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ANTI-CARTEL

ENFORCEMENT
TEMPLATE

CARTELS WORKING GROUP


Subgroup 2: Enforcement Techniques

Brazil
date of completion: 1/12/2005
2

ICN ANTI-CARTEL ENFORCEMENT TEMPLATE

IMPORTANT NOTES:

This template is intended to provide information for the ICN member


competition agencies about each other’s legislation concerning hardcore
cartels. At the same time the template supplies information for businesses
participating in cartel activities about the rules applicable to them; moreover,
it enables businesses which suffer from cartel activity to get information about
the possibilities of lodging a complaint in one or more jurisdictions.

Reading the template is not a substitute for consulting the referenced statutes
and regulations. This template should be a starting point only.

1. Information on the law relating to cartels

A. Law(s) covering cartels:


Law nº 8,884/94, “Brazilian Competition Law” (available at
www.fazenda.gov.br/seae in Portuguese and English)

Law nº 8,137/90, **["Defines crimes against taxation system,


economic order, and consumer relations"] (available at
www.planalto.gov.br in Portuguese)

B. Implementing
Not Applicable
regulation(s) (if any):

C. Interpretative guideline(s)
CADE’s Resolution nº 20/2000, **["Regulates the
(if any):
administrative proceedings and provides Guidelines on the
definitions and classification of restrictive practices (Annex I),
and basic criteria on restrictive practices’analysis (Annex II)"]
(available at www.cade.gov.br, in Portuguese)

Ordinance SDE nº 849/2000 **["SDE's internal regulation


concerning administrative proceedings for the investigation of
antitrust infringements"] (available at
www.fazenda.gov.br/seae, in Portuguese and in English),
which is going to be substituted by Ordinance SDE nº 4/2006
in March, 2006.
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D. Other relevant materials


Brazilian OECD Peer Review in English
(if any):
(http://www.mj.gov.br/sde/dpde/documentos/BrazilEng.pdf)

2. Scope and nature of prohibition on cartels

A. Does your law or case


The Brazilian Competition Law does not define the term
law define the term
“cartel”. However, according to the law, it is a violation against
“cartel”?
competition to set or offer in any way – in collusion with
competitors – prices and conditions for the sale of a certain
If not, please indicate the product or service.
term you use instead.

B. Does your legislation or


No, it does not.
case law distinguish
between very serious
cartel behaviour
(“hardcore cartels” –
e.g.: price fixing, market
sharing, bid rigging or
production or sales
quotas1) and other types
of “cartels”?

C. Scope of the prohibition


There is no such a distinction in the Brazilian Competition Law
of hardcore cartels:
or in any other competition regulation. There are no exceptions,
[including any
exclusions and/or defences for particular industries or sectors.
exceptions, exclusions
and defences e.g. for
particular industries or
sectors.]

D. Is participation in a
There are no per se infringement in the Brazilian Competition
hardcore cartel illegal
Law System. In all cases the anticompetitive objective or effect
per se?
most be fully demonstrated.
E. Is participation in a
In Brazil a cartel may entail administrative, civil, and criminal
hardcore cartel a civil or
liability.
administrative or
According to Law 8,884/94 (articles 20 and 21, I and II), cartel
criminal offence, or a
is an administrative offence and, according to Law nº 8,137/90,
combination of these?
cartel is a crime (the criminal statute also does not make any
distinctions betwen cartel behaviours). Besides, under Brazilian
Law, any anticompetitive conduct may also be considered a
civil violation, thus permitting recovery for damages.

1
In some jurisdictions these types of cartels – and possibly some others – are regarded as particularly serious
violations. These types of cartels are generally referred to as “hardcore cartels”. Hereinafter this terminology
is used.
4

3. Investigating institution(s)

A. Name of the agency,


Secretariat of Economic Law - SDE
which investigates
Ministry of Justice
cartels:
Secretariat for Economic Monitoring – Seae
Ministry of Finance

B. Contact details of the


Secretariat of Economic Law
agency:
Ministry of Justice
Address: Esplanada dos Ministérios, Bloco T - 5º andar
CEP 70064-900 Brasília-DF
Tel: (5561) 3429.3112 and 3429.3396
e-mail: dpde@sde.gov.br
website: www.mj.gov.br/sde

Secretariat for Economic Monitoring – Seae


Ministry of Finance
Esplanada dos Ministérios
Bloco P, Ed. Sede do Ministério da Fazenda
2o. andar, Sala 220
70048-900 – Brasília-DF
Tel: (5561) 3412-1912 Fax (5561) 3412-1764
e-mail: seae@fazenda.gov.br
website: www.fazenda.gov.br/seae (Portuguese and English)

C. Information point for


Secretariat of Economic Law
potential complainants:
Daniel Goldberg
Tel: (5561) 3429.3112 and 3429.3396
e-mail: daniel.goldberg@mj.gov.br
website: www.mj.gov.br/sde

Secretariat for Economic Monitoring – Seae


Carlos Emmanuel Joppert Ragazzo
Coordinator of Anti-Cartel Enforcement
Tel: (5561) 3412-1912 Fax (5561) 3412-1764
e-mail: carlos.ragazzo@fazenda.gov.br

D. Contact point where


See above
complaints can be
lodged:

E. Are there other


Yes, the Public Prosecutor´s Office and the Police may assist
authorities which may
competition authorities in Brazil.
assist the investigating
Under the Brazilian laws, Competition Authorities and the
agency? If yes, please
Public Prosecutor´s Office, with the help of the Police when it is
name the authorities and
necessary, can conduct searches on competition grounds.
the type of assistance
While Competition Authorities are responsible for prosecuting
they provide.
competition matters on the administrative level, the Public
Prosecution office does so on the criminal and civil level.
Sometimes investigations are conducted jointly by the Public
Prosection Office or Police and competition authorities.
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4. Decision-making institution(s)2 [to be filled in only if this is


different from the investigating agency]

A. Name of the agency


Administrative Council for Economic Defence – CADE
making decisions in
cartel cases:

B. Contact details of the


Address: Setor Comercial Norte – SCN, Quadra 2, Projeção C
agency:
CEP 70712-902 Brasília – DF, Brazil
Tel: (5561) 3426-8599 – Fax (5561) 3328-5523
e-mail: cade@cade.gov.br
website: www.cade.gov.br
C. Contact point for
patricia.araujo@cade.gov.br (International Advisor)
questions and
consultations:

D. Describe the role of the


The Brazilian Competition Authorities are: (i) the Secretariat for
investigating agency in
Economic Monitoring; (ii) the Secretariat for Economic Law;
the process leading to
and (iii) the Administrative Council for Economic Defense –
the sanctioning of the
CADE. The first two governmental bodies are investigating
cartel conduct.
agencies, whilst CADE is the judging body.

The proceedings are opened and carried out at SDE, where the
parties have the opportunity to present defense arguments and
evidence which they see appropriate for the case.

At the end of the proceedings, SDE renders an opinion either


suggesting the shelving of the case or the conviction of the
parties involved (Seae may also render an opinion in some
cases; the decision by Seae whether or not to present an
opinion is discretionary according to the Brazilian Competition
Law).
After the rendering of opinions by SDE and Seae (as the case
may be), the case is forwarded to CADE, for judgment. Such
procedure applies to every anticompetitive conduct and,
therefore, to cartel cases

E. What is the role of the


The Brazilian Competition Authorities can only handle cartel
investigating agency if
cases on the administrative level.
cartel cases belong
under criminal
The Public Prosecution Office deals with every competition-
proceedings?
related crime.

5. Handling complaints and initiation of proceedings

A. Basis for initiating

2
Meaning: institution taking a decision on the merits of the case (e.g. prohibition decision, imposition of fine,
etc.)
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investigations in cartel An investigation on a given cartel may be initiated through
cases: [complaint, ex complaints, ex officio or based on leniency agreements.
officio, leniency
application, notification,
etc.]

B. Are complaints required


There is no such requirement. However, usually complaints
to be made in a specific
are made in writting.
form (e.g. by phone, in
writing, on a form, etc.)?
However, in order to ease the rendering of information on
anticompetitive conducts, Seae has a formulary which
delineates some data which are usually necessary to initiate
an investigation. The form is available at www.fazenda.gov.br
(Portuguese).

C. Legal requirements for


There are no legal requirements. However, Ordinance SDE nº
lodging a complaint
849/2000 foresees some minor procedural requirements for a
against a cartel: [e.g. is
complaint, which are only referential.
legitimate interest
required, or is standing to
make a complaint limited
to certain categories of
complainant?]

D. Is the investigating
The Brazilian investigating authorities are obliged by law to
agency obliged to take
formally respond each complaint they receive. All the acts
action on each complaint
performed by investigating authorities in Brazil (even the
that it receives or does it
dismissal of frivolous complaints or complaints without legal
have discretion in this
cause) must be duly well-grounded.
respect?

E. If the agency intends not


Yes. As stated above, whenever the competition authority
to pursue a complaint, is it
decides not to proceed with an investigation it must address
required to adopt a
its reasons to the complainants.
decision addressed to the
complainant explaining its
reasons?

F. Is there a time limit


According to the Law, there is an eight day limit, but in
counted from the date of
practice this has not been effectively applied - the fact that it
receipt of a complaint by
is not enforced, however, does not void the procedure.
the competition agency
for taking the decision on
whether to investigate or
reject it?

6. Leniency policy3

A. What is the official name

3
For the purposes of this template the notion of ‘leniency’ covers both full leniency and a reduction in the
sanction or fines. Moreover, for the purposes of this template terms like ‘leniency’ ‘amnesty’ and ‘immunity’
are considered as synonyms.
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of your leniency policy (if “Leniency Agreeement” (Acordo de Leniência) (all leniency
any)? [Please indicate its provisions are stated in Law 8,884/94, art. 35-B and Ordinance
public availability.] SDE 849/2000, which is going to bem substitute by Ordinance
SDE nº 4/2006 in March, 2006).

B. Does your jurisdiction


Yes, both.
offer full leniency as well
as partial leniency (i.e.
reduction in the sanction
/ fine), depending on the
case?

C. Who is eligible for full


Only the first one to come.
leniency?

D. Is eligibility for leniency


The authority can only enter into a leniency agreement if it: (i)
dependent on the
either had no knowledge of the cartel; or (ii) insufficient
enforcing agency having
evidence so as to convict the defendants. This means that
either no knowledge of
even if the proceedings have been initiated, the agency may
the cartel or insufficient
still enter into a leniency agreement if it does not have, until
knowledge of the cartel
then, enough evidence for a conviction.
to initiate an
investigation?
If the investigation has been initiated, the party can only apply
for partial immunity.
In this context, is the
date (the moment) at It must be noted that our system allows for only one leniency
which participants in the agreement, either for full or partial leniency. The application is
cartel come forward with granted on a first come first served basis and latter applicants
information (before or cannot be granted partial immunity even if it brings relevant
after the opening of an evidence into the file. Nonetheless, in such cases SDE can
investigation) of any recommend to CADE a reduction on fines for other cooperative
relevance for the parties.
outcome of leniency
applications?

E. Who can be a beneficiary


The company or an individual (including businessmen). It is
of the leniency program
worth mentioning that for the effects of the leniency agreement
(individual /
to be extended to the directors and officers of the company,
businesses)?
they must also execute the leniency agreement. It is also worth
mentioning that the beneficiary to a leniency agreement is also
protected from criminal prosecution.

F. What are the conditions


The first condition for full immunity is that the agency did not
of availability of full
have notice of the cartel until the moment the applicant
leniency:
requested the leniency agreement. Besides, the party must (i)
confess its participation in the cartel; (ii) not be the cartel
leader; (iii) be the first company to apply for leniency; (iv) cease
the infringement as from the date the leniency agreement is
signed; (v) fully collaborate with the investigation and other
issues related to the administrative proceeding, provided that
such collaboration result (a) in the identification of the other
parties to the collusion, as well as (b) in the obtention of
documents which prove the cartel.

G. What are the conditions


The first condition for partial immunity is that the agency did not
of availability of partial
have enough evidence so as to convict the defendants.
leniency (such as
Besides, the party must (i) confess its participation in the cartel;
reduction of sanction /
(ii) not be the cartel leader; (iii) be the first company to apply for
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fine / imprisonment): leniency; (iv) cease the infringement as from the date the
leniency agreement is signed; (v) fully collaborate with the
investigation and other issues related to the administrative
proceeding, provided that such collaboration result (a) in the
identification of the other parties to the collusion, as well as (b)
in the obtention of documents which prove the cartel.

H. Obligations for the


(i) Cease the infringement as from the date the leniency
beneficiary after the
agreement is signed; (ii) full and ongoing cooperation in the
leniency application has
investigation and other issues related to the administrative
been accepted:
proceeding, aiming to the (a) identification of the other parties
to the collusion, as well as (b) obtention of documents which
prove the cartel. The leniency agreement shall establish the
necessary conditions to assure the effectiveness of the
colaboration and the good results of the proceeding.

I. Are there formal


The application must be made in writing and be presented
requirements to make a
before the Secretariat of Economic Law, in a closed envelope
leniency application?
written “Leniency Program”.

Besides, there are some clauses which are required in the


Agreement itself, such as the complete explanation of the facts
relating to the cartel, the identification of the authors and its
participation in the conduct, the existent documents, the
commitment to cooperate etc.

J. Are there distinct


The decision to enter into a leniency agreement is made by the
procedural steps within
Secretariat of Economic Law. Once the investigation is finished
the leniency program?
and the terms of the cooperation agreement are fullfiled, it is up
to the Competition Tribunal (Conselho Administrativo de
Defesa Econômica, “CADE”) to (i) extinguish the administrative
penalty, providing full immunity, in the cases in which the
authority did not have any information about the cartel until the
leniency application was filled; (ii ) in the cases of partial
immunity, to reduce from 1/3 to 2/3 the penalties, considering
the effectiveness of the collaboration and the good faith of the
applicant.

K. At which time during the


According to the Law, the applicant must request a leniency in
application process is
writing. However, it is common that the applicat has some
the applicant given
previous oral negotiation with the authority, so as to verify the
certainty with respect to
possibility of accepting a leniency if applied and after those
its eligibility for leniency,
understandings, the party will be “confident” to apply for a
and how is this done?
leniency agreement. In fact, the formal certainty is given once
the Leniency Agreement is entered into by the applicant and
the agency.

L. What is the legal basis


The leniency is granted by the Secretariat of Economic Law
for the power to agree to
(SDE) on the basis of an agreement entered into by SDE and
grant leniency? Is
the applicant (including enterprises and/or all individuals that
leniency granted on the
were involved in the practice). The decision about the leniency
basis of an agreement or
application is personally taken by the Secretary of Economic
is it laid down in a
Law. With respect to the crimes against the economic order set
(formal) decision? Who
forth by Law No. 8,137/90, the execution of the leniency
within the agency
agreement implies the suspension of the statue of limitations
decides about leniency
and impedes the filing of the accusation by the Public
9
applications? Prosecution Office.

Once the investigation is concluded by the Secretariat of


Economic Law, it is up to the Competition Tribunal (Conselho
Administrativo de Defesa Econômica, or CADE) to (i)
extinguish the administrative penalty, providing full immunity, in
the cases in which the authority did not have any information
about the cartel until the leniency application was filled; (ii) in
the cases of partial immunity, to reduce from 1/3 to 2/3 the
penalties, considering the effectiveness of the collaboration
and the good faith of the applicant.

If the leniency agreement is complied with by the undertaking,


punishment for the crimes against the economic order ser forth
by Law No. 8,137/90 is extinguished.

M. Does your legislation


No.
have a marker system? If
yes, please describe it.

N. Does the system provide


4 Yes. Besides getting a full amnesty in the investigation of the
for any extra credit for new cartel disclosed, it will receive a reduction of 1/3 of the
disclosing additional penalty regarding another conduct under investigation.
violations?

O. Is the agency required to


The application for a leniency agreement is confidential (and
keep the identity of the
will be kept as such if the leniency is rejected). Besides, there
beneficiary confidential?
is no legal provision regarding confidentiality of the agreement
If yes, please elaborate.
after it was signed. However, the Secretariat of Economic Law
can include a confidentiality clause in the Leniency Agreement
itself. Such provision defines that the agreement is confidential
for any third parties, including the details of the application. As
to the information provided by the applicant, such information
cannot be kept confidential to the other parties being
investigated. According to the due process principle, the other
parties have the right to know and present defence from
whichever evidence that are used in the investigation .

P. Is there a possibility of
There is no legal provision for such an appeal in Administrative
appealing an agency’s
level. However, the decision can be appealed in the Judiciary.
decision rejecting a
leniency application?

Q. Contact point where a


Secretariat of Economic Law
leniency application can
Ministry of Justice
be lodged:
Address: Esplanada dos Ministérios, Bloco T - 5º andar
CEP 70064-900 Brasília-DF
Tel: (5561) 3429.3112 and 3429.3396
e-mail: dpde@sde.gov.br
Hours: 9:00 AM - 6:00 PM

R. Does the policy address


No. However, as mentioned, in item 6.L above, even though
the possibility of

4
Also known as: “leniency plus”, “amnesty plus” or “immunity plus”. This category covers situations where a
leniency applicant, in order to get as lenient treatment as possible in a particular case, offers to reveal
information about participation in another cartel distinct from the one which is the subject of its first leniency
application.
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leniency being revoked? the leniency agreement is executed by the Secretariat of
If yes, describe the Economic Law, it is up to CADE to define whether the
circumstances where beneficiary has fulfilled its obligations under the leniency
revocation would occur. agreement and, depending on the conditions of the leniency, is
Can an appeal be made elegible for full or partial immunity. Therefore, even though the
against a decision to leniency cannot be “revoked” by the Secretariat of Economic
revoke leniency? Law, it may report to CADE that the obligations were not
fullfiled, which will be taken into consideration when CADE
analyzes the immunity.

S. Does your policy allow


Yes. There is no specific provision that allows affirmative
for “affirmative
leniency; on the other hand, in principle, under Brazilian legal
leniency”, that is the
system, it would not be a problem for the authority to do so.
possibility of the agency
approaching potential
leniency applicants?

7. Investigative powers of the enforcing institution(s)5

A. Briefly describe the


The Brazilian Competition Authorities may use several
investigative measures
investigating measures including: (i) requests for documents
available to the enforcing
and information; (ii) testimonies; and (iii) searches and
agency such as requests
inspections.
for information,
6
searches/raids , SDE and Seae themselves may authorize an inspection, which
electronic or computer may only occur with 24 hour notice to the party or parties
searches, expert opinion, searched. In this type of procceding, authorities cannot seizure
etc. and indicate whether original documents. They can only require or extract document
such measures requires copies.
a court warrant.
The search and seizure, however, may only be granted by the
Judiciary at the request of SDE and does not require prior
notice.

Criminal authorities may use wiretapping and searches for


criminal investigations.

Even though ciminal and administrative investigations are


independent, in principle, evidences produced in the
administrative investigation may be used in a criminal case and
the other way round.

B. Can private locations,


Yes. Searches in places other than business premises are
such as residences,
allowed. In case of searches that require judicial authorization
automobiles, briefcases
(please refer to answer above), Competition agents must
and persons be
convince the Judge that important documents or information on
searched, raided or
the investigation can be found in these kinds of places.
inspected? Does this
According to the Brazilian Federal Constitution, entry in private
require authorisation by

5
“Enforcing institutions” may mean either the investigating or the decision-making institution or both.
6
“Searches/raids” means all types of search, raid or inspection measures.
11
a court? residences for search purposes is only allowed during the day,
which is considered by our legal system as the period between
6 a.m. to 6 p.m.

In relation to people search, it is important to point out that all


the searches carried out this far by Competition agents were
made with the support of Police agents. Usually, Police agents
frisk people (briefcases, pockets, and so on) who leave the
premises of the search.

C. May evidence not falling


Searches are made within the course of a previous established
under the scope of the
procedure in which the object of the investigation must be
authorisation allowing
delimitated, even if not very precisely. Therefore, Competition
the inspection be seized
agents are only allowed to use evidence related to its core
/ used as evidence in
purpose (the search warrant displays the object of the
another case? If yes,
investigation as well as the premises to be searched). Such
under which
requirement applies equally to searches and inspections
circumstances (e.g. is a
(please refer to answer 7/A above).
post-search court
However, should evidence of other offences be found, the
warrant needed)?
Brazilian legal system compels the competition agent involved
in the search to inform the competent authorities about the fact
or document. And if the evidence is competition related,
Competition agents have the duty to iniatiate new inquiries.
It is worth noting that, in Brazil, such question is still debatable.
The Judiciary is yet to give further directions as to whether
evidence found in a search not related to its object can be used
in another case.

D. Have there been


If the search is conducted under an administrative
significant legal
investigation, there are not usually significant legal challenges
challenges to your use of
to use investigative measures authorized by the courts.
investigative measures
Besides, all searchs requested were authorized by the courts.
authorized by the
courts? If yes, please
On the other hand, if the investigation is conducted by a
briefly describe them.
criminal authority, the administrative authority has been facing
some legal challenges to participate and help in such
investigation, as well as to use the collected evidence. Some of
the allegations against the use of investigative measures
authorized by criminal Justice are:

1) Defendants allege that members of the competition


authorities would not be allowed to participate in searches
conduced by criminal authorities. As mentioned, in Brazil a
cartel is both a criminal and administrative offence and parallel
investigations may be conducted, but defendants allege that
those investigations are independent and a simultaneous
search cannot be pursued. As joint investigations are quite
novel, there has been no court decision on that issue so far,
but, until this moment, SDE only participated in criminal
searches when formally authorized by the criminal judge that
ordered the search.

2) Violation of confidentiality regarding correspondence and


telephone calls (wiretapping). According to the Brazilian
Constitution, both "violations" may only be requested under
and can only be authorized within criminal investigations. There
is some controversy as to wheather the Competition authority
is allowed to use those evidences in an administrative
proceeding - even though, so far, case law has been
12
favourable to it.

3) Fruits of the poisonous tree. Defendants allege that seized


documents in criminal investigations “contaminate” all the
Administrative Proceeding.

8. Procedural rights of businesses / individuals

A. Key rights of defence in


All the listed items are applied to Brazilian cartel cases.
cartel cases:
The right of access to the documents in the possession of the
enforcing authority, the right to a written statement of the case
against the defendant, the right to respond to that case in
writing, the right to respond orally, the right to confront
companies or individuals that make allegations against the
defendant, the right to legal representation before the enforcing
authorities, the right against self-incrimination, as well as the
right to be officially communicated of every decision adopted in
the process, the right to have reasonable deadlines to respond
to accusations and questionings of the authority and third
parties, the right to produce all types of proofs (oral,
documental, technical) and the right to confidentiality treatment
of information when it can cause economic damages if
revealed, are a result of the application of the principle of due
process of law, expressed in Brazilian Legal System in article
5th, items LIV and LV, of the Federal Constitution.

B. Protection awarded to
The general rule is that all documents and information used as
business secrets
evidence go to the court records of the administrative
(competitively sensitive
proceedings, which are available to the public in general.
information): is there a
However, should any information or document be considered
difference depending on
confidential by the Competition authorities (business secrets
whether the information
are often the case), they must remain unavailable to third
is provided under a
parties. They are kept in non-public court-records.
compulsory legal order
or provided under
Such rule applies irrespective of whether the information or
informal co-operation?
document was provided by means of a compulsory request or
voluntarily.

On the other hand, sometimes this rule has to be reviewed,


may it violate the principle of due process and the right of the
defendant to know every single piece of document wich is
being used as evidence against him.
13

9. Limitation periods and deadlines

A. What is the limitation


There is a 12 years limitation period from the date of the
period (if any) from the
termination of the infringement by which the investigation
date of the termination of
proceedings can be inniciated. However, if the administrative
the infringement by
proceedings are interrupted for more than 3 consecutive years,
which the investigation /
such proceedings shall be closed without judgement on the
proceedings must begin
merits.
or a decision in the
merits of the case must
be made?

B. What is the deadline,


There is an statutory sixty day limit to complete preliminary
statutory or otherwise (if
investigations and an statutory eight day limit to institute
any) for the completion
administrative process, after cognizance of the underlying fact,
of an investigation or to
formal complaint or closing of the preliminary investigations.
make a decision in the
There is no statutory deadline to make a decision in the merits.
merits?

C. What are the deadlines,


The decisions concerning the commencement or completion of
statutory or otherwise (if
an investigation can not be challanged. The CADE's decision
any) to challenge the
imposing sanctions for an infringement can only be challanged
commencement or
by the judiciary system (see answer 13/A below).
completion of an
investigation or a
decision regarding
sanctions?

10. Types of decisions


A. Please list which types
The decision may either shelve the case or find an infringement
of decisions on the
and convict the parties involved in a cartel (see answer 12/A
merits of the case can be
below).
made in cartel cases
under the laws listed
under Section 1.

B. Please list which types


Not applicable.
of decisions on the
merits of the case can be
made in hardcore cartel
cases under the laws
listed under Section 1 (if
different from those
listed under 10/A).

7
C. Can interim measures SDE or the Reporting Commissioner from CADE may adopt a
be ordered during the preventive measure in any stage of the administrative
proceedings in cartel proceedings whenever there are signs or sound reasons to

7
In some jurisdictions, in cases of urgency due to the risk of serious and irreparable damage to competition,
either the investigator or the decision-making agency may order interim measures prior to taking a decision
on the merits of the case [e.g.: by ordering the immediate termination of the infringement].
14
cases? (if different believe that the defendant directly or indirectly caused or may
measures for hardcore cause irreparable or substantial damages to the market, or that
cartels please describe it may render the final outcome of the proceedings ineffective
8 (article 52 of Law 8,884/94).
both .) Which institution
(the investigatory / the
decision-making one) is As previously stated, there are no distinctions between cartel
authorised to take such behaviours.
decisions? What are the
conditions for taking
such a decision?

11. Sanctions for procedural breaches (non-compliance with


procedural obligations)9

A. Grounds for the


Procedural sanctions may be imposed in case of any data or
imposition of procedural
documents requested by Cade, SDE, and Seae unreasonably
sanctions / fines:
denied, concealed, tampered with or delayed.

Any hindrance to inspections authorized by Seae or SDE is


also subject to procedural sanctions.

Any disobeyance to preventive measures or cease and desist


commitment adopted by Seae or SDE is also subject to
procedural sanctions.

B. Type and nature of the


The procedural sanctions described above are all
sanction (civil,
administrative sanctions.
administrative, criminal,
combined):

C. On whom can procedural


On anyone who commits the infractions stated in item 11A
sanctions be imposed?
above.

D. Criteria for determining


The procedural sanctions may vary according to the financial
the sanction / fine:
status of the infractor.

E. Are there maximum and /


Yes.
or minimum sanctions /
fines?
(i) In case of any data or documents requested by Cade, SDE,
and Seae unreasonably denied, concealed, tampered with or
delayed – the maximum fine is a daily fine of 5.000 Ufirs
(roughly R$ 5,000, Brazilian currency, corresponding R$1 =
US$2,35 ) which can be increased up to twentyfold according

8
Only for agencies which answered “yes” to question 2.C. above
9
In some jurisdictions non-compliance with procedural obligations (e.g. late provision of requested
information, false or incomplete provision of information, lack of notice, lack of disclosure, obstruction of
justice, destruction of evidence, challenging the validity of documents authorizing investigative measures,
etc.) can be sanctioned.
15
to the financial status of the infractor. The amount may not
exceed 90 days of daily fine.

(ii) Any hindrance to inspections authorized by Seae or SDE is


also subject to procedural sanctions – maximum fine equals to
R$425,700 reais.

(iii) Any disobeyance to preventive measures or cease and


desist commitment adopted by Seae or SDE is also subject to
procedural sanctions – the maximum fine is a daily fine of
5.000 Ufirs (roughly R$ 5,000, the Brazilian currency) which
can be increased up to twentyfold according to the financial
status of the infractor

12. Sanctions on the merits of the case

A. Type and nature of


The Brazilian Competition Law (art. 23 and 24) foresees
sanctions in cartel cases
several administrative sanctions:
(civil, administrative,
criminal, combined):
(i) fines, defined as such:
(a) for companies: a fine from one to thirty percent of the gross
On whom can sanctions pretax revenue thereof as of the latest financial year, which fine
be imposed? shall by no means be lower than the advantage obtained from
the underlying violation, if assessable;
(b) for managers directly or indirectly liable to their company's
violation: a fine from ten to fifty percent of the fine imposed on
said company, which shall be personally and exclusively
imposed on the manager; and
(c) in the case of other individuals and other public or private
legal entities, as well as any de facto or de jure associations of
entities or persons, even temporary ones, with or without legal
identity, that do not engage in business activities, when it is not
feasible to use the gross sales value, the fine will be 6,000 (six
thousand) to 6,000,000 (six million) UFIR or any other index
replacing it.

(ii) at the violator´s expense, half-page publication of the


summary sentence in a court-appointed newspaper for two
consecutive days, from one to three consecutive weeks;

(iii) ineligibility for official financing or participation in bidding


processes involving purchases, sales, works, services or utility
concessions with the federal, state, municipal authorities and
related entities, for a period equal to or exceeding five years;

(iv) annotation of the violation on the Brazilian Consumer


Protection list;

(v) recommendation that the proper public agencies: (a) grant


compulsory licenses for patents held by infractor; and (b) deny
the infractor instalment payment of federal overdue debts, or
order total or partial cancellation of tax incentives or public
subsidies;
16
(vi) the company´s spin-off, transfer of corporate control, sale
of assets, partial discontinuance of activities, or any other
antitrust measure required for such purposes.
Law nº 8,137/90 foresees two sorts of sanctions for cartel
behaviour: (i) imprisionment from 2 to 5 years; and (ii) fines.
Civil liability will vary according to the recovery of damages
which are set on a case by case analysis.

Administrative fines may be imposed against companies


(public or private), their managers, and any de facto or de jure
association of entities or persons, even temporary ones, with or
without legal identity.

Criminal liability will only be imposed against individuals


(representatives from the company involved in cartel
behaviour)

B. Criteria for determining


Administrative sanctions will take into account: (i) the severity
the sanction / fine:
of the infraction; (ii) the infractor´s good faith; (iii) the
advantages obtained or envisaged by infractor; (iv) actual or
threatened occurrence of the infraction; (v) the extent of
damages or threatened damages to competition, to the
Brazilian economy, to consumers or third parties; (vi) the
adverse effects on the market; (vii) the infractor´s financial
status; and (viii) recurrences.

Criminal liability will vary according to the advantage obtained


by the infractor and his or hers or its financial status.

C. Are there maximum and /


Administrative fines may vary.
or minimum sanctions /
(i) for companies: a fine from one to thirty percent of the gross
fines?
revenues recorded in the latest financial year; the fine cannot
be lower than the advantage obtained from the underlying
infraction, if assessable;
(ii) for individuals (managers), a fine from ten to fifty percent of
the fine imposed on the company, which shall be personally
and exclusively imposed on the manager;
(iii) for associations (when its not feasible to use the gross
revenue value) the fine range from 6,000 to 6,000,000 UFIR.
As for criminal sanctions, imprisionment may vary from 2 to five
years. Such imprisionment sanctions may be converted by the
Judge in a fine ranging from 200,000 to 5,000,000. Reais.
D. Guideline(s) on
Not applicable
calculation of fines:
[name and reference
number, availability
(homepage address) and
indication of the
languages in which
these materials are
available]

E. Does a challenge to a
Challenges against decisions rendered by Competition
decision imposing a
authorities presented to the Judiciary do not have automatic
sanction / fine have an
suspensory effect on the sanction.
automatic suspensory
effect on that sanction /
However, the Judiciary has often granted preliminary
fine? If it is necessary to
injunctions to that effect. The high amounts arbitrated as
17
apply for suspension, sanctions by Cade have often been considered a reason to
what are the criteria? permit the discussion of the case in the Judiciary pending the
payment of the fine.

13. Possibilities of appeal

A. Does your law provide


The Brazilian Competition Law does not permit appeals against
for an appeal from a
decisions rendered by Cade in the Executive Branch.
decision that there has
been a violation of a
However, any administrative decision (therefore including the
prohibition of cartels? If
ones rendered by Cade) can be appealed in the Judiciary. Both
yes, what are the
questions of law or fact and breaches of procedural
grounds of appeal, such
requirements may be re-examined by the Judiciary.
as questions of law or
fact or breaches of
Criminal sanctions are not set by administrative agencies. They
procedural
are already arbitrated by a Judge of the First Instance Court
requirements?
Therefore, appeals follow the standard Brazilian Criminal
Procedure System (and are forwarded to the Second Instance
Court up until the Brazilian Supreme Court, should this be the
case).

B. Before which court or


See answer above.
agency should such a
challenge be made? [if
the answer to question
13/A is affirmative]