22 April 2016
On March 15, 2016, the Brazilian Administrative Council for Economic Defense (“CADE”) and the Cartel Investigative Unit of the Federal Prosecution Office in São Paulo ("MPF/SP") executed a Memorandum of Understandings to improve their cooperation in negotiations of settlement agreements involving cartel investigations carried out in both administrative and criminal spheres (i.e., CADE and MPF/SP’s jurisdictions, respectively).
These authorities have already been cooperating in joint negotiations of Leniency Agreements – valid only for the first entity to apply. From now on, coordinated action is formalized for other types of negotiated solutions, such as “Settlement Agreements” (“TCC”, at the administrative level), "Plea Agreements” (article 4, Law No. 12.850/13) and "Qualified Confession " (article 16, Law No. 8.137/90), the last two at the criminal sphere. According to CADE, the execution of the Memorandum of Understandings provides greater “transparency and certainty” on the legal requirements to cooperate with CADE and MPF/SP, as well as the administrative and criminal benefits of such collaborations.
Under the terms of the Memorandum of Understandings, the interested party may simultaneously negotiate agreements in both spheres. It is noteworthy, however, that negotiations at the administrative and criminal levels remain independent from each other. In this sense, a Settlement negotiation with CADE does not bind individuals or legal entities to settle or confess in the criminal sphere and vice-versa.
The document also recognizes that if the settlement negotiation is not successful, it will not imply “confession as to matters of fact or acknowledgment of illegal conduct which is the object of the investigation”. In addition, the authorities must not use any information nor document submitted by the interested party during the settlement negotiation as evidence in the investigation.
The Memorandum of Understandings aims to formalize the joint efforts of CADE and MPF/SP, providing greater legal certainty for individuals and entities which envisage a comprehensive negotiated solution for investigations of alleged cartels and other anticompetitive practices.