The latest issue of our Brazil On The Record Newsletter is out! Every Saturday, we bring you the most important laws, decrees, administrative acts, and executive orders which have been approved by the Brazilian government — and published on the Federal Register (the Diário Oficial da União).

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BUSINESS AND INVESTMENTS

Schedule of receivables

To the core: Brazil’s Central Bank broadened competition in the banking sector by allowing, upon direct request from companies that sell products or services by credit card, payment accreditors (such as Cielo, Rede, American Express) to send the amounts related to installments (schedule of receivables) to any other financial institution. Until now, the sending could only be made to the bank with which the company had contracted a loan using these receivables as contractual guarantees.

Other issues to bear in mind:

In another decision published last week, the Central Bank decided to postpone, until April 8, the entry into force of a resolution that defines the conditions and procedures for banks to carry out credit operations linked to the amounts to be received by companies as a result of credit card installments.

Source: Circular nº 3.928, de 13 de fevereiro de 2019 (Banco Central) e Resolução nº 4.710, de 31 de janeiro de 2019 (Banco Central)


Financial stability

To the core: it increases the power of the Central Bank (Bacen) President on the committee responsible for

defining the practical measures to be taken to mitigate risks to the country&#8217;s financial stability. The Bacen president is empowered to directly define the convening of extraordinary meetings of the Financial Stability Committee (Comef). Until then, the Comef decided almost everything by consensus. Now, everything will be defined by a majority of votes, with the president of the Bacen having the deciding vote in case of a tie.</p> <p>One of Comef&#8217;s main duties is to define, every quarter, the so-called CFCA Brazil: the financial reserve that banks must accumulate during the expansion of the credit cycle, so that it is made available to the public later. It is a way for the Bacen to mitigate &#8220;the risks of excessive credit growth in times of great optimism and excessive reduction in times of pessimism.&#8221;</p> <h5>Other issues to bear in mind:</h5> <p>The Central Bank delegates Comef the task of preparing and approving the text of the Financial Stability Report (REF), which is published semiannually by the Central Bank and aims to &#8220;present a panorama of recent developments and prospects for financial stability in Brazil, focusing on the main risks and the resilience of the National Financial System, as well as communicate Comef&#8217;s vision on policy and measures to preserve financial stability.&#8221; The Circular letter does not make it clear whether, with this, the REF will be published quarterly, following the rhythm of Comef meetings, or if it is going to keep its pace of two times per year.</p> <p>Source: Circular nº 3.927, de 11 de fevereiro de 2018 (Banco Central)</p> <hr /> <h4><strong>Importing and trade</strong></h4> <p><strong>To the core:</strong> Last December, the Federal Revenue Service issued a Normative Instruction with procedures for importing merchandise involving trade operations. Now, it has been given greater detail, with the definition that any import operation involving trading can only happen if there is a previous record of all the agents involved in the operation, responsible for bureaucratic issues for the release of product, and the company that contracted the trading company and is in fact importing the product for resale in Brazil.</p> <p>The trading company also has to mention, in the Unique Portal of Foreign Trade, the CNPJ of the company to which it is making the clearance, and there must be a formal contract signed between the parties.</p> <p>Source: Portaria nº 6, de 25 de janeiro de 2019</p> <hr /> <h4><strong>Tax exemption</strong></h4> <p><strong>To the core: </strong>the Federal Revenue states that non-profit civil associations, such as business federations and industry associations, are exempt from CSLL (tax on profits) and Corporate Income Tax, even on revenues from sponsorship of companies in the city and local public bodies for the realization of parties and events, as well as the leasing of advertising spaces (provided that it is an advertisement limited to its members, that is, in the internal space of the association). In relation to Cofins social security contributions, these revenues must be taxed (with the exception of money coming from city hall and city companies).</p> <h5>Other issues to bear in mind:</h5> <p>In another Consultation Solution, the Federal Revenue also establishes that income from consulting services rendered by these non-profit entities is also exempt from Income Tax and CSLL, provided that the activity does not generate competition with another company that does not have right to tax exemption.</p> <p>Source: Solução de Consulta nº 320, de 27 de dezembro de 2018 (Receita Federal)</p> <hr /> <h4><strong>Credit guarantee</strong></h4> <p><strong>To the core:</strong> the Central Bank has updated the rule on the calculation for collecting contributions from banks to the Credit Guarantee Fund (a fund that covers potential problems of account holders in the event of bankruptcy, for example). What is new is the inclusion of an &#8220;additional&#8221; contribution, which had already been defined following a resolution approved by the National Monetary Council in April 2018. The rules relating to the calculation itself are very technical but without any additional novelty worthy of note.</p> <p>Source: Circular nº 3.929, de 13 de fevereiro de 2019 (Banco Central)</p> <hr /> <h2 style="text-align: center;">PENSIONS AND SOCIAL SECURITY</h2> <h4><strong>Unduly paid pensions</strong></h4> <p><strong>To the core:</strong> the Central Bank authorizes banks to repay, directly to government agencies, money that has been unduly deposited by the government to deceased persons (e.g., pensions and welfare benefits). The determination follows what was already provided in Provisional Measure No. 871, but now makes it clear that the repayment is made directly by the bank, independent of the deceased person.</p> <p>Source: Resolução nº 4.708, de 31 de janeiro de 2019 (Banco Central)</p> <hr /> <h4><strong>New pension propaganda</strong></h4> <p><strong>To the core:</strong> in an effort to persuade society to accept the reform of the pension system in Brazil, the government created a special evaluation commission, made up of representatives of the Government Department, the Office of the Chief of Staff, and the Ministry of Economy, to choose the advertising agency which will be hired to run the &#8220;New Pension System&#8221; campaign.</p> <p>Source: Portaria Interministerial nº 13, de 14 de fevereiro de 2019 (Secretaria de Governo)</p> <hr /> <h2 style="text-align: center;"><a href="https://brazilian.report/society/2018/12/07/brazil-education-productivity/">EDUCATIONAL SYSTEM</a></h2> <h4><strong>New rules for masters and Ph.D. courses</strong></h4> <p><strong>To the core:</strong> the new president of Capes, Anderson Ribeiro Correia (a former chief of one of the major military teaching institutes in Brazil), determined new rules for the opening of new masters and Ph.D. courses in the country, including distance learning masters courses, in the country, both by public and private universities. In general, the new rules reduce bureaucratic requirements. For example, if documentation is problematic, this is not an impediment for the new course proposal to proceed and have its merits analyzed anyway &#8211; which opens the door for approval of courses with low technical quality. At the same time, there are more loopholes for subjective control of the approval of new masters and Ph.D. courses.</p> <h5><strong>These are the gaps:</strong></h5> <ul> <li>From now on, new courses must meet the criteria of &#8220;appropriateness and justification of the proposal for regional or national development and its economic and social importance.&#8221;.To show that an engineering course, for example, has a direct potential impact on regional development is easy. But what about courses in sociology, history, philosophy or even psychology?</li> <li>The ordinance also requires, among the documents to be sent by educational institutions, a &#8220;detailed analysis and justification of the relevance of the new course for the institution.&#8221;</li> <li>Until now, the analysis was done in five steps. Now there will be only three. After the analysis of documentation, which may be incomplete, it is passed directly to the analysis of merit, with a detailed opinion on the proposal. The final step is the issuance of a final opinion by the Technical-Scientific Council of Higher Education. The report and referral proposal (for approval or rejection of the new master&#8217;s or doctoral degree) will now be the responsibility of a single advisor. By the previous rules, two advisors carried out this task jointly.</li> </ul> <h5>Other issues to bear in mind:</h5> <p>In the evaluation phase of the proposals, the possibility was first of &#8220;documentary diligence and due diligence&#8221; &#8211; that is, analyses of the paperwork and face-to-face visits to verify the conditions under which the course will be offered. Now, it is specified that only one documentary diligence and one visitation procedure will be allowed. In addition, if requests for clarification or other measures of Capes are not complied with within the deadlines, the process follows the process regardless, &#8220;even without the clarifications requested.&#8221;</p> <p>Source: Portaria nº 32, de 12 de fevereiro de 2019 (Coordenação de Aperfeiçoamento de Pessoal de Nível Superior &#8211; Capes)</p> <hr /> <h4><strong>Fund against student defaults</strong></h4> <p>In December 2017, former President Michel Temer sanctioned a law creating the FIES Guarantee Fund (FG-Fies), with the objective of protecting the government from having to automatically pay for potential student defaults. In this fund, the universities that join Fies are obliged to put money in the fund (between 10% and 25% of the monthly fees referred to Fies students) &#8211; as well as the federal government, which places up to the limit of R$ 3 billion. But in case of default, the money to be used initially to cover the deficit will be that of the colleges. In this new ordinance, Minister of the Economy Paulo Guedes places another R$ 500 million. It is the second contribution of the federal government to the fund (the first one was in March 2018), but still far from the foreseen limit.</p> <p>Source: Portaria nº 26, de 5 de fevereiro de 2019 (Ministério da Economia)</p> <hr /> <h2 style="text-align: center;">HEALTHCARE SYSTEM</h2> <h4><strong>Special drugs imports</strong></h4> <p><strong>To the core:</strong> imported drugs that are not regularized by the sanitary surveillance agency (Anvisa) may enter Brazil without any inspection, when there is court order for the public health system (SUS) to pay for treatments with said product. Previously, the sanitary surveillance officials at the port or at the airport of landing of the drugs had to carry out a technical analysis before clearing the product. Now any complementary analysis of Anvisa is waived and the import license is automatically granted.</p> <p><strong>Other issues to bear in mind:</strong></p> <p>This matter is subject to legal uncertainty. The Federal Supreme Court (STF) scheduled for May 22 the trial of a case with general repercussion (that is, the decision taken there will be valid for all other similar proceedings that are processed in the Brazilian courts) which deals precisely with the legality of the State being obliged to acquire imported medicines without registration in Anvisa. The rapporteur of the case, Justice Marco Aurélio Mello, has already voted against it.</p> <p>Source: Resolução RDC nº 262, de 1º de fevereiro de 2019</p> <hr /> <h4><strong>Radiopharmaceutical registration</strong></h4> <p><strong>To the core:</strong> Anvisa has defined new criteria for granting official registration for radiopharmaceuticals used for the diagnosis of diseases and the treatment of cancer and tumors, for example. These new rules apply only to radiopharmaceuticals that already have proven efficacy and safety (&#8220;consecrated use&#8221;). If the product has an active ingredient similar to another already registered in Anvisa, the registration will not be granted. Companies that had previously seen their applications refused will now have 30 days to file new lawsuits with Anvisa if they wish.</p> <h5><strong>Other issues to bear in mind:</strong></h5> <p>To grant registration, Anvisa &#8220;will assess the risk and benefit of granting registration of the radiopharmaceutical drug and the impact of its non-availability on the domestic market.&#8221; Companies that request registration do not need to present an operating permit issued by CNEN (National Nuclear Energy Commission), responsible for controlling the use of nuclear technologies in Brazil.</p> <p>Source: Resolução RDC nº 263, de 4 de fevereiro de 2019 (Agência Nacional de Vigilância Sanitária)</p> <hr /> <h4><strong>Lenalidomide application</strong></h4> <p><strong>To the core:</strong> the potential applications of lenalidomide for the treatment of multiple myeloma (bone marrow cancer) are amplified. Now, even patients without previous treatment or newly diagnosed with the disease can use the drug, which was released in Brazil in December 2017, but with more restricted indications at the time.</p> <p>Source: Resolução RDC nº 264, de 8 de fevereiro de 2019 (Agência Nacional de Vigilância Sanitária)</p> <hr /> <h2 style="text-align: center;">FOOD AND HEALTH SECURITY</h2> <h4><strong>Medicines and cosmetics suspension</strong></h4> <p><strong>To the core:</strong> companies that sell health products (from medicines to cosmetics) will be more likely to continue selling these products even when Anvisa orders a ban on them. The appeals presented by the companies to Anvisa will always have a suspensive effect (that is, the power to suspend the effects of the prohibition until a final decision is made). Though a 1999 presidential decree had a suspensive effect on appeals, an Anvisa resolution of 2008 provided that, in the case of a decision prohibiting sales, for instance, the suspensive effect could not be applied. This 2008 resolution is now repealed. Therefore, a company that resorted to the suspension of the marketing of a product will be able to keep ts medicine, cream, oil or whatever it is on sale from the moment they enter with an appeal.</p> <h5><strong>Other issues to bear in mind:</strong></h5> <p>The non-application of the suspensive effect was also valid for decisions which, if not fulfilled immediately, would endanger human health. In relation to these cases, from now on, an evaluation on a possible suspensive effect will still depend on a decision of the Board of Directors. That is, a prohibition decision will only apply immediately if the company does not file an appeal against the decision &#8211; which is quite unlikely.<br /> Appeals at the second instance in Anvisa will now be judged by the General Appeals Department, created in a resolution last December, and no longer directly by the Board of Directors. Previously, board was the second and last instance of appeal.</p> <p>Source: Resolução da Diretoria Colegiada nº 266, de 8 de fevereiro de 2019 (Agência Nacional de Vigilância Sanitária)</p> <hr /> <h4><strong>New psychoactive substance</strong></h4> <p><strong>To the core:</strong> A new psychoactive substance discovered in a seizure operation by Santa Catarina State police is now included in Anvisa&#8217;s list of controlled substances. This is RH-34, which was seized in tabs similar to LSD.</p> <p>Source: Resolução RDC nº 265, de 8 de fevereiro de 2019 (Agência Nacional de Vigilância Sanitária)</p> <hr /> <h2 style="text-align: center;">AGRIBUSINESS AND LAND OWNERSHIP</h2> <h4><strong>More credit and freedoms</strong></h4> <p><strong>To the core:</strong> on the one hand, producers (small, medium and large) will have more public credit available by the end of the first half of this year and, in simultaneously, they will also have the freedom to seek credit from sources other than official government programs. At the same time, banks, including private ones, will have more freedom to apply resources previously obligatorily linked to rural credit and now with free interest rate negotiation (with no pre-fixed rates by the government, therefore).</p> <h5><strong>Other issues to bear in mind:</strong></h5> <p>By June of this year, banks in general (public and private) should, in addition to existing obligations, maintain the value corresponding to 1% of the average deposit values for the National Program for Support to the Medium Rural Producer (Pronamp) loans received between July 2017 and June 2018. In the case of institutions working with Rural Savings Accounts (Banco da Amazônia, Banco do Nordeste, Banco do Brasil, Caixa Econômica Federal, among others), 1.2% of the amounts deposited in rural savings in the same period should go to Pronaf and 0.6% to Pronamp.</p> <p>The use of funds raised by banks through the issuance of Agribusiness Credit Letters (LCA) for investment in various applications is released. Until then, the application was mandatory in rural credit. Now this amount can be applied to interest rates to be settled freely for rural credit operations as well as for the acquisition of a Rural Product Certificate for the commercialization, processing or industrialization of products of agricultural origin or of inputs, and for the acquisition of CDCA (Certificate of Credit Rights of Agribusiness) issued by a cooperative.</p> <p>Source: Resolução nº 4.709, de 31 de janeiro de 2019 (Conselho Monetário Nacional)</p> <hr /> <h4><strong>Expired fines on agribusiness companies</strong></h4> <p><strong>To the core:</strong> A push by the Federal Comptroller General&#8217;s Office was required, but the Ministry of Agriculture is going to pass a fine tooth comb over the infraction notices issued against companies in the agricultural sector (slaughterhouses, for example) that have expired in the last five years &#8211; that is, government will no longer have to charge because the fines imposed have expired. The Secretary of Defense for Agriculture and Livestock orders that &#8220;the possible causes and the units where the processes are found&#8221; are investigated.</p> <h5><strong>Potential loophole:</strong></h5> <p>At no time, the ordinance determines any action in relation to cases of infraction notices that have not yet been prescribed, but which are close to that limit. This was, in fact, one of the main recommendations of the CGU audit that led to the publication of the Ministerial Order of Agriculture: &#8220;Improvement in the management of fines, in order to mitigate the inherent risk of prescribing amounts that currently amount to R$ 252 million&#8221;.</p> <p>Source: Portaria nº 17, de 8 de fevereiro de 2019 (Secretaria de Defesa Agropecuária)</p> <hr /> <h4><strong>Cattle performance</strong></h4> <p><strong>To the core:</strong> The deadline for submitting technical manifestations to the Ministry of Agriculture that may contradict the ban on the use of antimicrobials used as performance improvers in food-producing animals has been extended until March 21, and, following a recommendation from several international organizations, such as the WHO, which prohibited their use for this purpose because of a risk to public health. The extension is advantageous for companies. The question is what kind of attitude the government could take in this regard, as the international community is against the use of these antimicrobials.</p> <p>Source: Portaria nº 15, de 1º de fevereiro de 2019 (Ministério da Agricultura)</p> <hr /> <h4><strong>Harvest productivity</strong></h4> <p><strong>To the core:</strong> It extends to this year’s harvest and the next one the rule in force for the last two years on the expected productivity for the harvest. It should obey the average verified in Municipal Agricultural Production (MAP) between 2001 and 2010, excluding the two years with higher productivity and the two years with lower productivity.</p> <p>Sourc<em>e: Portaria nº 728, de 14 de fevereiro de 2019 (Ministério da Agricultura)</em></p> <hr /> <h2 style="text-align: center;">CORRUPTION AND ACCOUNTABILITY</h2> <h4><strong>Investigations interruption</strong></h4> <p><strong>To the core:</strong> the directors of the Federal Ombudsman&#8217;s Office (which is a member of the Federal Comptroller General&#8217;s Office) now have the power to directly decide on the closure of investigations, complaints and proceedings within their areas of competence. There are three departments which will no longer have to submit those decisions to the superior court, represented by the general magistrate: the Department of Accountability of Private Entities, the Department of Accountability of Public Agents, and the Department of Management of Correction System of the Federal Executive Branch. In the case of the latter, the power also passes to the two general coordinators ranked just below the director.</p> <h5>Other issues to bear in mind:</h5> <p>These directors will have the freedom to decide to close an investigation or even reject representations and information. In practice, the magistrate-general remains empowered to prosecute, but if any of the directors understand that a case deserves to be filed, he stops processing without the prior magistrate having to give a prior opinion. It may even result in quicker processes, but it seems more of a loophole to bring down investigations at the origin.</p> <p>Source: Portaria nº 691, de 7 de fevereiro de 2019 (Controladoria-Geral da União)</p> <hr /> <h4><strong>Secret intelligence</strong></h4> <p><strong>To the core:</strong> this is the first practical application of the decree that opened the scope for extending powers, within the government, to classify documents with secrecy of at least 15 years. The first delegation of powers came from the military area of government, under the command of the minister of the Office of Institutional Security, General Augusto Heleno. Now, the director general of Brazil&#8217;s intelligence agency (ABIN) will be able to classify documents as ultra-secret (25 years of confidentiality). Furthermore, ten other directors of ABIN may stamp documents to be kept secret until 2034 (15 years).</p> <h5>Other issues to bear in mind:</h5> <p>These are the units whose directors, in addition to the deputy director, have gained powers to define a document as confidential:</p> <ul> <li>Research and Development Center for Communications Security</li> <li>Department of Administration and Logistics</li> <li>Department of Personnel Management</li> <li>Department of Planning and Strategic Management</li> <li>School of Intelligence</li> <li>Department of Strategic Intelligence</li> <li>Department of Counterintelligence</li> <li>Department of Counter-Terrorism and Transnational Crimes</li> <li>Department of Intelligence Operations</li> </ul> <p>Source: Portaria nº 17, de 4 de fevereiro de 2019 (Gabinete de Segurança Institucional)</p> <hr /> <h4><strong>Citizenship check</strong></h4> <p>To the core: The Ministry of Citizenship has created an internal working group to overlook the rendering of accounts of projects and agreements that have presented problems in the last years, for &#8220;the identification and recovery of possible damage to the treasury and other penalties of those responsible, if it is the case &#8220;.</p> <p>Source: Portaria nº 284, de 6 de fevereiro de 2019 (Ministério da Cidadania)</p> <hr /> <h2 style="text-align: center;">VIOLENCE AND CRIMINAL MATTERS</h2> <h4><strong>Prison technology</strong></h4> <p><strong>To the core:</strong> Companies, including foreign companies, that want to sell technological solutions to Brazilian federal prisons, such as modern surveillance cameras, x-ray systems, cell phone signal blockers, among other solutions, will have to first go through an analysis committee. This commission, created by the National Penitentiary Department (DEPEN), will be responsible for holding hearings with companies and also for analyzing travel requests from servers to missions with the objective of knowing the application of these technologies in other countries.</p> <h5><strong>Potential loophole:</strong></h5> <p>All meetings of the Technical Committee, which shall be chaired by a representative of the Office of the Director General of Depen, shall have minutes. But there are two points to be considered: 1) This does not mean, at least verbatim, that audiences with the companies themselves should have ties; and 2) Will the minutes of the meeting be classified as confidential? If so, what is the degree of secrecy imposed?</p> <p>Source: Portaria nº 42, de 25 de janeiro de 2019 (Departamento Penitenciário Nacional)</p> <hr /> <h4><strong>Inmates visitation rights</strong></h4> <p><strong>To the core:</strong> inmates in federal maximum security units will have a much more rigorous visitation system &#8211; with prison management having the right to monitor conversations, including contact between detainees and their lawyers. These changes were published on the very day of the transfer of leaders of the PCC crime gang to federal-controlled penitentiaries, but the changes had been drafted before that. It ends the right to common, face-to-face visits, which allow physical contact (see below). Inmates can only be visited in booths separated by soundproof glass, with contact by way of a telephone, or via videoconference.</p> <p>And these visits must happen &#8220;under the necessary supervision.&#8221; Could this be a loophole for recording the conversation or video conference call? The ordinance now provides that in case of &#8220;a suspected use of encrypted language,&#8221; the visit may be interrupted. The only way to know if encrypted language is being used, is by listening in real time. So, yes, the indiscriminate monitoring of the conversations is indeed foreseen.</p> <h5>Other issues to bear in mind:</h5> <p>Even lawyers will no longer be able to meet with their clients other than in visitation booths. A directive of 2017 that specifically regulated the visit of lawyers in federal penitentiaries was revoked. As Moro&#8217;s order does not make any specific reference to lawyers, or this means that the presence of lawyers is totally liberated, or, what makes more sense in the spirit of the ordinance, that they will no longer have specific access and will be framed in the category of &#8220;friends.&#8221; The ordinance says that the omissive cases will be solved by the director general of DEPEN. Before, the omissions were solved directly by the directors of the penitentiaries.</p> <p>The only prisoner to be entitled to a common visit, without the limit of the parlor, will be the one who has been jailed for at least a year (360 days) from today, showing &#8220;great&#8221; behavior inside the prison. If he achieves this, he will be entitled to a visit of up to three hours per month. Today, these common visits happen weekly. That is, for at least a year, counted from last Wednesday, visits with physical contact to a person detained in federal prison will fall from 52 to zero.</p> <p>The exception to this rule is for plea-bargain informers and collaborators who are imprisoned in such units, or for eventual detainees who, although they do not meet the criteria for federal prison, for some reason are there temporarily. In these cases, the current procedures are maintained.</p> <p>Source: Portaria nº 157, de 12 de fevereiro de 2019 (Ministério da Justiça)</p> <hr /> <h4><strong>‘Humanitarian pardon’</strong></h4> <p><strong>To the core:</strong> after restricting the entitlement benefits of closed prisoners, President Jair Bolsonaro has now issued a &#8220;humanitarian pardon.&#8221; As we are talking about someone who has never given much attention to human rights, the &#8220;humanitarian&#8221; aspect here is very restricted. Only paraplegic or blind people or people with illnesses that cannot be treated in prison or terminal cancer, tumor or HIV-positive prisoners are entitled to pardon.</p> <p>But these are not just the criteria. First, the issue of physical disability only applies if the problem occurred after the arrest or as a result of the criminal act. Another exception: if the subject is a drug dealer, he can only be released if he is a first offender and is not a member of the PCC or other crime gangs. In practice, prisoners with disabilities or serious illnesses will only be excused if they have been convicted of crimes such as theft, digital crime, trafficking wild animals and others without violence.</p> <h5>Other issues to bear in mind:</h5> <p>The decree vetoes the granting of pardons to convicts for heinous crimes (homicide, robbery, kidnapping, rape, among others), other cases involving the practice of &#8220;serious violence&#8221; (domestic violence cases, perhaps?), in addition to crimes of torture, of criminal organization (many of those convicted by Lava Jato) and terrorism. Passive and active corruption, embezzlement (embezzlement of public funds) and influence peddling are also considered unforgivable by Mr. Bolsonaro, as well as sexual harassment and rape of vulnerable individuals (libidinous acts with children under 14 years).</p> <p>Not only are drug traffickers excluded from the pardon (except for the exceptions quoted above), but also drug mules and even those who plant marijuana, for example.</p> <p>When there is still an appeal by the Public Prosecution Service after a second instance conviction &#8211; that is, to increase the sentence &#8211; the pardon is not applicable.</p> <p>In the case of a person convicted of a crime that may be pardoned and, at the same time, by others that are impeding the grant of the benefit, the pardon will only be granted after the sentence for the most serious crime has been served.</p> <p>Source: Decreto nº 9.706, de 8 de fevereiro de 2019</p> <hr /> <h2 style="text-align: center;">LOGISTICS AND INFRASTRUCTURE</h2> <h4><strong>Traffic accident reimbursement</strong></h4> <p><strong>To the core:</strong> The National Transport Infrastructure Department (DNIT) will demand in court, from companies hired by the agency, the reimbursement of amounts paid by the agency as compensation generated by traffic accidents due to poor state of conservation of roads (for example, holes, lack of signaling, animals on the tarmac etc) . The ordinance defines the procedure to be adopted by DNIT for this collection. The priority of reimbursement requests will be for the cases where DNIT is sentences to pay lifelong pensions, continued benefits in general and indemnifications over BRL 200,000.</p> <p>Source: Portaria Conjunta nº 1, de 22 de janeiro de 2019 (Departamento Nacional de Infraestrutura de Transportes)</p> <hr /> <h4><strong>Renewal of port contracts</strong></h4> <p><strong>To the core:</strong> Companies that operate ports and are renewing contracts with the federal government should be &#8220;preferably&#8221; constituted as Specific Purpose Entities (SPE). Once the contractual addendum has been agreed, the company will have the term of one year to transform its constitution into an SPE. An alternative is the creation of an &#8220;operational or business unit&#8221;, as a branch, but with a decentralized bookkeeping system that allows monitoring of data as in the case of SPEs. The goal is to enable more consistent accounting analysis.</p> <h5>Other issues to bear in mind:</h5> <p>The companies must make a survey on the assets of the federal government being managed by these companies, including identification of movable, idle and inservable assets.</p> <p><em>Source: Resolução Normativa nº 28, de 11 de </em>fevereiro<em> de 2019 (Agência Nacional de Transportes Aquaviários)</em></p> <hr /> <h2 style="text-align: center;">DEFENSE AND HOMELAND SECURITY</h2> <h4><strong>The strength of the General</strong></h4> <p><strong>To the core:</strong> The strengthening of General Augusto Heleno&#8217;s figure is increasingly evident. A few weeks ago, the decree had created two new special advisor posts directly linked to the GSI chief minister. Now, a new presidential decree creates two additional advisor positions, at intermediate level, but also directly linked to the most powerful military minister of the Bolsonaro government.</p> <p>Source: Decreto nº 9.705, de 8 de fevereiro de 2019</p> <hr /> <h4><strong>Venezuelan refugees</strong></h4> <p><strong>To the core:</strong> Last November, Congress authorized an extraordinary credit of more than BRL 70 million for the Ministry of Defense to work in the receiving Venezuelan refugees. Now, since the balance was not fully used last year and the loan was opened in the last four months of the year, Bolsonaro is only authorizing the surplus to be used again for the same purpose. This maneuver is provided for in the Constitution.</p> <p>Source: Decreto nº 9.709, de 13 de fevereiro de 2019</p> <hr /> <h4><strong>Hall of shame</strong></h4> <p><strong>To the core:</strong> It sounds silly, but symbolically it has relevance. New rules make it easier to exclude those who have been awarded the Order of Merit of Defense, one of the highest honors of the Brazilian government. For example, former President Lula. The Council of the Order has gained a new duty: &#8220;to coordinate the process of exclusion of the recipient.&#8221; As Lula is decorated with the Grand Cross medal, but is currently in jail, it fits into one of the hypotheses for the Council to propose his exclusion.</p> <h5>Other issues to bear in mind:</h5> <p>The council is composed of four people: the Defense Minister, the Foreign Minister, the Joint Chiefs of Staff and the Secretary General of the Ministry of Defense. By 2014, there were nine members. Decisions by exclusion are easier now.</p> <p>Another margin for exclusions is that now the rule of the Order has been included in the rule that, in order to be admitted on the Board of the Order, one must &#8220;possess moral suitability, unblemished personal conduct and high concept in the class and community to which he belongs.&#8221; Before, this demand did not exist. It may be a loophole to rule out those who no longer meet those criteria. Among the honored are Eduardo Cunha, Geddel Vieira Lima, José Dirceu, Sérgio Cabral and Aécio Neves.</p> <p>There is scope for granting the Order of Merit in the category of Commander, Officer or Knight to any &#8220;personality of rank equivalent&#8221; to a lot of titles. Basically, whoever is convenient.</p> <p>Source: Portaria Normativa nº 10/GM-MD, de 4 de fevereiro de 2019 (Ministério da Defesa)</p> <hr /> <h4><strong>South Sudan embargo</strong></h4> <p><strong>To the core:</strong> Jair Bolsonaro&#8217;s decree determines compliance with the UN Security Council resolution that prevents the sale of arms and ammunition to South Sudan. The embargo is valid until at least May 31, 2019.<br /> <em>Source: Decreto nº 9.710, de 13 de </em>fevereiro<em> de 2019</em></p> <hr /> <h2 style="text-align: center;">ENVIRONMENTAL ISSUES</h2> <h4><strong>Food trucks in nature</strong></h4> <p><strong>To the core:</strong> The National Park of Brasília, the main ecological reserve of the federal capital, with its mineral water pools, will now be home to food trucks—an unprecedented action for Brazil&#8217;s national parks. The Chico Mendes Institute for Biodiversity Conservation (ICMBio) decided to open a selection process for vacancies within the park. Food trucks should open at 8 am. It will be compulsory to operate from Thursday to Sunday. Between Monday and Wednesday, it will be optional.</p> <p>They will not be able to sell alcoholic beverages, nor barbecued meat, nor popcorn. There will be a draw to decide which food trucks get the spaces and they will be separated into two categories: traditional food and healthy or natural food. The priority, however, will be for traditional food (in the case of five vacancies, three will be for traditional food). The documentation for accreditation must be submitted by March 15.</p> <p>Source: Portaria nº 38, de 29 de janeiro de 2019 (ICMBio)</p> <hr /> <h4><strong>Environmental intelligence</strong></h4> <p><strong>To the core:</strong> IBAMA has established rules for the agency&#8217;s servants to have access to the National System of Information on Public Safety, Prisons, Traceability of Weapons and Ammunition, Genetic, Digital and Drug Material (Sinesp Infoseg). It is the same system used by the police and intelligence authorities of the country. In the case of IBAMA, the objective is to give more subsidies to fight and prevent environmental crimes.<br /> Source: Portaria nº 393, de 7 de fevereiro de 2019 (Ibama)</p> <hr /> <h2 style="text-align: center;">MINING</h2> <h4><strong>Emergency contacts</strong></h4> <p><strong>To the core:</strong> The Secretary of Geology, Mining and Mineral Processing requires that the National Mining Agency (ANM) informs him of the names, positions and telephones of two directors of companies holding mining rights &#8220;for urgent contact in case of immediate need regarding the security of the enterprise.&#8221; In relation to new ventures, this information must be shared in real time with the secretary.</p> <p>Source: Portaria nº 36, de 8 de fevereiro de 2019 (Ministério de Minas e Energia)</p> <hr /> <h4><strong>Operational review of dams</strong></h4> <p><strong>To the core:</strong> The Ministry of Mines and Energy instructed the ANM to establish an investigation to find out how &#8220;the control and safety oversight of the stability risks of the dams subject to its field of competence&#8221; has been proceeded, including in relation to the independence of contracted external consultancies by companies, as well as the relationship between the public agencies involved in the supervision and control of dam safety. The ANM should send monthly reports to the Secretariat of Geology, Mining and Mineral Transformation on the ongoing assessments.</p> <p><em>Source: Portaria nº 37, de 8 de </em>fevereiro<em> de 2019 (Ministério de Minas e Energia)</em></p> <hr /> <h2 style="text-align: center;">CULTURE</h2> <h4><strong>Postponed art policy</strong></h4> <p><strong>To the core:</strong> Funarte extended for a further six months the initial term of nine months established in May last year for a working group formed by the body responsible for formulating public policies in the arts to define a plan for the dissemination of structural changes defined by a another working group (created in 2017).</p> <p>Source: Portaria nº 46, de 11 de fevereiro de 2019 (Fundação Nacional de Artes)</p> <hr /> <h2 style="text-align: center;">COMMERCIAL REGULATION</h2> <h4><strong>Flight security</strong></h4> <p><strong>To the core:</strong> Airlines, including air taxi companies, always have a person responsible for the operational safety of the fleet, whether by helicopter or aircraft. Until last week, it was up to the National Civil Aviation Agency (ANAC) to determine the criteria of &#8220;competence, experience and training&#8221; that should be followed by companies to define this responsible person. Now this will fall directly to the businesses. It is the logic of private sector self-regulation, landing this time in the area of civil aviation. For now, no reason for alarm, but the fact is that if an airline taxi company wants to hire someone without great experience (for being cheaper and with more options on the market, for example), they will be able to do so.</p> <h5>Other issues to bear in mind:</h5> <p>The logic of debureaucratization, which can be argued by the government, is relative in this case, as, in relation to other important functions in the airlines, the prior technical requirements of Anac were maintained. This is the case, among others, of the chief pilot and the maintenance manager.</p> <p>Anac&#8217;s resolution, on the other hand (positive), tightens up on companies and individuals who have been involved in irregularities in the past. The agency will not issue certification to companies that have placed, &#8220;or intend to place,&#8221; in strategic positions (such as chief operating officer, chief pilot, etc.) those who have been involved, in the last five years, in an irregularity that has led to the cancellation of certificates or suspension for more than 90 days. Previously, this verification was restricted only to the last two years.</p> <p>A possible breach, however: the resolution determines that this impediment will occur only in cases where the person &#8220;has demonstrated direct responsibility for the cause of the irregularity&#8221;. The question is: who proves this and when? Potentially, the problem may have happened, but the case will still be the object of administrative or judicial appeals &#8211; therefore, without final confirmation. The wording could have been more specific here. It was not.</p> <p>An unfortunate irony: although it was signed on the 7th, the resolution was published on day 11, the date of the death of the famous journalist Ricardo Boechat, the victim of a helicopter crash that was flying in an irregular situation.</p> <p>Source: Resolução nº 503, de 7 de fevereiro de 2019 (Agência Nacional de Aviação Civil)</p> <hr /> <h4><strong>Flight services control</strong></h4> <p><strong>To the core:</strong> The monitoring of the provision of services by airlines tends to become more rigorous. The National Civil Aviation Agency (ANAC) has changed the internal department responsible for this inspection. As of March 11, the Superintendence of Air Services Monitoring will be responsible, in addition to taking care of the &#8220;General Conditions of Air Transport and Accessibility&#8221;. This internal body already had enough power, and now it will have even more. It will, at the same time, formulate rules and punish those who infringe them. In a rough comparison, it is as if the Legislature has the power to propose laws and, at the same time, to take care of the application of fines and other punishments against those who violate them. Previously, this power to oversee airline services rested with the Superintendency of Tax Cases, which will now focus only on fiscalization of tax aspects involving companies in the sector.</p> <p><strong>Other issues to bear in mind:</strong></p> <p>ANAC&#8217;s Board of Directors also has the power to judge appeals filed by companies against suspensions or appeals, with or without simultaneous application of a fine in cash, which have been determined by the first administrative instance. These cases will now go straight to the board&#8217;s final decision. In the case of application of other, lighter punishments, the judgments continue to be attributed to the Assessment of Judgment of Autos in Second Instance.</p> <p>The &#8220;Advice of Articulation with the System of Investigation and Prevention of Aeronautical Accidents&#8221; is now known as &#8220;Operational Safety Advisory&#8221;. This new Advisory gains considerable powers over the control of the safety of Brazilian air transportation, encompassing many other coordination and monitoring actions in comparison with what was being carried out by the previous agency.</p> <p>Source: Resolução nº 502, de 30 de janeiro de 2019 (Agência Nacional de Aviação Civil)</p> <hr /> <h4><strong>Ad </strong>aeternum<strong> authorization</strong></h4> <p><strong>To the core:</strong> There is no longer a 10-year limit on the operation concession for airlines, which could be renewed in case the airline fulfills its &#8220;social objective and other applicable laws and regulations&#8221;. Now this concession is valid indefinitely, &#8220;as long as the company maintains all the technical and operational conditions defined by ANAC and complies with other applicable laws and regulations.&#8221;</p> <p>Source: Resolução nº 505, de 13 de fevereiro de 2019 (Agência Nacional de Aviação Civil)</p> <hr /> <h4><strong>Offers comparison</strong></h4> <p><strong>To the core:</strong> The regulatory agency responsible for the telecommunications area created a management group with the participation of the major telephony operators to improve the Anatel application that compares telecom operators&#8217; offerings (landlines, cell phones, internet and paid TV). A first version was released on a trial basis in the middle of last year. The new version of the Anatel Comparator application should be made available to the public within 10 months from now, but this deadline may be revised in the future, according to the ordinance itself.</p> <h5>Other issues to bear in mind:</h5> <p>The process of defining the criteria will have direct participation of the operators, so it is doubtful that the application reaches the public with total transparency. Companies may claim the right to the preservation of information that may benefit the competition.</p> <p>Source: Portaria nº 293, de 12 de fevereiro de 2019 (Agência Nacional de Telecomunicações)</p> <hr /> <h4><strong>Premium gasoline</strong></h4> <p><strong>To the core:</strong> The resolution of the National Petroleum Agency ends with the compulsory addition of gasoline, which has never been implemented, but is now permanently buried. Technically, the resolution excludes the mandatory presence of dispersing detergent in the composition of ordinary gasoline.</p> <p><strong>Other issues to bear in mind:</strong></p> <p>The ANP also ended the requirement that producers and importers of Gasoline A have to submit to ANP, every four months, the results of the &#8220;deposit analysis in valves of at least one batch sold in the period&#8221;.</p> <p>Source: Resolução nº 770, de 14 de fevereiro de 2019 (Agência Nacional do Petróleo)</p> <hr /> <h2 style="text-align: center;">SOCIAL MINORITIES AND HUMAN RIGHTS</h2> <h4><strong>Loan for the poor</strong></h4> <p><strong>To the core:</strong> Because of the Brumadinho dam disaster, city residents who already receive government benefits (either welfare benefits such as Bolsa Família, or INSS) will have their payments made in advance. By decision of the Social Security Department, now subordinate to the Minister of Economy, Paulo Guedes, the population of Brumadinho will receive an additional portion of the benefits to which they were already entitled, but with the condition that they return the funds in up to 36 installments, which will be discounted, every month, of the amount of the regular benefit.</p> <p>Source: Portaria Conjunta nº 91, de 11 de fevereiro de 2019 (Secretaria da Previdência)</p> <hr /> <h2 style="text-align: center;">REAL ESTATE MATTERS</h2> <h4><strong>New housing financing</strong></h4> <p><strong>To the core:</strong> Caixa Econômica Federal defined the amounts involved in FGTS operations. In the area of popular housing as a whole, the value is almost the same as last year. Instead of BRL 30 billion, it will be BRL 30.086 billion, for the granting of financing to individuals or legal entities that benefit families with gross monthly income of up to BRL 4,000. But there is an important detail:</p> <p>For the granting of discounts on loans to individuals, in urban or rural areas, the value increased from BRL 3 billion to BRL 6.3 billion for new properties in the amount of up to BRL 170,000 located in state capitals or cities with more than 1 million inhabitants. At the same time, the amount for granting discounts for new properties of up to BRL 190,000 in the Federal District and in metropolitan areas of São Paulo and Rio de Janeiro decreased from BRL 6 billion to BRL 2.4 billion. That is, it stimulates more financing of real estate outside the big centers. Also, there are BRL 300 million complementary to the granting of a discount on the financing of real estate used in urban areas.</p> <p>For non-popular housing units (maximum value of the property of BRL 950,000), total resources will be BRL 4.25 billion. Last year, it was BRL 5 billion. The criterion of 60% of this amount for new properties is maintained. For financing of basic sanitation works, BRL 2.4 billion goes to credit operations contracted by the public sector, and BRL 1.6 billion for operations contracted by private companies. Last year, these figures were, respectively, BRL 3.6 billion and BRL 2.4 billion.</p> <p>In the area of urban infrastructure, the values will be BRL 3.2 billion for the public sector and BRL 800 million for the private sector. Last year, the amounts were, respectively, BRL 5.3 billion and BRL 1.7 billion. The difference is that this year, an additional BRL 1 billion goes to the Pró-Cidades program, of which BRL 700 million is for public sector borrowers and BRL 300 million for the private sector.

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