Publications - 26/04/21

Criminal Aspects of the Brazilian New Bidding Law, Law Nº 14.133/2021

On April 1, 2021, Law Nº 14.133/2021 came into force, known as the Brazilian New Bidding Law, which promoted substantial changes in the regulation of bidding procedures and administrative contracts. Regarding criminal matters, it repealed all crimes provided for in Law Nº 8.666/93 and introduced eleven new crimes in the Brazilian Legal System, organizing them in their own chapter in the Brazilian Criminal Code, Chapter II-B “of crimes in biddings and administrative contracts”.

Most conducts established by Law Nº 8.666/93 continue be criminalized in the new law, with a new legal structure in the Brazilian Criminal Code. An example is the new crime of “illegal direct contracting” of Article 337 of the Brazilian Criminal Code, which is equivalent to the former crime of misconduct of bidding of Article 89 of Law Nº 8.666/93. The most relevant point, dully addressed at the end of this article, is the exaggerated increase regarding the penalties for these crimes.

Following the same logic here are the criminal types planned in the new and in the former law respectively: (i) frustration of the competitive character of the bidding, Article 337-F and Article 90; (ii) sponsorship of improper hiring, Article 337-G and Article 91; (iii) irregular modification or payment in an administrative contract, Article 337-H and Article 92; (iv) disruption of a bidding process, Article 337-I and Article 93; (v) infringement of secrecy in a bidding, Article 337-J and Article 94; (vi) removal of the bidder, Article 337-K and Article 95; (vii) fraud in a bidding or contract, Article 337-L and Article 96; (viii) unsuitable hiring, Article 337-M and Article 97; and (IX) improper obstruction, Article 337-N and Article 98.

Among the modifications promoted by the new law, stand out the exclusion of paragraphs in the crimes of illegal direct contracting and irregular modification or  payment in an administrative contract, that, in the former law, imposed the extent of criminal liability to the beneficiary from the consummation of crime.

However, even with the exclusion of these paragraphs, it must be observed that the one who benefits and competes with intent to commit the offenses still responds for the crimes provided for in the new legislation, according to the predicted at the Article 29 in the general part of the Brazilian Criminal Code. In this sense, the change in the new law is precisely to correct an undue repetition of standards within the same legal diploma and should not be confused with an exclusion of the responsibility of the one that also competes for the consummation of the crime in conjunction with the public servant.

Another important modification was the split-off of the criminal type of unsuitable hiring into two distinct behaviors. The first is to admit to the bidding process a company or professional declared unsuitable (Art. 337-M, caput), a conduct punished by 1 to 3 years of imprisonment and fine, and the second is to celebrate a contract with a company or professional declared unsuitable, whose penalty is 3 to 6 years of imprisonment and fine.

Law Nº  8.666/93 typified the two conduits mentioned in Article 97 and established a correspondent penalty of 6 months to 2 years of imprisonment and fine. Thus, the new law, in addition to increasing the penalty for the two conducts, has chosen to punish more seriously the conduct of concluding the contract with an unsuitable company or professional, since in this situation the result is more serious for the public administration.

It should also be noted that Article 337-L, which typifies the crime of fraud in a bidding or contract, excluded the established on Article 96 of Law Nº 8.666/93, which limited the practice of this crime to biddings instituted only for acquisition of goods, extending the conduct to all types of biddings. In the new article, there is also an important modification regarding the conducts described, punishing the provision of services that directly contradict the established in the edital de licitação (invitation to bid).

On the other hand, in addition to reproducing the crimes of the former bidding law, Law 14.133/2021 innovated and created the criminal type of omissão grave de dado ou informação por projetista (serious default of data or information by the engineer that makes the basic, executive or preliminary project of the bidding), provided for in Article 337-O. The penalty is 6 months to 3 years of imprisonment and fine.

The object of the crime is the suitability of the information provided to the Public Administration for the development of its final verdict in order to hire the best proposal presented in the bidding, criminalizing the engineer’s conduct that with intent, in prejudice of the competitive bidding character, omits, modifies or delivery to administration information in “relevant dissonance with reality”. The conduct is punished with double of the penalty if the engineer practices the conduct with the specific end of obtaining benefit, direct or indirect, for his/her own or from others, by virtue of paragraph 2 of that article.

Finally, the most important innovation of Law Nº 14.133/93 was the increase in the penalty for all bidding crimes. In this opportunity, it is highlighted that the new criminal types of illegal direct contracting, sponsorship of improper hiring, irregular modification or payment in an administrative contract and fraud in a bidding or contract are now punished with 4 to 8 years of imprisonment and fine. In the previous law, they were punished, in addition to the penalty of fine, of 3 to 5 years of imprisonment, with the exception of the crime frustration of competitive bidding character, whose sentence was 2 to 4 years of imprisonment.

The two main consequences of the increase in the penalty of these crimes consist, first, in the withdraw of the possibility of concluding a non-criminal persecution agreement, allowed only in crimes whose minimum sentence is less than 4 years according to the Brazilian Legal System, in the form of Article 28-A of the Brazilian Criminal Procedure Code.

The second is the change in the initial penalty serving regime in case of condemnation, which could previously be regime aberto (minimum security prison or correctional facility), article 33, §2, “c”, of the Brazilian Criminal Code, and will now occur in a regime semi-aberto (low to medium prison or correctional facility), Article 33, Paragraph 2, “b”, of the Brazilian Criminal Code or, in more serious cases, even in regime fechado (high and medium security prisons and correctional facilities), article 33, §2, “a”, of the Brazilian Criminal Code.

The objective of the new regulation is to promote the increase of the penalty in these crimes in order to try to avoid the sense of impunity to a person responsible for causing losses to the public administration and to public property in bidding procedures, punishing their conduct more severely and avoiding the perpetuation of decriminalized criminal procedural institutes.

However, these new penalties assigned to bidding crimes provide some distortions within the systematic of the Brazilian Criminal Code. Under a comparative analysis, the penalty of 4 to 8 years of imprisonment applied to some of the bidding crimes are equal to the established for crimes against property practiced by means of threat or violence (such as robbery and extortion, which are punished with 4 to 10 years of imprisonment), rape (penalty of 6 to 10 years of imprisonment) and severe bodily injury (penalty of 1 to 5 years and 2 to 8 years of imprisonment, respectively §1 and §2 of art. 191, of the Brazilian Penal Code), more severe conducts that protect more sensitive legal interests.

Our article on the Main Changes Introduced by the Brazilian New Bidding Law is available at: http://dprlaw.com.br/publications/main-changes-introduced-by-the-brazilian-new-bidding-law-law-no-14-133-2021/?lan=_en