In late Sept., the Tribunal of the Administrative Council for Economic Defense’s (“CADE”) signed 6 cease and desist agreements with companies and individuals investigated in the first CADE´s probe on information-exchange related to competition to hire and retain employees. The investigation embraces alleged anticompetitive exchange of information aiming to substitute a third neutral party that could carry benchmark studies related to employees benefits in the healthcare market. The total fines amounted for BRL 34,3 million.
In early Aug. 2022, the CADE‘s Tribunal discussed a new approach for calculating senior executives ‘ fines. The matter at issue concerned an alleged airport-food cartel probe.
The majority of CADE‘s Tribunal, led by Commissioner Gustavo Augusto, voted for the adoption of the following “more” deterrent methodology: (i) for hardcore cartel cases, an average of 15% of the company‘s fine to which the individual was linked, varying from 12% to 20% according to the individual‘s participation, and (ii) for other types of anticompetitive conduct, including cartels that involve less coordination, an average of 6% of the company‘s fine, varying from 1% to 12% according to the cartel‘s degree of coordination and the individual‘s role. Furthermore, the fine could be reduced according to the individual‘s ability to pay.
For years CADE fined senior executives conduct on approximately 2% of the company‘s fine to which the individual was linked. Therefore, the new methodology, agreed to by most members of the Tribunal, represents the imposition of significantly higher fines to senior executives.
For years CADE fined senior executives conduct on approximately 2% of the company‘s fine to which the individual was linked. Therefore, the new methodology, agreed to by most members of the Tribunal, represents the imposition of significantly higher fines to senior executives.
In May 2022, CADE‘s Tribunal unanimously condemned three telecommunications companies for allegedly engaging in anticompetitive conduct when forming a consortium to compete in public tenders. The total fines amounted for BRL 783 million.
CADE‘s Tribunal found that consortiums formed by companies with dominant position are usually anticompetitive unless there are “extremely high and proven efficiencies” resulting from the agreement.
In the specific case at issue, the combined market share of the three competitors surpassed 90. Furthermore, the companies allegedly failed to prove a legitimate economic rationality, that is, that the consortium was essential to compete in the public tenders and that efficiencies would be passed on to consumers.
In the past four months, the Secretariat of Foreign Trade (“SECEX”) initiated sunset review proceedings on antidumping duties applied to the following products and origins:
According to the Brazilian antidumping regulation, sunset review proceedings should be completed within 10 months, with a possible extension of 2 months. The antidumping duties remain in force while the proceeding is ongoing.
In the same period, GECEX imposed or renewed antidumping duties to the following products and origins:
Finally, SECEX terminated proceedings without the imposition or renewal of duties for the following products and origins:
The Secretariat of Foreign Trade (“SECEX”) issued in June its preliminary decision on the ongoing antidumping investigation against imports from the United States and Mexico of hard gelatin capsules. According to Circular nº 23, SECEX findings were positive for dumping, injury and causal link between them, but no provisional duties were applied. The investigation was initiated in Nov. 2021 and is expected to be concluded by Mar. 2023. The investigation was the last original investigation to be initiated by SECEX, as the Brazilian authority focuses on sunset reviews of the duties already in effect.
In late May, the Executive Management Committee (“GECEX”) at the Foreign Trade Chamber (“CAMEX”) determined the further reduction, by 10%, of the Import Duties applied to over 87% of the tariff lines that are part of the Mercosul Common Nomenclature (“NCM”). The reduction, in effect until Dec. 31, 2023, was implemented by Gecex Resolution nº 353/2022. The same items had been subject to a 10% tariff reduction in Nov. 2021, amounting to a total reduction of 20%. According to official statements, the measures are aimed to counter the negative economic effects, such as inflation, resulting from the Covid-19 pandemic and the war in Ukraine.
Denise Junqueira
djunqueira@cascione.com.br
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