BRAZIL LAW AND PRACTICE Contributed by: Alan Campos Elias Thomaz, Juliana Sene Ikeda, Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Campos Thomaz Advogados
Regulatory review applies only to restricted sectors, such as financial services, insurance, media and defence, where specific foreign ownership limits or governmental approvals exist. Exemptions are avail - able for institutional investors meeting transparency and beneficial ownership disclosure standards. In practice, the Brazilian regulators’ primary focus lies in ensuring foreign exchange compliance, tax compli - ance and anti-money-laundering integrity. 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview Brazil maintains a sophisticated and consolidated competition law system administered by CADE, an autonomous federal authority linked to the Ministry of Justice. CADE enforces Law No 12,529/2011, which governs both preventive merger control and the repressive enforcement of anticompetitive conduct, including abuse of dominance, cartels and market foreclosure practices. The law applies uniformly to domestic and foreign companies operating in Brazil or whose activities produce effects in Brazilian markets. At the core of CADE’s preventive jurisdiction lies the concept of the concentration act. This term refers to any transaction capable of producing competitive effects through the integration of previously independ - ent undertakings or through a change in control or material influence. It includes mergers, acquisitions, incorporations, joint ventures, asset transfers and long-term co-operation arrangements that may alter market structure or competitive incentives. A transaction qualifies as a concentration act and must be notified to CADE when, in the fiscal year preceding the deal, one party (including its economic group) gen - erated BRL750 million in revenue in Brazil and another party at least BRL75 million. Once both thresholds are met, filing is mandatory and suspensive, meaning that the parties cannot close the transaction before clear - ance. The rule applies equally to foreign-to-foreign transactions that have actual or potential effects in Brazil. There are no exemptions for foreign investors, although internal restructurings, temporary sharehold -
ings by financial institutions and transactions with no competitive impact may be excluded. Beyond traditional mergers and acquisitions, Brazil - ian law also requires notification of certain associative agreements – long-term co-operation agreements that resemble joint ventures in their competitive implica - tions. Under CADE regulations, such agreements are notifiable when they last at least two years (including renewals) and entail the joint performance of an eco - nomic activity involving risk sharing or shared control over strategic decisions. These rules are especially relevant for foreign investors entering joint ventures or strategic alliances involving shared technology, distri - bution or data management, which may trigger man - datory notification even in the absence of an equity acquisition. CADE’s review process is entirely electronic and fol - lows one of two procedural tracks. Simple cases are handled under a summary (fast-track) procedure, generally cleared within 30 days, while more complex cases follow the ordinary procedure, which may take from 90 to 240 days depending on the market inquiry. The General Superintendence ( Superintendência Ger- al SG) conducts the technical assessment and may unilaterally approve non-problematic cases. More sensitive transactions are referred to CADE’s Tribu - nal, composed of a president and six commissioners, which issues the final decision. Clearance must always be obtained prior to closing, and gun-jumping – the premature exchange of sensi - tive information, co-ordination of commercial conduct or integration of operations before CADE’s decision – is strictly prohibited. Violations may result in fines of up to BRL60 million, the nullification of the transaction and reputational damage. While merger control is preventive, CADE’s role extends to continuous market oversight. The author - ity actively monitors the abuse of dominant position, anticompetitive agreements and market foreclosure practices that may arise after an investment is com - pleted. This includes conduct such as predatory pricing, exclusivity arrangements, unjustified refusals to deal and the abuse of control over data or digital infrastructure. The integration of merger review and
69 CHAMBERS.COM
Powered by FlippingBook