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AGRIBUSINESS

Additives in meat

To the core: In March, the sanitary surveillance agency (Anvisa) approved the introduction of rules approved by Mercosur in December on the additives permitted in meat and the maximum quantity of each ingredient which will be permitted in each product. Among these additives are acidity regulators, flavorings, colorings, preservatives, thickeners, stabilizers, and flavor enhancers. Now, the Ministry of Agriculture will incorporate these new agency rules and

the new definitions of maximum quantities must be followed by those establishments subject to federal inspections.</p> <p><strong>Source:</strong> Instrução Normativa no 14, de 3 de junho de 2019</p> <hr /> <h2 style="text-align: center;">BUSINESS AND INVESTMENTS</h2> <h4>Facilitating the opening of companies</h4> <p><strong>To the core:</strong> Another step in the &#8220;Economic Freedom&#8221; provisional decree. The federal government decided this week on the definition of &#8220;low-risk&#8221; activities, which will not require operating licenses from authorities. However, if states or municipalities have their own rules, the local regulation will take precedent. A total of 287 economic activities were classed as low risk (Low Risk A). Among them are restaurants, bakeries, artisanal food producers, retail commerce in general (including butchers, bars, household appliance stores), mechanical workshops, internet cafés, physiotherapy clinics, hostels, and veterinary clinics (providing they do not sell controlled medications or administer x-rays). However, some conditions must<br /> be followed:</p> <ul> <li>When the activity is performed outside the virtual environment or the home of one of the company&#8217;s partners, the establishment where the activity takes place must be in a &#8220;fully regular&#8221; area and take into account the urban zoning laws determined by municipal governments. Another point is that, in order to apply for the Low Risk A category, the activity may not be carried out in an area over 200 square meters or in a building with over three floors, among other specific provisions.</li> <li>Beyond the lowest risk level, there is also Low Risk B (medium risk). This comprises all activities which do not classify as Low Risk A, excluding those classified as high risk. In these cases, businesses are exempt from fire brigade inspections and only require a Provisional Operating License, which will be issued automatically.</li> <li>High-risk activities are those which are defined in other federal, state, or municipal government resolutions. They must be related to certain requirements of sanitary safety, metrology, environmental control, and fire prevention. In these cases, prior inspections will be required before activities may begin.</li> </ul> <p><strong>Source:</strong> Resolução no 51, de 11 de junho de 2019</p> <hr /> <h4><strong>Tax incentives</strong></h4> <p><strong>To the core:</strong> The Ministry of Science and Technology created a working group to analyze and propose changes to the law which gives tax incentives to companies investing in research, development, and innovation. The group is tasked with proposing changes to help create &#8220;better results&#8221; with the incentive policy and &#8220;improve the allocation of resources from tax incentives to boost private investments in research,<br /> development, and innovation.&#8221; In other words, the indication is that the current tax breaks will be reorganized. The group, made up of seven representatives of the ministry, will have 90 days to conclude a report.</p> <p><strong>Source:</strong> Portaria no 2.851, de 10 de junho de 2019</p> <hr /> <h4>Amnesty for small businesses</h4> <p><strong>To the core:</strong> President Jair Bolsonaro sanctioned a supplementary law approved by Congress which opens a 30-day window for small businesses which were in default on January 1, 2018, and were suspended from the Simples Nacional tax system, to return to this special regime if they adhere to the Simples Nacional&#8217;s refinancing program.</p> <p><strong>Source:</strong> Lei Complementar no 168, de 12 de junho de 2019</p> <hr /> <h4>Data on fund members</h4> <p><strong>To the core:</strong> As of June 2020, administrators of investment funds (and institutions which act as distributors of membership interest in these funds) must send monthly reports to the Central Bank with information on all members. Among the data to be submitted is the name of the member and the quantity, type and value of the interest they hold. This does not mean that this information will be made available to the public. Today, for example, the Brazilian Securities Commission (CVM) only discloses information on the funds, not their individual members. However, it does give details on the number of members in each fund.</p> <p><strong>Other important aspects to bear in mind:</strong></p> <ul> <li>In the case of information about the name of the member, an exception is made for cases of membership interest negotiated on stock exchanges (in the case of real-estate funds), in which the identification to be supplied should be of the custodian.</li> </ul> <p><strong>Source:</strong> Circular no 3.945, de 12 de junho de 2019</p> <hr /> <h4>New rules for limited liability companies</h4> <p><strong>To the core:</strong> Specific rules were defined for the so-called &#8220;single person limited liability companies,&#8221; which are LLCs which, thanks to the recent Economic Freedom decree, may now be constituted by a single partner. In the case of these companies, decisions must be registered &#8220;in a written document (private or public instrument) subscribed by the single partner or his/her proxy with specific powers.&#8221; Furthermore, the name of companies constituted in this single-person fashion must include the name of the partner in the corporate name, with the suffix &#8220;Ltda.&#8221;</p> <p><strong>Source:</strong> Instrução Normativa no 63, de 11 de junho de 2019</p> <hr /> <h2 style="text-align: center;">CRIME AND CORRUPTION</h2> <h4>Funding terrorism</h4> <p><strong>To the core:</strong> Financial institutions, currency exchange services, stock exchanges and other entities subject to the rules of the money laundering enforcement agency (Coaf) must report &#8220;without delay and without informing the sanctioned parties, regardless of amount, transactions carried out, services provided, or proposals&#8221; in situations which involve not only individuals suspected of terrorism, but also those who facilitate the committing of the act, companies or entities owned or controlled by them directly or indirectly, as well as &#8220;people and entities working in their name or under their command.&#8221; Also on Coaf&#8217;s radar will be transactions—or attempted transactions—which represent &#8220;serious indications&#8221; of funding terrorism. These rules are part of Coaf&#8217;s regulation of a law stating that the Brazilian government must immediately comply with sanctions imposed by the UN Security Council on terrorism or the funding of terrorist<br /> activities.</p> <p><strong>Source:</strong> Resolução no 31, de 7 de junho de 2019</p> <hr /> <h4>Combating human trafficking</h4> <p><strong>To the core:</strong> Another significant change in the social participation in committees directly related to social concerns in the Bolsonaro government. In a decree published this week, Jair Bolsonaro altered the National Committee of Combating Human Trafficking (Conatrap), created in 2013. The most important change comes in relation to the group&#8217;s formation. Previously, the committee was made up of 26 members, with seven representatives from civil society organizations or specialists in combating human trafficking, and another ten representatives from national councils. Now, the committee will have only seven members, with three to be distributed among civil society organizations and national councils (which include members of the government). The government representatives will be made up of the administration&#8217;s most conservative wing: the Foreign Affairs Ministry, the Citizenship Ministry, and the Ministry of Women, Family, and Human Rights, as well as the national justice secretary, who will preside over the committee.</p> <p><strong>Source:</strong> Decreto no 9.833, de 12 de junho de 2019</p> <hr /> <h2 style="text-align: center;">ENVIRONMENT</h2> <h4 style="text-align: left;">Surveillance in the Amazon</h4> <p style="text-align: left;">To the core: The government removed any mention of the Amazonia Surveillance System (Sivam) in this week&#8217;s decree defining rules for the Amazon Protection System, of which Sivam is a part. Mentions of &#8220;other programs and projects established by the Sivam Deliberative Council&#8221; were also removed. The previous rules stated that Sivam &#8220;seeks to carry out works and services, the acquisition of equipment, and allocation of assets for the collection, processing, production and diffusion of data on the Amazon.&#8221; The surveillance system was the center of a scandal involving a billion-BRL procurement of cameras to monitor the Amazon, during the Fernando Henrique<br /> Cardoso government.</p> <p style="text-align: left;">Source: Decreto no 9.829, de 10 de junho de 2019</p> <hr /> <h2 style="text-align: center;">HEALTHCARE</h2> <h4>Spinal Muscular Atrophy</h4> <p>To the core: The Ministry of Health will offer access to the drug Spinraza, produced and sold exclusively by pharmaceutical company Biogen. It is the only existing medication in the world to treat spinal muscular atrophy (SMA). The treatment is extremely expensive. One single patient demands over BRL 1 million in one year, and there is still not total security over the effectiveness of the drug. The medication will be supplied via the public health system (SUS) for patients with levels II and III of the disease (the use of the drug for level I—the most severe—had already been incorporated by the SUS since April). This introduction will take place through a pilot project anchored on a &#8220;risk sharing agreement.&#8221;</p> <p>Other important aspects to bear in mind:</p> <ul> <li>Patients will have access to the medication in renowned centers to be selected by the Ministry of Health, among the Reference Services for Rare Diseases and university hospitals (including state universities).</li> <li>The additional evidence arising from this pilot project must be submitted to the National Committee of Incorporating Technologies of the SUS (Conitec) which will re-evaluate the broader incorporation of Spinraza for the treatment of SMA.</li> </ul> <p>Source: Portaria no 1.297, de 11 de junho de 2019</p> <hr /> <h2 style="text-align: center;">HOUSING</h2> <p>Rules for surety insurance in rentals</p> <p>To the core: An important alteration for all those who rent property. The Private Insurance Commissioner updated its rules for rental surety insurance. The main change involves the permission to take out collective insurance and the definition of the underwriter must be chosen in agreement between the owner and tenant. Another point is that it has been established that underwriters may make advance payments to homeowners if the tenant is late in paying rent. Insurers will have six months to adapt to the new rules. Current plans on offer must be substituted during this period.</p> <p>Source: Circular no 587, de 10 de junho de 2019</p> <hr /> <p>INFRASTRUCTURE</p> <p>Port concessions</p> <p>To the core: President Jair Bolsonaro delegated the Minister of Infrastructure the power to define the area of organized ports around the country, allowing that areas already established by ordinances and decrees may be reviewed. Potentially, this could be a move to facilitate the structuring of concessions in the sector.</p> <p>Source: Decreto no 9.827, de 10 de junho de 2019</p> <hr /> <p>Amazon development</p> <p>To the core: The Amazon Development Commissioner (Sudam), by way of a decision of its Board of Directors, approved the Regional Plan For Amazon Development for 2020–2023, but with the goal of being completed in 2031. The general purpose of the plan is to &#8220;reduce socioeconomic inequalities on inter- and intra-regional scales, with the creation of income and improvement of the quality of life of the population,&#8221; following the guidelines of the National Policy of Regional Development. Sudam&#8217;s approved plan has 218 pages and much interesting information on the region, but the most objective part is found in Annex III, which includes a list of &#8220;indications of projects-actions&#8221; to be performed over the next four years.</p> <p>There are 191 actions, divided into six axes: Productive Development, Science, Technology and Innovation, Education and Professional Training, Economic and urban Infrastructure, Social Development and Access to Essential Public Services, and the Strengthening of the Governing Capacity of Sub-National Agencies.</p> <p>Potential loophole:</p> <p>The plan lacks specific goals. There is only one general objective: to guarantee that, in 2031, the median Municipal Human Development Index (MHDI) of the Amazonian states be equal or have a difference of less than 0.05 in relation to the general Brazilian HDI. As it happens, the difference in HDI is 0.05 today, making this a relatively simple goal to be reached in 12 years.</p> <p>Source: Resolução no 77, de 23 de maio de 2019</p> <hr /> <p>Stimulus for BNDES</p> <p>To the core: A veto of former President Michel Temer was suspended and, subsequently, Jair Bolsonaro sanctioned articles of a law partially approved last year which permits the federal government to support the Brazilian Development Bank (BNDES) in equating the interest rate of financing granted by the BNDES for infrastructure projects in the North, Northeast and Center-west regions. This will be achieved with a transfer from the government to cover the difference between the interest borne by the financed company and the amount of interest from the source of funds used by the BNDES.</p> <p>Source: Lei no 13.682, de 19 de junho de 2018</p> <p>Task force for concessions</p> <p>To the core: The Defense Counsel of the Federal Government (AGU) created a task force with 27 members to be dedicated to cases involving contests (or potential contests) of infrastructure policies—essentially, concession projects for the private sector in the score of the Ministry of Agriculture and Ministry of Mines and Energy. Among other responsibilities, the group will propose initiatives of training in infrastructure matters and the adoption of the AGU of &#8220;measures to solve legal questions which may affect activities related to public policies of infrastructure.&#8221; In their day-to-day work, the members of the task force will monitor legal actions affecting policies of infrastructure, by way of the &#8220;continuous monitoring&#8221; and &#8220;adoption of all measures guaranteeing treatment compatible with the importance of the matter.”</p> <p>Source: Portaria no 319, de 13 de junho de 2019</p> <p>MINING AND ENERGY</p> <p>Quality of fuel</p> <p>To the core: The National Petroleum Agency (ANP) created the Fuel Quality Monitoring Program. The rules of the program essentially establish the rules for laboratories to be accredited by the agency to carry out analyses (which will not be inspections, in other words, gas stations will not be punished if their fuel is not up to standard). The program will involve analyses of samples of hydrous ethanol, gasoline C, and diesel B. With the results, the ANP will publish levels of fuel quality sold in Brazil.</p> <p>Source: Resolução no 790, de 10 de junho de 2019</p> <p>Competition in the fuel sector</p> <p>To the core: The National Energy Policy Board (CNPE) stated that it is of interest to the National Energy Policy that the ANP gives priority to six matters for the conclusion of studies and deliberation—all geared toward increasing competition in the fuel sector. Deadlines were also established. The two highest priority matters must be concluded in up to four months: the rule allowing transporters to sell fuels directly to gas stations and the &#8220;regulatory protection&#8221; of the use of distributor logos in gas stations.</p> <p>Source: Resolução no 12, de 4 de junho de 2019</p> <p>Nuclear policy</p> <p>To the core: Created in 2008, the Committee of the Development of the Brazilian Nuclear Program is now reformed by a decree signed by Jair Bolsonaro. The committee has the goal to define &#8220;guidelines and objectives for the development of the Brazilian Nuclear Program and supervise its performance.&#8221; Now, the role of the group, made up of 11 representatives of different ministries, appears to be more direct, with the responsibility of &#8220;formulating public policies related to the nuclear sector and propose improvements to the Brazilian Nuclear Program and supervise its performance,&#8221; as well as its supervisory role on the planning and performance of actions.</p> <p>Source: Decreto no 9.828, de 10 de junho de 2019</p> <p>Oil auction</p> <p>To the core: The previous wording of the resolution defining guidelines for the auction of surplus from transfer of rights contracts agreed with the federal government stated that Petrobras must receive redress for the entire investment made in the auctioned areas until the date of the production partitioning contract. This week, a change was made to the resolution establishing that Petrobras should receive redress at the time of signing that &#8220;co-participation agreement,&#8221; which happens after the partition contract. It is also clarified that the compensation to be paid to Petrobras must be proportional to what the hired company will have in the oil field.</p> <p>Source: Resolução no 13, de 11 de junho de 2019</p> <p>Clean fuels</p> <p>To the core: Distributors of common and type-C premium gasoline and diesel B and BX, which include biofuels, which did not reach their individual goals of reducing gas emissions and the greenhouse effect will have their names published on a list by the ANP. The percentage of completion of each company of annual goals specified by the agency, as well as potential administrative sanctions and fines, will also be published online.</p> <p>These individual goals, which began being set this year (until July 1), are part of RenovaBio, a program instituted in 2017 to foster the production of biofuels, and are calculated in accordance with the respective market share of each distributor in the sale of fossil fuels in the previous year.</p> <p>Source: Resolução no 791, de 12 de junho de 2019</p> <p>&nbsp;</p> <p>PUBLIC ADMINISTRATION</p> <p>Bonuses in the foreign ministry</p> <p>To the core: Changes to the bonuses paid by the Foreign Affairs Ministry to public servants who take part in activities of tutoring, correcting tests, elaborating teaching material, and taking part in examination panels, among other activities of this type. In this case, there was a reduction in the amount to be paid by the ministry. Previously, civil servants received 1.45 percent of the constitutional ceiling for each our dedicated to these extra jobs. This was the case for tutoring in classroom courses. This percentage now goes down to 1.28 percent. If this classroom course is of a training nature, the bonus falls to 0.97 percent. In the case of distance courses, the percentage falls from 1 percent to 0.46 percent. For elaborating material for distance courses, the drop is even larger: from 1.3 percent to 0.46 percent.</p> <p>Other important aspects to bear in mind:</p> <ul> <li>The ordinance in force up to now also foresaw the payment of 1.5 percent for each evaluated dissertation and report produced by civil servants (limited to ten per semester). The new ordinance no longer includes provisions for bonuses to be paid to public servants in these cases</li> </ul> <p>Source: Portaria no 587, de 7 de junho de 2019</p> <p>Bonuses in the education ministry</p> <p>To the core: The Ministry of Education made some specific changes to its rules for performance evaluations for the granting of bonuses to department employees (Performance Bonus for the General Plan of Offices of the Executive Branch—GDPGPE, Performance Bonus for Activities of Specific Offices—GDACE, and Performance Bonus for Activities of Social Policies—GDAPS). As well as everything now being together in one ordinance, the main change is that, in the case of the immediately superior office to the employee being vacant, performance analysis will be carried out by their legal substitute. Still, in any of these cases, evaluation may only be made by someone who has been in their posts for at least two-thirds of the evaluation cycle (one year). If no-one fills these requirements, the grade of the last evaluation will be repeated.</p> <p>Source: Portaria no 1.118, de 7 de junho de 2019</p> <p>Anti-impeachment decree</p> <p>To the core: A decree signed this week by President Jair Bolsonaro created an anti-impeachment mechanism and a protective field for irregularities committed by government agents. While it is a form of regulation of a law sanctioned last year by Michel Temer, from a bill authored by Senator Antonio Anastasia, Mr. Bolsonaro&#8217;s decree goes into more depth in what could be seen as a serpent&#8217;s egg for abusive practices carried out by the government as a whole—not only the federal administration.</p> <p>The following points are from specific articles of the law, one of them was criticized at the time by Public Prosecutors and accounting courts: &#8220;In administrative, controlling and judicial spheres, one does not make decisions based on abstract legal values without considering the practical consequences of the decision.&#8221; The most important parts of the decree are as follows:</p> <ul> <li>When a control agency or courts make a decision on the legality of general administrative actions on behalf of government agents (cabinet ministers, governors, mayors, secretaries, presidents), they must consider &#8220;the practical circumstances which imposed, limited or conditioned the action of the government agent&#8221; (budgetary limitations, the need to fulfill essential public services, potentially?). Another part of the decree established that &#8220;the complexity of the issue and responsibilities carried out by the agent will be taken into account for the potential liability of the government agent.&#8221; This opens a loophole for circumstantial motives to be defined subjectively and illegal acts being overlooked.</li> <li>Government agents may only be made liable for their decisions or technical opinions when they &#8220;act or do not act with intention, direct or potential, or commit serious errors in the performance of their role.&#8221; The practical definition of this conceptual salad, however, will depend on subjective interpretations.</li> <li>Even if a cause and effect relationship is established between the conduct of the government agent and the damaging result (for instance, clearing a dam which later collapses due to technical faults), this causality does not automatically lead to liability, except &#8220;if intent or serious error is proven.&#8221;</li> <li>Even if a large amount of money is misapplied from public funds, for instance, &#8220;the amount of damage to the treasury is not in itself proof to define serious error or intent.&#8221;</li> </ul> <p>Other important aspects to bear in mind:</p> <ul> <li>Less punishment, more prevention: &#8220;the work of control agencies will give priority to prevention actions before sanctions.&#8221; Also &#8220;potential estimations of damage caused to the treasury may not be considered exclusively as motivation to rule in favor of illegality of acts, contracts, increases, processes or administrative rules.”</li> <li>Any decision in the public sphere must be motivated, with the indication of &#8220;grounds of merit and legality.&#8221; The contextualization of facts is only necessary &#8220;when applicable.”</li> <li>In the case of decisions based only on &#8220;abstract legal values,&#8221; in other words, &#8220;those foreseen in legal norms with a high degree of indetermination and abstraction,&#8221; the government must follow the practical consequences of the decision, submitting those which &#8220;may be seen in light of facts and grounds of merit and legality.&#8221; In these cases, motivation must also consider &#8220;the possible alternatives&#8221; to the decision made.</li> </ul> <p>Finally, it is notable that a decree of this nature was not signed by Justice Minister Sergio Moro. Instead, it was signed by Economy Minister Paulo Guedes, as well as the AGU and the head of the Federal Controller General (CGU).</p> <p>Source: Decreto no 9.830, de 10 de junho de 2019</p> <p>Social Organizations in government</p> <p>To the core: Another controversial measure by the government. Now, the Ministry of the Economy is preparing the ground for the integration of Social Organizations (OSs) which are constant targets of protests by public servants all across Brazil, especially in the area of health. A law from over 20 years ago foresees that OSs may carry out the activities which are currently handled by government agencies in the area of teaching, scientific research, technological development, the environment, culture, and health.</p> <p>However, this was only regulated at the end of 2017, affecting potential agreements between the federal government and these organizations. Now, Paulo Guedes has established the processes to be followed within the government so that agencies interested in passing on certain activities to the responsibility of Social Organizations may do so. For example, the need for prior studies to indicate &#8220;the convenience and opportunity of applying the model.&#8221; The principal points are as follows:</p> <ul> <li>The proposals for transfer services to Social Organizations must be sent to the Special Department of Reducing Bureaucracy, Management and Digital Government and must include, as defined by the 2017 decree, among other details, a &#8220;quantitative and qualitative analysis of the professionals currently involved with performing the activity, with a view to be used for another activity or to be transferred to the selected private organization&#8221; and potential &#8220;information about roles, positions, bonuses, budgetary and physical resources to be demobilized.”</li> <li>Only after the government publishes an ordinance authorizing the so-called &#8220;publicization&#8221; (a euphemism for privatization via non-profit organizations) will the public call be made to interested organizations. These organizations do not need to be classified as OSs to take part in the call. If they are chosen, they will have 45 days to submit the documentation necessary for official government recognition. If they do not submit the documentation, another organization will be called.</li> </ul> <p>Source: Portaria no 297, de 12 de junho de 2019</p> <p>PUBLIC SECURITY</p> <p>Combating torture</p> <p>To the core: Responsible for carrying out visits to prisons all over Brazil to verify the situation of inmates and potential evidence of torture against prisoners, the National Mechanism for the Prevention and Combating of Torture will no longer be remunerated. The group will remain in existence, but the 11 members, who each have terms of three years, will no longer receive salaries from the government.</p> <p>Source: Decreto no 9.831, de 10 de junho de 2019</p> <p>TOURISM</p> <p>Management of remote beaches</p> <p>To the core: In April, Jair Bolsonaro sanctioned a law which, among other aspects related to government property, allowed the federal government to grant municipalities the right to administer not only urban coastal beaches (in other words, those located within the urban perimeter of cities), but also other types of beaches, such as those which form in rivers and lagoons, and rural coastal beaches—which are further from the urban boundaries of municipalities. For touristic endeavors, this is great news, as it allows for the care of harder to access beaches to be centralized (with some exceptions, such as beaches located in ecological reserves, which must remain under control of the federal government). This sharing of management, however, is not obligatory, and depends on whether the municipality agrees to it. This week&#8217;s ordinance simply updates the terms from a previous ordinance, from 2017, specifying the terms of accession and making reference only to &#8220;urban coastal beaches.&#8221;</p> <p>Source: Portaria no 44, de 31 de maio de 2019</p> <p>

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