Newsletter: CADE approves new rules for the submission of associative agreements

October 20, 2016

On October 18th, 2016 the Administrative Council of Economic Defense – CADE – has published Resolution No. 17, which addresses the cases of notification of associative agreements, overruling the previous Resolution governing the matter (Resolution No. 10/2014). The Resolution No. 17 is a result of a series of debates held during a public consultation, and it aims at solving the legal uncertainty issues arisen from the previous Resolution.

Its content is simpler since it demands notification only in agreements in which the parties or their economic groups are competitors in the same relevant market of the one referred in the agreement (hence dismissing the notification of agreements between vertically related parties), disregarding any minimum combined market share threshold in the market. Also, broad concepts of “cooperation” and “interdependency” in the former provision were ruled out, since the lack of proper specification was causing the notification of agreements with no antitrust significance.

According to the new Resolution, it is mandatory the notification of agreements among competitors, with 2 or more years of duration, whose object is the creation of an enterprise to develop a certain economic activity, sharing its risks and results. The economic activity must comprise the acquisition or the supply of assets or services, including non profit ventures, if (in theory) it may be carried out by a private company with profit purposes.

Agreements with less than 2 years of performance or with an indefinite timeframe must be notified (before its renewal) if the period of 2 years, from its signature, is reached or surpassed. The continuity of their binding effect for the same term or for more than 2 years is subject to CADE’s approval.

The agreements entered into before the effectiveness of Resolution No. 17, with a timeframe of 2 years or more, must be notified if they fall into the new regulation.

The Resolution No. 17 shall be published in the Official Gazette within the next days, coming into force after 30 days.

We remain at your disposal for any clarifications.

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