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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