Compliance and Investigations Newsletter No. 12 – December 2022

The Compliance and Investigations Newsletter aims to provide information on the main media news, trends, cases and legislation concerning compliance matters, in Brazil and abroad. This material is for informational purposes and should not be used for decision making. Specific legal advice can be provided by our lawyers.

Enjoy your reading!

Compliance and Investigations Team

CGU and AGU publish ordinance regarding criteria for reduction of fines in leniency agreements

The Brazilian Office of the Comptroller General (“CGU”) and the Brazilian Office of the General Counsel (“AGU”) published, on December 07, 2022, the Interministerial Ordinance No. 36 (“Ordinance”), which provides for criteria to reduce, in up to two thirds (2/3), the amount of fines applied within the scope of leniency agreements.

The Ordinance defines the methodology to measure the reduction index in leniency agreements, which encourages specific conducts by companies. In regard to the degree of cooperation from a company, the Ordinance establishes that the reduction index must take into consideration whether the company carried out an appropriately comprehensive internal investigation regarding the wrongdoings and the individuals involved in misconduct.

In addition, the Ordinance established the following criteria for evaluating internal investigations:

• timely submission of legally valid documents and information;
• breadth and relevance of investigations carried out;
• relevance, quantity and sufficiency of the submitted information; and
• quantity and quality of the evidences gathered and provided.

For more information, access the full Ordinance here.

DOJ, SEC and Brazilian authorities sign agreement with UOP LLC (subsidiary of Honeywell International Inc.)

On December 19, 2022, the Brazilian Federal Prosecution Office (“MPF”), the Brazilian Office of the Comptroller General (CGU), the Brazilian Office of the General Counsel (AGU), the U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) entered into a leniency agreement with the company UOP LLC (subsidiary of Honeywell International Inc.).

The agreement refers to bribes paid by UOP LLC, between 2010 and 2014, to executives of Brazilian state-owned oil company Petrobras, in exchange for retaining and maintaining contracts related to the construction of the oil refinery Premium.

The agreement establishes the payment of BRL 638,046,365.87 to the Brazilian authorities, of which:

• BRL 456,346,310.83 must be paid to Petrobras for reimbursement for damages and disgorgement; while
• BRL 181,700,055.04 must be paid in fines established by the Brazilian Clean Company Act and Improbity Act Law.

In addition, UOP LLP agreed to pay USD 79,000,000.00 to DOJ and USD 81,000,000.00 to SEC, which also contemplates bribes paid to Algerian government officials in exchange for retaining contracts with Algerian state-owned oil company Sonatrach. However, DOJ and SEC established that part of the payments made to Brazilian authorities will be offset from the total amount agreed with U.S. authorities.

For more information, access the official press releases published by MPF, CGU, DOJ and SEC.

CGU and AGU sign leniency agreement with Keppel Offshore & Marine

On December 19, 2022, the Brazilian Office of the Comptroller General (CGU) and the Brazilian Office of the General Counsel (AGU) entered into a leniency agreement with Keppel Offshore & Marine (“Keppel”).

The agreement was signed within the scope of the global cooperation agreement entered into in 2017 by Keppel with the Brazilian Federal Prosecutor’s Office (MPF) and the U.S. Department of Justice, which relates to bribes paid to government officials between 2001 and 2014, in exchange for benefits in contracts with Brazilian state-owned oil company Petrobras.

The agreement amounts to a total of BRL 1,223,657,710.19, of which BRL 880,086,254.93 was already paid due to previous agreements. As such, Keppel must pay the remaining balance of BRL 343,571,455.25.

For more information, access the official press release at CGU’s website.

Brazilian Government publishes Law nº 14,478/2022, which regulates cryptoassets 

On December 21, 2022, the Brazilian Government published Law No. 14,478 (“Cryptoassets Act”), which regulates matters concerning “virtual assets” (or cryptoassets).

The Cryptoassets Act amended the Criminal Code to establish a new definition of crime in its Article 171-A: “fraud by means of virtual assets, securities or financial assets, punishable by four (4) to eight (8) years of imprisonment.

In addition, the Cryptoassets Act amended the Money Laundering Act to include the possibility of increasing the sentence, up to one third (1/3) to two thirds (2/3), in case of :

• misconduct involving the use of virtual assets;
• repeated occurrence of criminal misconduct; or
• intermediation of criminal organization.

For more information, access the full Crypto assets Act here.