Anti-corruption enforcement through settlements against legal entities in Brazil decreased in 2023 and 2024, following an active year in 2022. Based on publicly available information, from January through December 2024, the Office of the Comptroller General (“CGU“) and the Office of the Attorney General (“AGU“) entered into three leniency agreements, while the Federal Prosecutor’s Office (“MPF“) entered into one leniency agreement in 2024, which remains under seal.
The decline in settlements by Brazilian Enforcement Agencies may be related to shifts in the enforcement priorities. However, it may also reflect a typical decrease in activity during the initial years of a new government, resulting from the replacement of politically appointed officials. It is noteworthy that a significant number of agreements were finalized in the final days of 2022– the last few days of the preceding government –, likely reducing the backlog of cases ready for settlement. It is possible that in the next two years, which will be the final years of the current mandate, the number of agreements will increase, as CGU’s website reports 21 agreements currently under negotiation.
Settlements in 2024
According to publicly available information, in 2024, the CGU and AGU entered into three leniency agreements and received six proposals to negotiate leniency agreements. Of these, two are still under analysis at the admissibility stage, one is under negotiation and three were rejected.
The three leniency agreements entered into in 2024 are summarized below:
Viken Shuttle AS, Viken Fleet I AS, and Viken Shipping AS
On June 13, 2024, the Norwegian companies Viken Shuttle AS, Viken Fleet I AS, and Viken Shipping AS (collectively referred to as “Viken”) entered into a leniency agreement with the CGU and AGU in connection with illicit acts foreseen in the Improbity Administrative Law. The negotiations were conducted in coordination with the MPF.
In 2019, the CGU initiated an investigation into the companies, aiming to scrutinize potential irregular practices related to a bidding conducted by Transpetro International BV (“TI BV”). Subsequently, in 2020, companies initiated negotiations with the CGU and the AGU, collaborating with information from their internal investigations.
According to publicly available information, the companies were involved in the payment of a commercial brokerage commission that was used by a third party to fund the payment of an undue advantage to a public official, in the context of the execution of contracts with the TI BV, based in the Netherlands. The companies claim that their representatives had no prior knowledge and did not authorize or instruct third parties to make illicit payments but admitted strict liability for the fact.
The companies have agreed to settle the amount of BRL 153,184,045.95 (approx. $27 million), which covers the payment of undue advantages, estimated damages, and fines as outlined in the Administrative Improbity Law. In addition, companies have committed to enhancing their compliance programs, with the monitoring of the CGU.
MicroStrategy Brasil Ltda.
On July 4, 2024, MicroStrategy Brasil Ltda. (“MicroStrategy”) entered into a leniency agreement with the CGU and the AGU related to illicit acts foreseen in the Federal Law 12,846/13 (Brazilian Clean Companies Act –“CCA”) between 2014 and 2018, in connection with irregularities within the Ministry of Labor related to bid rigging and information technology contracts entered by the public body.
The company has agreed to pay a total of BRL 6,157,183.65 (approx. $1.1 million). Of the total amount, BRL 4,179,984.59 (approx. $750 thousand) refers to the disgorgement of profits and the remaining amount refers to the fine provided for in the CCA. Additionally, MicroStrategy has committed to enhancing its compliance program, including the monitoring of the CGU.
Freepoint Commodities LLC
On November 14, 2024, the CGU and the AGU signed a leniency agreement with the US company Freepoint Commodities LLC (“Freepoint”) related to the payment of undue advantages to public officials through intermediaries between 2012 and 2018, which aimed to acquire insider information in transactions involving the purchase and sale of oil and its derivatives with Petrobras.
The leniency agreement was the result of collaborative efforts between Brazilian and U.S. authorities, who also entered into separate agreements with Freepoint. Under the leniency agreement entered into with the Brazilian authorities, Freepoint will pay over BRL 130 million in administrative fines and compensation for damages incurred by the Treasury.
Leniency Agreement under Secrecy
According to data available on the MPF’s website, in 2024 the MPF entered into a leniency agreement; however, the name of the company and the content of the leniency agreement remain under seal. According to the MPF, the company has agreed to pay the total amount of BRL 207,891,426.75 million (approx. $37 million) in fines and restitution.
Enforcement Overview
After 10 years of successful application of the CCA and with 30 Leniency Agreements entered into by the CGU since 2017 to 2024, and BRL 18,8 Billion (approximately USD 3.1 Billion) in settlement amounts, the CGU achieved a historic milestone by instituting, in 2024, a total of 76 Administrative Accountability Proceedings (“PAR”) against legal entities, aimed at investigating potential harmful acts against Public Administration. This number exceeded the previous record of 73 proceedings initiated in 2020, consolidating a new benchmark in combating corruption and strengthening public governance and private integrity in Brazil.
In addition to administrative sanctions, in August 2024, the CGU introduced a new kind of settlement under the CCA, the Term of Commitment, which offers an alternative agreement with the Public Administration for companies that do not meet the requirements to enter into a leniency agreement but want to settle their cases rather than litigate. While the leniency agreements remain as the most favorable settlement option under the CCA (with a reduction of up to two-thirds of the penalties), the Term of Commitment offers reductions of sanctions up to 4,5% of the companies’ gross revenues (which may represent a significant percentage of the sanctions), and the mitigation of debarment sanctions.
While not always necessary, depending on the analysis of the specific case, the CGU can determine that for the execution of a Term of Commitment the company must adopt or improve its compliance program. Furthermore, a relevant initiative by the CGU with respect to the rules applicable to the Term of Commitment relates to the CGU’s communication with the AGU and the MPF, which will occur whenever a new Term is executed. This measure is intended to encourage cooperation between the agencies, to ensure that misconducts investigated by more than one body are resolved in a coordinated fashion, and prevent companies from being sanctioned for conduct that has already been addressed within the scope of the Term of Commitment.
Furthermore, in 2023, certain Brazilian political parties filed a lawsuit (“Arguição de Descumprimento de Preceito Fundamental N. 1,051” or “ADPF 1,051”) requesting the suspension of payments under several leniency agreements that were entered into under the scope of Operation Car Wash. The arguments in the request for suspension pointed out that the amounts of the fines were remarkably high, which would jeopardize the maintenance of the signatory companies, and that the MPF would have acted improperly in the negotiations of these agreements. Because Brazilian leniency agreements sometimes provide for payments in installments over an extended period of years, the request would benefit several companies that had amounts outstanding and that did not have obligations before enforcement authorities in other jurisdictions.
As a result of ADPF 1,051, the AGU and the CGU coordinated a renegotiation of seven leniency agreements entered into with the companies (i) UTC Participações S.A.; (ii) Braskem S.A.; (iii) OAS; (iv) Camargo Corrêa; (v) Andrade Gutierrez; (vi) Nova Participações S.A.; and (vii) Odebrecht. In September 2024, the AGU and the CGU presented the final settlement proposal on the restructuring of the leniency agreements to the Brazilian Supreme Court, which is pending further analysis by the body. The main guidelines considered in the negotiations were the maintenance of economic activity, with the preservation and creation of employment opportunities in the construction industry, the preservation of the public integrity agenda, with the safeguarding of the leniency agreements in force, and the reinforcement of consensual mechanisms for resolving judicial conflicts. If homologated by the Brazilian Supreme Court, the renegotiation proposals will lead to amendments to the leniency agreements previously signed.
In October 2024, the CGU updated the Guide “Integrity Program: Guidelines for Private Companies”, which was published for the first time in September 2015. The purpose of this Guide is to provide clear instructions to companies on how they should implement or improve their integrity programs, considering the requirements provided in the applicable legislation, the best market practices and the need to tailor the Guide to the corporate context, given that its first version was issued in 2015.
Among the new provisions set out in the Guide is the extension of what the CGU defines as corporate integrity, which now encompasses matters related to good environmental, social and governance practices, and is not limited solely to the combat of corruption. This stance is in line with the changes implemented by the Decree N. 11,129/2022 in the Brazilian legal system by including as goals of an integrity program the promotion and maintenance of a culture of integrity within the organizational environment. This goes beyond merely adopting anti-corruption measures and emphasizes the essential role of developing shared values throughout the organization.
According to the CGU, such values are essential to ensure that the company’s credibility and reputation are safeguarded and must include a commitment to responsible action, committed to sustainable, fair, and democratic economic and social development, which may encompass, for instance, preventive measures against harassment in the workplace, respect for human rights and preservation of the environment.