TCU Approves Normative Instruction on Its Involvement in Leniency Agreements

On Wednesday, February 21, 2024, the Federal Court of Accounts (Tribunal de Contas da União, “TCU”) approved a new normative instruction regulating joint actions of the TCU and the Office of the Comptroller General of the Federal Government (Controladoria-Geral da União, “CGU”) in the negotiation of leniency agreements.

The regulation is the result of a technical cooperation agreement, signed in 2020 between the TCU, the CGU, the Office of the Attorney General of the Federal Government (Advocacia-Geral da União, “AGU”), and the Ministry of Justice and Public Security (Ministério da Justiça e Segurança Pública). It aims to establish clear criteria for TCU’s participation in leniency agreements, especially those regarding the assessment of damages to the public Treasury, as well as limiting TCU’s ability to impose additional sanctions, beyond those agreed upon in the collaborative agreement signed with the CGU/AGU.

Since the creation of leniency agreements—and especially with the advancement of high-profile investigations into wrongdoings involving the Federal Public Administration—the sheer number government agencies, each with their own investigative and sanctioning powers and prerogatives, has caused considerable legal uncertainty for companies entering into settlement alternatives—such as leniency agreements—subjecting them to the risk of overlapping sanctions, despite their collaboration efforts and the terms agreed upon with the State.

Within the scope of the TCU, the issuance of the Normative Instruction represents a significant advancement in efforts to streamline the administrative-sanctioning prosecution system. Recently, the TCU revised its own caselaw to account for CGU actions, with regard to the enforcement of its own punitive decisions. These new precedents were achieved in administrative defenses sponsored by Tauil & Chequer.