On 20 September 2021, the Administrative Council for Economic Defence (CADE) launched the Guide on Evidentiary Recommendations for Leniency Agreement Proposals (the guide) with the primary objective of clarifying the evidentiary criteria for conviction that have emerged from the CADE's tribunal case law.
This objective is a result of the need of the CADE's General Superintendence to increase the degree of certainty of its technical opinions when assessing the possibilities of conviction in proposed leniency agreement cases. This is because, as highlighted in the guide, the evaluation of evidence for the purposes of signing a leniency agreement takes place within the General Superintendence; however, for the purposes of a conviction, this judgment takes place before the CADE tribunal. Therefore, analysing the evidentiary requirements demanded by the tribunal's case law for the conviction of cartels and other infractions is a relevant parameter to guide the analysis of leniency proposals.
The guide has three central chapters. The first chapter is about the evidentiary standard, and the second chapter is about the inexistence (as a rule) of a predetermined legal value for evidence; both are fundamentally theoretical. Finally, it has a third chapter with a review of the tribunal's case law. The latter, the most extensive chapter of the guide, summarises the examples of evidence that decisively influenced the cases already appreciated by the CADE tribunal, for the purposes of conviction as well as dismissal, between the years of 1993 and 2020, with a focus on cartel cases.
On this basis, the guide considers:
- direct evidence;
- indirect evidence, including economic evidence, evidence of monitoring of the agreement and evidence of knowledge of the illegality;
- evidence of the effects of the conduct in Brazil;
- the sufficiency of the body of evidence;
- insufficient evidence (when without complementary evidence);
- the validity of the evidence; and
- evidence of the degree to which the conduct conforms to the CADE's standards.
The guide provides examples of materials that can counter insufficient evidence of the existence of the conduct brought before the CADE tribunal. This comprises:
- documents or unilateral reports;
- economic evidence and parallelism;
- recordings of phone calls (without knowing the content of the conversations);
- mention of an individual or company in communications from third parties;
- documents without authorship and/or without a date;
- participation in emails;
- scheduling and/or mentions of meetings; and
- anonymous reports.
Another interesting aspect of the publication goes beyond clarifying the forms of evidence that the tribunal most commonly accepts or rejects to form its opinion. By citing the precedents obtained in the case law survey, the guide presents several annexes containing lists of the relevant excerpts from votes handed down in the tribunal that were the basis for the conclusions and the systematisation of the evidentiary recommendations in the guide. This provides a point of reference that will certainly be of use for CADE itself, as well as for companies.
The launch of the guide is accompanied by a second initiative from the CADE that is also focused on strengthening the leniency programme: the creation of the tool named Clique Leniência (Click Leniency). Regulated by the CADE's Ordinance 416, which was published on 9 September 2021, the Clique Leniência system allows the interested party to make a confidential request that certifies them as the first to propose a leniency agreement in relation to a given conduct. This request can be made on the CADE's website at any time. The request will be considered to have been made on the day and time stated in the electronic receipt issued by the system and it does not prevent the request from being made in person at the CADE's specialised unit or by telephone or email, which are reserved for communications of this type.
Both the guide and Clique Leniência, which were launched at approximately the same time, appear to be attempts to make the CADE's leniency programme more accessible to potentially interested parties. The initiatives provide better guidance regarding the formalisation, negotiation and execution of agreements, which is likely in response to the significant decrease in leniency requests that has been observed in Brazil, and globally, since 2017.
For further information on this topic please contact Marcela Mattiuzzo or Jéssica Costa at VMCA by telephone (+55 11 3939 0708) or email ([email protected] or [email protected]). The VMCA website can be accessed at www.vmca.adv.br.