FCPAméricas Blog

Brazilian Federal Prosecutors Issue Guidance on Leniency Agreements

Author: Carlos Ayres

MPFOn August 24, 2017, the 5th Chamber of Federal Prosecutors, the body of the Brazilian Federal Prosecution Service dedicated to providing integration and coordination in the fight against corruption and responsible for ratifying leniency agreements signed by federal prosecutors, issued guidelines 07/2017 on leniency agreements for Brazilian Federal Prosecutors.

There is no new and significant information in the guidelines for those handling leniency agreements with federal prosecutors in Brazil. The guidelines formalize in a written document some practices that Federal Prosecutors have been adopting in settlement negotiations and agreements they sign in bribery-related cases. The guidelines, however, are a welcome development as they provide helpful information for companies and lawyers negotiating their first settlements with the Federal Prosecutors under the anti-bribery regime. Below is a summary of the 18 items set forth in the guidelines.

  1. The negotiation and formalization of the leniency agreement should be carried out by the federal prosecutor who has jurisdiction to file an improbity law suit or the law suit set forth in the Clean Companies Act.
  1. The beginning of the negotiations should be in parallel or after the plea agreement in the criminal area.
  1. The beginning of the negotiations should be marked with the signature of a “Confidentiality Agreement”. It should be kept under seal during the entire negotiation and, after the leniency is signed, until after the period set forth in the agreement.
  1. The beginning of the negotiations of the leniency agreement should be communicated to the 5th Chamber of Prosecutors.
  1. The negotiations should be carried out by more than one Federal Prosecutor, preferably, for those responsible for criminal and improbity matters. If the negotiations are carried out together with other authorities (e.g., CGU), the agreements will be signed in separate documents.
  1. The minutes of all meetings should be part of the administrative proceeding of the leniency agreement and include information about the participants and a brief description of the subjects discussed.
  1. The leniency agreements must have clauses that address, at a minimum, the following points:
    1. Legal basis for the leniency.
    2. Description of the parties.
    3. Demonstration of public interest. This includes opportunity to be the first company to reveal facts unknown to the authorities, and effectiveness and utility (in other words, capacity of the company to collaborate with the investigation and provide information unknown to the authorities, as well as how the company plans to provide the evidence).
    4. Objective of the agreement. This includes a brief description of the facts that will be reviewed and by whom. Detailed information should be included in the annexes (one annex for each fact).
    5. Obligations of the company including means and deadlines to provide the information, stop wrongdoing, implement a compliance program and submit the program to an external audit, when determined necessary, pay restitution of damages and pay a fine.
    6. Possibility about exchange of evidence with public authorities.
    7. Cooperation with foreign authorities.
    8. Authorization to sell company’s assets.
    9. Waiver of right against self-incrimination.
    10. Ratification by the 5th Chamber of Prosecutors
  1. Fines and sanctions will be applied based on the principal of proportionality, balancing the benefits of the information provided against the benefit given to the company.
  1. The amounts collected should not be invested in entities of the public administration.
  1. There will be no full release and payments made for damages and losses, which will be considered an anticipation of payments. This means that, if amounts paid to sign the leniency are later deemed lower than the actual damages or losses, it should be complemented.
  1. There will be an index with a detailed description about the contents of each annex.
  1. The prosecutors must reject the negotiator and request another if they feel uncomfortable or at moral risk with the negotiator appointed by the cooperating company.
  1. The negotiations, to the extent possible, should observe the obligations agreed to by Brazil as signatory to the OECD, United Nations and OAS anti-bribery conventions.
  1. Once the agreement is signed, it should be sent to the 5th Chamber of Prosecutors for ratification.
  1. The proceeding related to the leniency will be analyzed by a member of the Chamber and should be ratified by the Chamber.
  1. If there is need for further information or diligence, the proceeding will be returned to the Federal Prosecutor’s Office with jurisdiction for the case.
  1. If the leniency is ratified, an excerpt of the decision will be published, preserving, if applicable, the secrecy of the proceeding.
  1. Any doubts should be addressed to the 5th Chamber of Prosecutors.

The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.

© 2017 FCPAméricas, LLC

Carlos Henrique da Silva Ayres

Post authored by Carlos Henrique da Silva Ayres, FCPAméricas Contributor

Categories: Brazil, Enforcement, English, FCPA

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