June 13, 2017 / 12:00 PM / a month ago

Brazil may have to amend bank plea plan, Valor newspaper says

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SAO PAULO, June 13 (Reuters) - Brazil's government may have to amend parts of an executive decree raising fines on financial firms involved in illicit acts to include prosecutors in the structuring of plea deals along with the central bank and the securities industry watchdog, Valor Econômico newspaper said on Tuesday.

Terms of the original decree, being discussed by lawmakers, set administrative, not criminal punishment, of banks and other financial firms involved in corruption. An amendment could be in response to calls from Brazilian prosecutors who have criticized the content of the decree, Valor reported.

Including prosecutors in bank plea deals would be a key step toward enhancing the framework that would empower the central bank and capital markets regulator CVM and improve transparency, Finance Minister Henrique Meirelles said last week.

Neither the central bank nor the CVM had an immediate comment.

The decree raises fines for banks to as much as 2 billion reais ($603 million) from 250,000 reais currently. It also allows the central bank to strike plea bargain agreements with financial firms that admit breaching the law in exchange for softer fines or more lenient prison terms for their executives.

President Michel Temer's administration sped up preparation of the decree because of the risk of new disclosures snaring Brazilian banks in a vast corruption scandal, Reuters reported on June 8, citing government sources.

The decree was announced as Congress launches an investigation into the stock and currency trades of JBS SA and news of plea-bargain testimony from its owners surfaced. JBS, which is controlled by the billionaire Batista family, is the world's No. 1 meatpacker. ($1 = 3.3176 reais) (Reporting by Guillermo Parra-Bernal; Editing by Jeffrey Benkoe)

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