The Brazilian Anti-corruption Act # 12.846 of August 1, 2013, known abroad as the “Clean Company Act”, brought an important instrument to assist authorities in investigating and prospecting evidence, called a leniency agreement.
The leniency agreement was born in August 1993, in the United States, through the corporate leniency program. It proved to be quite efficient, considering the tightening of the legislation against investigative practices that caused physical or psychological injuries to those investigated, that is, against torture, which for many years was practiced as a way of collecting evidence to incriminate someone.
The leniency agreement did not become a novelty in Brazilian law since the advent of the Brazilian anti-corruption law, after all, it was already in our midst with the enactment of the Antitrust Act # 12,529 of November 30, 2011. In fact, it was due to the antitrust law that the leniency agreement almost fell into disrepute, in the famous case of a cartel formed in the State of São Paulo, extending to the States of Minas Gerais, Rio Grande do Sul and the Federal District, from 1999 to 2013 by several companies, including Siemens, Alstom, Bombardier, CAF, ESA, MGE, Mistui, MPE, TC / BR, Tejofran, Temoinsa and TTrans. Siemens entered into a leniency agreement with the Administrative Council for Economic Defense – CADE, the Federal Attorney General and the Attorney General for the State of São Paulo, with the purpose of exposing the entire scheme formed by the above companies, in exchange for the reduction of its penalty.
It happens that regardless of the leniency agreement, some authorities of the São Paulo Government, supposedly involved in the scheme or not, decided to retaliate and sue Siemens, ignoring the guarantees received by the company, as a result of its initiative, putting at risk the credibility of the leniency agreement.
On July 8, 2019, CADE condemned the 11 companies listed above, except Siemens, in addition to 42 individuals for forming a cartel in public tenders for trains and subways, in at least 26 bidding processes, attributing the total amount of penalties described below: for companies – R$ 515.6 million and for individuals – R$ 19.5 million.
But what is the leniency agreement? The leniency agreement is an instrument for investigating unlawful acts and for holding the legal entity to account (it is important to note that it is aimed at corporations) that act against the Public Administration, national or foreign. This regulation establishes that corporations in good faith which, spontaneously admits the practice of illicit and cooperates with administrative investigations, now have the opportunity to plead for the mitigation or even the exemption of certain applicable sanctions.
Despite the previous reference to a case involving antitrust legislation, the focus of this article is the leniency agreement provided for in the Brazilian Anti-corruption Act, which rewards the company that agrees with (i) the exemption from having to make the extraordinary publication of the condemnatory decision , (ii) the relaxation of the prohibition on receiving incentives, subsidies, subsidies, donations or loans from public bodies or entities and from public financial institutions or controlled by the public power, for a minimum of 1 (one) and a maximum of 5 (five) years and, finally, (iii) the reduction of up to 2/3 (two thirds) of the applicable fine.
The leniency agreement is applicable when the collaboration of the corporation results in the identification of the others involved in the infraction, if any, and in how quick it is to obtain the information and documents that prove the illegal act under investigation. However, for the legal entity to be able to sign a leniency agreement, it must (i) be the first to express its interest in collaborating in the investigation of the illegal act, (ii) completely cease its involvement in the investigated offense from the date of signature of the agreement and (iii) to admit its participation in the illegal act, (iv) to cooperate fully and permanently with the investigations and the administrative process, appearing, at its expense, whenever requested, to all procedural acts, until its conclusion and (v) provide information, documents and elements that prove the administrative infraction.
Regardless of the signing of the leniency agreement, the corporation remains under the obligation to fully repair the damage caused. And if there is non-compliance, the corporation will be prevented from entering into a new agreement for a period of 3 (three) years, counting from the date on which the public administration (Government) becomes aware of the violation.
The leniency agreement must be closed within 180 (one hundred and eighty) days, from the date of the initial proposal.
On the part of the public administration, the Comptroller General of the Union – CGU is the competent body to enter into leniency agreements, resulting from the Brazilian anti-corruption law, under the Federal Executive Power and in harmful acts against the foreign public administration.
However, the regulatory decree of the Brazilian Anti-corruption Act attributes to the Federal Attorney General’s Office, within the scope of the direct federal public administration, the duty to adopt judicial measures in Brazil or abroad. Such as the collection of the administrative fine applied in the PAR, the promotion of the extraordinary publication, the pursuit of the sanctions referred to in items I to IV of the caput of art. 19 of the Brazilian Anti-corruption Act # 12.846, of 2013, the full reparation of damages, in addition to eventual judicial action for the purpose of instruction or guarantee of the judicial process or preservation of the leniency agreement.
And it is this attribution of the Attorney General – MP, represented in the figure of the Republic Attorney General to meddle in the area of the leniency agreement, as occurred in the case of Operation Car Wash, which is currently under discussion. Would it be the exclusive competence of the CGU to discuss the terms of the leniency agreements, or could the MP claim this responsibility for itself?
It won’t be long before we have an answer …