CGU and AGU publish a Joint Ministerial  Ordinance that establishes criteria for reducing fines in leniency agreements governed by the Anticorruption Law

On December 9, 2022, the Joint Ministerial Ordinance (PN) No. 36 of December 7, 2022, issued by the Office of the Comptroller General (CGU) and the Office of the Attorney General (AGU), was published in the Official Federal Gazette (DOU) and entered into force, providing criteria for reducing, by up to two-thirds (2/3), the amount of the fine applicable in the negotiations of leniency agreements governed by the Anticorruption Law (Law No. 12,846/2013). The main goal of PN no. 36/2022 is to increase the predictability of sanctions applied in leniency agreements entered into with the CGU and AGU by companies investigated for committing harmful acts against the federal or foreign public administration.

In the event of execution of a leniency agreement, article 16, paragraph 2 of Law 12,846/13 (Anticorruption Law) establishes, among other benefits, the reduction of the applicable fine by up to two-thirds (2/3). In its turn, Decree no. 11,129/2022, which regulates the Anticorruption Law, establishes, in its article 47, the criteria that the commission in charge will take into consideration when applying the percentage of reduction of the fine provided for in article 16, paragraph 2 of Law 12,846/13: (i) timeliness of the self-reporting and unprecedentedness of the harmful acts; (ii) effectiveness of the collaboration of the legal entity; and (iii) commitment to assume relevant conditions for the fulfillment of the agreement.

The new PN no. 36/2022 refers, in its article 2, to these 3 (three) criteria in a more simplified form as (i) “self-reporting initiative”, (ii) “degree of cooperation” and (iii) “relevant conditions”, introducing, in its articles 3, 4 and 5, the methodology and parameters that must be observed when analyzing them in order to measure the margin of reduction of the fine during the negotiations of leniency agreements. It should be noted that the commission responsible for negotiating the leniency agreement must indicate, in its final report, the grounds for such reduction and that PN no. 36 does not apply to cases for which there is already a final report forwarded for signature of the leniency agreement when it came into force.

Firstly, in relation to the “self-reporting initiative” criterion, it will be observed whether there was a timely adoption by the legal entity of investigation and reporting measures to the CGU and AGU, with the purpose of submitting information and documents within the scope of the collaboration. To this end, article 3 and its paragraphs of PN no. 36/2022 establish that the timeliness of the self-denunciation will be considered if the period elapsed from the knowledge about indicative wrongdoing by the legal entity until its expression of interest in entering into a leniency agreement with CGU and AGU does not exceed 9 (nine) months. In cases in which the legal entity’s knowledge about an indicative harmful  act occurred before the publication date of PN no. 36/2022, the deadline for timely self-reporting will be 6 (six) months as of December 9th 2022, date of publication of the abovementioned regulatory act, except in cases in which the aforementioned rule of 9 (nine) months is more beneficial to the legal entity. Moreover, the novelty of the information on the harmful  acts dealt with in the negotiation will be evaluated considering the existence of reported information that is new to the public or to CGU or AGU, even if it refers to facts that are not unpublished.

In relation to the “degree of collaboration” criterion, article 4 and its paragraphs of PN no. 36/2022 establish that the parameters of the existence of an internal investigation, the delivery of information and supporting documents of the harmful acts and the celerity of the negotiation will be considered. In this sense, it will be observed if the legal entity has adopted adequate and effective internal investigation practices and if it has promptly submitted legally valid information and documents about the reported harmful acts, with an adequate degree of accuracy and scope as to the facts and those involved. Thus, the investigation of wrongful acts will be evaluated in view of the scope and relevance of the steps taken to prove materiality and authorship. The information submitted will be evaluated based on its relevance, quantity and sufficiency, also taking into consideration the existence of new information on facts already known to the CGU or the AGU, while the supporting documents will be evaluated based on the quality and quantity of the evidence collected and made available by the legal entity, as well as its organization, structure and correlation with the reported wrongdoing. In its turn, the celerity of the negotiation must be evaluated by considering the completeness, speed, and accuracy of the report of wrongful acts, with the assumption of responsibility by the legal entity and the indication of the other parties involved, following the model established by the CGU, as well as the promptness in carrying out the other actions required to conclude the negotiation.

Finally, with respect to the “relevant conditions” criterion, article 5 and its paragraphs of PN no. 36/2022 establish that in its analysis, the parameters of the payment conditions of the financial commitments assumed by the legal entity in the agreement will be observed. In this sense, the speed of the payment condition of the leniency agreement amount and, in case of installment plans, the payment profile outlined by the installments will be analyzed in the application of such criterion. Moreover, if the payment of the amounts does not occur within six (6) months, the characteristics of the guarantees provided for the payment will also be considered as part of this criterion.

The percentage of reduction of the fine verified will be reduced in disfavor of the legal entity in cases of its previous withdrawal of the settlement proposal or termination of the memorandum of understanding in previous negotiations regarding the same wrongful acts. Furthermore, the reduction of the fine may be applied in the event the legal entity, or its controller, conducts negotiations with other domestic or foreign public authorities,  in relation to the same wrongful acts, except in the case of coordinated negotiations or in duly justified exceptional situations.

Thus, the new Joint Ministerial Ordinance published joins other publications made by the CGU and AGU with the aim of encouraging legal entities involved in illegal practices against the public administration to promote, in a swift manner, preventive and remedial measures in line with the public interest and with the promotion of integrity in the public-private relationship.

For more information, contact Saud Advogados.