Leniency Agreements have been widely executed by Brazilian authorities and legal entities in cases of corruption or other misconducts against the public administration prohibited by Law 12,846/13 (Brazilian Clean Companies Act – CCA). The Leniency Agreement aims to improve the government’s investigative capacity, enhance the government’s ability to recover assets, reimburse damages caused to the public treasury, and foster a culture of integrity in the private sector.

According to information from the Federal Prosecutor’s Office (MPF), since the CCA came into force in January 2014, the MPF has entered into 49 (forty-nine) Leniency Agreements, resulting in the reimbursement of BRL 25,261,518,215.19 to the Union. In 2022, the MPF entered into 4 (four) Leniency agreements, which resulted in the reimbursement of BRL 744,682,417.35 to the harmed public entities and the National Treasury.

According to information from the Office of the Comptroller General (CGU), the CGU and the Office of the Attorney General (AGU) entered into 22 (twenty-two) Leniency Agreements, and 28 (twenty-eight) negotiations are currently in progress. The Leniency Agreements executed with the CGU and AGU have imposed the payment of over BRL 15 billion in fines and reimbursement of damages, of which BRL 6,29 billion have already been paid to the National Treasury or to the harmed public entities. In 2022, 5 (five) new Leniency Agreements were executed by the CGU and AGU, totaling the amount of BRL 1.216.464.609,50 in fines and reimbursement of damages.

In 2022, the MPF, CGU, and AGU entered into Leniency Agreements based on the CCA and Law No. 8,429/92 (Improbity Law) with companies from different sectors, namely: (i) Glencore (with the MPF); (ii) Hypera (with the CGU and AGU); (iii) Stericycle (with the CGU and AGU); (iv) Gol Linhas Aéreas (with the CGU and AGU); (v) UOP LLC (with CGU, AGU and MPF); and (vi) Keppel Offshore & Marine (with CGU and AGU). Two Leniency Agreements executed with the MPF in 2022 are currently under secrecy. Furthermore, in 2022, Eletrobras adhered to Andrade Gutierrez’s Leniency Agreement executed with the CGU and AGU in December 2018.

Stericycle Group

On April 20, 2022, the CGU and AGU announced the execution of a Leniency Agreement amounting to BRL 109,698,073.80 with Stericycle Group, specialized in hospital-waste-management, due to misconducts committed in 2017 in the context of medical waste collection contracts entered with the Brazilian Health System (SUS), in breach of the CCA and the Improbity Law. Simultaneously, Stericycle entered into a Deferred Prosecution Agreement (DPA) amounting to US$ 52.5 million with the US Department of Justice (DOJ) due to violations of the antibribery provisions and accounting provisions of the Foreign Corrupt Practices Act (FCPA). In addition, Stericycle agreed to pay approximately US$ 28 million to resolve a parallel investigation conducted by the US Securities and Exchange Commission (SEC).

Glencore

On May 24, 2022, the trading company Glencore entered into a Leniency Agreement with the MPF in connection with Car Wash Operation and entered into Plea Agreements with the DOJ and the US Commodity Futures Trading Commission (CFTC) to resolve investigations into corruption and market manipulation schemes in Glencore’s business operations in multiple countries. Moreover, Glencore pleaded guilty to corruption charges filed by the UK Serious Fraud Office (SFO). Overall, Glencore will pay US$ 1.5 billion under the agreements executed with authorities in Brazil, the United States, and the United Kingdom. Under the Leniency Agreement entered with MPF, Glencore agreed to pay approximately US$ 39.6 million directly to Petrobras. Under the Plea Agreement entered with DOJ, Glencore committed to pay approximately US$ 700 million, one of the ten largest fines ever applied under the FCPA. Under the Plea Agreement entered with the CFTC, Glencore agreed to pay a fine of US$ 485.6 million to resolve market manipulation investigations.

Hypera S.A

On May 31, 2022, the CGU and AGU entered into a Leniency Agreement with Hypera S.A. due to wrongdoings in connection with “Tira-Teima Operation” conducted by the MPF. The wrongdoings committed by Hypera were identified during an internal investigation conducted by the company. Under the Leniency Agreement, Hypera will pay R$ 110,882,122.19 to the Union due to violations of the CCA and the Improbity Law. According to Hypera, the amounts will be fully paid by its majority shareholder, Mr. João Alves de Queiroz Filho.

Gol Linhas Aéreas Inteligentes S.A

Another highlight was the global resolution entered into by Gol Linhas Aéreas Inteligentes S.A with the CGU, AGU, DOJ, and SEC on September 15, 2022. GOL admitted that it paid bribes amounting to US$ 3.8 million to public officials in Brazil in 2012 and 2013 to secure the enactment of two laws favorable to the company related to tax deductions on payroll and aviation fuel prices. Under the DPA entered into with U.S. authorities, GOL committed to pay approximately US$ 41.5 million, of which US$ 17 million will be paid to the DOJ and US$ 24.5 million will be paid to the SEC. GOL will also report to the DOJ for three years on the measures taken to improve its compliance program, although an independent monitor was not imposed. In addition, under the Leniency Agreement executed with the CGU and AGU, GOL undertook to pay US$ 3.4 million due to violations of the CCA and the Improbity Law.

Keppel Offshore Marine

In addition, on December 19, 2022, Keppel Offshore Marine executed a Leniency Agreement with the CGU and AGU due to bribes paid to public officials between 2001 and 2014 through a former consultant in connection with Petrobras contracts. The Leniency Agreement executed with CGU is part of a global resolution entered by Keppel with the MPF and US and Singapore’s anticorruption authorities in 2017. The total amount of the global resolution is BRL 1,223,657,710.19, of which BRL 880,086,254.93 have already been paid, with Keppel still having to pay the amount of BRL 343,571,455.25 under the Leniency Agreement executed with the CGU. In addition, Keppel committed to cooperating with the investigations and improving its compliance program.

Honeywell

On December 19, 2022, UOP LLC, a Honeywell company, executed a global resolution with the CGU, AGU, MPF, DOJ, and SEC due to payment of bribes of approximately US$ 4 million to a Petrobras executive to obtain a contract for the construction of an oil refinery. After conducting an internal investigation led by its Compliance Department, UOP LLC spontaneously reported the misconduct to the Brazilian authorities in 2019. Under the Leniency Agreement, UOP will pay the total amount of BRL 638,046,365.87, of which BRL 456,346,310.83 will be paid to Petrobras as reimbursement of damages and BRL 181,700,055.04 will be paid to the Union as fines provided for in the Improbity Law and the CCA. Under the settlements entered into with the US authorities, UOP LLC will pay approximately US$ 79 million to the DOJ and US$ 81 million to the SEC, and part of these amounts will be credit up against the values to be paid in Brazil.

Other Agreements

Furthermore, on February 4, 2022, Eletrobras disclosed to the market that it had adhered to the Leniency Agreement executed by the CGU and AGU with Andrade Gutierrez in December 18, 2018, for the purpose of reimbursement of the damages caused by Andrade Gutierrez due to corruption schemes in connection with Operation Car Wash. Eletrobras will receive R$ 139.6 million, benefiting the holding company Eletrobras (R$ 9.9 million) and the subsidiaries Chesf (R$ 9.9 million), Eletronorte (R$ 13.1 million), Furnas (R$ 63.1 million), and Eletronuclear (R$ 43.7 million). Andrade Gutierrez’s Leniency Agreement provides for the adherence of the harmed public entities to benefit from the terms of the agreement.

In 2022, anticorruption authorities of the Brazilian states also played an active role in the execution of Leniency Agreements. For instance, the Office of the Attorney General of the State of Minas Gerais (AGE-MP), the Office of the Comptroller General of the State of Minas Gerais (CGE-MG), and the Public Prosecutor’s Office of Minas Gerais (MPMG) entered into Leniency Agreements with Construtora Coesa, OEC and Novonor.

On November 7, 2022, Construtora Coesa S.A (formerly known as Construtora OAS) entered into a Leniency Agreement with CGE-MG, AGE-MG, and MPMG due to fraud schemes in contracts for the construction of the Administrative City (headquarter of the Minas Gerais Government), which took place between 2008 and 2010, and frauds schemes in contracts awarded by the Minas Gerais Energy Company (Cemig). Under the Leniency Agreement, Coesa will pay the amount of BRL 42.7 million as reimbursement of damages and  fines pursuant to the Improbity Law. In addition to the Leniency Agreement, Coesa also entered into a Civil Non-Prosecution Agreement with the MPMG.

Finally, on November 23, 2022, OEC S.A and Novonor S.A (former Odebrechet S.A) entered into a Leniency Agreement with the CGE-MG, AGE-MG, and MPMG also due to fraud schemes in contracts for the construction of the Administrative City and in contracts awarded by Cemig. Under the Leniency Agreement, OEC and Novonor will pay BRL 202.4 million as reimbursement of damages and fines pursuant to the Improbity Law. Moreover, the MPMG entered into a Civil Non-Prosecution Agreement with the companies, with the CGE-MG and AGE-MG as intervening parties. In addition, the companies committed to continue improving and monitoring their governance and compliance policies.

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In 2022, the CGU, AGU and MPF had an active year with respect to the execution of Leniency Agreements. Anticorruption authorities of the Brazilian states are also consolidating their roles in the execution of Leniency Agreements based on the CCA. Several negotiations for the execution of Leniency Agreements are currently in progress and, therefore, it is expected that other Leniency Agreements will be executed in the coming years. Furthermore, the enhancement of international cooperation between Brazilian and foreign anti-corruption authorities (especially those of the United States) has consolidated the trend for global and simultaneous resolution of transnational bribery. The scenario of enhancement interinstitutional cooperation in Brazil and improvement of international cooperation abroad reveals that 2023 should also be a landmark year for the consolidation of Leniency Agreements in Brazil.

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