Leniency and Agreements with CADE (TCCs)

Transcription

1 Sistema Económico Latinoamericano y del Caribe Latin American and Caribbean Economic System Sistema Econômico Latino-Americano e do Caribe Système Economique Latinoaméricain et Caribéen Leniency and Agreements with CADE (TCCs) Fernando de Magalhaes Furlan, Commissioner CADE II Regional Seminar UNCTAD-SELA on Trade and Competition and Preparatory Meeting for the VI United Nations Conference to Review All Aspects of the Set of Principles and Rules on Competition Brasilia, Brazil 26, 27 and 28 May 2010 SP/II-SR-UNCTAD-SELA-RSTCPMVIUNCRASPRC/Di N 10-10

2 Copyright SELA, May All rights reserved. Printed in the Permanent Secretariat of SELA, Caracas, Venezuela. The Press and Publications Department of the Permanent Secretariat of SELA must authorise reproduction of this document, whether totally or partially, through The Member States and their government institutions may reproduce this document without prior authorisation, provided that the source is mentioned and the Secretariat is aware of said reproduction

3 Leniency and Agreements with CADE (TCCs) Fernando de Magalhães Furlan Commissioner CADE UNCTAD and SELA Brasília, May 2010

4 Brazilian System of Competition Policy SBDC Law nº 8.884/94 CADE Takes final decisions and sets fines Art. 7º, II, III e IV Negotiates agreements and settlements Arts. 7º, VI; 10, IV; 53 e 58 Decides on the accomplishment of the leniency agreement Art. 35-B, 4º SDE Investigative authority Arts. 14º, III e IV; 30; 35 e 35-A Negotiates and settles leniency agreements Art. 35-B SEAE Non-binding opinion Art. 38

5 Historical analysis Law nº /00 Introduced the Leniency Program in the Law nº 8.884/94 Possibility of SDE to settle leniency agreements with individuals or corporations who have infringed competition, offering the extinction of administrative prosecution, or reduction of one to two thirds the applicable penalty, in exchange of effective cooperation with the investigations Prohibits agreements with CADE (TCCs) in cartel cases

6 Historical Analysis Law nº /07 Modify article 53 of Law nº 8.884/94 Reintroduces the possibility of agreements with CADE (TCCs) in cartel cases Only CADE negotiates and settles such agreements, under its exclusive discretion, in the case it understands that the agreement meets the interests protected by competition law Makes mandatory the contribution/payment to a Public Fund (FDD) in cartel cases

7 Requirements of the Leniency Agreements Article 35 B, 2º Law nº 8.884/94 Must not be the cartel leader The applicant must be the first to come forward, admit his participation in the unlawful practice and ceases its involvement immediately Applicant must compromise with full cooperation with the investigation that results in the identification of other members of the conduct and in clarification of the practice

8 Benefits of the Leniency Agreements Articles 35 B and 35 C Law nº 8.884/94 Full administrative immunity or reduction of penalties to applicants if the agreement is considered fulfilled Applicants receive a waiver from criminal prosecution while the leniency agreement is valid and full criminal immunity when the agreement is due fulfilled (art. 35 C)

9 Agreements with CADE (TCCs) Requirements Article 53, Law nº 8.884/94 and CADE s bylaws Applicants must cease involvement in the investigated practices Settlement of a fine in case of breach of the agreement Mandatory payment/contribution to the Public Fund (FDD) in cartel cases Obligatory admission of participation in the practice when there is a pre existing leniency agreement One shot game

10 Agreements with CADE (TCCs) Benefits Applicants receive a waiver from administrative prosecution while the agreement (TCC) is valid Full administrative immunity when the agreement is due fulfilled Agreement has no effect in the criminal field

11 Fighting cartels policy Leniency must not be considered an end in itself or a policy per se, but rather, among others, a tool to prosecute cartels Agreements with CADE (TCCs) and Leniency programs must be used together do enhance the enforcement of competition policy Agreements with CADE (TCCs) can enhance the effectiveness of competition policy in two ways: i) trade off of some amount of penalty for cooperation with the investigation and ii) reduce administrative costs

12 Fighting cartels policy A coordinated use of the Leniency Program and the Agreements with CADE (TCCs) allows competition authorities to cover a larger amount of cases that can be expeditiously and efficiently concluded, focusing in other cases. Examples of successful combined use of the two tools: Compressors Cartel (PA nº / ) Marine Hoses Cartel (PA nº / )

13 Thank You