessary if, e.g., the wiretapping involved individuals domiciled abroad. This decision is not unprecedented, because these conditions for international legal cooperation had already been discussed by STJ in the judgment of appeals related to the “Car Wash Operation”.

Finally, it is important to point out that this case decision sums to the precedents from the Court that fix the conditions under which the international legal cooperation must to be done and tends to give more agility to the criminal lawsuits since the directly asking for information or evidence is faster than the requirement for international legal cooperation.

THE BRAZILIAN FEDERAL PUBLIC PROSECUTOR’S OFFICE SIGNED OVER FIVE THOUSAND NON-PROSECUTION AGREEMENTS AND FOCUS ON THE PROSECUTION OF HUGE CRIMES
After the Law n. 13.964/2019 also known as “Anticrime Law”, which came into force in January 2020, introduced the non-prosecution agreement (“NPA”), the MPF signed over five thousand NPAs. According to the MPF’s information the top crimes in which an NPA was signed were white collar crimes – such as smuggling (1.165), frauds (802), using of false document (469), counterfeit money (285) and environment crimes (200). In addition, the agreements were signed in all Brazilian States.

The NPA may be signed when the individual who is under investigation confesses the crime. The crime in question cannot involve violence or threat and the minimum time of imprisonment provided by Law may not exceed 04 years. Moreover, the NPA is possible when the Public Prosecutor believes its conditions are necessary and sufficient to punish and prevent new crimes, be it through the compensation of the victim for the damage caused, the waiver of objects acquired or used during the commitment of the crime, the execution of community services, the payment of fine or other condition requested by MPF.

It is important to highlight that the high number of signed agreements in the short time of the Law indicates a greater focus from the MPF to prosecute only more serious and demanding criminal matters instead of prosecuting simple situations in which it is possible to compensate the victim without a lengthy and costly process. In addition, the plea bargain helps to decrease the problem of overcrowding prisons in Brazil.

Lastly, although many agreements are being signed, the NPAs have been object of several discussions in the courts and in legal literature. Thus, hopefully the number of NPAs signed may increase even more with legal certainty to the parties over time.

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