Text of Bill that reforms the Administrative Improbity Law goes to presidential sanction

On October 6, 2021, the Chamber of Deputies approved the final wording of Bill No. 2,505/2021 (“Bill”), which aims to reform Law No. 8,492/1992 – the Administrative Improbity Law (“AIL”) -, which disciplines the accountability of public agents for the practice of acts that result in illicit enrichment, embezzle the Treasury or violate the principles of Public Administration. With approval, the Bill was sent for presidential sanction or veto, to take place by October 28, 2021.

The approved Bill implements substantial changes to the AIL – only two articles of the Law have not undergone any change (Articles 15 and 19) – and seeks to make it compatible with Law No. 13,655/2018 (which amended the Law for the Introduction to the Brazilian Rules – “LINDB”, in Portuguese language), Law No. 12,486/2013 (Anti-Corruption Law), and the jurisprudence of the Superior Courts, relaxing important aspects of the current text (which, for example, allows the punishment of public managers even if the intention to harm the Administration is absent).

The reform intends to delineate, with clarity and precision, the limits for the application of the AIL, in order to differentiate true acts of administrative improbity (serious and intentional deviations that must be sanctioned with strict penalties) from errors committed by malpractice (administrative failures and managerial mistakes, made in good faith and while serving the public interest).

In this sense, the most striking change introduced by the Bill refers to the suppression of involuntary acts of improbity in the negligent modality – currently admitted for purposes of sanctioning conducts that result in damage to the Treasury. The approved text now punishes only voluntary conducts – requiring, without distinction, the proof of the agent’s specific intent (that is, of his/her free and conscious will of achieving the illicit result typified by law) for all kinds of acts of improbity (typified in articles 9, 10 and 11).

Among the relevant changes brought by the approved text, the following stand out:

 

(i) Exhaustive list of acts that violate the principles of public administration

• Assignment of an exhaustive list of conducts provided for in article 11 (which provides for acts that violate the principles of public administration), subjecting the agent’s sanctioning to the presence of relevant harm.

 

(ii) Penalties applicable against acts of improbity

• Exclusion of the penalty of loss of public office and suspension of political rights for the acts of improbity provided for in article 11.

• Limitation of scope of the prohibition to contract with the government penalty to the entity harmed by the act of improbity (except in case of a well-founded decision and provided that the extension of the prohibition to other entities does not make the company’s business activity unfeasible).

• Modification of the maximum gradation of the penalties of suspension of political rights and prohibition of contracting with the public power.

• The sanctioning of acts of improbity of minor offense is restricted to the legal assets protected by the AIL and limited to the imposition of a civil fine (without prejudice to compensation for damages and restitution of any undue gains that may exist).

• Express provision of the observance of the non bis in idem principle, preventing the same individual from being penalized more than once for the same offense – based on the AIL and the Anti-Corruption Law.

• The execution of any sanction is conditioned to the need for the condemnatory decision becoming final and unappealable (in the text currently in force, a final and unappealable decision is required only for the execution of the penalties of loss of public office and suspension of political rights).

 

(iii) Procedural aspects of the administrative and judicial procedures

 

• Establishing of a maximum period of 365 days – extendable only once, for an equal period – for the conclusion of civil investigations regarding acts of improbity.

• The preliminary defense phase is eliminated, with the extension of the response period to 30 days.

• Fixation of statute of limitations for the administrative improbity action at 8 years, counting (i) from the occurrence of the fact, or (ii) in the case of permanent infractions, from the day on which its practice ceased.

• Stipulation of rules to regulate the interruption of prescription and provisional prescription.

• The Public Prosecutor’s Office is granted exclusive authority to file the improbity action. The Public Prosecutor’s Office shall decide, within 1 year from the publication of the Law, whether to proceed with the actions of improbity currently carried out by the Public Treasury – under risk of dismissal of these actions, without resolution of the merits).

• The administrative improbity action is separated from the public civil action (provided for by Law No. 7,347/1985), expressly establishing the possibility of condemning the Public Prosecutor’s Office for loss of suit in the cases in which it has acted in proven bad faith.

• Stipulation of requirements and conditions for the execution of non-civil prosecution agreements between the Public Prosecutor’s Office and the accused.

• Important changes related to the exercise of the right of defense by the defendant are included, such as:

• Prohibition of the redistribution of the burden of proof to the detriment of the defendant.

• Impossibility of framing the act in more than one legal type of improbity, as well as of condemning the defendant for a different legal type from that mentioned in the initial petition.

• Need to produce all the evidence specified by the defendant in a timely manner, under penalty of nullity of any conviction.

• Subjection of the order preventing the disposal of assets to the demonstration of effective periculum in mora in the specific case.

 

(iv) Incorporation of LINDB precepts

• It is expressly determined that the magistrate:

• Weigh the practical consequences of his/her decision when evaluating a request for preventing the disposal of assets (g. prejudice to the provision of public services) and (ii) when issuing the sentence, especially when the defendant is a company (e.g. economic and social effects of the sanction and potential impossibility of maintaining the business activity);

• Consider the difficulties and obstacles experienced by the public manager at the time the act was performed, as well as other practical circumstances that imposed, conditioned, or limited their action at that time.

• Observe several legal parameters (e. principles of proportionality and reasonableness, nature, severity and impact of the infringement, extent of the damage caused, equity gain obtained by the agent, aggravating and mitigating circumstances, antecedents, conducts adopted by the agent to mitigate the damage/consequences of his/her action) in the application of sanctions.

If the text approved by Congress is approved without substantial vetoes by the President, the proposed reform of the AIL should provide greater legal certainty and predictability to the performance of the public manager, enabling a bolder, less bureaucratic and more efficient performance, in line with the real and always dynamic needs of society.

 

This article is intended exclusively to provide information and does not contain any opinion, recommendation or legal advice from Kestener & Vieira Advogados in relation to the matters herein addressed. Copyrights are reserved to Kestener & Vieira Advogados.