CADE signs agreement in cartel investigation regarding the market of fuel resale in the Federal District

In the judgement session of 05 April 2017, the Tribunal of the Administrative Council for Economic Defense – CADE approved a Cease and Desist Agreement (TCC, in its acronym in Portuguese) signed with Cascol Combustíveis para Veículos Ltda. regarding an administrative inquiry on a cartel in the fuel resale market in the Federal District.

The company and its shareholders will have to collect BRL 90,436,672.83 to the Fund for the Defense of Diffuse Rights (FDD, in its acronym in Portuguese). The TCC also foresees that the signatories cease the anticompetitive practice, acknowledge their participation in the investigated conduct, provide documents and fully cooperate with the authority until the end of the investigations.

Additionally, the agreement foresees the divestment of gas stations currently under Cascol’s management in key points of the Federal District. The agreement’s purpose is to reduce the market concentration and to allow the entry and the development of competitors, mitigating the risks for collusion in the sector.

Cascol has also to implement a compliance program, which includes the elaboration of an Ethics Code and the engagement of senior administrators and other employees in order to readjust the company’s behavior and to avoid potential future legal violations. It has also been established that Cascol will have to create a Board of Administration and to adopt a stricter internal control and more professionalism in its management. 

The TCC’s signature ends the Precautionary Measure adopted by CADE upon Cascol in 25 January 2016. This Measure determined the appointment of a temporary administrator for the company.

Agreement with Prosecution Service of the Federal District and Territories

In addition to the TCC’s signature, Cascol also signed an agreement with the Prosecution Service of the Federal District and Territories – MPDFT. The company will pay a compensatory fine of BRL 58.301million.The deals signed with CADE and MPDFT sums up to BRL 148.7 million.

Next steps

The agreements’ signature results in the suspension of the investigation regarding the TCC’s signatories, until the parties have fulfilled the agreements’ obligations.

The Administrative Inquiry (n. 08012.008859/2009-86) remains opened regarding the other investigated parties.

 On 24 March, CADE’s General Superintendence formally received from the Federal Police copies of the seized material from the Dubai Operation. Since then, the investigative body started to analyze this material in order to conclude the inquiry and be able to initiate an administrative proceeding on the case.