On March 7, 2013, the Brazilian antitrust authority (CADE) issued an amendment to the current rules governing cease and desist commitments (settlements) in administrative proceedings for the investigation of antitrust infringements. CADE intends to increase transparency and predictability in settlement negotiations in order to encourage companies and individuals to close pending investigations via settlements.

The most important changes relate to settlements in cartel investigations. Under the new rules, parties applying for a settlement in a cartel case must pay a monetary contribution to CADE that will never be lower than the minimum applicable fine provided by law. Also, the new rules provide that the individual and/or company must acknowledge participation in the infringement.

If settlement in a cartel case is reached while the investigation is still being conducted by the General Superintendence (GS), the individual and/or company will also be obligated to materially cooperate with the investigation. The GS will review the extent of such cooperation and how it can be useful to the investigation in order to determine the amount of the monetary contribution. This amount will also depend upon the moment that the settlement is proposed to the GS, subject to the following criteria:

(a) For the first settlement proposal, a reduction from 30% to 50% of the fine that would likely be imposed on the party; 

(b) For the second settlement proposal, a reduction from 25% to 40% of the fine that would likely be imposed on the party;

(c) For other proposals, a reduction of up to 25% of the fine that would likely be imposed on the party. 

If the GS has already finished its investigation and the case is before CADE's Tribunal, the reduction may not exceed 15% of the fine that would likely be imposed on the party.

In addition, new settlement proposals will not be accepted if they suggest reductions in fines greater than those set forth in settlements already executed in connection with the same investigation.

Under the new rules, the settlement procedure can be initiated either by a formal proposal from an individual or company, or by the GS. Following submission of the proposal, a commission formed by CADE officials will be assigned to negotiate the terms of the settlement. Once a final proposal is agreed to, the settlement must be approved by CADE's Tribunal. The proposal and the negotiation procedure may be kept confidential if so requested by the parties and agreed to by CADE.

Under the previous rules, all settlements were directly negotiated with a member of the Tribunal regardless of the stage of the investigation. According to the new rules, if the case is still under investigation by the GS, the GS will be in charge of the negotiation and will set the timeframe for it. If the case is already pending review by the Tribunal, the settlement proposal shall be addressed to the member of the Tribunal assigned to the case.

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