Shaping Brazil’s Leniency Framework: Key Insights from the CGU/AGU Public Consultation

Introduction

The leniency agreement, provided for under Law No. 12,846/2013, is a key enforcement tool that allows companies involved in misconduct against the Public Administration to cooperate with investigations in exchange for benefits such as reduced sanctions and the possibility of continuing to participate in public procurement. It applies when the company admits wrongdoing, ceases the illicit conduct, and presents evidence that helps clarify the facts and hold other parties accountable.

At the federal level, CGU and AGU are the competent authorities responsible for negotiating and signing such agreements. Recently, these institutions launched a public consultation on a draft Interministerial Ordinance, aiming to update the regulatory framework for leniency agreements, enhance transparency, legal certainty, and predictability for both companies and the State.

The CGU/AGU Proposal

The draft builds on CGU and AGU’s extensive experience in negotiating leniency agreements and introduces several significant innovations, including:

• Regulation of the “marker” system, allowing companies to formally express their intention to cooperate even before concluding their internal investigations, thereby securing greater benefits for timeliness.
• Encouragement of voluntary self-disclosure, with clear rules for scenarios where companies may receive up to a two-thirds reduction in fines.
• A safe harbor for acquiring companies, limiting liability for irregularities committed before the acquisition.
• Objective criteria to avoid double jeopardy (bis in idem), including clear rules for crediting amounts paid in other domestic or foreign proceedings.
• A clearer methodology for calculating illicit gains, using transparent and technical criteria, with the possibility of discounts linked to the company’s financial capacity.
• More precise rules on transparency, with specific provisions for information subject to legal, personal, or commercial confidentiality.

Key Contributions Submitted

1. Legal certainty and predictability

• Mandatory prior consultation: we suggested that the CGU should formally consult with the Federal Prosecution Service (MPF), Federal Court of Accounts (TCU), and other oversight bodies before signing agreements, to reduce the risk of parallel investigations or conflicting claims.
• Agreement stability: We proposed including a clause preventing authorities from reopening the merits of an agreement based on later interpretative changes, except in cases of fraud or willful misconduct.
• Broad release: We advocated for an express clause confirming that full compliance with the agreement extinguishes all related administrative and civil sanctions at the federal level.
  
  

2. Incentives for self-disclosure

• Extended deadline: We recommended extending the nine-month deadline to twelve months in complex or multijurisdictional cases, allowing sufficient time for robust internal investigations.
• Coordination with international cases: We called for more predictability in recognizing foreign agreements to avoid overlapping sanctions.
  
  

3. Economic viability and protection of public funds

• Calculation methodology: In cases of technical disagreement, we suggest appointing a mutually agreed-upon independent expert to determine the value of illicit gains.
  
  

4. Integrity programs

• Subsequent condition, not a bar: we argued that the absence of a compliance program should not preclude signing a leniency agreement but rather be treated as a subsequent obligation.
  
  

5. Transparency and confidentiality

• Agreed public version: We proposed that the public version of the agreement be subject to prior approval by the company, with due regard for proportionality.
• Protection of sensitive information: We emphasized the need to safeguard strategic commercial information that could compromise competitiveness.
  
  

6. Avoiding double jeopardy

• Mandatory compensation: We recommend that amounts paid in other jurisdictions (including state and municipal controllers) be credited when related to the same facts.
  
  

7. Monitoring

• Independent monitor by consensus: we defended the option of appointing a monitor chosen jointly by the company and CGU/AGU, with shared costs.
• Automatic termination: We proposed that monitoring obligations automatically cease once the final report confirms compliance.
  
  

Conclusion

In submitting our contributions, we aimed to align transparency and enforcement effectiveness with the realities of corporate integrity, economic sustainability, and regulatory predictability. We will closely monitor the next steps in this consultation and are ready to assist companies in navigating investigations, strengthening compliance programs, and managing potential negotiations with authorities.