Brazilian prosecutors’ absence casts doubt on multi-agency cooperation agreement
14 de August de 2020

No Comments

Brazil’s well-received plan for its enforcement agencies to coordinate leniency deals could be thwarted by the Federal Prosecution Service’s refusal to come to the table, experts say.

The anti-corruption section of Brazil’s Federal Prosecution Service (MPF) said on 10 August  that it is against signing the agreement, which sets out general principles for improving coordination in settlements, because it will be excluded from negotiations and must share confidential information with other agencies.

The MPF said the cooperation agreement, which was signed on 6 August between the Comptroller General of the Union (CGU), the Office of the Attorney General (AGU), the Federal Supreme Court and the Federal Audit Court (TCU), will not improve cooperation but rather harm the performance of each of the signatory agencies. It also claimed that the deal is unconstitutional because it shrinks the scope of its anti-corruption powers as de!ned in Brazil’s constitution.

The cooperation agreement formalises and aims to boost information-sharing, and dictates that leniency deal negotiations are to be handled solely by the CGU and AGU. Under the old system, Brazilian companies had to separately negotiate with different agencies.

The MPF, Brazil’s main criminal enforcement body, has turned its nose up at the idea of being excluded from any leniency agreement negotiations. The agency said that the cooperation agreement will limit its powers to investigate and strike plea deals with individuals.

The agreement “does not meet the public interest”, the MPF said.

Brazil’s prosecutor general and head of the MPF, Augusto Aras, was initially in favour of the agreement – and he even appears as a signatory to the original document – but he decided to withhold his consent until the MPF’s anti-corruption arm analysed the agreement, according to local reports.

Lawyers are generally positive about the multi-agency agreement, noting that it will streamline and unify corporate crime enforcement.

Luís Wielewicki at Sampaio Ferraz in São Paulo said: “In past settlements, there was no coordination like this.” He added: “We negotiators had to go to everyone and reach a settlement and negotiate with agencies simultaneously.”

Wielewicki said that the bribery settlement that is his client, London-headquartered oil and gas company TechnipFMC, signed in 2019 is a clear example of how there was previously no “single shop” for leniency agreements in Brazil. The company negotiated separately with the CGU, AGU and MPF, as well as US authorities, before eventually agreeing a deal with all agencies to pay a total of $300 million to resolve allegations of bribery.

Rogério Taffarello at Mattos Filho Veiga Filho Marrey Jr e Quiroga Advogados in São Paulo said that the coordination agreement is “significant”. He added that while it only contains general principles currently, it should pave the way for more specific joint procedures in the future.

“The agreement implies that the agencies have recognised over the last couple of years that we’ve not had enough certainty for companies or individuals in adhering to leniency agreements,” he said. “It’s still a process under construction.”

However, without the MPF’s participation, the agreement risks being weaker than intended or even completely redundant, according to other Brazilian practitioners, as companies will still have to undertake multiple sets of negotiations.

“The agreement would be a fantastic idea if they managed to get the prosecutors in,” said Eloy Rizzo Neto at Demarest in São Paulo. “But when you have an important player like the MPF not there, we struggle.”

He said that the agreement could raise questions about the CGU and AGU’s ability to negotiate matters linked to misconduct by government officials. Both bodies form part of the government, unlike the MPF, which is an independent body.

The MPF and some lawyers said the agreement’s purpose is also undermined by the absence of other public bodies, such as the Administrative Council for Economic Defence (CADE), the country’s antitrust authority, and the central bank.

Rizzo said that their absence from the deal, in addition to the MPF’s, makes no sense if Brazilian authorities are trying to create a “one-stop shop” for leniency negotiations. He added that due to the sensitive nature of the MPF’s work, it is understandable that the agency is hesitant to enter an information-sharing agreement with the other agencies because it could lead to leaks.

Other lawyers took a more relaxed view of the MPF’s refusal to sign the agreement. Taffarello said that the document will not stop the MPF or state prosecutors from cooperating with the other agencies as it currently does.

Carlos Ayres at Maeda Ayres & Sarubbi Advogados in São Paulo said that companies will still approach the MPF in leniency negotiations.

“There is no sign that anything will change or the MPF will be excluded from talks, and companies don’t want that, because if they don’t reach an agreement with the MPF, they can be sanctioned by them later,” he said. “So even if the MPF is left out of the cooperation agreement, companies will still try to involve them to protect themselves.”

Will Barbieri contributed to this report.

Anti-bribery & corruption


Share this post: