TCU enacts Normative Ruling No. 95 that defines the role of the agency in leniency agreements

On February 21, 2024, the Federal Audit Court (“TCU”) approved the Normative Ruling No. 95/2024 (“IN No. 95/2024”), which defines TCU’s guidelines, rules and actions regarding the execution and negotiation of leniency agreements under Law No. 12.846/2013 (“Clean Companies Act”). The measure is a result of the joint efforts of the Technical Cooperation Agreement (“ACT”) entered into in August 2020 between the Office of the Attorney General (“AGU”), the Office of the Comptroller General (“CGU”) and the Ministry of Justice and Public Security (“MJSP”), under the coordination of the Federal Supreme Court (“STF”).

The new IN No. 95/2024 stipulates that, once the leniency agreement proposal has been forwarded to the TCU, the TCU will start internal and confidential stages of identifying the external control proceedings and the increase of the debts previously calculated in relation to the proponent, with the information being forwarded to the reporting justice responsible for the cases. However, if the CGU finds and directs new information or documentation that may change the scope of the leniency agreement proposal, these identification steps will have to be redone. If the information provided by the proponent to the authorities is not truthful or complete, and this implies a change in the terms of the agreement, an assessment of the agreement’s content may be carried out at any time.

Additionally, the guidelines of the new Normative Ruling establish deadlines for the TCU`s to submit an opinion. According to Article 6 of the IN No. 95, once the CGU and the AGU have been informed that the agreement is ready for signature, the TCU’s technical area has 45 days, within the 90 days foreseen for the TCU’s opinion, to assess whether the negotiated amounts meet the applicable criteria and are sufficient to reimburse the Treasury, with the purpose of ensuring that the agreement will be advantageous to the Public Administration.

In this context, if the TCU considers that the amounts are not adequate, it will be the responsibility of the TCU to inform the CGU and the AGU of the need to supplement the amounts negotiated and to inform them of the appropriate amount to allow the reimbursement of the public treasury. On the other hand, if the TCU finds that the amounts are justified, it will be the duty of the TCU to monitor the payments until the obligations assumed by the company signing the leniency agreement are fulfilled, which makes the application of sanctions by the TCU not possible if the signatory company fulfills its obligations under the leniency agreement.

Notwithstanding, in cases where the amounts set forth in the leniency agreement cover the damages previously identified by the TCU, the proceedings involving the company signing the leniency agreement and which are related to the same misconducts covered by the agreement may be subject to (i) suspension; (ii) archiving; (iii) joinder of the procedures for the sole purpose of monitoring compliance with the leniency agreement; and (iv) non-initiation of external control proceeding that does not yet exist regarding the irregularities that are covered by the agreement.

It is worth noting that, in the event of default by the signatory company, the TCU, after hearing the bodies and the company, may suspend the benefits of the agreement, in addition to possibly declaring the effects of the agreement potentially null and void. In this case, according to Article 27 of IN No. 95/2024, it will be up to the existing external control proceedings, or a new one to be initiated, to analyze the adoption of sanctions and/or the collection of the amounts in default.

The new IN 95/2024 also took care to adapt its wording to the provisions of Law No. 13.709/2018 (“General Data Protection Law”) regarding the sharing of data and information during the internal process at the TCU. Pursuant to Article 11 of IN No. 95/2024, it is established that if a leniency agreement is not concluded, all documents provided by the proponent must be deleted from the TCU’s databases. In addition, the information shared between the CGU and the AGU cannot be used by the TCU against the proponent, even if the leniency agreement is not concluded. In relation to the third parties who are involved in the misconducts admitted by the collaborating company, Article 24 of IN No. 95/2024 states that the TCU may use the documents and information to which it has had access in order to promote, within the scope of its powers, the actions necessary to hold accountable these third parties, whether they are individuals or legal entities.

In line with the decisions already issued by the STF in previous years and in response to the need for better cooperation among the entities that make up the Brazilian anti-corruption microsystem, IN 95/2024 provides for the possibility of reducing or compensating fines already paid for acts listed in different legislation, as long as the company proves that the sanctioned irregularities are precisely those covered by the proceedings filed by the TCU.

Therefore, the new IN No. 95/2024 becomes a tool that seeks to bring legal certainty to leniency agreements by ensuring a scenario of greater predictability for companies considering adhering to this method of resolving irregularities. Considering the multiple agents involved in the dynamics of these agreements, the variety of information exchanged during investigations and the lack of guidelines regulating TCU’s role in negotiating, concluding, and calculating the amounts of leniency agreements, IN No. 95/2024 will be responsible for establishing an essential normative discipline for the TCU’s competences and spheres of action in this context.

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