For Odebrecht, agreement with CGU and AGU strengthens legal certainty for business recovery

The Ministry of Transparency and the Federal Controller General (CGU) and the Office of the General Counsel for the Federal Government (AGU) have signed a leniency agreement with Odebrecht S.A. in the amount of approximately R$ 2.7 billion. This is the biggest agreement ever signed by the two federal agencies and strengthens the legal certainty of actions to combat corruption in Brazil.

“This agreement enables us to recover our growth in a more sustainable manner, especially at Odebrecht Engenharia e Construção. Our commitment is to operate as an example of ethics, integrity and transparency, seeking projects that demand the best we have to offer to society: the technical experience of a company that is recognized as one of the best examples of excellence in Brazilian engineering,” said Luciano Guidolin, CEO of Odebrecht S.A.

The agreement also serves the public interest as it enables the preservation of the company and the continuation of its operations, jobs and payment of taxes, while generating the necessary revenues to pay the amounts agreed upon.

The amount was calculated by teams from CGU and AGU and will be deducted from the amount of the leniency agreement signed by Odebrecht with the Federal Prosecution Office of Brazil as well as authorities of the United States and Switzerland in December 2016.It will be paid over 22 years, adjusted by the Selic rate. The funds will be allocated to Petrobras and other federal government entities.

This agreement will serve as an example to disseminate the good practices expected in the public-private sector relationship. With the conclusion of this process, AGU and CGU will withdraw the corruption and administrative proceedings filed against Odebrecht and its business group on account of the facts disclosed in it.

Evidence – The agreement is the result of joint action by CGU and AGU, as envisaged in the Joint Ministerial Ordinance 2,278/2016. Both agencies recognize its importance in combating corruption due to the body of evidence presented by the company, which will help repair the damage caused and the imposition of sanctions on public and private agents involved in the wrongful acts. Apart from the substantial amount to be reimbursed and paid as fine to the Federal Government, another highlight of this negotiation was the high degree of collaboration acknowledged by CGU and AGU, which will use the facts disclosed in their action to combat corruption.

Under the terms of the agreement, CGU and AGU undertook to defend the validity and effectiveness of the agreement at all levels and to take legal measures to ensure its effectiveness, which includes measures to prevent the company from being punished twice for the same facts and prevent discriminatory acts by third parties due to the fact that Odebrecht had signed the agreement. It also preserves the constitutional authority of the Federal Accounting Court (TCU).

The agreement further recognizes the soundness of the current integrity program of Odebrecht group companies, which will also be monitored by CGU. Since March 2017, Odebrecht has been under external independent monitoring, under supervision of the Federal Prosecution Office and the U.S. Department of Justice. Under the new agreement, the group undertakes to implement the ISO 37001 certification to ensure actions to prevent wrongful acts and to seek the highest degree of ethics and transparency in the way its companies conduct their business.