Following the states of Rio de Janeiro, Espírito Santo, Santa Catarina, and the Federal District, the State of Pernambuco signed a law that compels the implementation of a compliance program (called an ‘integrity program’ in the public sector) by private companies that wish to contract with the state government. I am referring to State Law 16,722, enacted on December 9, 2019.
A prerequisite for the compliance program stipulated by the law is top management’s commitment to the respective execution, monitoring, evaluation, and updating of that program. The program must also (i) provide mechanisms for preventing, detecting, punishing, and remedying fraud and acts of corruption and (ii) be compatible with the nature, size, and complexity of the activities performed by the engaged legal entity.
Notwithstanding its sanction date in 2019, the requirement for compliance programs would only begin as of January 1, 2021, as recommended by the law’s text. However, a new law was sanctioned, delaying this timetable further. This is State Law 17.133, sanctioned and published on December 19, 2020, which postponed compliance programs’ requirement to January 1, 2022.
In any case, it is essential to note that compliance programs will only be required in the following circumstances:
The law also states that the amounts described above are to be updated according to State Law 11,922, of December 29, 2000, which uses UFIR as an adjustment factor.
