Compliance Program is Now Mandatory for Companies that contract with the Federal District Government – State Law No 1.806/2017
On February 02, 2018, State Law No 1806/2017 was enacted requiring any company that signs contracts and agreements, operates government concessions, and enters into public-private partnerships with the State of Rio de Janeiro government – either directly, indirectly or through government foundations – to put in place an effective compliance program in place.
The law is applicable to all types of companies, be them corporations or limited liability companies, legal entities or not, including national or international foundations or civil associations, regardless of their legal nature. Contracts subject to this state law are those that meet the following criteria:
(i) contracts in which the value limits are equal or higher than the ones of the bidding, estimated between BRL80,000.00 and BRL650,000.00, even if it is in the form of an electronic auction; and
(ii) contracts whose duration is equal or longer than 180 days.
According to the State Law No 1.806/17, the Compliance Program must be developed, applied, and updated according to the characteristics and actual risks inherent to the legal entity’s activities. All companies must ensure that their Compliance Programs are constantly improved and adjusted to guarantee their effectiveness.
The Law describes and specifies certain criteria in order to ensure the existence of a compliance program, such as engagement of senior management, carrying out a due diligence prior to hiring, and regular training.
Companies will have 180 running days to implement a Compliance Program, counted from the date on which the contract with the government is signed. Companies that fail to do so will be subject to a penalty of 0.1% of the contract´s total amount per day.
Felsberg Advogados is ready to provide any additional information or advice on how to develop and implement or adjust a Compliance Program to ensure that all the provisions of the State Law No 1.806 are complied with.
For further information regarding this matter, please contact André Fonseca (firstname.lastname@example.org), Evy Marques (email@example.com) or João Mendonça (joaomendonça@felsberg.com.br) partners of the White-collar crime, corporate and investigation and compliance department.
WHITE-COLLAR CRIME, CORPORATE AND INVESTIGATION AND COMPLIANCE DEPARTMENT.
A presente publicação possui caráter exclusivamente informativo, não contém qualquer opinião, recomendação ou aconselhamento legal do Felsberg Advogados a respeito dos temas aqui abordados.