Writer: Beatriz Borges

Administrative Sanctioning Law is an area of ​​law that has been gaining increasing relevance in Brazil, especially given the growing concern for integrity in relations between public authorities and citizens. It is a branch that regulates the application of administrative sanctions to individuals or legal entities that fail to comply with rules or obligations imposed by the State. 

Although the topic may seem technical, its practical implications are vast and extend to various sectors, such as health, the environment, procurement, and the financial market. Therefore, understanding how it works is extremely important for legal professionals.

1. What is Administrative Sanctioning Law?

Administrative Sanctioning Law is the branch of Administrative Law that deals with the accountability of individuals or companies that violate administrative rules imposed by the State. Unlike Criminal Law, which regulates the application of sanctions for the commission of crimes, Administrative Sanctioning Law operates in the field of administrative infractions (which can also be considered crimes and judged by the judiciary), being governed by its own principles and applying penalties that do not constitute restrictions on liberty (imprisonment), but rather measures such as fines, suspensions, injunctions, and prohibitions on contracting with the public sector.

In other words, administrative sanctioning law is a branch of law that regulates the application of punishments within the Public Administration, without necessarily using the structure of the judiciary, as is the case with criminal law, for example. 

This branch of law seeks to guarantee the proper functioning of public administration and the protection of the public interest, acting as a form of control over the actions of private individuals and public servants. Its objective is not only to punish, but also to prevent the commission of offenses and to educate those subject to the law so that they respect the rules governing their relations with the State.

1.1. Principles of Administrative Sanctioning Law

Like other branches of law, Administrative Sanctioning Law is guided by several principles aimed at protecting the rights of those subject to administrative action and ensuring the legitimacy of the sanctions imposed. In this case, the principles observed are shared among other branches that deal with procedural law. Among the main ones, the following stand out:

• Principle of Legality: No sanction may be applied unless it is previously provided for by law.
• Principle of Contradictory Proceedings and Full Defense: The individual or company accused of committing an infraction has the right to defend themselves and present evidence.
• Principle of Proportionality: The sanctions applied must be proportional to the seriousness of the offense committed.
• Principle of Legality: The sanctioned conduct must be described clearly and specifically in the applicable legislation.

Furthermore, it is important to highlight the need to observe Law No. 9.784/99 (Administrative Procedure Law) and the principles established therein, such as reasonableness, morality, and public interest. 

2. How does it work in practice?

In practice, the functioning of Administrative Sanctioning Law involves identifying an infraction, initiating an administrative process, and potentially applying sanctions. 

These procedures may vary depending on the administrative body or entity conducting the procedure, the conduct committed, and the law on which the administrative process will be based, but they follow some common steps.

2.1. Identification and Initiation of the Administrative Process

The administrative process is initiated due to the identification of a possible administrative infraction, which can occur through: regular inspections carried out by public bodies; complaints made by citizens or entities; and audits conducted by the public administration itself.

Upon discovering an infraction, an administrative sanctioning process is initiated, aimed at investigating the incident and ensuring that all parties involved have the opportunity to present their version of the facts.

2.2. Instruction Phase

After the procedure is initiated, an investigation phase begins, during which the administrative body and the opposing party gather and produce evidence, such as documentary, testimonial, and expert evidence, ensuring respect for due process and the right to a full defense. This stage is essential for the transparency of the process and to prevent arbitrary actions.

2.3. Application of the Sanction

If, at the end of the process, the infraction is proven, the administrative authority may apply the sanction provided for in the legislation used as the basis for initiating the process. Sanctions may vary according to the sector, the subject (natural or legal person), and the severity of the infraction, and may include:

• Fines: Monetary amounts imposed on the offender.
• Warnings: Penalties of an educational nature.
• Suspension or prohibition of activities.
• Revocation of licenses or authorizations.
• Prohibition on contracting with the public sector, as stipulated in the Bidding and Contracts Law (Law No. 14.133/2021).

In this case, the sanctions to be applied and their application parameters will vary depending on the law or regulation in which the illegality committed is foreseen. For example, in cases of irregular conduct by public servants, the sanctions are listed in Law No. 8.112/90 (Public Servants Regime) and can range from warnings to dismissal and revocation of retirement benefits. In cases of corrupt conduct by companies, the sanctions can be twofold, as defined in Law No. 12.846/2013 (Anti-Corruption Law): (i) a fine; or (ii) the extraordinary publication of the decision. 

In cases of disagreement with the sanction applied, the individual may appeal administratively or judicially, seeking to review or annul the decision.

3. Practical Examples of Administrative Sanctioning Law

Therefore, administrative sanctioning law can be seen in various areas of public administration and can be practiced by different public entities, depending on the infraction committed and, consequently, on the jurisdiction to judge said offense. 

However, before delving into the different branches in which they are applied, it is relevant to mention a type of highly relevant administrative sanctioning process that is widely known by legal practitioners and scholars: the Disciplinary Administrative Process (PAD).

The PAD (Administrative Disciplinary Proceeding) is the administrative procedure through which the Public Administration investigates, judges, and punishes its employees, and is generally initiated after the conclusion of an investigation. In it, "the Inspector General is responsible for initiating the procedure, ensuring respect for due process, the right to a fair hearing, and the right to a full defense."  

Now, to better illustrate how Administrative Sanctioning Law works, through the various areas of activity of the Public Administration, let's look at some practical examples:

3.1. Environment: Fines and Seizures

In the environmental sector, Administrative Sanctioning Law is widely used to punish infractions that cause damage to the environment. IBAMA (Brazilian Institute of Environment and Renewable Natural Resources) frequently applies administrative sanctions to companies and individuals who disregard environmental regulations, committing irregularities such as illegal deforestation and environmental pollution.

These sanctions are applied based on the Environmental Crimes Law (Law No. 9.605/1998), which provides for administrative penalties for offenses of this nature.

3.2. Public Health: Oversight by Anvisa

Anvisa (National Health Surveillance Agency) also plays a crucial role in Administrative Sanctioning Law. It is responsible for inspecting establishments and products related to public health, applying sanctions when infractions occur, such as the sale of counterfeit or expired medicines and the production of food that does not meet sanitary standards.

Sanctions may include fines, closure of the establishment, and even the recall of products that pose a risk to public health.

3.3. Public Bidding: Penalties Provided for in Law No. 14.133/2021

Another important example occurs in the context of public tenders. Companies that fail to comply with administrative contracts or commit fraud in bidding processes may be penalized with:

• Ineligibility to bid on and contract with the public administration for periods that can reach up to 5 years.
• Declaration of ineligibility, which prevents the company from participating in any bidding process throughout the country.

These sanctions are provided for in the Bidding and Contracts Law, which seeks to ensure integrity in public procurement processes and can be applied by the injured public entity. 

3.4. Financial Sector: Penalties from the Central Bank, CVM (Brazilian Securities and Exchange Commission), and COAF (Council for Financial Activities Control).

In the financial market, Administrative Sanctioning Law is exercised by entities such as the Central Bank, the Securities and Exchange Commission (CVM), and the Council for the Control of Financial Activities (Coaf).  

Penalties may include hefty fines and suspension of activities, protecting market integrity and investors.

4. Challenges and Perspectives of Administrative Sanctioning Law

Although it is a powerful tool, Administrative Sanctioning Law faces challenges that can compromise its effectiveness. Unjustified delays in conducting administrative processes are one of the biggest problems; after all, it is not uncommon to know someone who has experienced this or even suffered from the slowness in conducting an administrative process. 

The problem is so serious that, depending on the situation, it may need to be remedied through a decision by the judiciary. This is because many public bodies face a lack of resources and inadequate infrastructure, hindering the swift application of sanctions; furthermore, many employees are not prepared to conduct administrative sanctioning processes properly.  

As a consequence of the slowness and also the dissatisfaction with administrative decisions, another challenge is the tendency towards excessive judicialization, since often, those affected resort to the Judiciary to contest administrative decisions, which can prolong the resolution of cases and generate additional costs for the State.

Conclusion

Administrative law regarding sanctions is a fundamental instrument for maintaining order and the public interest, allowing the State to regulate and oversee its relations with citizens. Based on principles such as legality, proportionality, and the right to a full defense, it seeks to ensure that infractions are punished fairly and effectively.

In practice, Administrative Sanctioning Law is present in various areas, such as the environment, public health, bidding processes, and the financial market, demonstrating its broad applicability and importance in daily life. However, its effectiveness depends on constant improvement, both in the structure of administrative bodies and in the updating of the legislation that governs it.

As society evolves, Administrative Sanctioning Law will continue to play a crucial role in protecting collective interests, balancing the authority of the State with the rights of citizens and businesses.

Read more: Administrative efficiency and due process in sanctioning procedures.

Bibliography

OLIVEIRA, Guilherme Menezes. Administrative sanctioning law: foundations and implications for public management. Portal Direito e Cidadania . Available at: https://portaldireitoecidadania.com.br/direito-administrativo-sancionador/ . Accessed on: November 26, 2024.

What is Disciplinary Administrative Proceedings? Ministry of Development, Industry, Commerce and Services , May 23, 2024. Available at: https://www.gov.br/mdic/pt-br/acesso-a-informacao/perguntas-frequentes-faq/corregedoria/o-que-eo-processo#:~:text=O%20processo%20administrativo%20disciplinar%20%C3%A9,conduta%20do%20servidor%20em%20quest%C3%A3o . Accessed on: December 01, 2024.

Unjustified delays in administrative proceedings are subject to redress by the Judiciary. LEX PublishingMay 26, 2023. Available at: https://www.lex.com.br/demora-injustificada-no-tramite-de-processo-administrativo-e-passivel-de-reparacao-pelo-poder-judiciario/#:~:text=Demora%20injustificada%20no%20tr%C3%A2mite%20de,pelo%20Poder%20Judici%C3%A1rio%20%E2%80%93%20LEX%20EDITORA. Accessed on: Nov. 26 2024.