|
|
 | | From: | Edmund Fitzgerald | | Subject: | CARTEL WATCH BRAZIL | | Date: | Sun, 23 Jan 2005 00:26:48 -0500 |
|
|
 | From:
http://strategis.ic.gc.ca/epic/internet/inimr-ri.nsf/en/gr119248e.html
CARTEL WATCH BRAZIL
The Brazilian competition law agencies have stepped up anti-cartel
enforcement and made cartel prosecution a priority for 2003 and 2004. To
date over 260 cartel investigations have been conducted into industries as
diverse as marine transportation, steel, and orange juice, including some
cartels such as vitamins and lysine that have been vigorously investigated
and prosecuted by a number of other jurisdictions around the world.
Federal Law 8.884 of 11 June 1994 defines violations of the economic order
as: "any act in any way intended or otherwise able to.... limit or restrain
free competition (or)...control a relevant market..." Five specific types
of collusive practices that produce such effects are identified as: price
fixing, market division, bid-rigging, uniform practices and restrictive
agreements. Cartels are defined in CADE Resolution 20/98 as "...specific
arrangements, explicit or tacit, made by competitors in the same market and
covering a substantial part of the relevant market, involving matters such
as prices, production quotas and territorial distribution and allocation, in
a joint attempt to raise prices and profits to near monopoly levels."
Cartel investigations are initiated by the Secretariat of Economic
Accompaniment (SEAE) or the Secretariat of Economic Defense (SDE), either ex
officio or by third party complaint. The SDE presides over the case,
conducts the final hearings and submits an investigative report to the
Administrative Council for Economic Defense (CADE), with recommendation to
prosecute or to absolve the accused firms. When investigations are
commenced by the SDE, the SEAE performs supplementary investigations and
prepares technical opinions to be included in a final report to CADE. CADE
as the adjudicative body makes the final administrative decision, which is
subject to judicial review by the Federal Courts. If the firms are found in
violation, CADE will sentence them to monetary fines that range from 1 to 30
percent of their annual sales.
Ten to 50 percent percent of the amount of the fine imposed against the
legal entity may be imposed against individual company officers who acted on
behalf of the corporate offender. Such fines must be borne by the
individuals and may not be paid by the company.
Criminal Prosecution
In addition to the administrative prosecution carried out by the SDE,
cartels have been prosecuted criminally as well. Law 8.137 of 27 December
1990 defines cartel formation as a crime, punishable with imprisonment of
from two to five years.
Leniency Program
Federal Law 10.149 of 21 December 2000 implemented a leniency program
designed to encourage parties involved in cartel conspiracies to cooperate
with authorities and provide evidence of illegal activities. Law 10.149/00
provides anti-trust authorities with the power to grant administrative
amnesty associated with full, automatic criminal immunity for conspirators
cooperating with antitrust investigations, particularly important in a
system where cartels are prosecuted both administratively and criminally.
Law 10.149/00 establishes that the SDE may grant full amnesty or reduce by
one or two-thirds the penalty applicable to individuals or corporations that
have violated anti-trust law and choose to collaborate with the
investigations. Leniency agreements are only valid provided the SDE does not
already have enough evidence to secure the conviction of the corporation or
individual at the time the agreement is proposed. The leniency program
together with the new investigative powers also introduced by Law 10.149/00
have enabled Brazilian antitrust authorities to increase monitoring and
prosecution of cartel agreements among competitors.
Bilateral Treaties
On 26 October 1999 Brazil and the United States signed a Mutual Legal
Assistance Treaty to facilitate cooperation among their antitrust agencies
for international cartel enforcement. The Mutual Legal Assistance Treaty
entered into full force in June 2002 and will be put to the test for the
first time in the investigation of an alleged agreement between Enron and
AES to rig a bid for the privatization of a Brazilian power company in April
1998. On 12 December 2001, Brazil also signed an anti-trust cooperation
agreement with the Russian Federation. Another important development in
international cartel enforcement was the confirmation of Brazil's
association with the "OECD's Recommendation Concerning Effective Action
Against Hard Core Cartels".
More informations, please contact:
MARCONDES ADVOGADOS ASSOCIADOS
Av. Paulista, 949 - 3rd, 4th, 6th and 9th floors
São Paulo - SP Brazil - CEP 01311-917
Tel.: (55 11) 3253-9199 - Fax.: (55 11) 3285-2121
www.marcondes.com.br
|
|
|
