On October 18, 2016, The Administrative Council for Economic Defense ("CADE") approved a new Resolution on Associative Agreements ("Resolution No. 17" or "New Resolution")1, which regulates the hypotheses for filing of Associative Agreements pursuant to Law No. 12,529/2011, in an effort to clarify definitions and provide more legal certainty regarding the necessity for filing of these kind of agreements with the Brazilian antitrust authority's analysis.
Thus, according to Resolution No. 17, any agreement with a term of two (2) or more years must be considered associative, which establishes a joint enterprise for development of economic activity, provided that, cumulatively: (i) the agreement establishes sharing of risks and outcomes for the economic activity; and (ii) the contracting parties2 are competitors in the relevant market in relation to the subject matter of the agreement.3
Economic activity is defined as the acquisition or offering of goods and services in the market, even on a non-profit basis, provided that, in this case, the activity can be, at least in theory, developed by private company with lucrative purposes.4
Therefore, taking into account the repeal of CADE's Resolution No. 10, of October 29, 2004, which used to regulate the hypotheses for filing Associative Agreements, the vertical integration between the parties is no longer a condition for the filing of Associative Agreements before CADE.
Resolution No. 17 also states that agreements with terms of less than two (2) years holding the possibility for postponement or agreements for undetermined periods should be filed before its renovation when the new period achieves or exceeds the term of two (2) years.
The new Resolution will come into force thirty (30) days after its publication in the Official Brazilian Gazette, which is expected to occur before October 25, 2016.
2 According to Article 4 of the Resolution No. 17 of CADE, parties directly involved in the notified transaction and their respective economic groups are considered contracting parties
3 Pursuant to Article 2 of the Resolution No. 17 of CADE.
4 Pursuant to Article 2, §1 of the Resolution No. 17 of CADE
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