In a trial session held on March 7th, 2013, the Tribunal of the Administrative Council of Economic Defense - CADE approved Resolution No. 5, of March 6th, 2013, which set forth CADE's policy regarding the execution of agreements in investigations of anticompetitive conducts.

By means of the referred Resolution, published in the Official Gazette on March 11th, 2013, the Tribunal approved the Amendment no. 01/2013, which amends Section III of CADE's Internal Rules, referring to Cease and Desist Agreements (Termo de Compromisso de Cessação - "TCC").

The main purpose of the changes is to enhance CADE's policy for the execution of agreements, considering that they represent an important mechanism for the resolution of the cases.

Cease and Desist Agreements are agreements between CADE and the defendant investigated for anticompetitive conduct, by means of which the investigation is suspended with regard to such defendant until the fulfillment of the conditions set forth in the agreement, including the obligation to cease the anticompetitive conducts and its negative effects.

With respect to the obligations assumed by the committed party, it is worth noticing that the new rules approved by CADE establish the mandatory obligations of confession of guilt, payment of pecuniary contribution and cooperation with the authorities, for all cases regarding cartels.

According to the policy in effect up to the publication of the Amendment, the mandatory confession of guilt was only foreseen for those cases initiated by a Leniency Agreement. The pecuniary contribution, on its turn, was already mandatory for cartel cases. The obligation to cooperate with the authorities was not expressly foreseen, representing a new obligation inserted by amendment.

An important novelty inserted by the new policy concerns the parameters for the calculation of the pecuniary contribution, which vary according to the level of cooperation and the moment of submission of the proposal by the defendant.

For the first defendant to come forward and execute a TCC, the amount of the contribution shall be calculated considering a reduction from 30% to 50% of the fine that could be applied in the event of a condemnation; for the second defendant, a reduction from 25% to 40%, and from the third defendant on, a reduction up to 25%. With regard to the agreements executed after the remittance of the case to the Tribunal, the maximum reduction shall be of 15% of the expected fine.


This measure aims to provide a greater predictability and stimulate the execution of this type of agreement.

With regard to the procedure for the execution of a TCC, the applicable rules are, in a general overview, the following:

  • The execution of a TCC can be proposed by any defendant, which shall submit a requirement before CADE;
  • CADE’s General Superintendence may suggest the execution of a settlement and notify the defendant to express its interest in a settlement;
  • The requirement submitted in the course of an administrative process already remitted to the Tribunal must be addressed to the Tribunal and shall be negotiated by the Reporting Commissioner and a Negotiation Commission appointed by him;
  • The requirement submitted in the course of a preparatory proceeding, administrative inquiry or an administrative process under analysis of the General Superintendence, must be addressed to the referred body and shall be negotiated by the General Superintendent and a Negotiation Commission appointed by him;
  • For the agreements negotiated with the General Superintendence, the term for the negotiation shall be determined by the General Superintendent. For the agreements negotiated before the Tribunal, the term for negotiation shall be of thirty days, extendable for an equal period, being such period suspended if any diligences are determined by the Reporting Commissioner;
  • After the negotiation period, the defendant shall present a final proposal to be submitted for CADE's Tribunal final decision. It is worth mentioning that all settlements, both negotiated by the Reporting Commissioner or the General Superintendent, are subject to the Tribunal’s final decision, which cannot modify the terms of the settlement, but only fully reject or approve it;
  • The TCC can only be proposed once; if the negotiations fail or if the agreement is rejected by CADE's Tribunal, the defendant will be prevented from submitting a new proposal.

The draft of the Resolution was made available for public consultation from December 14, 2012 to January 14, 2013 and the suggestions received by CADE contributed to improve the wording of the provisions and bring more clarity to the proceedings.

CADE’s Chairman, Mr. Vinícius Marques de Carvalho, affirmed that “with the new settlement policy it is expected the increase, in the next years, of the number of TCC’s and leniency agreements executed, bringing more effectiveness to the fight against cartels.”

Despite the agency’s expectations regarding the increase in agreements of such nature, it is important to notice that the new rules for TCCs involving cartels, which represents most of the settlements executed by CADE, may result in a disincentive for defendants to seek this kind of agreement, in view of the burden resulting from the mandatory confession and cooperation with the authorities.

On the other hand, the definition of the parameters for calculating the pecuniary contribution brings more legal certainty, what shall raise the incentives for the execution of TCCs.