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Legal Update

Brazil: CADE and BACEN sign a Memorandum of Understanding

5 March 2018
Tauil & Chequer Legal Update
In the trial session held on February 28, 2018, the Administrative Council for Economic Defense (“CADE”) and the Brazilian Central Bank (“BACEN”) signed a Memorandum of Understanding (“Memorandum”) to set cooperation rules in merger reviews and investigations of anticompetitive practices involving financial institutions.

The Memorandum sets forth that, as a general rule, the approval of both CADE and BACEN is necessary to close a transaction. However, the analysis will be exclusively made by BACEN in cases that involve risks to the stability of the Brazilian National Financial System. This means that BACEN is responsible for the decision only in cases where there are systemic risks. In those exceptional cases, CADE will follow BACEN´s opinion and approve the transaction by considering it a chance for efficiency and economic development, according to Article 88, paragraph 6, I(c), of Law 12,529/2011 (Brazilian Competition Law). However, in the vast majority of cases, the approval of CADE and BACEN are still mandatory and both institutions should cooperate in the reviewing process.

CADE will be liable for assessing anticompetitive conduct in the financial sector, but it will consult BACEN, taking into consideration the information provided, before rendering its final decision.

The Memorandum also provides for a number of possible joint actions between both agencies, such as the issuance of guidelines, training programs and also the approval of a bill, if necessary.

The signing of this Memorandum puts an end to a dispute of more than 15 years between CADE and BACEN. In addition, it improves the synergy and transparency between both institutions in assessing merger reviews and anticompetitive conduct involving financial institutions.

This Memorandum is the result of a Working Group established in August 2017 between CADE and BACEN.


  • Eduardo Molan Gaban
    T +55 11 2504 4639
  • Natali de Vicente Santos
    T +55 11 2504 4254
  • T +55 11 2504 4695
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