Compliance and Investigations Newsletter – August 2024

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 legal team.

Enjoy reading!

Compliance and Investigations Team

CGU replaces summary judgment with settlement agreement in Administrative Liability Proceedings

At the “Business Integrity Day” event, held on August 28 and 29, 2024, the Brazilian Office of the Comptroller-General (“CGU”) announced Normative Ordinance No. 155/2024, which repeals Normative Ordinance No. 19/2022 and replaces the summary judgment with a settlement agreement in Administrative Liability Proceedings (“PAR”).

The settlement agreement is simpler, more straightforward, and faster negotiation instrument compared to the leniency agreement when it comes to determining the liability of legal entities for harmful acts against Brazilian or international governments.

The Normative Ordinance No. 155 expands the requirements for entering into the settlement agreement in comparison with the summary judgement. It also introduces the capacity for the CGU to condition the agreement’s execution on the legal entity’s commitment to implementing or improving an integrity program.

Normative Ordinance No. 155 entered into force on the date of its publication and converted summary judgment requests into settlement agreement requests. However, legal entities in this situation have ten days, counted from the date of publication, to waive this alternative.

To find out more, please see Normative Ordinance No. 155 of 2024 and the client alert published by our Compliance and Investigations team.

CGU sanctions seven companies for violating the Clean Company Act and Public Procurement Law, and formalizes two PAR summary judgments

On August 15, 2024, the CGU published eight PAR decisions in the Federal Official Gazette of Brazil, sanctioning seven companies and formalizing two summary judgments.

The association Cruzada Maranata de Evangelização and the companies Construtora Zag Ltda.; ASS Transportes Ltda.; Hortus Brasil, Comércio, Importação e Exportação Ltda.; and AMS Comércio de Materiais em Geral EIRELI were fined for violating Law No. 12,846/2013 (“Clean Company Act”) and Law No. 8,666/1993 (“Former Public Procurement Law”). In addition to Brazilian companies, the CGU also fined Indian company Bharat Biotech International Limited.

The sanctions also included:

• Extraordinary publication of sanctioning rulings;
• Declaration of ineligibility; and
• Temporary suspension of the right to bid and contract with the government.

In this regard, although law firm Monteiro e Cavalcanti Advogados Associados was not fined, it was declared ineligible for government contracts.

In addition, the CGU published two rulings granting summary judgment requests for World Mineral Resources Participações S.A. and Vicunha Serviços Ltda. to settle the PARs brought against them. As a result, reduced fines were imposed, and extraordinary publication of the sanction ruling was waived.

The sum of the fines amounted to nearly BRL 37 million.

To find out more, please access CGU’s article.

AGU requests deadline extension to settle Lava-Jato leniency agreements

On August 13, 2024, the Federal Office of the Attorney-General (“AGU”) requested a 30-day deadline extension to the Brazilian Federal Supreme Court (“STF”) for concluding a conciliation proposal regarding the new terms of Lava-Jato Probe’s leniency agreements.

The AGU had already made two similar requests as to properly address all the complex matters surrounding these cases. In this regard, Attorney General Jorge Messias clarified that this will be the AGU’s last request for an extension and that negotiations will be concluded once the additional deadline has expired, and legal entities will have no further opportunity to discuss the terms of the agreements.

Seven contractors participate in the contractual discussions, which include clauses that consider the companies’ financial capacity and the possibility of waiving late payment fines on overdue installments and interest on outstanding debt, as well as using tax loss credits to settle the debt.

Justice André Mendonça, who serves as rapporteur for the case in the STF, will analyze the AGU’s request.

To find out more, please access AGU’s report.

CGU and the Ministry of Transport organize “Integrity in Focus Workshop: Uniting Public and Private Sectors.”

On August 20 and 21, 2024, the CGU and the Ministry of Transport (“MT”) held the “Integrity in Focus Workshop: Uniting Public and Private Sectors” (“Workshop Integridade em Foco: Unindo Setores Público e Privado“), which gathered leaders and experts from the government and private companies to discuss integrity, transparency, and compliance in the transport sector.

The workshop stems from Technical Cooperation Agreement No. 06/2024, entered into in February 2024 between the CGU and the MT to establish mechanisms for sharing information, insights, and technological knowledge among agencies focused on developing and implementing measures to foster integrity and transparency and to prevent and combat corruption, particularly regarding administrative contracts entered into between the MT and its entities connected to private organizations.

The event welcomed representatives of the Brazilian Federal Court of Accounts (“TCU”) and the National Land Transportation Agency (“ANTT”). TCU’s President Bruno Dantas spoke of the TCU’s work to assess the Federal Government’s Integrated Transport Plan, through which the TCU emphasized the importance of planning to attract investments and ensure the safety and efficiency of Brazilian transportation systems.

ANTT’s Director-General, Rafael Vitale, joined the panel “Perspective of the Brazil Pact for Business Integrity in the Vision of Companies Linked to the Ministry of Transport,” emphasizing the weight placed by the ANTT in the balance between public and private interests to enable public-interest private projects. The Director-General reinforced the potential of the Brazil Pact to contribute to the implementation of integrity practices in companies that entered into contracts with the Federal Government.

Find out more about the workshop in the CGU article and the Ministry of Transport’s article.

Find out more about the TCU’s participation and the ANTT’s participation in the event, as well as about Technical Cooperation Agreement No. 06/2024 and the Brazil Pact for Business Integrity.