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CGU publishes ordinance on settlement agreement under the Brazilian Clean Company Act to replace summary judgment of PAR
August 29th, 2024
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At the Corporate Integrity Day event held today, August 29, 2024, in Brasília/DF, the Brazilian Office of the Comptroller-General (“CGU”) announced the publication of Normative Ordinance No. 155 of 2024, which repeals Normative Ordinance No. 19/2022.
The repealed ordinance addressed summary judgments in Administrative Liability Proceedings (“PAR”) as a simpler and faster negotiation option than the leniency agreement.
Normative Ordinance No. 155, which enters into force today, provides for the signing of what is now known as a “settlement agreement” within the scope of Law No. 12,846/2013 (“Brazilian Clean Company Act”), defined as follows:
“(…) a negotiation instrument resulting from the exercise of the State’s sanctioning power, which aims to foster a culture of integrity in the private sector, through the adequate, proportional and swift accountability of legal entities for the practice of harmful acts against the national or foreign public administration.”
It is worth noting that requests for summary judgment proposed on the basis of the repealed ordinance and which are still being analyzed will automatically be converted into requests to enter into a settlement agreement. In this case, Normative Ordinance No. 155 ensures that the legal entity can withdraw from the negotiation instrument within ten days of its publication.
In contrast to the repealed ordinance, Normative Ordinance No. 155 details the requirements for signing a settlement agreement, including the requirements relating to compensation for the damage caused and the advantage obtained as a result of the violation. The new ordinance also establishes that the CGU can condition the signing of the settlement agreement on the legal entity’s commitment to adopt or improve its integrity program.
At today’s event, the CGU also presented an updated version of its “Integrity Program: Guidelines for Private Companies” manual, published in September 2015, still under the former regulatory decree of the Brazilian Clean Company Act. The new manual will be available soon and provides important updates considering the 2022 federal decree that regulates the Brazilian Clean Company Act, as well as ESG (Environmental, Social and Governance) and integrity concepts in public tenders and government contracts.
Demarest’s Compliance and Investigations team is available to provide any further clarifications that may be necessary.
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