Portugal: Bribery & Corruption

The newly enforced Law No. 94/2021 complements and amends some legislation already in place regarding bribery and corruption crimes, transposing most of the legislative projects foreseen in the National Anti-Corruption Strategy for 2020-2024, which Portugal has been constantly improving in the last couple of years.

Since bribery can be prosecuted in its many forms – such as influence peddling, abuse of functions by public employee and corruption – its legislation is scattered throughout the Portuguese judicial system. Bribery offenses are envisaged under Article 363 (referring to Articles 359 and 360) of the PCC, regarding bribery per se as a crime against justice; Articles 372, 373, 374, 374-A and 374-B of the PCC, concerning different types of corruption in the public sector; Articles 375, 376 and 377 of the PCC, regarding embezzlement in the public sector; Article 379 of the PCC, concerning graft in the public sector; Articles 7 through 9 of Law No. 20/2008 of 21 April, amended by Law No. 94/2021, of December 21st1, regarding corruption in international trade and in the private sector; Articles 16, 17 and through 18 of Law No. 34/87 of July 16th, amended by Law No. 94/2021; Articles 36 and 37 of the Military Justice Code (Law No. 100/2003 of November 15th) regarding crimes committed by military personnel; Articles 8 and 9 of Law No. 50/2007 of August 31st, concerning crimes committed by sports agents.

The Judiciary Police (Polícia Judiciária) has a unit dedicated to detecting and preventing the commission of crimes related to bribery and corruption called the National Anti-Corruption Unit2. As soon as suspicions of any kind arise, they’re either communicated to the regional public prosecutor’s office – Department of Investigation and Prosecution (DIAP) – or the Central Department for Criminal Investigation and Action (DCIAP), which has nationwide jurisdiction.

Portugal’s jurisdiction foresees different kinds of bribery offenses and often envisaged in corruption crimes. The literal concept of bribery is stated in Article 363 of the PCC and consists in attempting to or persuading someone, through a gift or promise of an equity or non-equity advantage, to falsely testify or declare something false under oath – Articles 359 or 360 -, without the materialization of this intended result.

Although this crime only applies to false statements by the bribed person, it also constitutes bribery when someone in a dominant position agrees to receive an undue advantage in exchange for the provision of a service.

This broader definition formally constitutes corruption, which involves a combination of the following prerequisites: (i) an action or omission; (ii) practice of a lawful or unlawful act; (iii) and the consideration of an undue advantage for him/her/itself or a third party.

Corruption can be active or passive depending on whether the act or omission is committed by the person who corrupts (active) or the person who allows him/herself to be corrupted (passive). Passive corruption, as stated by Article 373 of the PCC, is defined as the promise, offer or giving to someone, directly or indirectly, of an undue advantage, for that same person or another person or entity, so that the person in question act or refrain from acting in the exercise of his/her duties. Active corruption, as provided by Article 374 of the PCC, is defined as the solicitation or acceptance by someone, directly or indirectly, of an undue advantage, in order to persuade the person in question to act or refrain from acting in the exercise of his/her duties.

Portuguese law foresees bribery of public officials as well as bribery of private persons, whenever said private persons are performing public functions. Under Article 386 of the PCC, there are 4 types of “public officials”: (i) a person holding public authority, such as administrative officials, judges and prosecutors; (ii) civil servants, which are entities serving public utility; (iii) military personnel (as defined under Article 4 of the Military Justice Code), such as officers, sergeants and Armed Forces; (iv) holders of political office and holders of high public office (defined in Articles 3 and 3-A of Law No. 34/1987, of July 16th), such as the President of the Republic and Members of Government.

Bribery and corruption criminals are held civilly responsible for any damages caused by their illicit conduct. In case the defendant is convicted, all the profits of his/hers criminal activity will be confiscated by the state. Also, under Article 7 of Law No. 5/2002 (amended by Law n.º 99/2021), there is a legal presumption that subverts the in dubio pro reo principle in such a way that a suspect has the burden of proof to regularize any revenue other than that which is consistent with that person’s lawful earnings. Failing to prove lawfulness of earnings results in such earnings being considered a product of crime and consequently being confiscated in favour of the State.

Any criminal act is either punished with imprisonment or a penalty later determined by the judge. Considering Portugal’s vast and scattered legal framework regarding bribery crimes, the penalty varies according to all the parameters at play.

For instance, passive corruption is sanctioned with imprisonment between 1 to 8 years if the act is contrary to the bribed official duties – Article 373, paragraph 1 of the PCC – and 1 to 5 years, if not – Article 373, paragraph 2 of the PCC. If the agent is a holder of political office or senior public official, passive corruption is sanctioned with 2 to 8 years in prison if the act is contrary to the bribed duties and with 2 to 5 years in prison if not – Article 17 of Law No. 34/87, of July 16th. According to Article 8 of Law No. 20/2008, of April 21st, private sector workers can be sanctioned with up to 5 years in prison or a penalty of up to 600 days. If the act or omission is likely to cause a distortion of competition or damage of assets to third parties, the agent shall be punished with imprisonment from 1 to 8 years. Sports agents can also be punished for passive corruption with imprisonment from 1 to 8 years, suspended from sport events for a period from 6 months to 3 years, denied public subsidies for 1 to 5 years, and prohibited from working as a sports agent. Active corruption is sanctioned with imprisonment from 1 to 5 years if the intended act is contrary to the bribed party’s duties – Article 374, paragraph 1 of the PCC – and up to 3 years if not – Article 374, paragraph 2 of the PCC. If the agent is a holder of political office or senior public official, active corruption is sanctioned between 2 and 5 years in prison if the intended act is contrary to the bribed party’s duties and up to 5 years if not – Article 18 of the Law No. 34/87, of July 16th. There can also be an ancillary penalty which can be the loss of office or prohibition from holding public office or working in the public sector. According to Article 9 of Law No. 20/2008, of April 21st, private sector workers are sanctioned with imprisonment of up to 3 years in prison or a penalty. If the act or omission is likely to cause a distortion of competition or damage to assets of third parties, the agent shall be punished with imprisonment of up to 5 years or a penalty of 600 days. Sports agents can also be punished with active corruption with imprisonment from 1 to 5 years, suspended from sport events for a period from 6 months to 3 years, denied public subsidies for 1 to 5 years, and prohibited from working as a sports agent. All these sanctions can be aggravated depending on the value of the bribe.

Although there aren’t any specific provisions regarding hospitality, travel and entertainment expenses, according to the national anti-corruption strategy for 2020-2024, it is stated that the adoption and implementation of regulatory compliance programs by companies have been identified as the best way to prevent and fight corruption because it calls for a greater commitment on the part of the private sector.

The difference between what is unacceptable or acceptable in terms of hospitality, travel and entertainment expenses is whether such equities are perceived as compensation for the performance of public duties or not. What can be seen as an illicit deal (a bribe) depends on the context, the amount involved or any other circumstances that might be relevant in the case. The promotion of a good environment through simple acts of courtesy that cannot in any way influence the public official’s activity is not criminally relevant.

Yes, under the Articles 15 to 21 of Law No. 19/2003 of July 20th, political parties and election campaigns are funded mostly through their own revenues, private funds and public grants. Due to transparency and public service policies, anonymous donations are strictly prohibited, and all political parties are obliged to register the donor’s personal information and a limited amount is established for donations coming from individuals.

Facilitation payments are not explicitly foreseen in Portuguese Law which leads them to fall under the same principle as mentioned in question No. 7: some gifts may be considered acceptable depending on the context and role of both parties. Moreover, under article 372 PCC any type of undue benefit – no matter how small – is considered unacceptable when it serves as an exchange for a specific action performed by the public official. Given that facilitation payments are meant to expedite or secure the performance of an action to which the payer is already legally entitled to, and the receiver obliged to perform, these payments can represent undue benefits. Therefore, it is the intent behind the offer that draws the line which separates an acceptable gift from an unacceptable one. There are however Codes of Conduct setting out some rules in this matter.

In the particular case of Portuguese’s Government officials, Article 8 of Resolution No. 184/2019 (which approves the Government’s Code of Conduct) strictly forbids the acceptance of any amount over €150, in order to uphold the official’s impartiality and integrity.

Apart from the fundamental rights granted by Portugal’s Constitution to any defendant, there are no particular provisions regarding bribery and/or corruption crimes.

Any person who is suspected of committing a crime – whether it is bribery or any other type of crime – has a set of rights arising from the Portuguese Code of Criminal Proceedings (PCCP). Amongst the most fundamental rights of any defendant in criminal proceedings (common to democratic States) is the (i) in dubio pro reo principle, meaning that the Prosecution has the burden of proof of the facts concerning the crime. Other fundamental rights are: (ii) the privilege against self-incrimination (known as the right to remain silent); (iii) the right to be assisted by a lawyer (and even to be appointed a defendant if needed); (iv) the right to be informed of the facts relating to him/her before making any statement to any authority; (v) the right to intervene in the investigation, offering evidence and (v) the right to appeal against any unfavourable relevant decision.

In an ever-evolving legal framework, compliance programs are highly recommended and slowly being implemented across all public and private sectors precisely to supervise all suspicious activity. For instance, the Decree-Law No. 109-E/2021 introduced a National Anti-Corruption Mechanism (MENAC), which is an independent administrative entity with authority powers to ensure the effectiveness of anti-corruption policies and related crimes in vital public sectors, namely through the issuance of guidelines and directives to all corporations.

However, the existence of compliance programs does not exclude criminal liability. Regardless, although legal persons are held liable for acts of bribery committed in their name or in their interest, such liability is excluded when the legal person demonstrates that the agent of bribery acted against explicit orders or instructions such as written rules and corporate regulation. Any compliance program must establish clear instructions, prohibiting any sort of offers to public officials that are intended or may appear to intend to influence in any way their performance.

Both individuals and corporate entities alike may be held civilly and criminally responsible for bribery of any kind.

Under the National Anti-corruption Regime (annexed to the aforementioned Decree-Law No. 109-E/2021), corporate entities must adopt and implement regulatory compliance program (PPR) that includes (i) a prevention plan regarding corruption and related crimes; (ii) a code of conduct; (iii) an anti-corruption training program; and (iv) a whistleblowing channel.

MENAC is responsible to oversee all these operations and ensure their correct implementation, guiding said corporate entities if need be.

EU Directive 2019/1937, published by the European Parliament and Council on October 23rd was recently transposed to the Portuguese jurisdictional system on December 20th, through Law No. 93/2021, which foresees, namely, the creation of internal and external reporting channels in both public and private entities, protection to all public and private employees who decide to report any violations of EU Law and prohibits all acts of retaliation towards the whistle-blower (namely, negative performance reviews, amendments to the employee’s contract or even outright dismissal) and grants a witness protection program to the whistle-blower, as well as legal protection at all times.

At the time of writing, statistics from the 2021 Internal Security Report have not yet been published. However, the 2020 Report shows an average of 688 new investigations regarding corruption crimes. Considering the awareness regarding corruption and bribery crimes, we expect the number of investigations in 2021 to keep rising.

There is as ongoing debate on how to increase the effectiveness of the justice system, especially in criminal investigation regarding complex criminal proceedings. Judicial cooperation plays an important role in tackling transnational criminality, but it is still not as agile as it should be. Many criminal proceedings last various years. Statutes of limitations occur in many cases leading to public alarm and a general sense that justice is failing.

Means of criminal investigation available to the public prosecutor’s office have been reinforced throughout the years. There are undercover police investigators, phone tapping, confiscation of assets, breach of bank and tax secrecy, international law enforcement and judicial cooperation, access to data, and various other means that are useful to investigate economic and financial crime.

Yes, the PCCP sets out the legal framework for appeals against any unfavourable relevant decision. However, due to successive legislative reforms, the right to appeal has been subject to more and more restrictions.

Taking into account the most recent legislative proceedings – through the introduction of Law No. 94/2021 and Decree-Law No. 109-E/2021 – there are no immediate plans for further reforms. However, the National Anti-corruption Strategy is far from being fully developed and will surely mature over time.

Portugal joined several international conventions related to corruption, the most relevant being: The Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Paris, 17.12.1997) was ratified by Portugal in 31.2.2000, according to Notice No. 253/2000 (21.12.2000) of the Ministry of Foreign Affairs. It was also transposed on a national level trough Law No 20/2008 /21.3.2008). The Convention on the Fight against Corruption (Strasbourg, 30.4.1999) was ratified by Portugal in 7.5.2002 according to Notice No. 60/2002 (2.7.2002) of the Ministry of Foreign Affairs. An additional Protocol (Strasbourg, 15.5.2003) was ratified by Portugal according to Notice No. 32/2015 (9.4.2015) of the Ministry of Foreign Affairs. The United Nations Convention against Transnational Organized Crime (New York, 31.10.2003) was ratified by Portugal in 28.9.2007 according to Notice No. 148/2008 (30.7.2008) of the Ministry of Foreign Affairs.

Portugal’s legal framework does not foresee any lawyer-led investigation concept. The only legal privilege that applies refers to communications between clients and lawyers, which are protected under the Statute of the Portuguese Bar Association (Article 92 of Law no. 145/2015 of September 9th) and Council of Europe Recommendation 21 of October 25th 2000 (Principle I, paragraph 6). Violation of Attorney-client secrecy is punished under Article 195 of the PCC. Facts that become known as a result of offering of legal services fall within the scope of lawyer-client confidentiality. Nonetheless, cases where the lawyer is involved in the furtherance of a criminal purpose are, of course, not subject to such protection.

When it comes to anti-bribery and corruption, it’s safe to say our legal system has been reformed, namely trough the approval of the measures that were agreed upon in the National Anti-corruption Strategy of 2020. Tackling bribery and corruption is on the agenda of Portuguese political makers, much driven by the increasing social reprobation of white-collar crimes, often seen as the cause of both social and economic problems. Preventing and prosecuting crimes related to corruption has become one of the main priorities in Portuguese criminal policy. However, criminal proceedings in Portugal are slow-paced and it takes a tremendous amount of time to reach a conclusion. This is often perceived as one of the biggest faults in our jurisdictional system and has led to several condemnations of Portugal by the European Court of Human Rights.

Both public and private entities haven been enforcing measures aimed at the preventing bribery and corruption namely trough awareness campaigns, transparency policies and the implementation of codes of conducts.

An independent administrative entity called “MENAC” (“Mecanismo Nacional Anticorrupção” meaning “National Anti-Corruption Mechanism”) has been created in December 2021. It’s scope, as foreseen in Decree-Law No 109-E/2021 is to tackle corruption in its various forms, promoting transparency and integrity within public practice.

Measures such as these indicate that anti-corruption and anti-bribery prevention awareness has been growing among public and private entities.

To be a suspect of bribery is nowadays perceived as a form of moral indictment. Avoiding any type of suspicion has become as important as proving one’s innocence. And even tough a suspect might prove his/her innocence, this might not re-establish one’s reputation. This is mostly due to the combination between two factors: “Mediatisation” of justice and the unreasonably long length of time that it usually takes to reach a verdict in Portuguese courts.

The biggest challenge Portuguese authorities face when investigation fraud and corruption is finding the right balance between the efficiency of the investigation and the effectiveness of fundamental rights, whilst overcoming the lack of means and resources. Furthermore, it is also important to ensure quicker criminal proceedings, especially in the so-called “mega-files”, which involve high-profile entities. Bribery and corruption are becoming more and more sophisticated and involving high-profile persons. Prosecutors point out difficulties in highly complex investigations such as the ones involving several jurisdictions and a huge number of suspects.

Businesses face the difficult task of finding the balance between reacting quickly to any criminal activity within the company and prevent copy-cat behaviour, while maintaining its reputation to the public. Companies should create strong compliance systems and internal best practice guides, ensuring that all employees, managers, and directors (from the bottom to the top) have adequate knowledge of what is prohibited and punishable by law. Companies should seek legal advice in all their activities, especially those that bring them into direct contact with public entities. Despite the efforts to increase the efficiency of investigations, the delay of criminal proceedings continues to pose a serious problem in the Portuguese judicial system. Anyone suspected or victim of a crime is likely to wait years for justice to be made. This can cause serious damages, namely to the reputation.

Complying to MENAC’s law enforcement policies will pose serious challenges among businesses that have been neglecting the National Anti-corruption Strategy. Individuals involved in bribery and corruption will continue to seek new ways and opportunities to exploit and, consequently, launder their corruption. In recent years, virtual currencies have emerged and attracted all sort of criminals due to their underlying infrastructure – the blockchain – which is particularly attractive because it protects the transactor’s identity. We have reasons to believe that the decentralized nature of cryptocurrencies will continue to pose a serious challenge to on-going investigations.

Corruption is perceived as a phenomenon with deep historical and cultural roots in Portuguese society very much facilitated by an inefficient and slow bureaucratic system. Some facilitation payments are aimed at nothing more than speeding up public programs that are too slow. Reducing bureaucracy and increasing efficiency is, therefore, fundamental in preventing corruption. In June 2020, the Government approved the Strategy for Innovation and Modernisation of the State and Public Administration 2020-2023, which may be an important step towards that goal.

Moreover, our judicial system faces scarcity of investigators, prosecutors, judges and administrative staff. Therefore, a key aspect in tackling bribery and corruption is in reforming government functions at all levels for a better coordination between all authorities that may me involved in an investigation (investigators, prosecutors, tax authorities, social security and others). This would allow to gain better results in detecting and deterring corrupt behaviour, with fewer resources.

Measures aimed at preventing factors that lead to corruption must go hand-in-hand with reinforcement of the legal system’s resources and reform of government functions. More than repressing it is necessary to prevent corruption.