During the last trial session, which occurred on May 11, 2016, the Administrative Council for Economic Defense – CADE approved Guidelines regarding Cease-and-Desist Agreements (known by the Portuguese acronym “TCC”) in cartel cases.
TCC is a negotiated solution which permits CADE to suspend the continuation of investigations related to legal entities and/or individuals who enter into the agreement (the committed parties) while its terms are being complied with. Furthermore, if the TCC is proposed before the case records are sent to CADE’s Tribunal (maximum adjudicatory body of the authority), a reduction of 30% to 50% of the “estimated fine” may be granted to the first proponents of the agreement. This discount is regressive, becoming 25% to 40% for the second proponent; and up to 25% for the following proponents. If the proposal is made after the files are sent to the Tribunal, the possible reduction is a maximum of 15% of the “estimated fine”.
The negotiation of TCCs in cartel cases, which demands more attention than other cases due to some additional conditions provided by CADE’s Internal Regulation (RI-CADE), will now count as the new Guidelines. Although the Guidelines are non binding (a fact which is highlighted in the document), they represent CADE’s understanding of the matter and may offer more transparency, predictability, effectiveness and speed to this sort of negotiation.
The document is structured around the main aspects of the negotiation of a TCC in a Cartel case, pursuant to articles 85 of Law 12.529/2011 and 184 and 189 of RI-CADE, which are: collaboration; pecuniary contribution; recognition of participation in the investigated conduct; and the obligation of not returning to the practice to which they confessed. The document also contains, in its annexes, the main model agreements used by CADE and the draft of other relevant documents such as the “History of Conduct” and “Detailing of the Contribution of Committed Parties”.
The Guidelines also detail the method of evaluation of the level of cooperation of proponents in order to establish the percentage of discount, as well as the criteria used to calculate the “estimated fine”. Another important aspect highlighted by the recently released document is that, in contrast to the Leniency Agreement, its execution does not provide immunity to the committed parties in the criminal sphere. However, a TCC proponent may demonstrate interest in CADE supporting them in the negotiation of a plea bargain agreement (colaboração premiada) with the Prosecutor’s Office and/or the Federal Police.
Click here to read the Guidelines (Portuguese only).