Cade Publishes Rules For Gun Jumping Investigations

Author:TozziniFreire Advogados
Profession:TozziniFreire Advogados


The Administrative Council for Economic Defense (CADE) recently published the Resolution No. 24, with changes to the administrative proceeding to investigate potential gun jumping cases, especially regarding the criteria for fine calculation.

Gun jumping occurs when the parties take actions to implement transactions before CADE's approval. Once the wrongdoing is detected, the companies involved are subject to a fine from BRL 60,000.00 (sixty thousand reais) to BRL 60,000,000.00 (sixty million reais). CADE may also declare the transaction null and void, and launch an administrative proceeding to investigate potential anticompetitive conduct.

The new methodology establishes a minimum fine of BRL 60,000.00 (sixty thousand reais), which shall be increased according to the transaction value, the turnover of the economic groups involved, the intention of the parties, the antitrust impacts of the deal and the period between the closing and CADE's decision. Spontaneous submission may be considered as a mitigating factor.

The new resolution intends to give more predictability to this kind of procedure. Its actual impacts and effects will be...

To continue reading