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Legal Update

Federal Prosecutor’s Office signs unprecedented leniency agreement with Andrade Gutierrez

11 May 2016
Tauil & Chequer Legal Update

The 13th Federal Court in Curitiba approved the leniency agreement between the construction company Andrade Gutierrez and the Federal Prosecutor’s Office (“MPF”) within the context of the “Lava Jato” operation. The company agreed to cooperate with the investigations, to cease its involvement in the incidents  discussed in the agreement, to implement a compliance program, and to pay a civil fine as a result of the company’s unlawful acts in the amount of BRL 1,000,000,000.00 (one billion Brazilian reais).

The agreement also covers other investigations against the company in addition to the “Lava Jato” operation, and was signed by members of the assistant Working Group for the Prosecutor General of Brazil,  and Federal Prosecutors in Paraná (members of “Lava Jato” Task Force), Goiás and Rio de Janeiro.

Under the agreement, the “MPF” will refrain from filing criminal complaints against the individuals signatory to the agreement or civil actions regarding the incidents included in  the leniency agreement. The “MPF” will also seek the mere declaratory recognition of public improbity acts, without the imposition of further penalties, in public civil actions currently underway against Andrade Gutierrez.

The “MPF” agrees to propose similar agreements with other public agencies, notably the Office of the Comptroller General - CGU and the Administrative Council for Economic Defense - CADE, underwriting, where applicable, the terms already agreed upon by the “MPF” and Andrade Gutierrez.

The amount corresponding to 10% (ten percent) of the civil fine to be paid by the contractor company shall be allocated to the criminal prosecution bodies signatory to the agreement. The remaining 90% (ninety percent) of the fine will be distributed between injured companies as compensation for damages, considering the proportion of the damage suffered by each company.

Andrade Gutierrez’ employees and agents who participated in the incidents outlined in the leniency agreement may adhere to its terms, in which case they will also receive its benefits. This provision does not apply to individuals who have already entered or will enter into their own collaboration agreements with the Federal Prosecutor’s Office.

Observations in this update about Brazilian law are by Tauil & Chequer Advogados and are not intended to provide legal advice. Any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.


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