1 ¿QUÉ ES LA COLUSIÓN EN LICITACIONES? COLOMBIAN LENIENCY PROGRAMME Superintendence of Industry and Commerce

2 ¿QUÉ ES LA COLUSIÓN EN LICITACIONES? Background … Superintendence of Industry and Commerce

Superintendence of Industry and Commerce 2013 Law 1340 of 2009 Article 6: The SIC has exclusive authority in matters of competition. Article 14: introduced the leniency programme Article 15: Confidential information Article 16: Settlement procedure Articles 25 and 26: Fines Decree 2896 of 2010 “Through which Article 14 of Law 1340 of 2009 is regulated”

Superintendence of Industry and Commerce Susy Serrano González 2013 Who can be part of the Leniency programme? Natural or legal persons who have not acted as coercers of the agreement. The participant in the agreement who can provide enough and useful evidence in order to initiate the investigation. The participant in the infrigement who can fully cooperate with the SIC. The infringing party agrees to end anticompetetive behaviour.

Superintendence of Industry and Commerce 2013 Once the request has been made to the Deputy Superintendent for Competition: 1.He will asses if the undertaking fulfils all the criteria already mentioned 2. He will decide the percentage of the immunity granted to the leniency applicant. 3. If so, the SIC will sign an agreement with the leniency applicant. Procedure

Superintendence of Industry and Commerce 2013 If the primary applicant does not meet the legal requirements the following party will be next in place to benefit from the fine exemption. The same applies to subsequent applicants. The Deputy Superintendent for the Protection of Competition, according to the evidence provided, will evaluate a partial reduction for the second, third, and other participants in the following manner: Up to 70% for the second leniency applicant meeting the requirements, Up to 50% for the third and, Up to 30% for all others.

Superintendence of Industry and Commerce 2013 Leniency programme - do s and don’t s -

Superintendence of Industry and Commerce 2013 Those primary applicants who would benefit from total exemption from the fine but who do not fulfil the requirements cede their position to those who apply in second or third place. This is a very good aspect because it attracts more agents who are more likely to become benefitted. Leniency program - Do’s -

Superintendence of Industry and Commerce 2013 Penalties: The implications of the economic increase of fines (financial penalties of up to 100,000 times the minimum wage or 150% of the economic benefit of the infringement) have meant that the parties are more likely to denounce anticompetitive behaviour. Leniency program - Do s -

Superintendence of Industry and Commerce 2013 Settlements vs. Leniency Colombian law allows an early termination of an investigation if the party makes a settlement offer. Therefore: Participants in an agreement may use this tool up to and before the end of the term to provide the evidence. This may result in a low participation in the cases where whistleblowing takes place, as the settlement procedure offers more effectiveness and is less risky. Leniency programme - Don’t s -

Superintendence of Industry and Commerce 2013 Time to apply Colombia does not set a limit for filing a claim, which enables the participants in an agreement to submit it at any time before the motivated report is sent to the Superintendent of Industry and Commerce. This discourages early collaboration in the sense that they have a wider margin of time to analyse the position and quality of the evidence collected by the SIC, and so their considerations on whether or not to participate in the programme will be subject to change. Leniency programme - Don’t a -

Superintendence of Industry and Commerce 2013 Normative clarity Decree 2896 of 2010 is not clear in establishing the consequences of the denial of benefits, either because the applicant failed to comply with their obligations or failed to provide sufficient evidence. According to Decree 2896, the Superintendence shall resend to the parties all the evidence provided; however, eventually the information collected during the negotiation, even when returned, can be used by the competition authority, disadvantaging those who tried to participate. Similarly, there is no clarity on the criteria for assessing the evidence or the granting of benefits, which will be awarded at the discretion of the Deputy Superintendent for Competition. This could be perceived as an additional risk to which the participants are subject as the fear is that they could "confess" without receiving any benefit. Leniency programme - Don’t s -

Superintendence of Industry and Commerce 2013 Criminal Law Bid rigging is the only anticompetitive conduct sanctioned by Criminal Law. It permits a reduction in the penalty for those who, having applied to the collaborative programme benefits, received total exemption from the Superintendence. This is perceived as a disincentive to participate in the programme since the criminal law does not allow a full exemption. Leniency programme - Don’t s -

Superintendence of Industry and Commerce 2013 Thank you.