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

Confidential IPOs

To the core: Companies which must register for an IPO on the Brazilian stock exchange will be able to complete this process in a confidential manner, by way of a “private analysis,” in which the company’s information is kept confidential until the request for issuance is accepted or the company publishes a market notice and its preliminary prospectus. This has been a long-time request of companies and follows the system already used in the United States. Requests for private analyses must provide justification, but “private treatment must be granted by the technical areas”, rules Brazil’s securities commission.
Other issues to bear in mind:
  • It put an end to the restriction on public offer registrations in the 16-day period that precedes the mandatory disclosure of quarterly financial results by listed companies. This was also another long-time request of companies, as it prevented registrations from taking place for 64 days out of the year.

Source: Deliberação CVM nº 809, de 19 de fevereiro de 2019 (Comissão de Valores Mobiliários)


Privatizations curriculum

To the core: One of Jair Bolsonaro’s long-time supporters in the race for the presidency, Salim Mattar—owner of major Brazilian car rental company Localiza—was made the special secretary of Privatization and Divestment. Mr. Mattar now has formal powers to appoint the presidents of state-owned companies linked to the Ministry of the Economy. Among such companies are Banco do Brasil and Caixa Econômica Federal, the Brazil’s leading state-controlled banks. Although these banks are not (at least for the time being) on the list of companies to be privatized (and have had their new presidents appointed recently), this proxy extends to 29 other state-owned companies, including several subsidiaries of Banco do Brasil and Caixa. It would appear that the days of these subsidiaries are numbered.

Source: Portaria nº 438, de 25 de fevereiro de 2019 (Ministério da Economia)


Salaries of NGO officers

To the core: In response to a tax consultation, Brazil’s federal revenue service clarified that, in order to remain exempt from Corporate Income Tax, all non-profit civil associations (such as NGOs) are required to respect a ceiling for the remuneration of its officers: 70% of the constitutional limit, which is equal to the salary of the President of Brazil (BRL 39,200).
Also, these officers may not be related to any &#8220;institution, partner, director, adviser, benefactors or equivalent&#8221; of the association.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64973953"><span style="font-weight: 400;">Solução de Consulta nº 50, de 22 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Receita Federal)</span></p> <hr /> <h4><b>Export insurance</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> It is now the responsibility of the executive secretary of Camex (Brazilian Chamber of Commerce) to grant export credit insurance—offered by the Brazilian government to export companies that—due to issues connected to commerce, politics and natural disasters—do not receive the right amount in their export contracts.</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The head of Camex also has the power to take international legal action to collect the amounts owed to the company and, consequently, to the Brazilian state. These powers include the possibility of hiring an &#8220;authorized institution or lawyer with proven unblemished conduct in Brazil or abroad.&#8221;</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The ordinance represents a strengthening of Camex, which was already a focus of controversy in the beginning of the Bolsonaro government.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65638774"><span style="font-weight: 400;">Portaria nº 3, de 28 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Ministério da Economia)</span></p> <hr /> <h4><b>New tariffs system</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">The Central Bank ended the tariffs currently charged in the Reserve Transfer System (the system which guarantees wire transfers and electronic transfers, for example). Now these tariffs will be subject to proper regulation by the Department of Banking Operations and Payment Systems. Until now, this had been defined in a Circular Letter of the Central Bank, signed by the Director of Monetary Policy, one of the highest-ranking officers in the bank&#8217;s structure.</span></h5> <h5><strong>Other issues to bear in mind:</strong></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">In another circular letter, published on the same day (</span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/63795585"><span style="font-weight: 400;">Circular nº 3.932, de 14 de fevereiro de 2019</span></a><span style="font-weight: 400;">), the Central Bank also delegated the responsibility for setting tariffs for the use of the Sisbacen (Central Bank Information System), which will now be under the Information Technology Department.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">It seems, in principle, to be a change of a bureaucratic nature, but it will be important to keep tabs on this matter to see what this may entail. </span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/63795593"><span style="font-weight: 400;">Circular nº 3.931, de 14 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">TAXES</h2> <h4><b>Employers’ unions</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Brazilian tax authorities clarified that the standard income of employers&#8217; unions, such as membership fees, dues, contributions and donations, without any consideration for the provision of services, are exempt from the Cofins social security contribution. With regard to Income Tax and CSLL (social contribution on net income), the exemption also applies in the case of activities provided for in the bylaws, &#8220;such as those arising from the leasing of spaces in its headquarters to affiliated companies with it for the purpose of holding events related to this branch; arising from the provision of salary surveys conducted for associates, as well as those related to the leasing of advertising space in magazines published by the union to be made available to associates and whose content is related to the activities of the entity and in line with its institutional objectives.&#8221;</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64973953"><span style="font-weight: 400;">Solução de Consulta nº 45, de 14 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Tax breaks</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Minister of the Economy, Paulo Guedes, establishes the procedures that state governors must adopt to report practices of &#8220;tax war&#8221;—in this case represented by state goods and services tax (ICMS) exemptions given by other states without the prior approval of the Brazilian tax policy council. The states must formally present a complaint to the Minister of the Economy. The General Counsel for the Federal Treasury (PGFN) will then have 15 days to decide whether there is sufficient evidence to accept the complaint. If so, Paulo Guedes will then have 120 days to decide on the case.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65179688"><span style="font-weight: 400;">Portaria nº 76, de 26 de fevereiro de 2019</span></a></p> <hr /> <h4><b>2019 Income Tax Declaration</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> In the general rules for this year&#8217;s Income Tax Declaration, the only concrete change is that anyone who has received taxable income above BRL 5 million cannot fill out their return via the tax authority&#8217;s mobile app. Last year, this cut-off was only for incomes above BRL 10 million. These same people must declare their income tax using digital certificates.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64576113"><span style="font-weight: 400;">Instrução Normativa nº 1.871, de 20 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">PENSIONS AND SOCIAL SECURITY</h2> <h4><b>Registration of rural pensioners</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The form of registering &#8220;special beneficiaries&#8221; (rural pensioners) in the National Register of Social Information will be regulated. This is one of the points altered by Decree 871, signed this year by President Jair Bolsonaro. The previous rules allowed government agreements with rural workers&#8217; unions to control this register of social information. A working group is now being set up specifically to propose the regulation of this issue.</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Representatives of private entities may attend working group meetings if the group wishes so.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The working group will have 60 days to complete its task.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65393901"><span style="font-weight: 400;">Portaria Conjunta nº 1, de 27 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Retirement model change</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The deadline for active state servants to migrate their retirement model from the traditional one to the supplementary pension scheme, managed by Funpresp (pension fund of the federal government), will remain open until March 29 this year. The deadline had been extended by a decree last year, and has now become law.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64575674"><span style="font-weight: 400;">Lei nº 13.809, de 21 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">EDUCATIONAL SYSTEM</h2> <h4><b>Hybrid education</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> After defining new criteria for the approval of Master&#8217;s and Ph.D. courses in the country, Capes (an agency linked to the Ministry of Education) created a working group to foster the convergence of different educational &#8220;modalities&#8221; through technology and a mix between remote and face-to-face teaching (hybrid education). </span></h5> <p><span style="font-weight: 400;">&#8220;Educational modalities,&#8221; in this sense, correspond to Youth and Adult Education, Special Education, Professional and Technological Education, Field Education, Indigenous Education, Quilombola Education and, last but not least, Distance Education. </span><br /> <span style="font-weight: 400;">The mission of the working group is therefore to show how this can all be put into the same bag and in a way that includes distance learning.</span></p> <h5><b>Potential loopholes:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The working group will only involve the head of the education ministry&#8217;s bureaucratic structure, without the participation of entities related to teachers, for example. Not that this was an obligation, but it is an important signal in the current context. A conservative nucleus will define this plan, with the participation of representatives from the offices of education minister Ricardo Vélez-Rodriguez, the departments of higher education, basic education, professional and technological education, Inep, among others.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">In order to support this work, the group could also rely on studies from private institutions from Brazil and abroad and be able to invite representatives of &#8220;public and private entities, as well as researchers and specialists who have knowledge on the subject.&#8221; This could go both ways, but it is, in any case, an opening for the participation of &#8220;experts&#8221; in education trained by Jair Bolsonaro’s ideological guru, Olavo de Carvalho.</span></li> </ul> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The working group will also develop strategies for the development of &#8220;digital skills&#8221; in the training of teachers, as well as Master&#8217;s and Ph.D students. That is, the idea is to develop these modalities of teaching remotely.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The group’s work should be completed within four months.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/63966258"><span style="font-weight: 400;">Portaria nº 42, de 18 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Capes)</span></p> <hr /> <h4><b>Equipment for schools</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">Signed directly by Minister Ricardo Vélez Rodriguez, this resolution establishes that the transfer of resources from the National Fund for Education Development to purchase educational toys, furniture or equipment, exclusively for state and municipal children&#8217;s education facilities, will only be authorized once the works have reached at least 80% completion. That is, nurseries must first be built before they can receive public money to be furnished.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65636643"><span style="font-weight: 400;">Resolução nº 2, de 28 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;"> HEALTHCARE SYSTEM</h2> <h4><b>Foreign money for health</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The government begins to lay the groundwork to receive foreign funds to improve the Brazilian health system. A committee was created to prepare the presentation of projects of interest to the area to receive money through international loans, from organizations such as the International Bank for Reconstruction and Development. Among the specific attributions of this group is &#8220;to maintain dialogue with international credit organizations aiming to define the programming of credit operations for new projects in the area of health&#8221;.</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The Ministry of Health has benefited in previous years from some transfers from international organizations for actions related to the national program to combat sexually transmitted diseases and HIV, and to purchase equipment and train health professionals. By April 15, the committee must submit a report to the Minister of Health on the projects currently underway, with an evaluation of any &#8220;maintenance, alteration, correction or discontinuity&#8221; needed.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The order opens up space for large consulting firms, as the text says that the group will have the power to &#8220;approve the hiring, when appropriate, of consulting services to prepare studies concerning the preparation of new projects.&#8221; It remains to be seen whether there will be a bidding process for such cases or whether approval will be given to a specific company, without an auction, as is often the case in the federal government with regard to consulting contracts.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The promise is that the committee will also have the mission of &#8220;creating more efficient mechanisms for control and enforcement of resources within projects&#8221; and also to give transparency to their execution.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/63798941"><span style="font-weight: 400;">Portaria nº 241, de 14 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Ministério da Saúde)</span></p> <hr /> <h2 style="text-align: center;">FOOD AND HEALTH SECURITY</h2> <h4><b>Self-controlled food chain</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The ordinance establishes a permanent group formed by internal departments of the Ministry of Agriculture and nominally leaving the door open for the CNA (Confederation of Agriculture and Livestock of Brazil) and CNI (National Confederation of Industry), in addition to the Organization of Brazilian Cooperatives. The objective of the group is to serve as a &#8220;technical and consultative&#8221; body to &#8220;implement self-control programs to be applied by establishments regulated by agricultural defense legislation&#8221;. The group will propose the implementation and evaluation of &#8220;Self-Control Programs&#8221;. It will also have the power to propose normative acts necessary for the implementation of these programs.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64779361"><span style="font-weight: 400;">Portaria nº 24, de 21 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Ministério da Agricultura)</span></p> <hr /> <h4><b>Outsourced analysis</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">Until the accreditation of outsourced laboratories for the analysis of production and quality control, transport and storage stages of medicines and other biological products is regulated, the possibility for importers of medicinal products to hire services from third-party laboratories for this purpose is suspended. This possibility had been opened up by a resolution last June, but has now reverted to the rule that control must be carried out by the laboratory of the importer of the products, with the hiring of other laboratories forbidden. Last December, the suspension had already been determined, but for a period of two years.</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">When the tests are done by laboratories of the same economic group of the importer or manufacturer of the drug, there is no problem, as long as the quality control system is unified.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Outsourcing of quality control is only allowed for specific, dynamic (active pharmaceutical ingredients of animal or vegetable) and phytotherapeutic drugs. Exceptions are also given to other types of medicines.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">There is also scope for hiring laboratories outside Brazil, when there is an &#8220;absence or impossibility&#8221; of another laboratory suitable for hire in the country, or depending on the degree of complexity of the case itself. Anvisa may request proof of this need—that is, there is no express obligation that this proof must be submitted to Anvisa as a precondition for hiring laboratories from outside the country.</span></li> </ul> <p>Source: <a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64973437"><span style="font-weight: 400;">Resolução da Diretoria Colegiada nº 268, de 25 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Equipment imports</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> It deals with the manufacture or import of used equipment by doctors, dentists and beauticians. Today, they need to go through a registration system, which is relatively simple. Anvisa’s resolution only concerns medical risk class 1 medical equipment, which must be non-invasive, but with several exceptions. Among them are some </span><i><span style="font-weight: 400;">in vitro</span></i><span style="font-weight: 400;"> diagnostic devices. It is now enough to inform Anvisa of a company&#8217;s intention to sell the equipment, indicating the name, manufacturer, purpose and other elements that characterize the device. This is known as the “notification system.”</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65638625"><span style="font-weight: 400;">Resolução da Diretoria Colegiada RDC nº 270, de 28 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">AGRIBUSINESS AND LAND OWNERSHIP</h2> <h4><b>New procedures for certificates</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Ministry of Agriculture postponed to April 26 of this year the entry into force of the new procedures for issuing phytosanitary certification for consignments and phytosanitary certification for re-exportation. Originally, the new rules, published in normative instruction last November, still under Michel Temer’s government, would come into effect in mid-February.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64779690"><span style="font-weight: 400;">Instrução Normativa nº 2, de 22 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Agricultural meteorology</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> A working group was created to diagnose the performance of the Ministry of Agriculture in the field of agricultural meteorology and to propose an improvement of this activity. The group will have 75 days to submit a proposal.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64366798"><span style="font-weight: 400;">Portaria nº 714, de 13 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Fishermen registration</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">An ordinance temporarily authorizes the registration of artisanal professional fishermen, until December 31, when the general re-registration of the sector will be completed. The registration request protocols submitted from 2014 are validated, as well as those that have been delivered without all necessary documentation (and thus no longer have the license suspended). With the regularization, these fishermen can have access to a government insurance (a kind of unemployment insurance for fishermen, to be paid in the off-season of fish).</span><br /> <span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64578629"><span style="font-weight: 400;">Portaria nº 24, de 19 de fevereiro de 2019</span></a></h5> <hr /> <h2 style="text-align: center;">CORRUPTION AND ACCOUNTABILITY</h2> <h4><b>Direct line</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Federal Disciplinary Board, an agency linked to the Federal Controller General&#8217;s Office, now allows those responsible for the state&#8217;s superintendencies and the Disciplinary Board&#8217;s officers (among them, the board responsible for the accountability of private entities) to call into action the Federal Police, the Federal Prosecution Service, and the Federal Accounting Court. In other words, they may make telephone calls and email representatives of these institutions about irregularities found in their inspections and verifications. Prior to that, communication with these agencies was the exclusive jurisdiction of the head of the Disciplinary Board. Decentralization of this assignment is an important step in tightening the siege on irregularities committed by public servants.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64576114"><span style="font-weight: 400;">Ordem de Serviço nº 4, de 20 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Nepotism</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> Incra, the federal body responsible for land reform procedures, has created specific rules for the control of internal nepotism, which includes not only the appointment of family members, but also the control over possible hiring of companies related to relatives of employees. When the nominee for a position is not a public servant, and has a family relationship with an occupier of a position of trust (even permanent servants may be regarded as in positions of trust), the hiring process should not continue. When the nominee is a public servant, the hiring can happen even with relatives inside, but as long as the relative who is in the agency does not become his subordinate.</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">In the process of hiring companies, these companies must declare if they have relatives in positions of trust in Incra and that acts in the area responsible for hiring. The same logic applies to agreements and outsourcing. If an outsourcer has a family bond, it should be replaced.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64368134"><span style="font-weight: 400;">Portaria nº 205, de 5 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Transfer of funds accountability</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Ministry of Regional Development paved the way to adopt a more relaxed process for the analysis of accountability of transfers of funds made to municipalities due to situations of public calamity or emergency. The agency is calling it &#8220;technical analysis.&#8221; In practice, the rendering of accounts related to lendings of up to BRL 5.7 million will not involve face-to-face visits to prove the execution of the services, unless there is a specific requirement in this sense by a control agency, such as the CGU. In general, the analysis of the correct use of public money will be made through photos of the services, but the need for municipal governments to send images may be waived in the case of works that are not clearly visible, such as the desorption of rivers, recovery of dirt roads, excavations, repairs in residences, among others. There are several examples, included in the ordinance itself by the Ministry of Regional Development.</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Even in cases of onlays above BRL 5.7 million, the on-site visits will only happen by sampling. That is, not all municipalities that received values above this amount—the largest ones—will be inspected in person.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64777788"><span style="font-weight: 400;">Portaria nº 454, de 18 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Ministério do Desenvolvimento Regional)</span></p> <hr /> <h4><b>Access to Information Act</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The government has collected setbacks in recent weeks. In one such turn of fortune for President Jair Bolsonaro, he was forced to overturn the decree that made it possible for third-level government officials to have the power to make public records confidential for 15 years and potentially increase the number of top-secret public documents. The decision to repeal came during the crisis surrounding former cabinet minister Gustavo Bebianno&#8217;s fall and could be interpreted as an attempt to generate a positive agenda.</span></h5> <h5><b>Potential loopholes:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The decree permitted the delegation of powers. The only agency that took advantage of the decree during its short time in force was the Office of Institutional Security, which a few weeks ago gave the power to all directors of the Brazilian Intelligence Agency (ABIN, the Brazilian equivalent to the CIA) to define documents as confidential (15 years of secrecy). The repeal of the decree does not make it clear whether the acts subsequent to the decree are validated, that is, whether they remain valid even with the decree losing effect. So far, no GSI ordinance has been withdrawn revoking the delegation of powers to ABIN&#8217;s board of directors.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65179949"><span style="font-weight: 400;">Decreto nº 9.716, de 26 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Audit model</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> It is established that the internal audit bodies of government agencies and ministries will use the Internal Audit Capability Model (IA-CM) as a preferred reference.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64160869"><span style="font-weight: 400;">Portaria nº 777, de 18 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (CGU)</span></p> <hr /> <h4><b>Response for controllers</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">It establishes that the Special Internal Control Office of the Ministry of Economy will centralize the receipt of and response to demands from control bodies such as the Federal Accounting Court and Controller General. In the case of demands addressed directly to the minister or to the executive secretary, the Special Internal Control Office must draft the response, receiving subsidies until one day before the deadline determined by the control body. If the demand is for other agencies, such as the Federal Revenue Service, the answer is elaborated by the specific agency, with the internal control office contributing when appropriate.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64367904"><span style="font-weight: 400;">Portaria nº 410, de 19 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Ministério da Economia)</span></p> <hr /> <h2 style="text-align: center;">VIOLENCE AND CRIMINAL MATTERS</h2> <h4><b>Army in prison</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">Minister Sergio Moro determined the use of the Armed Forces to protect the surrounding neighborhoods of the federal penitentiary of Porto Velho, to where organized crime leader Marcos &#8220;Marcola&#8221; Camacho was transferred. The decree sets a radius of 10 kilometers from the walls of the prison.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65168314"><span style="font-weight: 400;">Decreto nº 9.717, de 26 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">LOGISTICS AND INFRASTRUCTURE</h2> <h4><b>Private fine collectors</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> An ordinance suspended an order that allowed private companies to collect fines on behalf of the DNIT (federal body in charge of highways), offering different payment methods, such as by credit card. The original ordinance did not make clear how the company would be paid, or how it would make money. It simply said that this would not involve a burden on DNIT. The business model was not clear. </span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/63796581"><span style="font-weight: 400;">Portaria nº 1.047, de 14 de novembro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">ENVIRONMENTAL ISSUES</h2> <h4><b>Environmental licensing</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> At its own discretion, IBAMA (the federal agency responsible for environmental issues) will now be able to delegate any environmental licensing process to states and municipalities. This includes, among others, permits for developments in indigenous lands (the Belo Monte Dam was one of these cases), in protected areas and for oil exploration on the Brazilian coast. Companies may directly request IBAMA to pass a licensing process of their own enterprise onto states or municipalities. The decision by the delegation will depend simply on the &#8220;assessment of timeliness and convenience&#8221; by IBAMA&#8217;s Environmental Licensing Division—though the final decision rests with the IBAMA president (who is already signing the new rules).</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">There is an overwhelming tendency for many new business procedures to be delegated to states and municipalities, so much so that the normative instruction defines that, in the event of controversy over who is responsible for licensing, IBAMA may preempt the law and delegate the licensing process to state or municipality, even if IBAMA is not clear on the original jurisdiction.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Some safeguards have been put in place: IBAMA may, at any time, carry out inspections in the licensing processes that have been delegated. It can also resume the licensing process at any time.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The infraction notices to be applied in the environmental licensing processes will be the responsibility of the state or the municipality that receives the IBAMA delegation.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">As was clear in the Brumadinho disaster, state and (above all) municipal agencies are more naturally vulnerable to pressure from companies. For them, this measure is very positive. It is hard to imagine the case of a company that prefers to be monitored by IBAMA than by a municipal environment secretary. This delegation is not automatic, but opens a window in which IBAMA must also justify to these companies why processes will be held at a federal level, if they choose not to delegate.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65393173"><span style="font-weight: 400;">Instrução Normativa nº 8, de 20 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Ibama)</span></p> <hr /> <h4><b>Environmental services</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The deadline for the state superintendencies of IBAMA to present their state programs to convert fines into environmental services was postponed to July 31, 2019.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/63965074"><span style="font-weight: 400;">Instrução Normativa nº 7, de 15 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">MINING</h2> <h4><b>Regulatory agency interference</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Ministry of Mines and Energy will begin to make a preliminary examination of any normative act regarding the mining area. An ordinance of the Department of Geology and Mining, an internal sector of the ministry, orders that the National Mining Agency (ANM)—responsible for regulating the sector—forward them all normative acts already published and future ones, so that it can evaluate &#8220;convenience, timeliness and thematic relevance, including for the purpose of appropriate corrections.&#8221; Basically, it is calling into question the competence and integrity of the National Mining Agency, suggesting it is susceptible to companies&#8217; interest.</span></h5> <h5><b>Other issues to bear in mind:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Measures decided upon by the ANM must be sent to the Ministry of Mines and Energy &#8220;before it is even publicly disclosed,&#8221; so that the aforementioned analysis may be carried out and the ordinance, resolution or other normative act be &#8220;adjusted.&#8221; There is, therefore, scope for changes to rules before they take effect.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Supposedly, the ANM should have autonomy to regulate the mining sector, just as Anvisa regulates the area of medicines and biological products, and ANS takes care of the health insurance plans. This measure is a direct interference in a regulatory agency. It&#8217;s like Anvisa having to submit its decisions to the Ministry of Health. It is increased control, but it also goes against the government&#8217;s liberal discourse.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/web/guest/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64788348/do2-2019-02-25-portaria-n-40-de-18-de-fevereiro-de-2019-64788055"><span style="font-weight: 400;">Portaria nº 40, de 18 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Secretaria de Geologia e Mineração)</span></p> <hr /> <h2 style="text-align: center;">COMMERCIAL REGULATION</h2> <h4><b>Antidumping I</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Brazilian government initiates an analysis of the right to apply antidumping policy in relation to imports of tableware from Argentina, China and Indonesia.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64973264"><span style="font-weight: 400;">Circular nº 12, de 25 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Antidumping II</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">The government has decided to maintain antidumping policies against imports of new rubber bicycle tires from China, Vietnam and India. It was the first manifestation of the Foreign Trade Secretariat since the controversy about the removal of barriers against the importing of powdered milk, later reversed by a decision of President Jair Bolsonaro.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/63964919"><span style="font-weight: 400;">Circular nº 9, de 18 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Banks balance sheet data</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">Banks will have to report specific numbers on dividends, interest on shareholders&#8217; equity and cash bonuses in their balance sheets. Previously the requirement was for the information only of &#8220;dividends and bonuses to pay&#8221;—therefore, they would be reported jointly. Interest on the social capital of cooperatives will also need to be informed, as the case may be, as well as &#8220;other remunerations of capital.&#8221;</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64972899"><span style="font-weight: 400;">Carta Circular nº 3.935, de 25 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Verification of export cargo</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The ordinance reintroduces a rule that had been revoked in an order of January 29 of this year. As a result, air carriers will once again be allowed to open export cargo at Guarulhos Airport, even without the presence of agents of the Federal Revenue Service, and provided the procedure is recorded by airport monitoring cameras. The purpose of the opening is to verify flight safety issues. For example, to discard the presence of explosives. This procedure was vetoed for three weeks.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64368048"><span style="font-weight: 400;">Portaria nº 35, de 19 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Interest rate information</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">Banks should inform the Central Bank of the average adjusted interest rate, which is the average interest charged to overdraft credit in a special modality, where there is a reduction or exemption of interest during some days of the month. However, this is only mandatory if this model accounted for more than 5% of credit via overdraft.</span></h5> <p><b>Source: </b><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64367261"><span style="font-weight: 400;">Carta Circular nº 3.932, de 20 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">SOCIAL MINORITIES AND HUMAN RIGHTS</h2> <h4><b>Child assistance I</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The Early Childhood &#8220;Happy Child&#8221; Program now targets families with children of up to 6 years old who must be enrolled in the Single Register of the Federal Government (CadÚnico) or who are on the list of recipients of the Continuous Payment Benefit (BPC). Previously there was no such explicit linkage. In practice, this concerns only families with a per capita income of up to half a minimum wage (about BRL 500) or who have a total income of up to 3 minimum wages, or families with children up to six years of age who live with elderly people or persons with disabilities who depend on others.</span></h5> <h5><b>Potential loopholes:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The limit of families benefited by municipalities remains the same with the new resolution. However, the criteria for calculating the maximum value to be transferred to municipalities previously involved a limit of individuals from the target population living in the municipality—that is, a specific frame within the public of the program. It now considers the general population. That means that there are now more people under the same roof, without the government having increased the volume of food purchases.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64160602"><span style="font-weight: 400;">Resolução nº 6, de 19 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Child assistance II</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The government has defined criteria for sharing federal resources to states for funding the Happy Child program. Each state will receive at least BRL 850,000. States with more eligible municipalities will receive more funds.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65179690"><span style="font-weight: 400;">Resolução nº 1, de 13 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Brumadinho victims</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> Banks are authorized to postpone the due date of rural credit operation installments that had an original due date between January 25 and June 30. This benefit is exclusive to family farmers and producers who were harmed by the dam failure in Brumadinho.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65635867"><span style="font-weight: 400;">Resolução nº 4.711, de 27 de fevereiro de 2019</span></a></p> <hr /> <h4><b>Support for assistance</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The resolution provides a very general definition of how the federal government will provide technical support to enable states and municipalities to improve their Social Assistance Policies. There are almost no practical details, but there is a provision for in-person technical support (meetings, individualized support, seminars, workshops) and remote assistance (email, telephone calls, messages, information materials, videoconferences, applications &#8230;).</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64160604"><span style="font-weight: 400;">Resolução nº 3, de 19 de fevereiro de 2019</span></a></p> <hr /> <h4><b>New deadline</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">It extends the deadline for municipalities to be able to prove the use of at least 50% of previously transferred funds so that they can then receive new funds for a program of access to the labor market, aimed at young offenders.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64578390"><span style="font-weight: 400;">Resolução nº 7, de 21 de fevereiro de 2019</span></a></p> <hr /> <h2 style="text-align: center;">REAL ESTATE MATTERS</h2> <h4><b>Housing financing rules</b></h4> <h5><b>To the core:</b><span style="font-weight: 400;"> The programming of the budget execution of the FGTS (Guarantee Fund for Time of Service) to finance the housing area, including popular housing, had been defined in the final week of the Michel Temer government. It predicted that the money approved for this year should be released monthly, at a pace of approximately 8.3 percent each month. However, the Ministry of Regional Development, which took over the responsibilities of the now-extinct Ministry of Cities, overturned these budget implementation rules. It was only defined that previous rules would be valid until February. From March on, there is no longer any rule.</span></h5> <h5><b>Potential loopholes:</b></h5> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">With this vacuum in the rules of execution, the government has two possible options: a) to use this &#8220;freedom&#8221; to anticipate, more intensely, the money that would only be released in a staggered and rigid way during the year; or (b) simply freeze the use of these resources, given budgetary constraints.</span></li> </ul> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65180025/do1-2019-02-27-instrucao-normativa-n-6-de-22-de-fevereiro-de-2019-65179907?TB_iframe=true&amp;width=921.6&amp;height=921.6"><span style="font-weight: 400;">Instrução Normativa nº 6, de 22 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Ministério do Desenvolvimento Regional)</span></p> <hr /> <h2 style="text-align: center;">LEGAL MATTERS</h2> <h4><b>Fines for pedestrians and cyclists</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">The government has defined the motto of its educational traffic campaign for this year and the next as &#8220;the preservation of the lives of pedestrians, cyclists and motorcyclists.&#8221; At the same time, the National Traffic Council is using the campaign as justification to repeal rules that defined procedures for the application of fines to pedestrians and cyclists who do not comply with the traffic rules defined in the Brazilian Traffic Code. In the case of bicycles, the Traffic Code provides, among other obligations, that they must always circulate in the same direction as cars and must have specific safety items, such as a bell and rearview mirror on the left side. Noncompliance with these and other rules was subject to a fine, but now it is no longer. Or, at least, there is no more standardization of the administrative procedures that must be adopted in this regard.</span></h5> <p><span style="font-weight: 400;">Source: </span><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65638620"><span style="font-weight: 400;">Resolução nº 772, de 28 de fevereiro de 2019</span></a><span style="font-weight: 400;"> (Conselho Nacional de Trânsito)</span></p> <hr /> <h4><b>Justice ministry normative acts</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">An ordinance establishes a rite for the processing of proposals for normative acts in the scope of the Ministry of Justice. This ranges from bills to ordinances, anything that is normative. It draws attention to the possibility of proposals for normative acts coming from &#8220;civil society entities.&#8221; Even if the proposal is not considered feasible by the technical area, the entity must be informed about this decision and about the &#8220;result of the analysis&#8221;.</span></h5> <p><span style="font-weight: 400;">Source</span><b>: </b><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/65178644"><span style="font-weight: 400;">Portaria nº 178, de 26 de fevereiro de 2019</span></a></p> <hr /> <h4><b>New identity card</b></h4> <h5><b>To the core: </b><span style="font-weight: 400;">The adoption of the new identity card—which includes voter registration and driver&#8217;s license details all together in the same document—is postponed until March 2020. It was to take effect on March 1 of this year. </span></h5> <p><b>Source: </b><a href="http://www.in.gov.br/materia/-/asset_publisher/Kujrw0TZC2Mb/content/id/64578393"><span style="font-weight: 400;">Decreto nº 9.713, de 21 de fevereiro de 2019</span></a></p> <p><span style="font-weight: 400;">

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