ICN Annual Conference Moscow , 2007

1. Brazil: Implementing ICN’s Recommended PracticesMariana Tavares de AraujoSecretary of Economic Law – SDEMinistry of Justice / Brazil ICN Annual Conference Moscow, 2007

2. Merger Review • In the past 5 years, Brazil took a number of measures to comply with ICN’s RP: • Jurisdictions’ notification thresholds and timing • Review period • Documentation requirements • Transparency concerns • Coordination with other authorities • “Soft convergence” to recommendations has enhanced agencies’ efficiency • Still important aspects to cover that depend on amending the current legislation

3. Merger Review: From Soft Convergence to Full Convergence to ICN RPs • Bill with amendments to the Antitrust Law was listed as a Government Priority in January 2007 • Restructure of the system • Incorporation of appropriate standards of materiality as to the level of "local nexus" required for notification • Elimination of notification thresholds not based on objectively quantifiable criteria (market share) • Pre-merger system with no deadlines • Early termination for simple cases

4. Cartel Prosecution: Top Priority • Brazil complies with ICN RPs for Cartel Enforcement • Elements of a solid anticartel regime are in place: • Clear definition of cartel in the law • Institutions equipped to detect, investigate and prosecute cartels in place • Firms and individuals are being punished • Upward Spiral: Leniency & Dawn Raids

5. Brazilian Leniency Program • Created in 2000; first application in 2003 • First leniency was signed only when effective enforcement had been implemented and agency already had some positive reputation on ability to uncover anticompetitive behavior • Only the first-in receives leniency treatment (individuals and companies) • Applicant cannot be the leader of the cartel • Full or partial immunity (criminal + administrative fines) • State and federal prosecutors are invited to sign agreements with administrative authorities to protect applicant from criminal liability • Approximately 10 agreements were signed since 2003, and other 4 are currently being negotiated

6. Recent Improvements: Regulation 04/2006 • SDE identified procedural aspects that created unnecessary burdens for parties that were addressed in such Regulation • ICN Materials and assistance from Fellow ICN members crucial for that purpose • Leniency Program: lack of clear procedure and sufficient protection for potential beneficiary during negotiating phase: • Marker System: application can be accepted on the basis of limited information; applicant is then granted time to perfect the information and evidence • Regulation provides for return of documents in case no agreement is reached • Oral Leniency: similar requirements as written agreement

7. Leniency Program: Success Stories • A sign that enforcement in Brazil is effective and that leniency program, although recent, is set in the right path, is that leniency applicants in other jurisdictions frequently come to us • Growing number of candidates to the program & number of search warrants served: • 2003, 2004 and 2005 – 11 warrants served and 2 people arrested • 2006 – 19 warrants served • 2007 (January/May) – 38 warrants served and 16 people arrested

8. Cartel Prosecution: Expected Changes • With respect to cartel prosecution, proposed changes of the bill include the possibility of settlements / negotiated plea agreement for cartels • enormous benefits to society by persuading cartel members -- through the promise of transparent, proportional, and expedited treatment -- to cooperate early and pay the agreed sum of money • We expect that with such tool more resources will be free to crack other cartels • Amendments to the law were supported by ICN materials, which were all very important to convince government and private sector of need for change