In recent trial sessions, the Court of the Administrative Council of Economic Defense (Cade) discussed whether the non-establishment of administrative proceedings to investigate alleged anticompetitive crimes reported by the signatories of leniency agreements would prevent them to obtain the certification of proper execution. Leniency Agreements are an important instrument for Cade'senforcement, especially for the investigation of collusive practices that are difficult to detect, such as cartels.
Cade’s General Superintendence (“CADE/SG”)is the body responsible for signing the Leniency Agreements, while the Cade Court is responsible for verifying if the agreement was executed in accordance with its terms. Once the Court certifies that the agreements were properly executed, it confirms the benefits sought by the signatories: the termination of Cade's punitive action or the reduction of applicable administrative penalties, as well as the extinction of the punishability of crimes related to cartel practice.
In the case examined, which runs under secrecy, the rapporteur councillor considered that the Leniency Agreement could not be certified as executed, sinceits content was not able to assist in the investigation of the reported anticompetitiveacts. In his opinion, the opening of an administrative proceeding to investigate the unlawful acts reported would be a consequence of the contributions made by the signatories during the investigation phase conducted by Cade’sGeneral Superintendence.
The rapporteur explained that the evidence brought by the signatories was uncompelling and that there were others that could have generated a different outcome from the filing of the administrative inquiry based on the information provided by the signatories. The rapporteur did not discriminate such evidence because of the secrecy of the procedure, but he mentionned,as an example, ongoing procedures in the Federal Prosecutor's Office that could have been presented by the signatories.
Accordingly, the rapporteur voted against the certification of the execution of the Leniency Agreement, on the gorunds that the signatories did not produce sufficient evidence for the administrative inquiry to result in the openingof an administrative proceeding able to investigate and punish alleged anticompetitive acts.
Another counselor of the Cade Court disagreed, understanding that, in fact, it would be up to the General Superintendence to evaluate the evidence offered when signingthe leniency agreement and to conduct investigations based on the information brought by the signatories.
According to the counselor, the signatory is not aware of the entire evidential set of which the General Superintendence has at the time of the signingof the agreement, so that it cannot foresee the repercussions of the evidence brought by him or her in the investigations promoted by the General Superintendence. Other members of the Cade Court stressed that it is up to the General Superintendence to establish minimum standards of proof for the signingof leniency agreements, and it also hasthe prerogative to examine such evidence, not the Cade Court.
In view of this discussion, the plenary, by a majority, certified that the leniency agreement was properly executedAlso, the Court established that the upcoming decision of the General Superintendence not to open an administrative proceeding would not be a reasonnot to certify its execution.
The plenary decision highlighted Cade's concern not to transfer the burden of the investigation’s results to the signatories of the Leniency Agreement, who would have fullfiledall the obligations under which they commited themselves to deliver all documents and information available to them about the facts reported.