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Baggage on flights

To the core: President Jair Bolsonaro vetoed some changes made by members of Congress to a Provisional Decree issued by former President Michel Temer, which reinstated the obligation for commercial airlines to offer free 23kg baggage allowance in Brazil. Mr. Bolsonaro decided to uphold companies’ rights to charge for all checked bags. In his justification for the veto, the president said that “the obligation to offer a baggage allowance limits

competition, as it negatively impacts the business model of low-cost airlines, whose main characteristic is the separate sale of several items which make up the air transport service.&#8221; </span></p> <p><span style="font-weight: 400;">At the same time, Mr. Bolsonaro sanctioned a change to the Brazilian Aeronautic Code which scraps restrictions on foreign capital on the ownership of airlines headquartered in Brazil. The previous legislation demanded that 80 percent of owner&#8217;s equity belonged to Brazilians, as well as the entire boards of the companies. </span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Lei nº 13.842, de 17 de junho de 2019</span></a></p> <h2 style="text-align: center;"><b>BANKS AND FINANCIAL SYSTEM</b></h2> <h2 style="text-align: center;"></h2> <h4><b>Infractions on the stock market</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">The Brazilian Securities Commission (CVM) will focus on investigating and punishing cases of severe infractions of stock market laws by publicly held companies, their representatives and other institutions regulated by the CVM, such as investment funds and brokers. In this sense, the agency may shelve cases of infractions which are less severe. In order to evaluate the importance or severity of the case, a series of criteria should be used, such as the amount involved and the losses caused to investors, the impact on the credibility of the financial market, the previous record and good faith of the people involved, among other aspects. This will come in force as of September this year, when this week&#8217;s normative instruction takes effect.</span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Instrução nº 607, de 17 de junho de 2019</span></a></p> <h1></h1> <h2 style="text-align: center;"><b>CRIME AND CORRUPTION</b></h2> <h2 style="text-align: center;"></h2> <h4><b>Drug money</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">In a new Provisional Decree, President Jair Bolsonaro gave more freedom for the immediate use of resources obtained from the apprehension and seizure of assets suspected to have been obtained as a result of drug trafficking. </span></p> <p><span style="font-weight: 400;">The measure ranges from cash to cars, boats, and houses. </span></p> <p><span style="font-weight: 400;">Now, instead of the government having to wait until cases are concluded to have access to the money from the sale of assets linked to drug trafficking, the amounts seized in cash and resources resulting from auctions must be deposited in the Caixa Econômica Federal (and not the Central Bank), which will have 24 hours to transfer it to the account of the Public Treasury. </span></p> <p><span style="font-weight: 400;">If the suspect or defendant is absolved of the crime, the amount will be returned, with interest and adjusted for inflation, in up to three days. The money currently held by the Central Bank must be transferred to Caixa by June next year.</span></p> <p><b>Other important aspects to bear in mind:</b></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The assets of the National Anti-Drug Fund (Funad) may be invested on the financial market, and the returns may be used to supply the fund.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">In order to receive transfers of up to 40 percent from the Funad, military and civil police forces must be up to date with the supply of statistical data on the fight against drug trafficking. The forces must also have structures suitable for managing seized goods, &#8220;able to help in the control and assignment of apprehended assets and carry out their transfer.”</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The Federal Police and Federal Highway Police will receive a slice of up to 40 percent of the amount resulting from seizures carried out by these two agencies. Similar to the case of military and civil police forces, the exact amount to be transferred will be determined by the Ministry of Justice.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The National Department of Drug Policy of the Ministry of Justice will be the agency in charge of the disposition of the assets, which may take place via auctions, onerous donations to public agencies related to drugs, or via direct sale. In the case of auctions, assets of any value may be subject to this process, being sold to the highest bidder, providing that the top bid is not less than half of the asset&#8217;s value. Invitations for bids must be &#8220;widely published&#8221; in national newspapers.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The provisional decree allows private companies to be hired to carry out valuations of seized assets, as well as handling their disposition via auctions.</span></li> </ul> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Medida Provisória nº 885, de 17 de junho de 2019</span></a></p> <h1><b> </b></h1> <h2 style="text-align: center;"><b>ENVIRONMENT</b></h2> <h2 style="text-align: center;"></h2> <h4><b>Amazônia Legal</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">In January, with the changes implemented by the new government, Incra became responsible for processes of land demarcation in the Amazônia Legal, for the issuance of deeds for land in the region, and for donating federal property located there. However, with the lack of new rules and formal adaptations resulting from this change in responsibility, which was previously of the now extinct Special Department of Family Agriculture and Agrarian Development, an ordinance has been published transferring all normative acts valid until now to Incra. This incorporation of rules is provisional, and will be in effect until a new internal regulation of Incra is decided upon and until the agency issues new rules on the matter.</span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Portaria nº 1.242, de 12 de junho de 2019</span></a></p> <h2 style="text-align: center;"></h2> <h4><b>Land dispute</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">Since 1985, the federal government and the state of Mato Grosso have fought over control of an area of 1.7 million hectares, related to two farm properties and 11 times the size of the city of São Paulo. In 2011, after discussions involving Congress, a decree was published by which the federal government donated this land to Mato Grosso, with the exception of indigenous lands, conservation units and other elements which must remain under the control of the government. </span></p> <p><span style="font-weight: 400;">However, there are still legal elements in the way. In a decree published last Friday in a special edition of the Federal Register, President Jair Bolsonaro ordered that, in order for the land transfer to be carried out, legal matters currently underway which concern the property of the land do not need to be completed. The decree, however, establishes that the Mato Grosso government will need to make an &#8220;express commitment&#8221; to take the federal government&#8217;s place in all legal processes, as well as bearing legal costs.</span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Decreto nº 9.838, de 14 de junho de 2019</span></a></p> <p><b> </b></p> <h2 style="text-align: center;"><b>HEALTHCARE</b></h2> <h2 style="text-align: center;"></h2> <h4><b>Intervention in Rio hospitals</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">The government created an inter-ministerial working group to elaborate a plan, in just 15 days, to transfer and centralize procedures for the procurement of goods, services and supplies for Rio de Janeiro hospitals to the Ministry of Health. The &#8220;gradual centralization&#8221; will include bidding processes as well as the management of contracts. The plan must also include proposals for the management of stock and suppliers of medications, and the definition of the &#8220;goods and services for federal hospitals in Rio de Janeiro for which the bidding processes, acquisitions, procurement and management will be exclusively attributed to the centralization in the scope of the Ministry of Health.&#8221;</span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Decreto nº 9.840, de 14 de junho de 2019</span></a></p> <h2 style="text-align: center;"></h2> <h2 style="text-align: center;"><b> </b><b>INFRASTRUCTURE</b></h2> <h2 style="text-align: center;"></h2> <h4><b>Loosening driver&#8217;s license rules</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">While this was not a measure directly issued by Jair Bolsonaro, it is another controversial traffic-based decision under his government. As of September, those interested in obtaining a driver&#8217;s license for regular cars (CNH type B) will only have to do 15 hours of practical lessons on the road. Another five hours (if the equipment is available), may be held on simulators. Previously, the total requirement was of 25 hours of practical lessons, with five compulsory hours using simulators. </span></p> <p><span style="font-weight: 400;">The traffic department has therefore removed requirements for the use of simulators for obtaining all licenses. Nighttime lessons are also affected by the resolution. Previously, of the 25 obligatory hours of lessons, five had to be held during the evening. Now, of the 20 required hours, only one must be at night. For a driver to obtain a type A license (for motorcycles) the 20 hours of classes remains, but instead of four lessons during the evening, only one nighttime lesson will be required.</span></p> <p><b>Other important aspects to bear in mind:</b></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The resolution makes it much easier to obtain licenses for mopeds. In this case, until September of next year, those seeking licenses for these vehicles do not even need to frequent theoretical or practical classes. Completing the theory and practical tests will suffice. If the candidate fails the practical test, then they will have to do practical lessons. Regardless, lessons are reduced, needing only five hours of practical lessons, with only one in the evening. Previously, the requirement was for 20 hours of practical lessons, with four in the evening.</span></li> </ul> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Resolução nº 778, de 13 de junho de 2019</span></a></p> <h2 style="text-align: center;"></h2> <h4><b>Traffic decisions</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">Further changes to Brazil&#8217;s traffic system, this time in the bureaucratic structure which defines traffic rules. The National Traffic Board (Contran) will now be made up of cabinet ministers. Previously, representatives of ministries took part in the board, as well as public servants. The ministers of Foreign Affairs and the Economy will now have seats on Contran.</span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Resolução nº 776, de 13 de junho de 2019</span></a><span style="font-weight: 400;">, </span><a href=""><span style="font-weight: 400;">Resolução nº 777, de 13 de junho de 2019</span></a><span style="font-weight: 400;"> and </span><a href=""><span style="font-weight: 400;">Resolução nº 779, de 13 de junho de 2019</span></a></p> <p><b> </b></p> <h2 style="text-align: center;"><b>MINING AND ENERGY</b><span style="font-weight: 400;"> </span></h2> <h2 style="text-align: center;"></h2> <h4><b>Priority projects in oil and gas</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">PPI projects in the field of infrastructure related to the oil, natural gas, and biofuel industries will now be considered priority projects for the government in the scopo of reduced Income Tax payments on the returns obtained from the issuance of debentures and other financial instruments destined to finance these projects. The majority of these rules published by the Ministry of Mines and Energy already existed, but some specific changes were made, such as the inclusion of &#8220;liquefaction of natural gas and regasification of Liquefied Natural Gas,&#8221; &#8220;production and storage of biofuels,&#8221; and production and storage of fuels and other oil derivatives&#8221; among the categories of projects to be given priority, even if they are not part of the PPI.</span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Portaria nº 252, de 17 de junho de 2019</span></a></p> <p>&nbsp;</p> <h2 style="text-align: center;"><b>PUBLIC ADMINISTRATION</b></h2> <h2 style="text-align: center;"></h2> <h4><b>The (Military) Chief of Staff</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">The government&#8217;s civilian political liaison and negotiation team did not last six months. In a provisional decree published this week, President Jair Bolsonaro appointed an active Army General in charge of the political relations with Congress and parties from the government&#8217;s support base. Recently appointed as Government Secretary, General Luiz Eduardo Ramos will now inherit certain powers that once belonged to the Chief of Staff, now being tasked with assisting &#8220;the President directly in the guiding of the relationship of the federal government with Congress and political parties.&#8221; Furthermore, as of June 25, General Ramos will have veto power on all important government appointments, with the exception of cabinet ministers. </span></p> <p><span style="font-weight: 400;">Meanwhile, professional politician Onyx Lorenzoni, Chief of Staff, and a member of the same party as the leaders of the House and Senate, will be left isolated politically and administratively. With this week&#8217;s provisional decree, the Chief of Staff is now no longer responsible for analyzing the legality of presidential acts and forwarding appointments. Traditionally linked to the office of the Chief of Staff, the Sub-Department of Legal Matters, which examines all decrees, provisional decrees, and bills sent by the government to Congress, will now come under the President&#8217;s General Secretary, a post also held by a military man. </span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Medida Provisória nº 886, de 18 de junho de 2019</span></a></p> <h2 style="text-align: center;"></h2> <h4><b>Bolsonaro&#8217;s tricks</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">President Jair Bolsonaro pulled a legal maneuver and will force Congress to once again debate the political convenience of transferring the money laundering enforcement agency (Coaf) to the Ministry of the Economy, as well as leaving the care of indigenous rights (except the demarcation of land, which will continue the responsibility of the Ministry of Agriculture) under Justice Minister Sergio Moro. </span></p> <p><span style="font-weight: 400;">The president decided to veto all of the changes made by Congress to the provisional decree issued at the beginning of the year which redefined the cabinet structure of the new government. Among the vetoes includes the migration of Coaf from the Ministry of Justice to the Ministry of the Economy. </span></p> <p><span style="font-weight: 400;">The detail is that, at the same time, Jair BOlsonaro issued a new provisional decree inserting the majority of the vetoed provisions, including moving Coaf to the Ministry of the Economy. Union registration, initially under the control of Mr. Moro, was also passed to Paulo Guedes and his economic team. In practice, Mr. Bolsonaro could have sanctioned these changes and transformed them into laws, but by issuing a new provisional decree, despite being exactly the same as that previously approved by Congress, he has forced the matter to return to the House and Senate, hoping that the chambers may change their minds over the next four months.</span></p> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Lei nº 13.844, de 18 de junho de 2019</span></a><span style="font-weight: 400;"> and </span><a href=""><span style="font-weight: 400;">Medida Provisória nº 886, de 18 de junho de 2019</span></a></p> <h2 style="text-align: center;"></h2> <h2 style="text-align: center;"><b>SCIENCE AND TECHNOLOGY</b></h2> <h2 style="text-align: center;"></h2> <h4><b>Space program</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">By way of a decree, President Bolsonaro altered the rules related to the operations of the Brazilian Space Program Development Committee, created last year. Now, besides the government agencies which already make up the committee (Institutional Security Office, Chief of Staff, Ministries of Defense, Foreign Affairs, Science and Technology, and the Defense Counsel of the Federal Government), others may be called to take part in meetings and be given the right to vote, if the matter being discussed is of interest to the agency. Meetings will be held every four months, and all decisions must be made by two-thirds of those in attendance.</span></p> <p><b>Other important aspects to bear in mind:</b></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The committee will now have more defined working groups whenever required for the development of its activities. These groups, which must have at most five members, may draft studies on &#8220;the development of launch infrastructure and of launch vehicles for orbital and suborbital artifacts,&#8221; &#8220;projects which seek the strengthening of the national industry destined to the Brazilian space sector,&#8221; &#8220;the composition of personnel in careers of science and technology destined for the Brazilian space sector,&#8221; &#8220;public policies, social actions, and land issues related to areas of the country intended for facilities of launch centers,&#8221; and about &#8220;the proposals of establishing legal frameworks for the Brazilian space sector.&#8221;</span></li> </ul> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Decreto nº 9.839, de 14 de junho de 2019</span><b> </b></a></p> <h2></h2> <h2 style="text-align: center;"><b>SOCIAL SECURITY AND PENSIONS</b></h2> <h2 style="text-align: center;"></h2> <h4><b>Social Security benefits</b></h4> <p><b>To the core: </b><span style="font-weight: 400;">With several changes in relation to the text originally proposed by the government in January, President Jair Bolsonaro sanctioned a provisional decree instating a detailed review of the benefits granted by the Social Security Institute (INSS). The focal point of the measure, now written into law, is the increase in rigor of the control of social security benefits. Members of Congress approved several amendments, and the majority of them ended up being sanctioned. The main changes in relation to the original bill are as follows:</span></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">The INSS will now directly receive information related to companies registered at commerce registries and notary publics from the National Department of Commerce Registration.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Notaries must inform the INSS daily on deaths, births, marriages, entries and notifications recorded. When there is no internet service, the report may be sent within up to five working days. Previously, this reporting was monthly and only included deaths.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Notary publics may receive requests of INSS assistance, forwarding the evidentiary documentation to the agency. </span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Those responsibly for acts of domestic violence against women will suffer regressive action on behalf of the INSS. The institute will go to court to demand redress for expenses borne with the payment of benefits resulting from the violence. </span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">According to the original decree, the deadline for submitting a defense to the accusation of receiving unlawful benefits was ten days. Now, the deadline has returned to 30 days for urban workers, and 60 days for people living in rural areas. </span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">If notifications by post about the suspicion of benefit irregularities is not sufficient (for example, if the individual is not found), notices may be served via publication.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Proof of steady union or economic dependence by dependents, for the purpose of receiving INSS benefits, will depend on the submission of material proof which is no more than two years old. In the case of death pensions, the spouse or partner must submit proof of the steady union for at least two years before the death. People convicted for the death of an individual receiving benefits, or for attempted murder, will no longer be able to receive benefits from the INSS themselves..</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">In the original provisional decree, as of 2020, beneficiaries who receive rural pensions would only be recognized by way of their registration on the INSS. This date has been delayed until 2023. </span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The INSS will no longer have access to data from the Federal Revenue Service. While this was foreseen in the original wording, this point was vetoed by Jair Bolsonaro. Another point to this end is that, in the original decree, beneficiaries of the Continuous Payment Benefit (BPC) would have to authorize access to their bank details so that they may continue to receive the benefit. Congress, however, repealed this provision.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Benefits paid above the ceiling adopted by the general regime of the pension systems (private sector pensions) will now be considered potentially irregular cases, and will be examined more carefully.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">In the original decree, there was a possibility of family assets (including residential properties) being given as pledge in the case of notices of irregular benefits paid intentionally or fraudulently, &#8220;as well as by third parties who knew or should have known of the illicit origin of the funds.&#8221; This final sentence was enigmatic, but it is clear that it opens a wide net for ordering the pledge of family assets. All of this, however, was repealed by Congress.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">The initial wording stated that, if maternity pay was not requested in up to 180 days after birth or adoption, the benefit would no longer be valid. This was repealed by Congress. Furthermore, representatives approved an amendment, which has now been sanctioned, ensuring that unemployed women would also receive maternity pay, as long as they have their children while they are beneficiaries (within 12 months of having lost a registered job).</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Children with learning or mental disabilities, of any age, may receive pensions in the case of death of INSS beneficiaries, regardless of regulation. However, to prove this disability, they may be subject to home visits. Previously, the provision was that they would have to go to INSS offices.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Jair Bolsonaro vetoed a paragraph which ordered the proof of economic dependence of general dependents for the receipt of pensions for death, including spouses (with the exception of children under 21 years or with disabilities).</span></li> </ul> <p><b>Source:</b> <a href=""><span style="font-weight: 400;">Lei nº 13.846, de 18 de junho de 2019</span></a></p> <p>

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