Last Friday, on November 10, 2023, the Brazilian Office of the Comptroller General (“CGU”) and the Administrative Council for Economic Defense (“CADE”) signed the Technical Cooperation Agreement CGU/CADE No. 52/2023 (“Agreement”). The Agreement will be in force for 48 months.
The main goal of the Agreement is to promote an enhanced cooperation between the two entities, especially through:
To achieve the referred goals, the Agreement provides for a "Work Plan" (Annex I) with more details on the scope of the cooperation, including operational issues, deadlines and actions required to fulfill the obligations undertook by CGU and CADE. Within the CGU, the Private Integrity Secretariat will be responsible for executing the Work Plan, while, at CADE, the responsibility will lie with the General Superintendence, through its Deputy Superintendents.
The Agreement refers to a commitment between CGU and CADE to pursue an integrated and coordinated performance, including through joint investigations, the delimitation of working areas, the analysis of the suitability of internal regulations, proposals for regulatory changes, and compatibility in the application of sanctions in decisions and negotiated solutions – including the effects of signing leniency agreements, settlements, and early decisions.
From the private sector perspective, the Agreement is a good sign of alignment between two relevant entities. It is worth noting that the same act could result both in a violation to Law No. 12,846/2013 (Brazilian Anti-Corruption Law) and Law No. 12,529/2011 (Brazilian Competition Law).
In practice, the coordination between entities that have jurisdiction over the same act based on different laws contributes to greater legal certainty for the individual in the context of an administrative proceeding, investigation, or while negotiating an agreement.
There is an increasing expectation that authorities will carry out a more coordinated approach, with greater transparency and more robust workflows, for increasing efficiency in the performance of such authorities. The Agreement can be considered a new step in this direction, especially in investigations related to cartels and corruption in public procurement.
Furthermore, there is an expectation that the Agreement will expand CGU and CADE’s investigative capacity in joint actions, which could result in a greater number of investigations and more effective results, as well as to increase the number of negotiations of agreements.
This reinforces the need for companies to adopt and continually develop anti-corruption and competition compliance policies, procedures and internal controls, with the aim of preventing, detecting and remedying unlawful practices with greater quality and celerity, especially involving corruption and violations to the economic order.
Thus, conducting internal investigations is essential to identify potential violations and allow a given company to have sufficient elements to evaluate the sharing of results with the competent authorities. In such cases, a coordinated action between authorities, such as CGU and CADE, can increasingly lead companies to choose the cooperation path.
In addition to issues related to compliance programs, the Agreement could create opportunities for advocacy measures and potential proposals for regulatory changes to improve the design of CGU’s and CADE’s jurisdictions, methodologies and workflows.
