I ENFORCEMENT POLICIES AND GUIDANCE

The Brazilian Competition Act (Law No. 12,529 of 30 November 2011) is the primary statute that deals with competition matters (both repression to violations to the economic order and merger control) in Brazil. The agency responsible for enforcing the competition laws is the Administrative Council for Economic Defence (CADE), considered the Americas' agency of the year by Global Competition Review in 2018.

There have been no significant changes to the composition of CADE during 2018. However, Paula Farani de Azevedo Silveira was appointed to CADE's Tribunal in February and Alexandre Cordeiro, CADE's General Superintendent since 2017, added to the technical team responsible for CADE's General Superintendence (SG) by nominating Alden Caribé de Souza as Chief of Staff of the SG.

Besides these few modifications to its composition, CADE has focused its efforts on cooperation with other public authorities, both national and international,2 regarding the development of the fight against cartels in Brazil, and the academic development of the Competition Authority. In this regards, CADE settled an agreement with the Centre for Studies in Economic and Social Law to promote the development of research projects. CADE has also signed technical cooperation agreements with the Public Prosecutor's Offices in the States of Paraíba, Sergipe, São Paulo, Maranhão, Mato Grosso, Piauí, Alagoas and Tocantins to develop the fight against cartels and other antitrust practices in Brazil.

CADE's prosecution efforts resulted in the continuation of important investigations relating to Operation Car Wash. The coordinator of the task force regarding this operation explained, in January 2017, the relevance of the cooperation between CADE and the Public Prosecutor's Office (MPF) to develop investigations.3 An example of the continuation of the investigations was that the companies Carioca Christiani-Nielsen Engenharia, Norberto Odebrecht, OAS and Andrade Gutierrez entered into settlement agreements with CADE to acknowledge their participation in alleged cartels in tenders relating to alleged frauds in Petrobras' tenders, as Angra 3, the aforementioned companies and some of their employees disbursed a total of approximately 897.9 million reais within the scope of those settlement agreements.4 CADE has continued to take important steps to clarify its internal procedures and decision-making processes. One of these was the opening of a public hearing for third parties to submit proposals to modify CADE's Internal Rules. CADE also published its Guidelines for Remedies5 and Resolution No. 21/2018,6 which establishes rules regarding the access of documents relating to leniency and settlement agreements. The aim of these provisions is to provide companies, executives and lawyers with more transparency in relation to CADE's internal rules and practices.

II COOPERATION WITH OTHER JURISDICTIONS

Notwithstanding the importance of CADE's enforcement of international cartel activities, CADE's current investigations are mostly domestic, not international. As a result of this, the cooperation between CADE and other competition authorities was not prominent in 2018, with the exception of the notification of individuals located abroad.

However, CADE is in constant contact with various antitrust authorities from different jurisdictions to exchange practices and proceedings relating to investigations, whether at seminars led by the BRICS countries and the Organisation for Economic Co-operation and Development or by direct exchanges of information. A significant change with regard to its participation on the international scene was that, on 18 January 2018, CADE joined COMPAL,7 a programme under the United Nations Conference on Trade and Development.

In October 2018, CADE signed memoranda of understanding with the Paraguay National Antitrust Commission8 and with the Costa Rica Ministry of Economy, Industry and Trade9 during the eighth annual Meeting of the Working Group on Trade and Competition in Latin America and the Caribbean. The aim of these forms of cooperation is to share experiences and reinforce the implementation of the competition rules of each agency.

III JURISDICTIONAL LIMITATIONS AND EXEMPTIONS

i Jurisdictional limitations

CADE has expressly affirmed its jurisdiction to investigate foreign cartel practices even in situations where the alleged perpetrators have no physical presence in Brazil. In these cases, CADE argues that it is sufficient that the illegal agreement has potential effects in Brazil. This approach has ignited several investigations in which CADE specifically indicated that there was no evidence that the practice took place in Brazil. These investigations were based purely on the potential impact of foreign conduct on Brazilian markets. CADE's approach to the matter has been a subject of discussion over a long period. During 2016, for example, CADE discussed the effects of alleged international cartels in Brazil in at least three important cases.

In Administrative Proceeding No. 08012.000773/2011-20, which was initiated to investigate an alleged international cartel in the thermoplastic elastomers market, CADE decided to close the investigation because it concluded, in summary, that (1) there was no evidence of causal relationship between the alleged practice that happened outside Brazil and imports of the products to Brazil, (2) the evidence contained in the case records related only to alleged acts that happened in China and Hong Kong, and (3) no penalties were imposed on the defendants in other jurisdictions. The Reporting Commissioner also stated that the practice could result in indirect effects in Brazil through the entry of imported products made using the materials that were the subject of the alleged cartel. However, CADE concluded that there was no evidence of indirect effects in Brazil.

In Administrative Proceeding No. 08700.001020/2014-26, also regarding the market for plastics, Reporting Commissioner Alexandre Cordeiro Macedo decided to close the case mainly in consideration of various factors: (1) that the alleged illegal contacts among competitors would have been restricted to Hong Kong and China, with no discussion regarding other regions of the world and, therefore, the practice could not be considered an international conduct, but was limited to two countries; (2) there would be no agreement to fix the prices of products sold to Brazil; and (3) there was no evidence that could demonstrate that the products that were the subject of the alleged agreements were exported to Brazil.

Finally, CADE discussed the 'effect doctrine' in an investigation into an alleged international cartel in the market for dynamic random access memory (DRAM) (Administrative Proceeding No. 08012.005255/2010-11). Reporting Commissioner Márcio de Oliveira Júnior rendered a decision highlighting that not only practices with direct effects on Brazil could be punished by CADE, but also those that resulted in indirect effects. CADE's Commissioner affirmed that 'the existence of sales in Brazil conducted by the participants of a cartel is the most clear effect that the agreement affected the Brazilian economy'. However, an international cartel, according to CADE, could also cause harmful effects in Brazil in the absence of direct sales, mainly if the cartel involved intermediate goods or components. In that regard, CADE decided that the practice under investigation would have affected the Brazilian market, at least, through (1) the direct import of DRAM to Brazil and (2) the import of products that use DRAM components, where DRAM represented a relevant part of the final product, which would not be fit for purpose without the DRAM.

Also in 2018, we highlight two cases judged by CADE that involved discussions on the effects of an alleged international cartel within two markets in Brazil: gas-insulated switchgear (Administrative Proceeding No. 08012.001376/2006-16) and colour picture tubes (Administrative Proceeding No. 08012.002414/2009-92). In the first proceeding, Reporting Commissioner Polyanna Vilanova reinforced CADE's understanding that an international cartel may be punished in Brazil even if there is only the potential for it to cause effects in the country. In the second proceeding, Reporting Commissioner Paulo Burnier da Silveira issued an important decision regarding the standard of evidence of the potential effects of an international cartel in Brazil. According to the Commissioner, this potentiality may be identified if the evidence contained in the case record (1) emphatically mentions Brazil as part of an agreements between competitors, (2) emphatically mentions Latin America as part of an agreement between competitors, or even (3) indicates the existence of a global cartel, without indicating clearly that Brazil is not part of the agreement between competitors.

ii Exemptions

There are no express industry exemptions under the Competition Act. Despite this, a discussion is pending with respect to antitrust violations in the financial sector.

The issue relates to provisions of the Banking Act10 that may be interpreted to mean that the Brazilian Central Bank has sole jurisdiction in investigations of financial institutions and in the analysis of transactions involving such institutions. The matter has been, and continues to be, widely debated within the government and in Congress, and has already been submitted to the analysis of the General Counsel for the Executive Branch, which defended the notion that the Central Bank would have sole jurisdiction in such cases. CADE does not agree with this approach and has thus initiated certain investigations into financial institutions,11 even though it may be argued that financial institutions are exempted from CADE's jurisdiction; it is therefore likely that the matter will only be definitely resolved after its analysis by the Brazilian courts, or upon a new and clear law being enacted by Congress.

IV LENIENCY PROGRAMMES

A leniency programme was introduced in Brazil in 200012 and affirmed by CADE in May 2012. The relevance of leniency programmes has been on the increase. It is now fairly easy to make a request for a marker to CADE. The request may be made in writing or orally and, if available, a marker will be issued by the SG within five business days after the request is made. Markers may be obtained prior to presenting evidence of the violation to ensure that a certain applicant is the first to qualify for leniency. Once the marker is issued, the leniency proposal shall be presented within a term defined by CADE, which may be extended.

To obtain a marker, an immunity application, which may be made by companies or individuals, must only provide information about the applicant itself, the other known participants of the violation, the products or services affected by the violation, the geographical scope of the violation and, if possible, the duration of the violation. Typically, applications are made jointly by companies and individuals, and at least in theory their legal representation may be provided by the same counsel. Under the current rules, leniency agreements may be extended to individuals and companies that were not included in the original agreement.13

The request for a marker is, of course, treated as strictly confidential by CADE. If a leniency application is not available, the applicant shall not be jeopardised for trying to obtain the marker. It will still have its right to full defence if an investigation is actually initiated in the case and the investigation may not be initiated solely based on such a marker. It should be mentioned that CADE has been increasingly cautious before entering into a leniency agreement; it has requested more evidence of the illegal practice and, for international practices, it has been requesting strong evidence of the effects on the Brazilian market.

In any case, the leniency programme may be considered attractive given that the offender (either an individual or a company) will have total immunity from, or at least a significant reduction (between one-third and two-thirds)14 of, any fines and other penalties that may be imposed by CADE.15 Notwithstanding the immunity from or reduction of the administrative fine, the leniency programme also provides for criminal immunity for applicants. However, it does not provide for immunity against private damage claims or against civil claims that may be initiated by the Public Prosecutor's Office (see Section VII). The leniency programme also does not provide for immunity in relation to certain different, but related, violations, such as acts of corruption. Even though these acts may be subject to separate leniency programmes, it is still unclear how CADE and the anti-corruption enforcement entities will cooperate and work together to avoid inconsistencies that may weaken both programmes.

Applicants under the leniency programme are required to cooperate with CADE in investigations. In addition, applicants are required to identify the other participants in the antitrust offence16 and to provide evidence that is sufficient to support the investigation into the reported violation.17 Another sine qua non condition of leniency applications relates to the fact that applicants must be the first to qualify in order to be entitled to sign a leniency agreement.18

The level of cooperation required by CADE is typically higher than that expected under US or European investigations. This is mainly because of the fact that other defendants still tend to challenge investigations initiated by CADE. With the increase in the number of cases based on leniency applications and the confirmation of the leniency programme in Brazilian courts, this may change in the future.

In addition to continuous cooperation, the Competition Act also requires that:

  1. applicants cease all involvement in the violation notified or under investigation as of the date on which the agreement is proposed;19
  2. CADE does not have sufficient evidence to ensure the conviction of the applicants at the time of the proposal;20 and
  3. applicants confessing their participation in the unlawful practice must cooperate fully and continuously with the investigations and the administrative procedures, and take part, at their own expense whenever requested, in all procedural acts until they have been completed.21

In 2018, five leniency agreements were signed by CADE.22 Of these, three involved facts relating to the scope of Operation Car Wash.

It is important to mention that, since the new Competition Act entered into force, there are no restrictions preventing a cartel instigator or leader from applying for immunity before CADE.

V PENALTIES

After conducting an investigation relating to a cartel practice, CADE may either shelve the process if it does not find sufficient evidence of the illegality of the investigated practice, or rule that the practice is illegal under the terms of the Competition Act and impose administrative penalties on the companies and individuals under investigation.

If CADE decides that a company's conduct is illegal, it may impose a fine ranging from 0.1 to 20 per cent of its gross revenue in the sector of activities in which the practice took place in the year before the investigation started.23 In addition, CADE may impose on the senior managers who are directly or indirectly liable for their company's violation a fine of between 1 and 20 per cent of the fine imposed on the company; these fines should be personally and exclusively borne by the individuals. Further, CADE may impose a fine on (non-corporate) third parties, which can range from 50,000 to 2 billion reais.24

In previous years, CADE has clarified its understanding relating to the applicability of the new Competition Act to practices that took place when the former Act was in force. In line with the previously adopted approach, CADE decided to apply the former Competition Act in the analysis of the Marine Hoses cartel case25 in February 2015, as it was more beneficial than the current Act in terms of the fines that could be imposed on the companies involved in the illegal practices. In fact, the former Act may prove to be more beneficial, especially for companies that are active in only one sector, because it sets forth that taxes should be excluded from the calculation of the fine. There is no such provision in the new Act.

Besides the above-mentioned monetary fines provided for in the Competition Act, CADE may also impose other penalties, such as a half-page publication of the summary of decisions in newspapers,26 and ineligibility from participation in official financing or in government bidding procedures.27

Penalties for antitrust violations shall be calculated based on the following mitigating and aggravating factors:28

  1. the severity of the offence;
  2. the offender's good faith;
  3. the advantages obtained or envisaged by the offender;
  4. the actual or threatened occurrence of the offence;
  5. the extent of the damage or threatened damage to open competition, the Brazilian economy, consumers or third parties;
  6. the negative economic effects on the market;
  7. the offender's economic status; and
  8. recidivism.

Until November 2018, CADE's fines in cartel cases for the year totalled approximately 284,7 million reais. The largest penalty ever imposed by CADE relates to the Cement cartel, judged by CADE's Administrative Tribunal in 2014. The case is relevant not only because of the scale of fines (3.1 billion reais) but also because of the other remedies imposed by the Tribunal, such as the divestment of plants and a prohibition of operations in the cement and concrete sectors until 2019. CADE's rationale was that the cartel had been widespread across the entire country for many years, thereby changing the structure of the market. In line with this, CADE ordered the sale of assets in the markets for cement and concrete by four companies; therefore, Votorantim and InterCement would have to sell, respectively, 35 per cent and 25 per cent of their production capacity, whereas Itabita and Holcim would be obliged to sell 22 per cent of their production capacity.

Further, new entrants to the cement sector would also have a 'transparency commitment', allowing CADE to request documents and information at all times and without previous authorisation, to ensure that new entrants would not join the cartelised structure of the market. CADE also ordered Votorantim to sell its minority shares in competitors active in the market for cement. The Cement case is currently being reviewed by the Brazilian courts, as some of the companies and individuals challenged CADE's decision, requesting that it be annulled.

Further, a review of decisions handed down by CADE in the Brazilian courts, with the aim that they be annulled, has become more common in Brazil. For instance, in 2015, White Martins, which was allegedly involved in a cartel relating to the industrial and medical gas market, was relieved by the Judiciary Branch from the payment of one the largest fines ever imposed by CADE. The case is still being discussed at the Superior Court of Justice.

In addition to the penalties that may be imposed by CADE, other procedures may be used by third parties or by the MPF in relation to cartel practices. Criminal actions initiated by the Public Prosecutor's Office may lead to imprisonment of the executives involved for between one and five years.29 Separate settlements are usually negotiated with the MPF. These tend not to lead to imprisonment, but only to fines and to the obligation to perform community service. Usually, the amounts involved in settlements with the MPF are substantially lower than those in settlements with CADE.

In the civil sphere, the MPF may initiate public civil actions before the Brazilian courts claiming indemnification for moral and property damages caused to consumers or to society. Penalties in such cases are of a monetary nature, and amounts may vary according to several conditions, such as the extent of the damage that society allegedly suffered.

According to CADE's rules, settlements in cartel investigations require that the company or individual admits its participation in the practice under investigation.30 Because of this requirement, several defendants are unable to enter into settlement agreements with CADE. This is generally owing to:

  1. potential criminal investigations that may be influenced by such acknowledgment;
  2. potential civil claims that may be filed in Brazil or other jurisdictions;
  3. ongoing investigations in other jurisdictions;
  4. reputational and corporate governance issues; and
  5. questions as to whether the conduct actually took place or had effects within the Brazilian territory.

Further, CADE's rules establish that the defendant must collaborate with the authority. Requiring collaboration may also be a problem for companies, especially when it is impossible for a defendant to provide additional evidence to CADE. For example, investigations are sometimes initiated a long time after the conduct has taken place, and the defendant may therefore no longer have information or documents about it. Moreover, a company that would be willing to enter into a settlement agreement could lack information and documents because the business concerned has been sold. In such cases, companies would not be able to settle a case and end an investigation, or would end up with a low discount, which would mean that the settlement was not financially viable. Needless to say, neither defendants nor CADE would benefit from having to litigate cases until the end of the process – and possibly before the Judiciary Branch.

Finally, CADE's rules contain additional parameters for establishing the monetary contribution that would have to be paid to CADE for settling cartel cases. The rules set forth that the first defendant to propose a settlement would obtain a discount of between 30 and 50 per cent of the fine that would be paid by the end of the process. The second defendant would obtain a 25 to 40 per cent discount. Other defendants would obtain a discount of up to 25 per cent. If settlement is requested after the end of the discovery phase, the maximum potential reduction would be 15 per cent. Discounts are defined based on the level of collaboration provided by the defendants.

However, there may well be several discussions regarding the amount of the fine that would be applicable to the parties. In fact, the rules do not account for the culpability of the defendants. For obvious reasons, this is a policy that could be questioned. CADE has been trying to mitigate eventual discrepancies during the negotiations to create some proportionality, but this has been on a case-by-case basis so far.

Since the new rules for settlements were established by CADE in March 2013, it has experienced an increase in the number of applications for settlements.

VI 'DAY ONE' RESPONSE

Generally, dawn raids in Brazil are regulated by the Civil Procedure Code31 and only a judge may grant an order for a dawn raid to occur. Specifically for antitrust investigations, dawn raid orders may be obtained through two different proceedings: the SG,32 acting through CADE's Attorney General, requests the General Counsel for the Executive Branch to seek an order in a federal court to perform a dawn raid;33 or the MPF, based on the criminal provisions applicable to cartel behaviour, may independently seek a court order directly to obtain evidence in a certain cartel investigation. In both cases, CADE and the MPF (and the federal police in some cases) tend to cooperate and coordinate actions to carry out the dawn raid.

Judges may grant dawn raid orders if it is shown that there are good arguments on the merits (fumus boni iuris) and that there is the risk of imminent and irreparable harm (periculum in mora) if the order is not granted. Judges may freely evaluate whether the evidence indicated in each case is sufficient to fulfil the first requirement.34 The second requirement is usually fulfilled by CADE based on the argument that the dawn raid would avoid the destruction of documents and additional evidence.

In addition to companies' premises, CADE may request access to the homes of individuals under investigation. Courts are usually hesitant to grant orders for dawn raids on private addresses unless CADE is able to provide specific evidence to support such a request.

Dawn raid orders must be enforced by court officials and at least two witnesses. One of the court officials carrying out the dawn raid is required to read the court order and request access to the premises of the company under investigation.35 If access is denied, court officials may use force to enter the premises. Court officials are also required to draft a report of the dawn raid, which must be signed by both the officials and the witnesses.36

The Civil Procedure Code37 establishes that obstructing court orders may result in a fine that will be duly measured by the judge but that is limited to 20 per cent of the value of the claim.38 Further, obstructing a dawn raid may also be considered a crime under Brazilian law. The Criminal Code39 sets forth that disobeying a legal order from a public official may result in imprisonment40 and a fine.

During a dawn raid, the court officials, members of CADE, the federal police and the MPF may seek and seize objects, papers of any kind, commercial books, computers and digital files. However, these documents or materials must relate to a current investigation, as fishing expeditions are not allowed under Brazilian law. The evidence seized in a dawn raid must be sealed by court officials to guarantee its authenticity.41

As soon as a company learns about the dawn raid, it may question its legality before the courts. The company will be entitled to the right of full defence and may question whether the requirements for the dawn raid have been complied with by CADE and duly assessed by the court that granted the dawn raid order. If the dawn raid is considered illegal, the materials seen, copied or seized will also be considered illegally obtained and will be unsuitable for use in the investigation to be carried out by CADE.

Employees of the company or of its external counsel should always escort the officials responsible for the dawn raid. Employees must be instructed to treat the officials with courtesy, but to contact the legal department if they have doubts as to whether a particular document may be copied or a particular room may be searched. Privileged documents and documents that fall outside the scope of the investigation should not be copied or seized. A copy and a complete list of all documents analysed or seized by the authorities must be kept by the company.

Except in specific circumstances, employees should refrain from answering on-the-spot questions. Under Brazilian law, there is no obligation to answer such questions, and employees should be instructed to always indicate that they will not answer any questions unless authorised to do so by their employer's legal department.

During 2018, CADE made use of such proceedings to enforce its policies against cartel practices. For example, in July, CADE conducted dawn raids at companies that were allegedly involved in cartel practices in tenders involving medical equipment within the scope of the Resonance Operation42 and at companies that were allegedly involved in the cartel practices involving asphalt pavements within the scope of the Nexus Operation.43

VII PRIVATE ENFORCEMENT

In addition to administrative, criminal and civil investigations by CADE and the MPF, cartel perpetrators may also be subject to private lawsuits for claims for damages. Third parties may initiate lawsuits before Brazilian courts in an attempt to recover losses and damages that they may have suffered. Damages lawsuits are starting to become more commonplace, and the expectation is that this trend will continue, as well as CADE analysing more cartel cases and the lower state courts ruling on such cases. In fact, when examining the Liquefied Gas case,44 CADE expressly mentioned that customers should claim damages against the defendants in the investigation. CADE also started, in 2017, to forward the case records with alleged cartel practices to the State Public Prosecutor in order to file a lawsuit for damages, if necessary. This was the case in the Ceramic-rollers cartel,45 in which CADE had also included the name of companies that were allegedly damaged by the practice.

Adjunct Superintendent Diogo Thomson de Andrade held a conference in March 2018 entitled 'Interplay between public and private enforcement'. This demonstrates an internal interest in gaining a better understanding of the subject of private enforcement.

Under Brazilian law, most of the information gathered in an investigation may be made available to third parties at least until the end of the investigation.46 Thus, in CADE decisions, third parties may have access to a substantial level of evidence to be used in potential damage claims, but only after an investigation is over. In fact, in the alleged Subway cartel in São Paulo, CADE restated its position that the information and documents gathered in an investigation or obtained under a leniency agreement will only be available to third parties as a result of a judicial authorisation or at the end of the process.

Regarding disclosures ruled by the Judiciary Branch, a decision handed down by Minas Gerais State Lower Court determined that Gerdau must disclose its sales documents. The company was convicted in 2005 by CADE for colluding with two competitors in the steel beams market. Two companies that acted as distributors have filed a lawsuit to seek damages regarding their supposed losses during the cartel's active period. As those companies are gathering evidence to estimate the value of the damage allegedly suffered, the judge in the case ruled that, despite the provision of Brazilian tax law, Gerdau ought to provide documentation dating prior to 2000.

CADE opened a public hearing in 2017 regarding access to cartel evidence in order to draft a regulation to enhance private enforcement in Brazil. The fact that evidence may be made available by CADE to third parties at the end of an investigation may be considered a drawback to the leniency programme and to potential settlement agreements. This may be a relevant issue in cases involving alleged international cartels, considering that evidence made available to CADE in Brazil may end up in the hands of customers, and may therefore be used to form the basis of damages claims in Brazil or abroad. The result of the aforementioned public hearing was Resolution No. 21/2018, which provides in its Article 12 that compensation in the scope of a claim for damages may be considered as a mitigating circumstance for a defendant in the calculation of penalties provided for in the Brazilian Competition Act or in the calculation of the pecuniary contribution in the case of a settlement agreement. Further, CADE's General Attorney Walter de Agra Júnior publicly stated his interest in filing claims for damages caused by alleged cartel practices.47 However, as at November 2018, there is no formal rule on the matter.

The value of the damages granted in similar lawsuits in Brazil is dependent on several factors, such as the extent of the damage caused to the eventual plaintiff and the amount of evidence available in each case. The amounts awarded will also depend on how strongly plaintiffs are able to demonstrate that damages may be quantified. In fact, the calculation of potential damages will certainly be a central issue in the lawsuits, as this may lead to a lengthy process in Brazilian courts. In order to mitigate the obstacles regarding the calculation of damages, the Secretariat for the Promotion of Productivity and Competition Advocacy (known as Seprac) has published its guidelines on calculating cartel damages.48

VIII CURRENT DEVELOPMENTS

Competition policy has been implemented more efficiently in Brazil during 2018. This was evidenced through the update or creation of some guidelines and the promotion of CADE itself before both national and international authorities.

The main developments regarding CADE have been its efforts to reinforce the effectiveness of the provisions set forth in the Competition Act, but also to initiate an active participation in the enhancement of private enforcement in Brazil.


Footnotes

1 José Alexandre Buaiz Neto is a partner at Pinheiro Neto Advogados. The author thanks Daniel Rebello, Giovana Porto and Elis Brayner for their assistance with preparing this chapter.

2 A list regarding the national agreements entered into in 2018 by CADE may be found online at www.cade.gov.br/acesso-a-informacao/convenios-e-transferencias/acordos-nacionais.

7 Competencia y Proteccion al Consumidor en America Latina.

10 Law No. 4,595 of 31 December 1964, as amended.

11 For example, see Administrative Proceeding No. 08700.003070/2010-14, involving Banco do Brasil SA.

12 Brazil's leniency programme was initially dealt with in Provisional Measure No. 2,055 of 11 August 2000, which was later altered and converted into Law No. 10,149 of 21 December 2000. With the enactment of the new Competition Act in 2011, most of the provisions regarding leniency applications were incorporated into the Act.

13 Article 238, Paragraphs 1 and 2 of CADE's internal rules.

14 In cases involving practices that were previously unknown to CADE, the leniency programme will ensure total immunity. In situations in which investigations were initiated by CADE prior to the application, reductions of one-third or two-thirds of the potential fines will be determined by CADE's Board. See Article 86, Paragraph 4 of the Competition Act.

15 Article 86 of the Competition Act.

16 Article 86, Item I of the Competition Act.

17 Article 86, Item II of the Competition Act.

18 Article 86, Paragraph 1, Item I of the Competition Act.

19 Article 86, Paragraph 1, Item II of the Competition Act.

20 Article 86, Paragraph 1, Item III of the Competition Act.

21 Article 86, Paragraph 1, Item IV of the Competition Act.

23 Article 37, Item I of the Competition Act.

24 Article 37, Item II of the Competition Act.

25 Administrative Process No. 08012.010932/2007-18.

26 Article 38, Item I of the Competition Act.

27 Article 38, Item II of the Competition Act.

28 Article 225 of CADE's internal rules.

29 These penalties are provided for in the White Collar Act, Law No. 8,137/1990.

30 The requirement of admitting participation in the practice under investigation was already included in the previous rule in cases where a leniency agreement had been entered into.

31 Articles 839 to 843 of Law No. 5,869 of 11 January 1973, as amended.

32 Under the Competition Act, the SG-CADE is responsible for carrying out the investigation of antitrust cases.

33 Article 13, Item VI(d) of the Competition Act.

34 It is obviously easier for CADE to have a dawn raid order granted if there is a leniency agreement or material evidence of the illegal practice. For example, in cases involving anonymous tips, orders are usually denied (see Special Appeal No. 29,447/MG).

35 Article 842 of the Civil Procedure Code.

36 Article 843 of the Civil Procedure Code.

37 Article 14, Item V, Sole Paragraph of the Civil Procedure Code.

38 In Brazil, all claims must be quantified as monetary sums. The monetary sum may be the damages, when specific damages are sought, or may be established as an estimate by the plaintiff. In a request for a dawn raid, generally the value of the claim is close to 10,000 reais.

39 Article 330 of the Criminal Code.

40 If the obstruction is by means of threat or violence, the penalty is a period of detention of between two months and two years. However, if as a result of the threat or violence the act is not executed, the agent may be subject to imprisonment for a term of one to three years. Obviously, the agent of the threat or the violence may also face charges in relation to such a threat or violence.

41 CADE may request that the entire procedure be kept confidential. However, there have been cases in which leaks have occurred, and companies need to be extremely cautious with confidentiality in these cases.

44 Administrative Proceeding No. 08012.009888/2003-70.

45 Administrative Proceeding No. 08700.004627/2015-49.

46 In the Hydrogen Peroxide case, for example, CADE has made available in its decision relevant evidence obtained in its investigation.