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On March 2nd, 2020, the Ministry of Justice and Public Security issued the Ordinance No. 71/2020, which establishes rules for the formalization of Consent Decrees within the Consumer Nacional Secretariat (“SENACON”) in administrative proceedings or preliminary investigations.

The parties can execute Consent Decrees either before, during or after the conclusion of administrative proceeding, at first or second administrative instance.

In order to request the signing of a Consent Decree, the applicant must present a specific petition addressed to the Consumer Defense and Protection Department (“DPDC”) which, in turn, will refer it to the National Consumer Secretary for appreciation. If both parties agree to conclude the Consent Decree, that will interrupt the deadline for the statute of the limitation of the punitive pretention until the negotiations are closed. Those negotiations will be confidential, besides suspending the administrative procedure.

The Ordinance anticipates the possibility of discounts of the fine. In this scenario, the authority will consider the probability of the company paying the fine and the opportunity cost considering the early termination of the administrative procedure.

The Consent Decree must include the following contractual clauses:

  1. provisions related to the adjustment of the behavior, upon the definition of a schedule with goals and obligations towards the regularization of the committed party, an eventual collective damage reparation and the prevention of similar behaviors;
  2. appropriate means, conditions and the area of influence of the agreed commitments;
  3. obligation to submit  regular information to SENACON;
  4. applicable sanctions in case of non-compliance with the agreed obligations;
  5. supplier’s resignation to the right to discuss, judicially or out-of-court, any controversies related to the facts that constitute the object of the Consent Decree.

Finally, the Ordinance establishes that the conclusion of the Consent Decree will result in the termination of the related administrative proceedings, except for the infractions not contemplated in the negotiations. The signing of the Consent Decree will not imply any confession as to the matter of the case, nor the acknowledgement of the illegality of the behavior under analysis, unless there is express provision of the contrary. The Ordinance will come into force on March 6th, 2020.

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