Civil Non-Prosecution Agreements: A Promising New Tool for Advancing Brazil’s Anticorruption Agenda

In late 2019, the Brazilian Congress passed an “anti-crime package” which included, among other things, an amendment to the Administrative Improbity Act that authorized a new form of “civil non-prosecution agreement” (known by its Portuguese initials, ANPC). Under an ANPC, prosecutors can reach civil agreements with individuals who voluntarily disclose their corrupt acts, thus avoiding the usual judicial proceedings for determining penalties under the Improbity Law. (To be clear, ANPCs are used to resolve civil matters and impose administrative sanctions, rather than to resolve criminal cases.) More recent amendments to the Improbity Act have strengthened this mechanism by giving prosecutors greater discretion to reach settlements with individuals accused of improbity.

This reform is a major change to the traditional Brazilian approach to administrative sanctions, which historically bars the settlement of any case involving corruption or improbity. That said, Brazil has already expanded the use of settlement agreements in other contexts. For example, in the context of enforcing criminal laws against corporations, the 2014 Clean Company Act (CCA) authorized so-called “leniency agreements,” under which prosecutors may offer to lower penalties to companies that self-disclosure wrongdoing and cooperate with the investigation. The ANPC mechanism is similar but different in a couple of important respects. First, the ANPC applies to individuals rather than firms. Second, while the CCA authorizes leniency agreements only in cases where the company discloses information about other unlawful activities and thus helps the investigation, an ANPC may be issued as long as the individual agrees to reform her own conduct, even if she does not provide additional information that is useful in ongoing investigations. On the other hand, similarly to leniency agreements, the enforcement authorities need not seek judicial approval to resolve a case via ANPC, so long as the agreement is reached before the beginning of a judicial proceeding. (If a formal proceeding has already begun, then the judge would still need to sign off on the termination of that proceeding.)

Although ANPCs have yet to be used on large scale, this tool holds great promise for substantially improving Brazil’s effective enforcement of its anticorruption laws, for several reasons:

  • First, allowing prosecutors and defendants to settle Administrative Improbity Act cases out of court will substantially speed up the resolution of such cases, saving valuable time and scarce resources. Right now, resolving these cases through the usual judicial process takes an average of five years. This long delay is bad for both the prosecutors and the accused. Many of these cases can and should be resolved more quickly through settlement, thus saving prosecutors resources and allowing them to secure the benefits of a cooperating witness more quickly, and also allowing the accused person both to save legal costs and to begin rehabilitating her reputation after acknowledging her previous misconduct.
  • Second, by allowing prosecutors to efficiently resolve matters involving relatively small acts of corruption, the ANPC enables prosecutors to address these smaller issues. Without the ability to address smaller infractions via ANPC, prosecutors might simply ignore them altogether, because introducing these smaller violations into a case that also involves more significant misconduct could delay the final judicial resolution of the whole case. (In Brazil, if a corruption case involves multiple individuals who played different roles in the alleged wrongdoing, the lawsuit must be brought against all the implicated people.) Resolving smaller matters via ANPC could therefore ensure accountability for infractions that would otherwise be ignored. And these smaller violations, taken in the aggregate, may be quite significant.
  • Third, the availability of ANPCs creates stronger incentives for individuals to cooperate with anticorruption agencies, analogous to what the CCA’s leniency agreements accomplished for companies. With the advent of ANPCs, a person who has violated the Improbity Law has a stronger incentive to voluntarily self-disclose to the authorities to cooperate with investigators—including by providing evidence about other wrongdoers—in exchange for leniency. (In this regard, it is worth noting that the information provided to enforcement authorities pursuant to an ANPC is classified, which could make prospective cooperators more confident about disclosing information.)
  • Fourth, large-scale use of ANPCs might improve enforcement of penalties, thus reducing the perception (and the reality) of impunity. Currently, even when a judicial proceeding imposes monetary sanctions under the Administrative Improbity Act, only around 10% of the sentences are carried out, and in only 4% of cases does the defendant pays the total amount of the money indicated in the ruling. There are a variety of reasons for this, including the insufficiency of the judicial mechanisms to ensure payment and the fact that defendants can take advantage of the long delays in these proceedings to fraudulently transfer their assets before final judgment. These problems can and should be addressed, but fixing them will take time. An advantage of the ANPC mechanism is that the sanctions are negotiated and automatically enforced as soon as an agreement is reached. The negotiations include discussions between the enforcers and the defendants about how the latter will comply with penalties, which can include disclosure of assets. If a defendant were to attempt to transfer or conceal her assets, and claim inability to pay, the enforcers could decline to offer an ANPC, thus requiring the accused to defend herself in a lengthy and costly legal proceeding. Thus the availability of ANPCs may substantially increase the proportion of Impunity Act sanctions that are actually paid.

In short, the ANPC expands on an anticorruption strategy that has already proved fruitful in Brazil and elsewhere: enabling law enforcement to offer leniency to those who admit their wrongdoing and agree to cooperate, in order to make anticorruption efforts more efficient and more capable of taking down the worst offenders. That said, this benefit comes with an important caveat: The expanded use of settlements, with minimal judicial oversight, places even greater responsibilities on the law enforcement agencies. It is therefore essential to ensure that these agencies have both adequate capacity—including sufficient budget and personnel—and adequate independence. As long as we can rely on these agencies to do their jobs well, empowering them to settle a substantial fraction of improbity cases will significantly advance Brazil’s anticorruption agenda.

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