Immunity, Sanctions & Settlements

Last verified on Tuesday 26th June 2018

Colombia

Alfonso Miranda Londoño, Andrés Jaramillo Hoyos and Daniel Beltrán Castiblanco
Esguerra Asesores Jurídicos

    Immunity or a 100 per cent reduction in sanctions

  1. 1.

    What benefits are available to the first applicant to qualify?

  2. The benefit for the first applicant to qualify is full exoneration of the fines that the Colombian competition authority, the Superintendency of Industry and Commerce (SIC) can impose pursuant to Law 1340, 2009 (Law 1340). Full exoneration refers only to the administrative sanctions. It does not protect the leniency applicant from criminal or private judicial actions aiming to recover the damages causeed by the anticompetitive conduct, including class actions.

  3. 2.

    Do the protections extend to current and former officers, directors and employees?

  4. Yes. According to Decree 1074 of 2015, known as the Colombian Unified Decree for Commerce, Industry and Tourism (UDCIT), which was reformed in the Leniency Chapter (Chapter 29) by Decree 1523 of 2015, benefits granted to the leniency applicant automatically extend to any facilitator, unless: 

    • he or she denies its participation in the cartel; 
    • he or she does not provide the assistance requested by the authority to produce evidence (eg, own depositions, hearings, etc); 
    • he or she has destroyed, altered or otherwise modified evidence relevant to prove the anticompetitive practices; or 
    • the leniency applicant (company) loses the benefits.  

    The UDCIT defines facilitator as “any person who cooperates with, authorises or tolerates antitrust practices' as established in article 26 of Law 1340”.

  5. 3.

    Is immunity available after an investigation begins?

  6. Yes. According to the UDCIT, the investigated parties may apply to the Leniency Programme up until the term to respond to the Opening Resolution has expired (ie, 20 business days after the said Resolution has been notified to the investigated party). It should be noted that: 

    • eligibility for full or partial immunity will be assessed on a first come, first serve basis, subject to compliance with the requirements described in the following question; and 
    • that the filing for leniency must contain solid factual and legal arguments that represent a significant contribution to the investigation. The Deputy Superintendent for Competition Protection, who is the officer that conducts the investigation, will assess the merits of the filing presented by the investigated party. The more advanced the proceedings are, the more difficult to successfully clear the evaluation on the merits made by the Deputy Superintendent.
  7. 4.

    What are the eligibility requirements before an investigation begins?

  8. Pursuant to the UDCIT, when the applicant makes its first approach to the SIC to secure a marker, it must:

    • acknowledge its participation in the cartel –without being its promoter or instigator (ie, ringleader), and
    • provide information about the existence, modus operandi, affected market and members of the cartel.

    If this is complied with, the SIC will accept the application and sign a Leniency Agreement with the applicant. In this document, the applicant is requited to:

    • accept its participation in the anticompetitive conduct. However, if it’s proved that the applicant was the promoter or instigator of the cartel, it cannot be eligible to apply;
    • provide complete and useful information or evidence concerning: 
      • the goals of the cartel;
      • the circumstances of place, time and manner surrounding the conduct;
      • the parties to the cartel and their degree of participation (eg, as principals, accomplices or accessories before and after the fact); and 
      • the affected markets (ie, relevant product and geographic market);
      • the period in which the cartel was in effect.
    • cooperate with the SIC during the administrative investigation. This encompasses providing useful information, timely response to information requests from the SIC, and refraining from obstructing the investigation by hiding, destroying or manipulating evidence related to the case; and
    • cease its participation in the cartel or conspiracy.

    Additionally, to obtain full exoneration, the applicant must be the first to file for leniency (the proceeding wants to incentivise a “race to the Authority”). 

  9. 5.

    What are the eligibility requirements after an investigation begins?

  10. Formally, the eligibility requirements are the same. Nevertheless, as previously mentioned, a leniency application can be presented once the formal investigation has been launched and up until the deadline to respond to the Opening Resolution has expired (ie, 20 business days after the investigated party has been notified to the parties). However, it must be noticed that the SIC will evaluate the usefulness of the information contained in the applicant's filing. Thus, applying before the formal investigation has been launched creates a better opportunity to get full immunity, since the standard of usefulness of the information would be lower. As the investigation advances and evidence is gathered and the likelihood that the information will be considered valuable by the SIC decreases. When it comes to leniency applications, time is of the essence.

  11. 6.

    Will the applicant have to admit to a violation of law?

  12. Yes, both for obtaining total immunity or reduction of the fines.

  13. 7.

    Are ringleaders or initiators of the conduct eligible?

  14. Pursuant to the UDCIT, the leniency benefits, whether they consist in total immunity or in reduction of the fines the SIC can impose, are not available for the instigator or the promoter of the conduct. The instigator or promoter of the conduct is the person that forces or induces other person or persons to participate in anticompetitive agreement as long as such coercion remains during the execution of the cartel and is deemed relevant to determine the conduct of the other companies involved in the scheme. 

  15. 8.

    When must the applicant terminate its involvement in the conduct?

  16. There is no precise time for this in the regulation. However, under the UDCIT, in order to be eligible to receive the leniency benefits, the applicant must put an end to its participation in the unlawful conduct. This means that the company must take corrective actions before or immediately after it files its application to be able to sign a leniency agreement with the SIC and receive the benefits.

  17. 9.

    What constitutes termination of the conduct?

  18. The Law does not define what constitutes "termination of conduct". Also, the Law does not imply that the applicant must cause the termination of the cartel; however, the applicant must guarantee that his own participation has stopped.

  19. 10.

    Will the applicant be required to make restitution to victims?

  20. The SIC is the national competition authority appointed by Law 1340 as the guardian of the constitutional principle of free competition. In this capacity, the SIC conducts administrative investigations aimed to the repression of anticompetitive conducts, in protection of the public interest in general. The SIC has no judicial capacity in this regard, and will not award damages to individual persons or companies that may be affected by the anticompetitive conducts. Since the outcome of the administrative investigation does not refer by nature to indemnification of damages, pursuant to this procedure the leniency applicant is not required to make any restitution to the potential victims of the anticompetitive conduct. Individual persons affected by the anticompetitive conducts may seek indemnification of their damages through the civil jurisdiction, regardless of the fact that there has been a successful leniency application that grants the applicant total immunity from the fines that the SIC can impose. For that purpose individual persons can use private or class action, and in some cases even unfair trade litigation.

  21. 11.

    Can more than one applicant qualify for immunity?

  22. No. In accordance with the UDCIT, the SIC only grants total immunity to the first applicant conditional on compliance and fulfilment of the requirements described above. If the first applicant fails to fulfil those conditions, the next applicant can be granted the first position Nevertheless, other applicants continue to be eligible for a significant reduction of the fines.

    It should be noted that in the case known as the “Notebook Cartel” two companies received full immunity due to the fact that the SIC considered that both of them were the “first applicant”. This, since the notebook business of one of the companies was later acquired by the other, and given the length of the cartel both companies were involved in it in different periods of time. As can be seen, at an early stage in the development of its Leniency Programme, Colombia has already applied the “Predecessor – Successor Doctrine”.

  23. 12.

    Can an applicant qualify if one of its employees reports the conduct to the authority first?

  24. It is important to note that there is a distinction between the application presented by an employee acting on behalf of the company and an employee presenting his or her own personal leniency application. Hence, if the employee presents his or her own personal application first, he or she could be granted full immunity. However, the UDCIT expressly states that the benefit granted to the employee presenting his or her own personal application will not extend to the company.

    Accordingly, if the company follows the application of its employee, it can obtain the second place in the leniency process and the reduction of the applicable fines. As can be seen, if a person applies for leniency as an individual, his position as leniency applicant (even if the applicant did not obtain the first place) will not be extended to the company.

  25. 13.

    Does the afforded protection extend to any non-antitrust infringements?

  26. No. The immunity or reduction of fines awarded pursuant to the leniency programme only apply to antitrust infringements. The leniency application will not impede private or class actions aimed at the indemnification of damages. Also, it must be considered that bid rigging in public contracts is the only antitrust conduct in Colombia that has criminal implications. A successful leniency application will not bar criminal prosecution and will only produce a reduction in the criminal sanctions.

  27. 14.

    What confidentiality assurances are given to the first applicant to report?

  28. Confidentiality assurances vary depending on the stage of the proceedings and other factors. During the preliminary investigation, the applicant has complete confidentiality regarding his or her identity, the application and the information contained within. Once the formal investigation begins, the confidentiality of the identity of the applicant can be maintained if it is requested to avoid commercial retaliation (article 15 of Law 1340). In any event, the identity of the leniency applicant will be revealed at the time of the motivated report that the Superintendent Delegate for Comepetition Protection  will present to the SIC evaluating the evidence and recommending sanctions or acquittal. Within the formal investigation all investigated parties have full access to the investigation file, which is different from the leniency file. Within the formal investigation, third parties are granted access to the investigation file with the exception of those documents that are labelled as confidential by the SIC.

  29. 15.

    Does the authority publish guidance regarding the application of the programme?

  30. Yes. The programme is briefly mentioned in the SIC’s web page but please note that it is not up to date with the most recent information. In addition, the SIC periodically launches media campaigns announcing the risks of antitrust investigations for persons and companies and promoting the benefits of applying to the leniency programme. Finally the SIC organises conferences and forums throughout the year, in which it interacts with the academic and business communities and usually includes topics related to the leniency programme.

  31. 16.

    Do the rules for obtaining immunity in your jurisdiction conflict with the immunity rules in other jurisdictions?

  32. The Colombian leniency programme is, in general terms, similar to other programmes in the region. However, there are some differences with other jurisdictions. For instance, in Colombia, when the SIC opens an investigation, it may reveal the identity of the leniency applicant to the investigated parties and even to the public. In other jurisdictions, however, confidentiality must be maintained during the proceedings. In that sense, leniency applicants may face difficulties in complying with the requirements in different jurisdictions.

    Immunity application and marker process

  33. 17.

    What is the initial process for making an application?

  34. There are different ways to contact the SIC to make an effective marker and apply for leniency. The applicant can contact the SIC in writing or by email. In the latter case, the moment of access to the programme will be the one stated in the minutes prepared by the SIC.

    The applicant must express its intention obtain a marker and secure a position to apply for leniency, and the SIC will establish the period to comply with the initial conditions to secure the marker, if they are not complied with at that time.

    Again, the SIC will create a minute stating the date and time of the contact with the prospective applicant in order to secure the precedence of his application in case that the conditions are met to grant a marker. In that case, the date and time of the initial contact will be the effective date and time of the marker.

  35. 18.

    What information is required to secure a marker?

  36. As mentioned in question 4, pursuant to THE UDCIT, when the applicant makes its first approach to the SIC to secure a marker, it must:

    • acknowledge its participation in the cartel – without being its instigator; and
    • provide information about the existence, modus operandi, affected market and members of the cartel. 

    Current regulations do not establish a clear threshold regarding the amount of information required to secure a marker.

    In accordance with the UDCIT, during the five business days after reception of the application, a SIC official will evaluate the document and inform the applicant whether such application complies with the legal requirements stated in the Law.

    If the officer determines that the application does not comply with the requirements, such application would be regarded as not filed. On the contrary, if the officer determines that the application complies with the requirements, he will proceed to issue a certification (ie, marker) informing the applicant about its position within the leniency programme.

    If the SIC does not respond during the five-day term, it will be understood that the application complies with the legal requirements.

  37. 19.

    How much time will an applicant have to perfect its marker?

  38. Regulations do not specify the time that the SIC should grant the applicant to secure its marker. That term is agreed in each case between the applicant and the SIC and should provide a reasonable time to acquire the required information. Most probably the SIC will consider that 30 days is in principle a reasonable initial time to perfect the marker.

  39. 20.

    Can the deadline for perfecting the marker be extended?

  40. Yes. There is no statute or regulation concerning the deadline to perfect the marker. Accordingly, the SIC at its discretion can decide to grant an extension to the applicant. The SIC will be inclined to extend the time if the applicant can show progress in its internal investigation.

  41. 21.

    What is required to perfect the marker?

  42. As mentioned in question 4, in the leniency agreement, the applicant is required to:

    • accept its participation in the anticompetitive practice. However, if it is proved that the applicant was the promoter or instigator (ie, ringleader) of the cartel, it cannot be eligible to apply;
    • provide complete and useful information or evidence concerning: 
      • the goals of the cartel;
      • the circumstances of place, time and manner surrounding the conduct;
      • the parties to the cartel and their degree of participation (eg, as principals, accomplices or accessories before and after the fact); and 
      • the affected markets (ie, relevant product and geographic market); and
      • the duration of the cartel.
    • cooperate with the SIC during the administrative investigation. This encompasses providing useful information, timely response to information requests from the SIC, and refraining from obstructing the investigation by hiding, destroying or manipulating evidence related to the case; and
    • cease its participation in the cartel or conspiracy.
  43. 22.

    Can the scope of the marker be expanded if additional information is discovered by the applicant?

  44. Yes. Experience has shown that this is a very probable scenario. Usually companies coming forward have only discovered the tip of the iceberg. During the ensuing internal investigation they can be confronted with more evidence of the anticompetitive conduct contained in the reported market as well as in other markets not included in the initial filing.

  45. 23.

    Can an applicant lose its marker if a second applicant comes forward with better information?

  46. No. The applicant may only lose its marker if the information provided does not comply with the requirements stated in the UDCIT, if the applicant is in primary position aiming for full immunity. If a company or person applies first and complies with the aforementioned rule, it can be granted full immunity even if the second applicant brings better information. The aim of the law is to reward the first company that comes forward.

  47. 24.

    What if the applicant’s investigation reveals that no violation exists?

  48. Pursuant to the UDCIT, the applicant can withdraw its application and even withdraw the evidence presented to the SIC – if the applicant does not withdraw the information in the next 10 business days after the withdrawal of the programme, it is understood that it authorises the SIC to use the information to perform the investigation. The fact that an initial application was presented will not be used as evidence of the violation of the law by the SIC. The fact that the applicant considers that there has been no antitrust violation does not bar the SIC from starting a formal investigation.

  49. 25.

    What if the authority decides not to investigate?

  50. The SIC has the discretionary power to decide whether or not to investigate potential anti-competitive conducts. If, after the preliminary investigation, the SIC decides to abstain from opening a formal investigation, the SIC will inform the applicant of this decision. By definition there will be no fines in a case like this. The leniency application in such a case will be kept confidential by the SIC.

    Immunity cooperation obligations

  51. 26.

    What is the applicant required to produce?

  52. The applicant is required to cooperate fully with the SIC and provide any useful information it has access to. Specifically it is required to provide evidence regarding the following items: 

    • the agreement’s objectives; 
    • the agreement’s main activities (circumstances of place, time and manner); 
    • the identity of the parties involved in the conspiracy; 
    • the degree of participation of each of them; 
    • the affected products or services; 
    • the affected geographic area; and
    • the estimated time in which the agreement took place.

    Additionally, the applicant is required to refrain from destroying, altering or concealing relevant information or evidence regarding the alleged anticompetitive agreement. Likewise, the applicant must also cease being part of the agreement.

  53. 27.

    Will the applicant be required to make a written confession?

  54. One of the essential elements of a leniency application is the confession of wrongdoing on the part of the applicant. Pursuant to the UDCIT, an application to the leniency programme can be presented in written format at the SIC's offices or via email, at the choice of the applicant. 

  55. 28.

    Can third parties obtain access to the materials provided by the applicant?

  56. One of the essential elements of a leniency application is the confession of wrongdoing on the part of the applicant. Pursuant to UDCIT, an application to the leniency programme can be presented in written or verbal format at the choice of the applicant. 

    Because the applicant is “blowing the whistle” and denouncing other participants, the evidence presented to demonstrate the involvement of third parties will be shown to them, so they can exert their right to defence and, if applicable and feasible, belie the declarations and documents presented by the applicant as evidence.

  57. 29.

    Will the applicant lose its protection if one or more of its employees refuses to cooperate?

  58. Pursuant to the UDCIT, the company is forced to facilitate the SIC taking the testimony of its employees. If the company is willing to help the SIC to collect the testimonies, the fact that one or more employees refuse to cooperate with the SIC will not in itself damage the company’s application, provided that it has other means to demonstrate the conduct and comply with the requisites for a successful leniency application. As a matter of general principle, the company should make reasonable efforts to ensure that all the relevant employees cooperate with the SIC.

    Although the UDCIT states that the leniency benefits awarded to the company are "automatically" extended to the natural persons involved, in question 2 there is a list conducts that may exclude the applicant from the leniency programme, among these, lack of cooperation with the SIC.

  59. 30.

    Will the applicant lose its protection if one of its employees engages in obstructive conduct before or after the application?

  60. See question 29. In general terms obstructive behaviour of employees will take them out of the umbrella protection of the company’s leniency application and will not damage the position of the company, unless the obstructive conduct affects the compliance of the company with the requirements for a successful leniency application, as set out in question 4. As a matter of general principle, the company should make reasonable efforts to ensure that all the relevant employees cooperate with the SIC and abstain from any kind of obstructive behaviour.

  61. 31.

    Will the applicant be required to provide materials protected by attorney-client privileges or work-product doctrine?

  62. Attorney–client privilege is a constitutional right. Thus, the candidate is not required to provide materials protected by that privilege. However, the applicant may waive this right if it considers it necessary to ensure success in obtaining leniency benefits. This decision may create a difficult precedent for a multinational company and should be taken only if strictly necessary.

    Granting immunity

  63. 32.

    How does the authority announce its promise not to charge or sanction?

  64. Pursuant to the UDCIT, once the "first-in" applicant has handed over its information and evidence, the SIC will evaluate it and if it complies with the requirements set out above, the delegated SIC officer will sign a leniency agreement with the applicant. The leniency agreement will contain the following: 

    • a description of the evidence and information provided by the applicant; 
    • the recognition that the applicant was first in time with its application, or the position that the applicant has in the leniency programme for that investigation, and the fact that the applicant complies with the requisites for a successful application as described before; and 
    • an explanation regarding the conditional nature of the immunity, which depends on the confirmation of the Superintendent of Industry and Commerce in the resolution that puts an end to the investigation.

    The confirmation of immunity in the leniency agreement granted by the delegated SIC officer is conditional upon complete compliance with the requirements.This evaluation will be made in the final decisions (Resolution) by the head of the SIC when deciding the case. Before this confirmation is issued, there is no certainty of the application of the leniency benefits.

  65. 33.

    Does the authority put its commitment in writing?

  66. Yes. As explained in question 32, the SIC signs a leniency agreement with the applicant in which the leniency benefits are exposed.

  67. 34.

    Who is given access to the document?

  68. See questions 14 and 28. Normally, only the applicant and the SIC have access to the collaboration agreement, which remains in the leniency file and which is a separate file from the investigation dossier (even with a different internal number).

  69. 35.

    Does the authority publish a model letter for conferring immunity?

  70. So far the SIC has not published guidelines or models regarding leniency, but it is very possible that as the programme develops the SIC will produce such documents.

    Individual immunity or leniency

  71. 36.

    Is there an individual immunity programme?

  72. Yes. See questions 2, 12 and 29. Individuals can apply for leniency, or as collaborating employees of a company that has applied for leniency. According to the UDCIT, when an individual is the first to participate on a leniency programme, the company does not benefit from his or her application. However, the leniency benefits awarded to a company will be "automatically" extended to the natural persons who collaborate with the SIC.

  73. 37.

    What is the process for applying?

  74. The procedure for application to the leniency programme is exactly the same for natural persons and companies.

  75. 38.

    What are the criteria for qualifying?

  76. Natural persons have the same qualifying criteria as companies for participation in the leniency programme and for qualifying or obtaining the leniency benefits.

    Revocation of immunity

  77. 39.

    On what basis can corporate immunity be revoked?

  78. See question 32. Once the delegated SIC officer has evaluated the information and evidence filed by the applicant and once compliance with the requirements for obtaining the leniency benefits is established, a leniency agreement is signed.

    The confirmation of immunity granted in the leniency agreement by the Delegate is conditional upon the complete compliance with the requirements stated in the UDCIT. The final evaluation of this will be made by the head of the SIC when deciding the case.

    Before this confirmation is issued, there is no certainty of the application of the leniency benefits. It could be said then that there is no possibility of revocation of the leniency benefits, because in reality they are not firm until the Superintendent issues the final decision.

    It is possible that the SIC may decide not to confirm the leniency benefits for one or more of the following reasons:

    • the applicant fails to comply with the obligations accepted in the leniency agreement;
    • the Superintendent is in disagreement with the evaluation regarding the usefulness of the information and evidence made by the Delegate at the time of the signature of the leniency agreement;
    • it is demonstrated that the applicant was the instigator or promoter of the cartel;
    • the applicant fails to stop its participation in the anticompetitive conduct;
    • the applicant fails to cooperate with the SIC or to respond to its new requests for information; or
    • the applicant obstructs the investigation by hiding, destroying or manipulating the evidence.
  79. 40.

    When can it be revoked?

  80. See questions 32 and 39. The company is only certain regarding the firmness of the leniency benefits when the SIC issues its final decision. Before that happens, it only has an expectation based in the evaluation contained in the leniency agreement, but not a granted right. As said before, there is no revocation of the leniency benefits, because in reality they are not firm until the Superintendent issues the final decision.

  81. 41.

    What notice is required to revoke?

  82. See questions 32, 39 and 40. As said before, there is no revocation of leniency benefits, because in reality they are not firm until the Superintendent issues the final decision. For that reason there is no term or notice of such decision.

  83. 42.

    Can the applicant file a judicial challenge to a decision to revoke?

  84. Yes. The final resolution by which the Superintendent decides the case is an administrative act against which the interested parties can file a reconsideration plea within 10 days of its notification. The Superintendent should decide the plea for reconsideration within two months. If the decision is unfavourable, the interested parties can file a lawsuit before the administrative jurisdiction, aimed to the annulment of the decision and the indemnification of the damages caused.

    In addition, the UDCIT states that when the motive for revoking was the applicant’s role as instigator of the cartel, said loss of benefits will be decided by the head of SIC, taking into account the due process and defence rights of the applicant. 

    Reduction in sanctions

  85. 43.

    Does the leniency programme allow for reductions in sanctions?

  86. Yes. Pursuant to the UDCIT, whenever an applicant seeking total immunity does not meet the requirements to obtain that benefit, or when an applicant directly requests a reduction in the fine in exchange for cooperation, this fine may be reduced by the SIC. This is the situation where second and further applicants stand.

    To obtain a reduction of a fine, the applicant should comply with the following requirements:

    • recognise its participation in the anticompetitive conduct;
    • provide the SIC with evidence related to the anticompetitive conduct that adds significant value to the evidence already in the hands of the SIC;
    • cooperate with the SIC throughout the investigation in the form described in the answer to question 4;
    • assure that it is not the promoter or instigator of the anticompetitive agreements; and
    • put an end to its participation in the anticompetitive conducts.

    In addition, the UDCIT concedes a benefit (Amnesty Plus) of an additional 15 per cent reduction of the fine, to a leniency applicant that was not granted full immunity in the investigation, but got first-in position in other leniency application of another cartel.

    In order to obtain such benefit, the applicant must inform the SIC about the second cartel before signing the leniency agreement in the first cartel investigation.

  87. 44.

    What is the process for seeking a reduction in sanctions?

  88. The process is exactly the same as the applicant seeking full immunity. However, in accordance with the UDCIT, the second applicant can obtain up to 50 per cent of the fine reduction and the rest of applicants up to 25 per cent of the fine reduction. (Note that the Amnesty Plus may increase these caps).

    The SIC will evaluate the extension of the reduction in fines that should be granted to the applicants for such reductions. The result of this evaluation will be known in the final resolution.

  89. 45.

    Is there a marker process similar to immunity applications?

  90. See questions 4 and 17 to 25. The marker system works in a similar way in both applications that are aimed at obtaining full immunity and in applications that are only aimed at or that obtain a reduction in fines.

  91. 46.

    Are the reductions in sanctions fixed or discretionary?

  92. The SIC applies the reductions in sanctions using its own discretion and within the limits established in the UDCIT. The limits are as follows:

    • a first-in applicant that is eligible in terms of the Decree may be awarded total immunity or a 100 per cent reduction of the possible fines; 
    • a second-in eligible applicant may be awarded a maximum of a 50 per cent reduction of the possible fines; and
    • a subsequent eligible applicants may be awarded a maximum of 25 per cent reduction of the possible fines.
  93. 47.

    How are the reductions in sanctions calculated?

  94. The SIC will reduce the sanctions of eligible applicants using its discretion within the limits set out in question 46, taking into account the quality of the information provided and the timing of the application to the programme.

  95. 48.

    Are there sentencing guidelines?

  96. Even though Law 1340 substantially increased the fining capacity of the SIC, so far (June 2016) the authority has not issued sentencing guidelines. The SIC does, however, appear to use some kind of calculation system to establish the fines it imposes on companies that breach the law.

    There are some broad rules set out in article 25 of Law 1340. Pursuant to this article the SIC must consider the following in imposing fines: (i) the conduct’s effect on the market; (ii) the size of the affected market; (iii) the benefits obtained by the offender through its conduct; (iv) the degree of participation of the party involved; (v) the procedural conduct of those under investigation; (vi) the offending business’s market share, as well as the portion of its assets or sales involved with the infringement; and (vii) the infringer’s equity.

    There are also aggravating and mitigating circumstances that the SIC has to consider.

  97. 49.

    If an applicant's cooperation reveals self-incriminating information that expands the scope of the conduct known to the authority, will that conduct be factored into the fine calculation?

  98. Yes. Pursuant to article 25 of Law 1340, cooperation with the SIC that leads to uncovering illegal conduct is a mitigating circumstance in connection with the sanctions.

  99. 50.

    Are there fixed or discretionary discounts for the first applicant to cooperate after the immunity applicant (assuming there is an immunity applicant)?

  100. See question 46. The first applicant may receive total immunity; the second eligible applicant may be awarded a maximum of 50 per cent reduction of the possible fines; and the third and beyond will receive up to 25 per cent. The decision regarding to the reduction of the sanction within the said limit is discretionary of the SIC.

  101. 51.

    Other than fine reductions, are there additional incentives offered to an applicant that is the first non-immunity applicant?

  102. Since the SIC cannot impose different kinds of sanctions, fine reductions are the only incentives it can offer to the applicant that is the first non-immunity applicant.

  103. 52.

    Does the competition authority publish guidance regarding sentencing reductions?

  104. See question 48. The competition authority has not published any guidance regarding leniency programmes and there are no sentencing guidelines. The SIC is working on a new regulation that will probably cover those issues.

  105. 53.

    Does the authority provide for "Amnesty Plus" benefits?

  106. Yes. The UDCIT says that an applicant that is not in the first leniency position in a cartel investigation, but is the first to denounce other cartels, can be awarded a 15 per cent bonus in the leniency application where he is not in the first position.

  107. 54.

    How is the Amnesty Plus discount calculated?

  108. See question 53. Please notice that the 15 per cent hypothetical reduction may be aggregated to the reduction originally obtained (depending on the applicant’s position in the leniency program), even if that means exceeding the caps stated in  UDCIT).

    Cooperation obligations for sentencing reductions

  109. 55.

    Are the cooperation obligations similar to those for immunity applicants?

  110. See question 26. The cooperation obligations related to sentencing reductions are similar to those required for total immunity. Whenever an applicant who aimed to obtain total immunity does not meet the conditions named above, or when an applicant directly requests a reduction in the fine, the fine may be reduced if the applicant:

    • recognises that it participated or continues to participate in the anticompetitive agreement or agreements;
    • provides useful information and evidence regarding the anticompetitive agreement or agreements that adds a significant value to the existing evidence;
    • assists its employees in testifying to the SIC;
    • answers any requests from the SIC to clarify the facts;
    • abstains from destroying, altering or concealing relevant information or evidence regarding the alleged anticompetitive agreement; and
    • ceases to be part of the agreement.
  111. 56.

    Will the applicant be required to make a written confession?

  112. See question 27. Confession is an essential element of a leniency application. Pursuant to the UDCIT, application to the leniency programme can be presented in written form before the SIC or via email.

  113. 57.

    Can third parties obtain access to the materials provided by the applicant?

  114. See questions 14 and 28. The leniency application itself is considered to form part of the preliminary investigation and will be kept confidential. Other investigated persons and companies will have access to the documents that the SIC includes in the investigation file (different from the leniency file) once the formal investigation is launched. In the past, the SIC’s decision to maintain the confidentiality of the leniency dossier has been challenged before the courts in particular cases, but the decision has been decided favourably to the authority.

  115. 58.

    Will an applicant qualify for sentencing reductions if one or more of its employees refuse to cooperate?

  116. See question 29.

  117. 59.

    Will the applicant lose its protections if one of its employees engages in obstructive conduct before or after the application?

  118. Generally yes. See questions 29, 30 and 58.

  119. 60.

    Will the applicant be required to provide materials protected by attorney-client privilege or work-product doctrine?

  120. See question 31.

  121. 61.

    Can an applicant challenge the amount of the reduction of sanctions?

  122. Yes. See question 42.

    Settlements

  123. 62.

    How is the settlement process initiated?

  124. As in most Latin American countries, in Colombia the main weight in the application of competition laws depends on the activity of the authority that has responsibility for the enforcement of competition law in all sectors of the economy.

    The SIC conducts investigations that are administrative in nature (not judicial) aimed at finding out if there has been a violation of the competition laws, in which case the violation is prohibited and a fine is imposed. The SIC has no capacity to order indemnification of damages to third persons affected by the anticompetitive behaviour. These persons can seek the indemnification of their damages using civil actions, group actions (similar to class actions) and even unfair competition actions.

    Under Colombian competition law there can be two different kinds of settlements: a settlement with the SIC and a settlement between private parties.

    Settlement with the SIC
    The resolution that opens the formal investigation is notified to the accused persons who will have twenty working days to present and request evidence and if they decide so, offer garantías (a form of settlement, consent decrees with the SIC), a procedural benefit that allows the investigated parties to request the anticipated termination of the investigation, without sanctions, by undertaking that they will behave in a form consistent with competition laws and in compliance with a set of obligations including providing collateral. The benefit of such garantías is that the investigation is terminated immediately without sanctions and without a definition regarding the legality or illegality of the investigated conducts.

    The Superintendent can accept or decline a garantía at his sole discretion, depending on its sufficiency to convince the Superintendent of the compliance of the investigated companies with competition law. Unfortunately, the current administration of the SIC considers that the authority should only accept the garantías in exceptional cases.

    Settlement between private parties
    Pursuant to Law 640, 2001, in those cases in which an investigation is initiated following an accusation (ie, not at the SIC’s initiative), the SIC will call for a settlement hearing between the investigated parties and the accusers in order to promote an agreement regarding the settlement of their private interests. If such settlement is achieved it will not affect the continuation of the investigation, for the SIC is protecting the public interest. In practice these hearings have not been very effective for that reason.

    Moreover, plaintiffs in private actions – such as damages actions and class actions – are required, by law, to carry out a settlement hearing whose purpose is to search for an agreement that satisfy the parties and prevent the judicial procedure.

  125. 63.

    Is the amount of the sanction always fixed in the settlement agreement?

  126. Settlement with the SIC
    In the case of a settlement with the SIC, such an agreement does not require an admission of wrongdoing by the investigated parties and nor should it be interpreted as such. The settlement agreements refer to the conducts that the SIC considers suspicious and the commitments that the investigated parties undertake to remove any suspicion from them. If the garantías are accepted there will be no sanction.

    Settlement between private parties
    Private enforcement is tried under the rules of civil procedure. Under these rules the parties have the duty to provide evidence both of the anticompetitive nature of the conduct and the damages they suffered as a consequence. The judgment of the lower and higher courts will only refer to the damages suffered by the parties and not to any sanctions or fines as these powers are exclusive to the SIC.

    Group actions are tried under special procedural rules contained in Law 472 of 1998. The ruling will refer to the damages suffered by the group.

  127. 64.

    What role, if any, do the courts play in the settlement process?

  128. Settlement with the SIC
    Settlements with the SIC is an administrative procedure particular to the SIC. The courts do not play any role in the settlement process.

    Settlement between private parties
    In the case of settlements between private parties, under Law 640, 2001 the lower courts are required to conduct a settlement hearing. Thus the judge is in charge of setting the date for the hearing to be conducted.

    Class actions require the judge to take a more inquisitive approach on the matter. The settlement hearing is conducted and if successful the agreement will be made enforceable through a court ruling containing the terms of the covenant. Judges in class actions will review the settlement agreement and have the power to order follow-up procedures to verify compliance with the parties’ covenant.

  129. 65.

    Are the settlement documents, including any factual admissions, made public?

  130. Settlement with the SIC
    A settlement with the SIC does not require, nor it should be interpreted as an admission of wrongdoing and therefore there will be no factual admissions. The decision to accept the settlement offer is made public as the final decision of the Head of the SIC regarding the case.

    Settlement between private parties
    In a settlement between private parties, the judge will rule that a settlement has been reached and no publication of the covenants is required. In the case of class actions, pursuant to articles 29 and 61 of Law 472, 1998 the judge will order the publication of the agreement in public media that have national circulation (eg, newspapers and magazines).

  131. 66.

    Is an admission of wrongdoing required?

  132. No admission of wrongdoing is required in either a settlement with the SIC or between private parties.

  133. 67.

    Do companies that enter into settlement agreements receive an automatic sentencing discount?

  134. Settlement with the SIC
    In a settlement with the SIC, as no admission of wrongdoing is required, there is no decision regarding the sentencing. Accordingly no reference to the fines is made.

    Settlement between private parties
    In class actions the judge will issue an order containing duties and obligations with which the defendants must comply. The conclusion of settlements during these proceedings may lead to the avoidance of higher sentencing by the courts.

  135. 68.

    Do all of the subjects of an investigation have to agree to the settlement procedure before it is initiated by the authority?

  136. Settlement with the SIC
    The settlement commitment does not have to be filed by all the investigated parties, although its success is directly proportional to the number of parties that offer the settlement agreement. This is explained by the fact that the investigated parties make commitments to eliminate the suspicious conduct. The investigated parties’ initial settlement offer sets the framework for the negotiations. The head of the SIC can only require clarifications and minor additions. It cannot request major commitments to the investigated parties’ proposal.

    Settlement between private parties
    The settlement agreement can be reached among all the parties, or between some of the plaintiffs and some of the defendants. As the parties reach an agreement their lawsuit will be dropped against each of them.

  137. 69.

    Will the authority settle with subjects who refuse to cooperate?

  138. Settlement with the SIC
    The SIC may investigate a lack of compliance with the orders it issues as well as of the commitments made by the parties under the settlement agreement. It is important to note that negotiations are independent of the investigation and one should not affect the other. Nevertheless, a lack of cooperation with the head of the SIC will definitely increase the difficulty of reaching a settlement.

    Settlement between private parties
    The parties are required to attend the settlement hearing. An unjustified failure to attend may incur procedural consequences and fines.

  139. 70.

    If the settlement discussions terminate without an agreement, may any information provided or statements made during the negotiations be used against the parties?

  140. Settlement with the SIC
    Settlement negotiations are conducted with the Head of the SIC. The Deputy Supertintendent for Competition Portection who conducts the investigation is not privy to the information exchanged with the head during the proceedings. Likewise, when determining on any antitrust violation that has been committed, the Head will refrain from using such information.

    Settlement between private parties
    The negotiations between the parties cannot be used in the final decision. Confidentiality is an incentive for the parties to settle.

  141. 71.

    May a party to the settlement agreement void the agreement after it is entered?

  142. Settlement with the SIC
    Under Law 1340, 2009 any violation of the commitments entered into in the settlement agreements are subject to the same fines for antitrust violations. It is common for the SIC to establish a follow-up programme that contains obligations for the investigated parties to send information to the SIC regarding compliance with the commitments acquired.

    Settlement between private parties
    The parties may make a request to a judge to declare the settlement void for lack of compliance, or any other contractual defences (ie, duress, hardship, lack of consent or capacity).

  143. 72.

    Does the competition authority publish guidance regarding settlements?

  144. There are no official guidelines for the offer to settle before the SIC. The guidelines have been created by the case law on the subject matter.

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Questions

    Immunity or a 100 per cent reduction in sanctions

  1. 1.

    What benefits are available to the first applicant to qualify?


  2. 2.

    Do the protections extend to current and former officers, directors and employees?


  3. 3.

    Is immunity available after an investigation begins?


  4. 4.

    What are the eligibility requirements before an investigation begins?


  5. 5.

    What are the eligibility requirements after an investigation begins?


  6. 6.

    Will the applicant have to admit to a violation of law?


  7. 7.

    Are ringleaders or initiators of the conduct eligible?


  8. 8.

    When must the applicant terminate its involvement in the conduct?


  9. 9.

    What constitutes termination of the conduct?


  10. 10.

    Will the applicant be required to make restitution to victims?


  11. 11.

    Can more than one applicant qualify for immunity?


  12. 12.

    Can an applicant qualify if one of its employees reports the conduct to the authority first?


  13. 13.

    Does the afforded protection extend to any non-antitrust infringements?


  14. 14.

    What confidentiality assurances are given to the first applicant to report?


  15. 15.

    Does the authority publish guidance regarding the application of the programme?


  16. 16.

    Do the rules for obtaining immunity in your jurisdiction conflict with the immunity rules in other jurisdictions?


  17. Immunity application and marker process

  18. 17.

    What is the initial process for making an application?


  19. 18.

    What information is required to secure a marker?


  20. 19.

    How much time will an applicant have to perfect its marker?


  21. 20.

    Can the deadline for perfecting the marker be extended?


  22. 21.

    What is required to perfect the marker?


  23. 22.

    Can the scope of the marker be expanded if additional information is discovered by the applicant?


  24. 23.

    Can an applicant lose its marker if a second applicant comes forward with better information?


  25. 24.

    What if the applicant’s investigation reveals that no violation exists?


  26. 25.

    What if the authority decides not to investigate?


  27. Immunity cooperation obligations

  28. 26.

    What is the applicant required to produce?


  29. 27.

    Will the applicant be required to make a written confession?


  30. 28.

    Can third parties obtain access to the materials provided by the applicant?


  31. 29.

    Will the applicant lose its protection if one or more of its employees refuses to cooperate?


  32. 30.

    Will the applicant lose its protection if one of its employees engages in obstructive conduct before or after the application?


  33. 31.

    Will the applicant be required to provide materials protected by attorney-client privileges or work-product doctrine?


  34. Granting immunity

  35. 32.

    How does the authority announce its promise not to charge or sanction?


  36. 33.

    Does the authority put its commitment in writing?


  37. 34.

    Who is given access to the document?


  38. 35.

    Does the authority publish a model letter for conferring immunity?


  39. Individual immunity or leniency

  40. 36.

    Is there an individual immunity programme?


  41. 37.

    What is the process for applying?


  42. 38.

    What are the criteria for qualifying?


  43. Revocation of immunity

  44. 39.

    On what basis can corporate immunity be revoked?


  45. 40.

    When can it be revoked?


  46. 41.

    What notice is required to revoke?


  47. 42.

    Can the applicant file a judicial challenge to a decision to revoke?


  48. Reduction in sanctions

  49. 43.

    Does the leniency programme allow for reductions in sanctions?


  50. 44.

    What is the process for seeking a reduction in sanctions?


  51. 45.

    Is there a marker process similar to immunity applications?


  52. 46.

    Are the reductions in sanctions fixed or discretionary?


  53. 47.

    How are the reductions in sanctions calculated?


  54. 48.

    Are there sentencing guidelines?


  55. 49.

    If an applicant's cooperation reveals self-incriminating information that expands the scope of the conduct known to the authority, will that conduct be factored into the fine calculation?


  56. 50.

    Are there fixed or discretionary discounts for the first applicant to cooperate after the immunity applicant (assuming there is an immunity applicant)?


  57. 51.

    Other than fine reductions, are there additional incentives offered to an applicant that is the first non-immunity applicant?


  58. 52.

    Does the competition authority publish guidance regarding sentencing reductions?


  59. 53.

    Does the authority provide for "Amnesty Plus" benefits?


  60. 54.

    How is the Amnesty Plus discount calculated?


  61. Cooperation obligations for sentencing reductions

  62. 55.

    Are the cooperation obligations similar to those for immunity applicants?


  63. 56.

    Will the applicant be required to make a written confession?


  64. 57.

    Can third parties obtain access to the materials provided by the applicant?


  65. 58.

    Will an applicant qualify for sentencing reductions if one or more of its employees refuse to cooperate?


  66. 59.

    Will the applicant lose its protections if one of its employees engages in obstructive conduct before or after the application?


  67. 60.

    Will the applicant be required to provide materials protected by attorney-client privilege or work-product doctrine?


  68. 61.

    Can an applicant challenge the amount of the reduction of sanctions?


  69. Settlements

  70. 62.

    How is the settlement process initiated?


  71. 63.

    Is the amount of the sanction always fixed in the settlement agreement?


  72. 64.

    What role, if any, do the courts play in the settlement process?


  73. 65.

    Are the settlement documents, including any factual admissions, made public?


  74. 66.

    Is an admission of wrongdoing required?


  75. 67.

    Do companies that enter into settlement agreements receive an automatic sentencing discount?


  76. 68.

    Do all of the subjects of an investigation have to agree to the settlement procedure before it is initiated by the authority?


  77. 69.

    Will the authority settle with subjects who refuse to cooperate?


  78. 70.

    If the settlement discussions terminate without an agreement, may any information provided or statements made during the negotiations be used against the parties?


  79. 71.

    May a party to the settlement agreement void the agreement after it is entered?


  80. 72.

    Does the competition authority publish guidance regarding settlements?