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ARTICLE · 27 AUGUST 2015

Brazil, Bribes And Backward Tracing – Only In Jersey

Reed Smith (Worldwide)
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The Municipality of Sao Paulo and the Republic of Brazil successfully defeated an appeal from two BVI registered companies to the Privy Council which considered what the circumstances are, if any, where backward tracing would be permitted.

GlobalInsolvency/Bankruptcy/Re-Structuring
Colin Cochrane
Colin Cochrane
Elizabeth McGovern
Elizabeth McGovern
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The Municipality of Sao Paulo and the Republic of Brazil successfully defeated an appeal from two BVI registered companies to the Privy Council which considered what the circumstances are, if any, where backward tracing would be permitted.

Background

The two appellants, "Durant" and "Kildare" are BVI registered companies, which were controlled by Mr Paulo Maluf who, between 1993 and 1996, had been the mayor of Sao Paulo. Mr Maluf had, over the course of a few months in 1998, received a number payments that were paid into an account belonging to Mr Maulf's son in the name of Chanani (the "Chanani account"), and thereafter were transferred to an account held by Durant in Jersey (the "Durant account") and then on to an account held by Kildare, also in Jersey. These payments represented bribes to Mr Maluf in connection with an infrastructure contract and amounted to over US$10.5m.

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