Thursday, 9th December 2010 by Rachel Bull

Acting head of Brazil′s Council for Economic Defence (CADE), Fernando Furlan, has confirmed that the country′s antitrust regime will see a radical overhaul by mid-2011.

Speaking on Tuesday at Latin Lawyer′s M&A conference in São Paulo, Furlan said that Senate approval of procedural and structural changes to Brazil′s competition regulation is highly likely in the ′near future′.

The regime will be ′deeply and broadly changed′ from the government′s original antitrust amendment bill, he said.

Furlan said it is ′reasonable to expect′ the new bill would be approved in the first six months of 2011.

Following a review of the government′s original draft amendment to Brazil′s competition law, the House of Representatives made significant changes to the bill. It was then passed to the Senate, which made further changes. The newly amended bill will now be sent back to the House for a further review. It must either accept the changes or revert to the original proposal.

The new bill includes major structural changes to the existing three-tier enforcement system. Furlan said CADE and the Secretariat of Economic Law (SDE) would merge. The Secretariat for Economic Monitoring (SEAE) will remain, but will relinquish its merger review responsibilities to the newly merged enforcer. It will keep its competition advocacy role.

Tito Amaral de Andrade, at Machado Meyer Sendacz e Opice Advogados in São Paulo, supports the idea. ′It is important to have a centralised body. It will reduce bureaucracies and enhance efficiency,′ he says.

Leopoldo Pagotto, at Xavier, Bernardes, Bragança, Sociedade de Advogados in São Paulo, says this is one of the best aspects of the bill. ′I hope the merger will reduce red tape dramatically,′ he says. ′When we submit a merger filing in Brazil, it is necessary to file at each of the three antitrust agencies. In spite of the coordination that has been achieved in recent years, I think mere administrative measures do not significantly decrease red tape. When approved, the new Brazilian antitrust law will make the merger review simpler.′

Among its changes to the bill, the Senate proposes very high merger thresholds. The government′s original bill stated that filing would be mandatory for companies with a turnover of more than 400 million reais (US$236 million). The Senate, however, increased the turnover thresholds to 1 billion reais (US$591 million). The House of Representatives added that the target company′s turnover should be at least 30 million reais (US$17.7 million), which would reduce the number of cases under review. The Senate increased this to 40 million reais (US$23 million).

The Senate′s amendments also reduce the minimum fine for antitrust violations from 1 per cent to 0.1 per cent of a company′s annual turnover. The maximum fine will also be reduced from 30 per cent to 20 per cent of turnover.

(Latin Lawyer 09.12.2010)

(Notícia na Íntegra)