Understand how each instrument works and their main differences.
In recent years, Brazil has witnessed a series of anti-corruption operations that have brought to light two legal instruments widely used by public administration: leniency agreements and plea bargaining. Both play a crucial role in investigating crimes, identifying those involved in criminal practices, and stopping illegal activities, but despite being frequently confused, they have significant differences in their application and objectives.
In this article, you will understand how each of these instruments works and their main distinctions, thus providing a clear view of the applicability and benefits of these instruments.
Leniency Agreement
A leniency agreement is a tool used in the fight against corruption, especially in the business sphere, since it is an agreement that must be signed with legal entities involved in illicit practices. Inspired by legislation from other countries, such as the American Sherman Antitrust Act, the leniency agreement in Brazil was first regulated by Law No. 12.529/2011 (Competition Law) and more widely applied with Law No. 12.846/2013 (Anti-Corruption Law).
How it works?
A leniency agreement is an agreement signed between a company (or legal entity) and the State, through the competent Public Administration body, such as the Comptroller General of the Union (CGU), the Federal Public Prosecutor's Office (MPF), and the Administrative Council for Economic Defense (CADE).
In other words, a Leniency Agreement can be signed by companies that have committed offenses foreseen in various Brazilian laws, such as the Anti-Corruption Law, the Penal Code, and the Competition Law, and therefore, several public administration entities have the authority to enter into such an agreement.
Read also: Administrative Liability Process
For this reason, and aiming to guarantee uniformity and greater legal certainty of this instrument in the country, the Comptroller General of the Union (CGU), the Federal Public Prosecutor's Office (MPF), the Attorney General's Office of the Union (AGU), the Federal Court of Accounts (TCU), and the Ministry of Justice and Public Security (MJSP) signed a Technical Cooperation Agreement in 2022.
For the agreement to be validated, the company confesses to its participation in illegal acts (such as corruption, bid rigging, cartel formation, among others) and, in exchange for its cooperation in the investigations, obtains benefits such as:
- Reduction of fines;
- Suspension or mitigation of administrative sanctions;
- Possibility of continuing to enter into contracts with the public administration.
For the agreement to be valid, the company must immediately cease the illegal practices and effectively cooperate with the investigation, providing substantial evidence to help identify others involved. Failure to comply with these obligations may result in the revocation of the agreement and the imposition of more severe penalties.
Furthermore, companies must fulfill counterpart obligations such as implementing or improving their integrity program, paying the agreed amounts, and continuously cooperating with investigations, otherwise the agreement will be terminated and the full amount of penalties that would have been applied will be collected.
For companies, a leniency agreement represents an opportunity for redemption in the market, as it allows them to reduce financial and reputational damage. By signing the agreement, the company signals to the market that it is committed to transparency and corporate ethics, especially if it adopts a robust compliance program.
Practical example
The leniency agreement became more widely known among Brazilians in the context of Operation Lava Jato, with several leniency agreements being signed with large construction companies involved in corruption schemes. These companies, by cooperating with the investigations, received benefits such as reduced sanctions and the lifting of the ban on contracting with the government, something that would have been devastating for their continued operation.
Plea Bargain
A plea bargain (or leniency agreement) is a legal instrument used in criminal proceedings that allows the investigated party or defendant to collaborate with the authorities to obtain a reduced sentence or other legal benefits. In other words, unlike a leniency agreement, it is entered into by individuals as a way to obtain benefits in exchange for their cooperation in the investigation of illegal acts.
Currently, the instrument is regulated by Law No. 12.850/2013 (Law on Criminal Organizations), but Law No. 9.807/99 (Law on the Protection of Victims and Witnesses) is also relevant for the application of this institute, since it broadened the possibility of entering into plea bargain agreements in relation to all types of crime.
You may also be interested in: Non-prosecution agreement and corruption.
How it works?
Unlike a leniency agreement, a plea bargain is made between an individual (natural person) and the State, represented by the Public Prosecutor's Office or police officers. The informant, usually an individual under investigation or defendant in a criminal case, confesses to their involvement in crimes and provides relevant information for the investigation, such as details about the modus operandi of the criminal organization, names of other individuals involved, and material evidence that may help convict third parties.
The benefits of award-winning collaboration include:
- Reduction of sentence;
- Replacing imprisonment with restrictions on rights;
- In exceptional cases, even total exemption from punishment.
However, for the plea bargain to be effective and valid, the collaboration must be voluntary and result in the effective identification of other criminals or the recovery of embezzled funds.
For the cooperating witness, a plea bargain represents a chance to lessen the impact of a conviction. Furthermore, depending on the level of cooperation and the severity of the crimes revealed, the cooperating witness may even avoid serving time in prison, something that is especially attractive to defendants involved in white-collar crimes.
It cannot be denied, however, that the instrument is the target of criticism, since many believe that it does not guarantee the veracity of the informants' accounts and does not offer punishments in cases of possible obstruction of justice. For this reason, changes in the application of this type of agreement are being discussed.
Practical example
In addition to the use of plea bargains within the scope of Operation Lava Jato, another operation that received significant media attention was Operation Carne Fraca, launched in 2017. Due to the investigations, brothers Wesley and Joesley Batista, owners of the JBS meatpacking company, received judicial pardons after confessing to the company's involvement in illegal activities and cooperating with the investigations.
Interested in this topic? How about exploring it further in our Postgraduate Program in Criminal Law?
Main Differences Between the Instruments
Therefore, as explained, although leniency agreements and plea bargains have as their main objective collaboration with the authorities to clarify crimes and facilitate investigations, they have fundamental differences, both with regard to the subjects involved and the benefits offered.
Here is a visual summary of the main distinctions:
| Leniency Agreement | Plea Bargain | |
| Subject | Company (legal entity) | Individual (natural person) |
| Legal forecast | Anti-Corruption Law (Law No. 12.846/2013) and Law No. 12.529/2011 (Competition Law) | Law on Criminal Organizations (Law No. 12.850/2013) |
| Application | Illegal acts against public administration committed by legal entities, such as bid rigging, corruption, and cartel formation. | Crimes stipulated in the Penal Code, offenses within criminal organizations, corruption, and money laundering committed by individuals. |
| Benefits | Reduction of fines, maintenance of contracts with the public sector, exemption from certain sanctions. | Reduction or elimination of the sentence, substitution of imprisonment, and even judicial pardon. |
| Objectives | Compensation for damages to public funds and business continuity | Identifying crimes and holding others involved accountable. |
| Consequence of the violation | Revocation of benefits and full application of sanctions. | Loss of benefits and possible conviction without mitigating circumstances. |
These differences mean that each instrument has a specific role within the legal system, even though both are a way of facilitating investigative work. While the leniency agreement largely aims to protect the economic continuity of companies, the plea bargain focuses mainly on the criminal accountability of individuals and the dismantling of criminal organizations.
Conclusion
Although leniency agreements and plea bargaining may seem similar in certain aspects, their purposes, subjects, and consequences are quite distinct. Leniency agreements are aimed at companies and seek to repair the damage caused to public authorities, while plea bargaining focuses on holding individuals accountable and clarifying crimes within the criminal sphere.
Understanding these differences is fundamental for lawyers and legal professionals working in both business and criminal law. Each of these instruments has its specific place within the Brazilian legal system, and knowing how to use them correctly can be key to mitigating damages and contributing effectively to the justice system.
Now that you understand the differences between the two instruments, how about learning more about the role of administrative sanctions under the Anti-Corruption Law in our Postgraduate Program in Administrative Law ? Check out our other articles to stay up-to-date with best legal practices!
References:
BRAZIL. Technical Cooperation Agreement between the Federal Public Prosecutor's Office, the Comptroller General of the Union (CGU), the Attorney General of the Union (AGU), the Ministry of Justice and Public Security (MJSP), and the Federal Court of Accounts (TCU) regarding the fight against corruption in Brazil, especially in relation to leniency agreements under Law No. 12.846 of 2013. Available at: https://repositorio.cgu.gov.br/bitstream/1/68730/5/ACT_%20assinado_versão%20final.pdf . Accessed on: September 23, 2024.
BRAZIL. Comptroller General of the Union. How to make an agreement . Leniency Agreement . Available at: https://www.gov.br/cgu/pt-br/assuntos/integridade-privada/acordo-leniencia/como-fazer-um-acordo . Accessed on: September 23, 2024.
BRAZIL. Court of Justice of the Federal District and Territories. Plea Bargaining . Easy Law . Available at: https://www.tjdft.jus.br/institucional/imprensa/campanhas-e-produtos/direito-facil/edicao-semanal/delacao-premiada . Accessed on: September 23, 2024.
BRAZIL. Federal Public Prosecutor's Office. Leniency Agreements . Combating Corruption . Available at: https://www.mpf.mp.br/atuacao-tematica/ccr5/publicacoes/guia-pratico-acordo-leniencia/ . Accessed on: September 23, 2024.
Understand what plea bargaining is and when it can be used. CNN Brazil, September 08, 2023. Available at: https://www.cnnbrasil.com.br/politica/entenda-o-que-e-delacao-premiada-e-quando-ela-pode-ser-utilizada/ . Accessed on: September 23, 2024.
Brazilian Supreme Court releases content from JBS owners' plea bargain; see main points. G1 , May 19, 2017. Available at: https://g1.globo.com/politica/noticia/stf-libera-conteudo-da-delacao-dos-donos-da-jbs.ghtml . Accessed on: September 23, 2024.
TEIXEIRA, Pedro. AGU and CGU conclude leniency agreements with companies involved in Lava Jato. CNN Brasil, September 20, 2024. Available at: https://www.cnnbrasil.com.br/politica/agu-e-cgu-concluem-acordos-de-leniencia-com-empresas-da-lava-jato/ . Accessed on: September 23, 2024.
US Federal Trade Commission. Guide to Antitrust Laws. The Antitrust Laws . Available at: https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/antitrust-laws . Accessed on: September 23, 2024.
