Publications

Category: Labor and employment

The labor legislation provides that for every 12 months worked, the employee is entitled to 30 days of vacation, which must be taken within the 12 months following the date on which the employee accrued this right. For each vacation period, the employee must be paid the remuneration that would be due to him as though he had worked, plus the constitutional increase of 1/3 of the amount, up to two days before the vacation period granted.

In 2014, the Superior Labor Court (TST) promulgated Precedent 450, which provides as follows:

“Payment is due at twice the remuneration for vacation, including the constitutional one third, based on article 137 of the Consolidated Labor Laws, when, even when taken at the appropriate time, the employer has breached the deadline provided for in article 145 of the same law.”

In other words, Precedent 450 of the TST establishes that the payment of double vacation pay, legally provided for when vacation is enjoyed outside of the time period, is also applied in the event that the employer pays vacation after the legal deadline, even if the vacation is enjoyed at the appropriate time.

In 2017, the governor of the state of Santa Catarina proposed a petition for breach of a fundamental precept (ADPF), which is an instrument for control of constitutionality used to prevent or repair injury to a fundamental precept, the subject matter of which is the constitutionality of Precedent 450 of the Superior Labor Court. This is ADPF 501.

The filing of ADPF 501 was supported, basically, on the fact that the TST allegedly applied, by analogy, a sanction provided for for conduct other than that indicated in the precedent. Thus, since the Judiciary is usurping a typical function of the Legislative Branch, there was said to be breach of the constitutional principle of separation of powers, in affront to the Federal Constitution.

After the labor reform, the legislation itself now stipulates that "precedents and other pronouncements of case law issued by the Superior Labor Court and by the Regional Courts of Labor Appeals may not restrict rights legally provided for or create obligations that are not provided for by law.” Thus, the creation of obligations not provided for by law, as stated in Precedent 450, is now expressly forbidden by the labor legislation itself.

Justice Alexandre de Moraes, reporting judge for the ADPF, found that, even if the obstacles related to legality and the use of analogy were overcome, it would be impossible to carry the penalty imposed for a given case of default to a different situation, since sanctions rules have a restrictive interpretation, which means that they cannot have a broader interpretation than that conferred by the literalness of the law.

The Attorney-General of Brazil also issued an opinion favorable to the understanding that it is impossible to apply the sanction provided for in Precedent 450 of the TST: "it is not incumbent on the Superior Labor Court to change the scope of application of the rule itself, in order to reach a situation not contemplated by it, especially since it is a rule with sanctioning content and, therefore, of restrictive interpretation.”

Based on the above-mentioned grounds, the ADPF was granted relief in a majority opinion to declare the unconstitutionality of Precedent 450 of the Superior Labor Court and invalidate all court decisions that have not become final and unappealable, which, supported by this precedent, have applied the penalty of double payment in the event of late payment of vacation pay.

In all actions in which there is a judgment that is not yet final and unappealable in this regard, therefore, it is possible for companies to request a review of the decision, not least because the decisions handed down in the scope of claims of breach of a fundamental precept are unappealable and binding on all proceedings that still discuss the same matter. There are enough matters to litigate these decisions all the way to the Federal Supreme Court (STF).

Category: Banking, insurance and finance

The Legal Framework of Securitizations, established by Law No. 14,430/22, defined the certificates of receivables in a broad and comprehensive way, admitting their use in securitization in the most varied sectors of the economy, which will allow the expansion and consolidation of the receivables credit market in Brazil beyond the real estate, agribusiness and financial sectors.

In the cases in which they are publicly offered or admitted for trading on a regulated securities market, certificates of receivables are classified as securities, as set forth in Article 20, § 1, of the Legal Framework of Securitizations, which fits them in the definition of Article 2º, IX, of Law No. 6,385/76 (“Capital Markets Law”).

Their public distribution in the capital market, therefore, is subject to prior registration with the Brazilian Securities Commission (CVM), as provided for in Article 19 of the Capital Markets Law, except in situations in which such registration is expressly waived in accordance with the regulatory rules issued by the Brazilian Securities Commission, according to the competence delegated to it by Articles 8,  I, and 19, § 5 of the aforementioned law.

In the regulatory sphere, issuances and offers for public distribution of securities are regulated by Instruction No. 400/03, issued by the Brazilian Securities Commission (“CVM Instruction No. 400/03”), which regulates public offerings for the distribution of securities on primary or secondary markets and aims to ensure the protection of investors and the integrity of the capital market.

CVM Instruction 400/03 requires that any public offering for the distribution of securities in the primary and secondary markets, in the Brazilian territory, addressed to individuals, legal entities, fund or universality of rights, residents, domiciled or incorporated in Brazil, be previously submitted for registration with the Brazilian Securities Commission. This is a relatively time-consuming and costly process due to the need to preparation, review and collection of various documents that are submitted for review and approval by the Brazilian Securities Commission through many protocols.

In order to facilitate issuers’ access to the capital market and reduce the time and costs of public issuances, the capital market also relies on another regulation, the Instruction No. 476/09, also issued by the Brazilian Securities Commission (“CVM Instruction No. 476/09”), which contains provisions that automatically exempt public offerings directed to a restricted number of professional investors from registration, as defined in Article 11 of Resolution No. 30/21, issued by the Brazilian Securities Commission (“CVM Resolution No. 30/21”).

In addition, this regulation allows the securities offered to be traded on the secondary market, even if the issuer is not registered with the Brazilian Securities Commission. For this, trading must be restricted to qualified investors, as defined in Article 12 of CVM Resolution No. 30/21. The regulator assumes that these investors have sufficient knowledge to assess the risks of the securities offered and, therefore, a prior review of the documentation by the regulatory entity would not be necessary.

In this sense, the well-known public offering with restricted distribution efforts, carried out under the terms of CVM Instruction No. 476/09, is widely used in the capital market. However, in view of its exceptional nature, said regulation has an exhaustive list of securities whose public offering restricted to a group of professional investors may be exempted from prior registration with the Brazilian Securities Commission. As certificates of receivables were recently created by the Legal Framework of Securitizations, they are not included in the list.

In view of this situation, on August 18, 2022, the Brazilian Securities Commission correctly issued Resolution No. 165 which equated certificates of receivables to  Certificates of Real Estate Receivables and Certificates of Agribusiness Receivables for the purposes of applying the CVM Instruction No. 476/09.

This measure, which takes effect on September 1, 2022, will allow certificates of receivables to be  automatically exempted from registration with the Brazilian Securities Commission when publicly offered to a restricted group of professional investors. The resolution, therefore, makes it possible for issuers of certificates of receivables to have easier access to the capital market, which contributes to the development of the securitization market and offers potential benefits for the expansion of this private financing instrument to various economic sectors.

The equivalence will only be valid until the entry into force of Resolution No. 160/22, issued by the Brazilian Securities Commission (“CVM Resolution No. 160/22”), which, as of January 2, 2023, will inaugurate a new regulatory framework for public offerings of securities, replacing and revoking CVM Instructions Nos. 400 and 476, with several changes in the registration processes of public offerings at the regulatory entity.

As of 2023, public offerings that are currently automatically exempted from registration under the terms of CVM Instruction 476 will be automatically registered with the Brazilian Securities Commission, through the protocol of certain documents, but without the need for prior analysis.

In this new scenario, certificates of receivables are duly covered by CVM Resolution No. 160/22, which includes these certificates using a broader language – “securitization-related securities issued by securitization companies registered with the Brazilian Securities Commission”. Thus, public offerings of these securities may be submitted to the public body through the rite of automatic registration of distribution, provided that the other applicable requirements are met.

The recently edited CVM Resolution No. 165, therefore, meets the market's need and expands the scope of CVM Instruction No. 476/09 to admit that the certificates of receivables recently created by the Legal Framework of Securitizations can be offered publicly, with automatic exemption from registration, to restricted groups of professional investors.

Category: Capital markets

In order to reform and simplify the information regime disclosed by the publicly-held securities issuing companies, the Brazilian Securities and Exchange Commission (CVM) issued, on December 23, 2021, the Resolution CVM 59. Among the changes brought by this standard, we highlight those related to the reference form, which underwent relevant changes in its structure, with a considerable reduction in the number of sections.

In its new version, the form will have 13 sections (compared to the current 21). The change resulted in the exclusion of some sections and the inclusion of new disclosure obligations by publicly-held companies in categories "A" and "B", especially with regard to information relating to environmental, social and governance (ESG) issues and climate information.

The new reference form will enter into force on 2 January 2023 and will apply to the disclosure of information relating to the financial year ending 31 December 2022.

The table below illustrates the changes in the structure of the sections in relation to the current standard, as provided for in Annex C to CVM Resolution 59:

The main novelty brought by CVM Resolution 59 is the obligations to disclose ESG information and climate. The change is a reflection of investor behavior and the growing market interest in greater transparency of companies in relation to compliance, in addition to commitment to these themes. The change also meets the longing for a standardization of the information provided, following what has already been done by regulatory agencies in international capital markets.

To provide greater transparency, the "practice or explain" model was used, already incorporated in the Governance Report of publicly held companies of the Brazilian Institute of Corporate Governance (IBGC). The goal is to get publicly-held companies to implement or at least justify the non-implementation of ESG practices in their reference forms, allowing investors to analyze whether the practices adopted by a company are consistent and adapt to ESG standards disseminated by the market.

The ESG and climate information will fully apply to category "A" companies and will be partially applicable to the category "B" companies. They will appear in at least six sections of the new reference form, as we highlight below:

• 1. Issuer activities:

"1.9. In relation to environmental, social and corporate governance (ESG) information, indicate:"

The company shall indicate, for example, whether it discloses its information in an annual or corresponding report, the methodologies used in the preparation of the report, whether it is audited by an independent entity and whether it considers any materiality matrix and ESG performance indicators, as well as the Sustainable Development Goals (SDGs) of the United Nations (UN). If so, the company should indicate whether any of the indicators and/or SDDs are material for its business.

Regarding climate responsibility, the company should also clarify whether the report considers the recommendations of recognized entities related to climate issues, in addition to pointing out whether it carries out greenhouse gas emission inventories in detail.

If the company does not comply with any of the conduct, it must justify in sub-item "i" item 1.9.

• 2. Comments of officers

"2.10. Officers should indicate and comment on key elements of the issuer's business plan, specifically exploring the following topics:"

The company's officers should clarify the opportunities included in the issuer's business plan related to ESG issues.

• 4. Risk factors

"4.1. Describe risk factors with the effective potential to influence the investment decision by observing the categories below and, within them, the decreasing order of relevance"

Among the risk factors, the company should include factors on social, environmental and climate issues, including physical and climate transition risks.

• 7. General Meeting and Administration

"7.1. Describe the main characteristics of the administrative bodies and the supervisory board of the issuer"

The company shall provide social information on the composition of the above-mentioned bodies, indicating the total number of members grouped by self-declared identity of (i) gender; (ii) color or race; or (iii) diversity attributes that you understand relevant. In addition, it should indicate specific objectives that the company has in relation to the diversity in these bodies.

Regarding climate issues, the company should indicate the role of management bodies in the assessment, management and supervision of risks and opportunities related to climate.

"7.2. in relation specifically to the Board of Directors"

It should be declared whether there are channels established for critical issues related to ESG and compliance issues and practices to come to the board's attention.

• 8. Remuneration of directors and officers

"8.1. Describe the remuneration policy or practice of the board of directors, the statutory and non-statutory officers, the fiscal council, the statutory committees and the audit, risk, financial and remuneration committees"

When describing the elements that make up remuneration, the main performance indicators should be indicated, including, where appropriate, indicators related to ESG issues. We highlight that this item will be optional to companies with registration of category "B".

• 10. Human resources

"10.1. Describe the sender's human resources"

The total number of employees and groups should be indicated, based on the activity performed, geographical location and diversity indicators, which, within each hierarchical level of the company, cover self-declared gender identity, self-declared identity of color or race and age group. We clarify that this item will be optional to companies with registration of category "B".

The wide inclusion of ESG factors in the reference form demonstrates the importance that CVM and the market have been giving to the theme. The change follows the trend of international markets and shows the commitment to encourage companies to realize the importance of the effective implementation of environmental, social and governance practices in their business.

Companies should pay special attention to the changes, even if they will only come into force next year, as the practical and strategy changes often necessary for fulfilling obligations are not always simple and quick to implement.

Category: Banking, insurance and finance

Law No. 14,430, sanctioned on August 3, 2022, originated from Provisional Measure No. 1.103/22, instituted the Legal Framework of Securitization and consolidated the sparse legislation that disciplined the Certificates of Real Estate Receivables (CRI) and Certificates of Agribusiness Receivables (CRA).

It is an important legal rule that will have a significant impact on the expansion and consolidation of the securitization market in Brazil, by contributing to financial disintermediation and the expansion of the capital market.

The law standardizes the general rules applicable to the securitization of credit rights and issuance of certificates of receivables, establishes important definitions for the market, brings a uniform and comprehensive concept of certificate of receivables, in addition to pacifying issues that generated legal controversy or burdened the structuring of operations.

The legal framework of securitization represents a paradigm shift in the receivables credit market in the country, since it will allow the expansion of securitization with the intermediation of securitization companies to the most diverse sectors of the economy.

Prior to the enactment  of Provisional Measure No. 1.103/22, securitization with the intermediation of securitization companies were restricted to the real estate, agribusiness and financial sectors.

In the education and sanitation sectors, for example, there is a demand for private investment instruments through capital market, which was already manifested in bills that were processed in the National Congress, aiming at the creation of Certificates of Educational Receivables and Certificates of Sanitation Receivables. These regulatory initiatives ended up not evolving, but with the edition of the Legal Framework of Securitization, this demand can be met due to the creation of the broad concept of "Certificate of Receivables".

The reform implemented by Law No. 14,430 is part of the broad context of modernization of the rules applicable to securitization companies and the securitization market. In the regulatory sphere, we highlight the edition of CVM Resolution No. 60/21, which came into force on May 2, 2022. This resolution of the Brazilian Securities Commission complements the law recently sanctioned by establishing a regulatory framework for securitization companies and the securitization market.

The regulatory standard shares the same view of the legal diploma. It was conceived to encompass a comprehensive concept of Certificate of Receivables, which will allow the use of this instrument in various economic sectors. This alignment was possible thanks to the discussions for the drafting of the law, which took place between public administration and private sector entities within the scope of the Capital Markets Initiative (IMK), a strategic action led by the Ministry of Economy, in which Brazilian Securities Commission participates.

The coordination, supervision and supervision of the securitization market and its participants is the responsibility of the Securitization Superintendence created in 2021, which is part of the Brazilian Securities Commission.

Regarding the the main changes brought by the Legal Framework of Securitization, the following stand out:

• The creation of important legal definitions for the securitization market, such as "securitization companies" and "securitization";
• The use of a uniform and comprehensive concept of "Certificate of Receivables";
• The possibility for securitization companies – including securitization companies of financial credits – to use the fiduciary regime with the constitution of separate estate in the issuance of any Certificate of Receivables and other securities representing securitization;
• The protection of the investor in relation to risks related to tax, social security or labor issues of the securitization company, with removal from the application of article 76 of Provisional Measure 2.158-35^[1];
• The possibility of capital calls through the execution of a subscription promise and payment of certificate of receivables;
• The extension of the revolving mechanism – previously restricted to agribusiness credits – for securitization involving receivables of any kind, with implementation subject to adjustment in CVM Resolution No. 60/21, which currently prohibits revolving on real estate securitization;
• The possibility of recomposing the backing of the structure with other credit rights in view of the insufficient of the separate estate;
• The provision of payment of investors with credit rights in situations of settlement of issues arising from the insolvency of the securitization company or insufficiency of the separate estate assets, in situations in which there was no agreement between investors or quorum at the general meeting; and
• The extension of the correction clause by the exchange variation for Certificates of Receivables of any nature, which was previously restricted to Certificates of Agribusiness Receivables (CRA), provided that the requirements set forth in law and by the National Monetary Council are observed.

The income tax exemption on income paid to individuals holding Certificates of Real Estate Receivables (CRI) and Certificates of Agribusiness Receivables (CRA), however, does not extend to other Certificates of Receivables.

Provisional Measure No. 1.103/22 has been in force, with force of law,  since its edition, on March 15 of this year. During its process in the National Congress, 55 parliamentary amendments were presented.

Among the proposed amendments, we highlight the revocation of items I, II and III of paragraph 8 of Article 3 of Law 9,718/98 to allow the fundraising expenses incurred by legal entities whose purpose is the securitization of credits to be deducted from the calculation basis of the contribution to PIS/PASEP and COFINS taxes.

The revoked items limited this possibility to the securitization of real estate, agribusiness and financial credits. This tax treatment is necessary to facilitate the payment flow in the acquisition of credit rights in securitization.

The edition of the Legal Framework of Securitization is an important advance for the receivables credit market and inaugurates a new paradigm in this sector, with enormous economic potential and guarantee of legal certainty for the performance of securitization companies. The reform will therefore allow the consolidation and expansion of the securitization market in Brazil and has the potential to positively affect the most varied sectors of the economy, in addition to strengthening the national capital market.

^[1] Provisional Measure 2.158-35. "Art. 76. The rules establishing the allocation or separation, in any capacity, of assets of an individual or legal entity have no effect in relation to debts of a tax, social security or labor nature, in particular with regard to the guarantees and privileges attributed to them.

Single paragraph. For the purposes of the provisions of the caput, all the assets and income of the taxable person, his estate or his bankrupt estate, including those that have been subject to separation or affectation, remain liable for the debts referred to therein."

Category: Litigation

The reforms promoted in the Expropriation Act (Decree-Law 3,365/41) by the Federal Law 13,867/19 have brought significant changes to public expropriations, especially in relation to the negotiation process between the private and the Public Administration, as we have already dealt with in article published on this portal.

The new provisions allowed the use of mediation or arbitration to define indemnity amounts and conduct negotiations. To this end, the specific conditions of the rule must be observed,^[1] as well as the provisions of applicable federal laws.^[2] These changes were long awaited as a way to reduce the initiation of disputes.

The process of extrajudicial negotiation, either through mediation or through arbitration, is swifter and more efficient. Despite criticism from some scholars about the evaluation criteria – it is argued that it would be potentially harmful to the population because the amount of compensation is not ratified by Judiciary – there are several ways to ensure that public expropriation through out-of-court means occurs in a way that is more beneficial to the expropriated.

For this purpose, it is necessary that expropriation be analyzed from the legal and social point of view, considering the public interest and the importance of that eviction – the gains generated for the community or even the need to vacate the area to ensure the safety of the population – and the right to private property, constitutionally guaranteed.

Considering that the eviction for public utility is inevitable, even if it interferes in some way in the right to property, there are ways to ensure a fair, fast and economically advantageous indemnity process for the resident forced to vacate the property, placing it at the center of the negotiation, to avoid having even greater losses.

One way to ensure isonomy in trading is related to the methodology of real estate valuation. Often, the areas and venous values of real estate are outdated in the official documents issued by the municipal government. In these cases, it is possible to elaborate a specific evaluation methodology, using the real area of the property and the standards of the Brazilian Association of Technical Standards (ABNT) for valuation purposes. This evaluation methodology helps mitigate the effects of informality in which a large part of the population is located.

Another way is to plan well-defined stages and flows of negotiation, making the process of extrajudicial expropriation faster than lawsuits. It is not new the large number of demands in progress in the Judiciary and the slowness of payments made with writ of payments to public authorities (precatórios).

Not by chance, the stimulus to consensual conflict resolution is one of the principles brought by the 2015 Code of Civil Procedure.^[3] While the judicial expropriation process can last for years until the due indemnity is paid, out-of-court negotiation can be completed in a few months when well defined and organized.

The speed of the expropriation process is important considering that it avoids causing more damage to the expropriated, while offering an efficient and resolving solution to public expropriation. This, of course, when the process is allied to a compensation based on fair criteria.

The use of alternative methods of negotiation and dispute resolution to solve situations involving expropriation, therefore, proves to be quite advantageous, and can generate benefits to both the expropriator and the expropriated.

^[1] "Art. 10-A. The public authority shall notify the owner and offer him compensation.

• 1 - The notification dealing with the caput of this article shall contain:

I - copy of the act of declaration of public utility;

II - plan or description of the goods and their confrontations;

III - value of the offer;

IV - information that the deadline for accepting or rejecting the offer is 15 (fifteen) days and that silence will be considered rejection;

V - (VETTED).

• 2 - Accepts the offer and made the payment, will be drawn up agreement, which will be a skilled title for the transcription in the registration of real estate.
• 3 - After the offer, or after the period without manifestation, the government will proceed in the form of the arts. 11 and following of this Decree-Law."

"Art. 10-B. After the option for mediation or arbitration, the individual shall indicate one of the bodies or institutions specialized in mediation or arbitration previously registered by the body responsible for expropriation.

• 1 - Mediation shall follow the rules of Law No. 13,140 of June 26, 2015, and, in the alternative, the regulations of the body or institution responsible.
• 2 - The mediation chamber created by the government may be elected pursuant to Article 32 of Law No. 13,140 of June 26, 2015.
• 3 (VETTED).
• 4 - Arbitration shall follow the rules of Law No. 9,307 of September 23, 1996, and, in the alternative, the regulations of the body or institution responsible.
• 5 (VETTED)."

^[2] Law 13.140/15, which provides for mediation between individuals as a means of resolving disputes and on the self-composition of conflicts within the public administration, and Law 9.307/96, which provides for arbitration.

^[3] "Art. 3- Threat or right-to-injury shall not be excluded from the judicial assessment.

• 1 - Arbitration is permitted in the form of law.
• 2 - The State shall promote, whenever possible, the consensual settlement of conflicts.
• 3 - Conciliation, mediation and other methods of consensual settlement of conflicts shall be encouraged by judges, lawyers, public defenders and members of the Public Prosecutor's Office, including in the course of the judicial proceedings."

Category: Compliance, investigations and corporate governance

The Federal Government published on July 12 the Decree 11,129/22, which regulates the Anti-Corruption Law and replaces the former Decree 8,420/15. The new decree brought innovations on relevant topics introduced by the Anti-Corruption Law. But, after all, what changes in practice for companies in terms of civil and administrative accountability for acts against public administration?

Verification and accountability

Decree 11.129/22 consolidates other sparse rules that dealt with the investigation and accountability in cases of corruption, such as instructions, ordinances and manuals of the Office of the Comptroller General (CGU) and Attorney General’s Office (AGU), presenting more detailed provisions.

First, the guidelines related to the Preliminary Investigation and the Administrative Proceeding for Accountability (PAR) stand out. The investigative measures available at preliminary investigation are now expressly provided for in the new decree. Productions of evidence previously restricted to the committee responsible for conducting the PAR are available within the framework of preliminary investigation, with emphasis on:

• precautionary suspension of the effects of the act or the proceedings under investigation;
• search and seizure requests;
• requests for banking information on the movement of public resources, although confidential; and
• requests of tax information.

Decree 11.129/22 also changes the deadline for the conclusion of investigations, which was previously 60 days extendable for another 60, to 180 days extendable, without specifying time and no longer having as a requirement the need for any kind of justification for the extension.

Sanctions

In relation to sanctions, there are also relevant changes in relation to the criteria and percentages of calculation of the fine. In the new decree, the percentages of sum or reduction of the fine now show a gradation in the percentage with no minimum value.

Before, for example, the percentage of reduction of fine for legal entities who had and applied an compliance program aligned with the instructions of the respective regulatory decrees was "1% up to 4%". Decree 11.129/22 provides that the reduction of fines for an integrity program becomes "up to 5%" which, in practice, allows a reduction of any amount. In the old decree, if the evaluation of the compliance program allowed a reduction of 0.8% it would not be applied, because the minimum was 1%.

The new standard brings a stricter approach to illicit public procurement.

Before, the calculation of the fine was based on calculation percentages related to contracts ranging from R$ 1.5 million to R$ 1 billion.

In practical terms, the scale of percentage of fines related to illicit in public contracts was calculated considering contracts with amounts above R$ 1.5 million. Now, this calculation will be done considering contracts starting at R$ 500,000, as follows:

- 1% in the case of contracts with value between R$ 500,000 and R$ 1.5 million;

- 2% in the case of contracts with value above R$ 1.5 million up to R$ 10 million;

- 3% in the case of contracts with value above R$ 10 million up to R$ 50 million;

- 4% in the case of contracts with value above R$ 50 million up to R$ 250 million;

- 5% in the case of contracts with value above R$ 250 million.

Leniency Agreement

There are also changes in multiple provisions on the Leniency Agreement, with the introduction of more conditions for legal entities when concluding an agreement, including, expressly, the duty to fully redress the damage caused and the amounts corresponding to the undue income or unjust enrichment.

Decree 11.129/22 also brought responsibility for monitoring the obligations of adoption, implementation and improvement of the integrity program under the leniency agreement for the CGU. It is worth noting that this monitoring can be carried out directly or indirectly by the CGU, that is, there is also the possibility of hiring an independent third-party monitor by the legal entity.

Whatever the scenario, supervision and evaluation will be responsibility, directly or indirectly, of the CGU, which can waive the monitoring depending on the characteristics of the harmful act, the remediation measures adopted by the legal entity and the public interest.

In order to establish a technical investigation aligned with the provisions of the Anti-Corruption Law itself, the new decree includes, as one of the conditions for concluding the Leniency Agreement, that the legal entity admits its objective responsibility for the harmful acts, replacing the previous wording that dealt with the admission of participation in the violation.

The limitation period in the Leniency Agreement is now interrupted when the Memorandum of Understandings (MoU) is signed. In practice, a longer negotiation period is granted, since the negotiation of the agreement should be closed within 180 days, starting from the date of signature of the MoU, and no longer from the presentation of the proposal, as it was in the old decree.

In addition, by Decree 11.129/22, the Leniency Agreement may contain a clause on the possibility of using an uncontroversial portion of compensation for damage to compensate other amounts in other sanctioning or accountability proceedings, relating to the same facts. This means that due amounts can be compensated in other processes that reference the same facts. There is, however, no specification whether it includes state or municipal processes in this list of possibilities.

Compliance program

 
With regard to the legal entity compliance program, the recommendations listed in the paragraphs of Art. 57 bring some innovations in relation to the previous decree, such as:

• the express mention of the allocation of adequate resources for the operation of the program;
• the inclusion, in addition to periodic training, of periodic communications; and
• risk-based due diligence, especially related to the hiring of third parties, hiring and supervising politically exposed persons, and conducting and supervising sponsorships and donations.

In addition, the final provisions mention a simplified assessment of the compliance program in the case of very small and small businesses. The regulation will be the responsibility of the CGU.