The Leniency Agreement, under the Brazilian Clean Companies Act (“CCA”), aims to compensate the damage caused to the treasury and has been widely adopted by Brazilian authorities and companies. Among the obligations commonly established in leniency agreements, it is possible to highlight the payment of monetary fines – according to the parameters provided for in the CCA – and full compensation for the damage, as well as obligations to implement or improve compliance programs, with the respective obligation of periodic monitoring and reporting on the implementation and evolution of the lenient companies’ compliance mechanisms.
According to publicly available information on the Federal Prosecutor’s Office (MPF) website, since the CCA came into effect, the Federal Prosecutor’s Office has entered into 42 leniency agreements, of which 7 were subsequently amended, some more than once, generating restitution of BRL 24,522,039,740.00 to the Union. Notwithstanding the prolongation of the coronavirus pandemic throughout 2021, the Federal Prosecutor’s Office entered into 6 leniency agreements in 2021, equivalent to the number of leniency agreements entered into in 2017 – despite the fact that the negotiations of 4 of the agreements began in 2019 and 2020 – and which resulted in the restitution of BRL 1,353,102,525.00 to the harmed entities and National Treasury.
Meanwhile, according to the information available on the website of the Office of the Comptroller-General (CGU), until December 2021, 17 leniency agreements had been entered into with the CGU and the Office of the Attorney General(AGU), and 24 negotiations are currently in progress. The leniency agreements signed with the CGU and the AGU establish the payment of BRL 15,45 billion in fines, of which BRL 5,57 billion have already been paid to the National Treasury or to the harmed public entities. In 2021, 5 new agreements were signed, totaling BRL 1.772.573.132,13 in agreed fines and corresponding to 29% of the agreements already signed by the entities.
In 2021, the MPF, CGU, and AGU entered into leniency agreements, under the CCA and the Administrative Improbity Law, with companies from different sectors, as follows: (i) Rolls-Royce PLC (only with CGU and AGU); (ii) Statkraft (only with CGU and AGU); (iii) Amec Foster Wheeler (with CGU, AGU and MPF); (iv) Sicpa and Ceptis (only with CGU and AGU); (v) Samsung Heavy Industries (with CGU, AGU and MPF); (vi) H. Strattner & CIA (only with MPF); (vii) Aegea Engenharia e Comércio Ltda. (only with MPF); (viii) Car Rental Systems do Brasil Locação de Veículos Ltda. and Hertz France S.A.S (only with MPF); and (ix) JBJ Agropecuária Ltda. and Prima Foods S.A. (only with MPF).
As a highlight, the multinational Rolls-Royce entered into a leniency agreement with CGU and AGU due to the payment of a total of USD 9.3 million in bribes between 2003 and 2013, through third-party intermediaries in exchange for Petrobras’ contracts, which were revealed during the Operation Car Wash investigations. The CGU leniency agreement was entered in the context of Rolls-Royce’s global resolution carried out in 2017, when agreements were entered into simultaneously with the MPF, the US Department of Justice (DoJ) and the UK Serious Fraud Office (SFO) to resolve bribe offences committed in several countries, including Brazil, China, Indonesia, Russia and Nigeria. The total value of CGU leniency agreement amounts to USD 27.8 million, of which USD 2.2 million will be paid to the Union, in order to complement the payment of USD 25. 6 million that had already been made in Brazil. In addition, the UK-based company committed to improve its compliance program.
Moreover, Samsung Heavy Industries (SHI) also entered into a leniency agreement with the CGU, AGU, and MPF for bribery and money laundering misconducts in connection with Petrobras’ agreements. The leniency agreement was the result of a global resolution involving Brazilian authorities and the DoJ. Although it was a global resolution, the Samsung settlement was a two-step settlement, as, in November 2019, SHI had already entered into a Deferred Prosecution Agreement with the DoJ for the same misconduct. In the leniency agreements with the Brazilian authorities, SHI assumed the obligation to pay the total amount of BRL 811,786,743.49, of which approximately USD 37,5 million was considered as a credit of the fine established by the DoJ. Furthermore, under the leniency agreement, SHI also committed to improve its compliance and governance policies and procedures.
Similarly, in June 2021, leniency agreements were concluded between the companies Amec Foster Wheeler Energy Limited and Amec Foster Wheeler America Latina, subsidiaries of the John Wood Group PLC, and CGU, AGU and MPF. This settlement was a result of international cooperation and, therefore, similar agreements were also entered into with the DoJ, the Security Exchange Commission of the United States of America (SEC) and the SFO. The leniency agreement relates to unlawful conducts that occurred under a project entered into with Petrobras, which occurred before Amec PLC acquired Foster Wheeler AG in November 2014, and prior to Wood’s acquisition of both companies in October 2017. Within the scope of the leniency agreement, the companies committed to pay the total amount of BRL 86,196,063.32 million (USD 17,492,149.14) in Brazil. The companies also have to pay amounts to the American and British authorities. In addition to the payment of fines, the subsidiary companies of the Foster Wheeler Group committed to enhance its governance and compliance policies.
The leniency agreement signed by the CGU and the AGU with the companies Statkraft Energias Renováveis S.A. (Statkraft), Macaúbas Energética S.A., Seabra Energética S.A., and Novo Horizonte Energética S.A. was the result of Statkraft’s self-disclosure to the Brazilian authorities in 2016, after the company had conducted an internal investigation. Statkraft admitted that, prior to acquisition of Desenvix Energias Renováveis S.A. in 2015, Desenvix made unlawful payments to expedite approvals from public entities between 2011 and 2014. The unlawful payments are related to resources from the (FNE). With the resolution, the company committed to pay the amount of BRL 18,01 million. The lenient companies also committed to update and improve their governance and compliance policies.
The agreement entered into by Car Rental Systems do Brasil Locação de Veículos Ltda. and Hertz France S.A.S with the MPF in 2021 relates to a resolution with all Brazilian authorities, as in 2020 the companies had already entered into a leniency agreement with the CGU and the AGU. The information about the MPF’s agreement, however, is under secrecy as of the date of this publication.
Other agreements entered into by the MPF in 2021 are also currently under secrecy.