Publications

Category: Tax

The Federal Supreme Court (STF) concluded, on March 17, the judgment of Extraordinary Appeal 796.939 / RS (Theme 736 of the General Repercussion) in the virtual plenary. At the time, the Court analyzed the constitutionality of the isolated fine of 50% provided for in article 74, §§ 15 and 17, of Law 9,430/96.

Under the terms of the law, the taxpayer who ascertains a credit related to a tax or contribution administered by the Federal Revenue that can be refunded or reimbursed – including credit resulting from a final court decision – may use it to offset his/her own debts, due or yet to fall due, within five years of the undue payment (article 168 of the National Tax Code – CTN).

This procedure is subject to the analysis and approval of the Revenue Revenue. If the body does not recognize the claim of credit, even partially, it will formalize the rejection of the tax reclaim or the non-approval of the offset made.

In case of non-approval, the amounts subject to offset will be charged, plus interest and a 20% moratorium fine (article 61, paragraph 2, of Law 9,430/96). This decision paves the way for administrative litigation and allows the presentation of a manifestation of nonconformity with suspensive effect (article 74, paragraph 9, of Law 9,430/96).

In addition, in a separate procedure, the Federal Revenue Service draws up a tax assessment notice to demand the collection of the isolated fine of 50% on the credit that originated the offset request not approved (Law 12,249/10), with interest accrual (article 74, §17, of Law 9,430/96).

The isolated fine is launched indistinctly, when there is no legal grounds for the penalty, and even before the final term of the administrative proceeding in which the legitimacy of the offsetting procedure is discussed.

The tax legislation itself determines that the taxpayer presents an offset request for subsequent approval by the Tax Authority, but, at the same time, establishes the imposition of a punitive fine on any debt that may not be approved.

What was discussed, in addition to the creditory right, is that the application of an isolated fine in these situations represents a double penalty of the taxpayer, in breach of the right to full defense and to a fair hearing, as well as the right of petition provided for in article 5, XXXIV, paragraph "a", of the Federal Constitution.

In that sense, it was argued that the isolated fine represents an undue political sanction that aims to prevent the taxpayer from recovering the amounts unduly collected from the Tax Authorities, constituting a confiscatory practice by the Public Administration, which is prohibited by the Federal Constitution (article 150, inc. IV, of CF/88) and by Precedents 70, 323 and 547 of the Federal Supreme Court.

The procedure would present an obstacle to the right to recover taxes improperly collected, capable of generating a very high financial risk to the taxpayer who acted in good faith when determining indebtedness before the Federal Revenue and proceed with the offset of such amounts, as provided for in the tax legislation.

Not for any other reason, §17 of the law, in its original wording^[1],  determined that the penalty should be applied only to taxpayers who utilized the offsetting request as a means of evading the collection of amounts owed, acting in bad faith, deceit, fraud or simulation.

In many cases, the non-approval of the offset results from the non-recognition by the tax authorities of rectifications in the fiscal bookkeeping (DCTF and SPED Fiscal – ECF and EFD-Contributions) by the taxpayers, for mere mistake in the calculation basis.

The isolated fine, therefore, ends up discouraging the rest of the taxpayers who, in good faith, present offsetting requests, exercising the right to recover amounts unduly paid.

Thus, it was neither reasonable nor proportionate to impose the penalty, which does not aim to discourage the taxpayer from practicing undue offset, but, in fact, to increase tax collection and punish bad taxpayers.

In line with the understanding mentioned above and confirming the Court's historical position on this matter, in the judgment of RE 796.639/RS, STF dismissed the Extraordinary Appeal of the Federal Attorney, for recognizing as unconstitutional both the already repealed §15 (Law 13.137/15) – relating to the application of an isolated fine on the rejected restitution requests – and the current §17 of article 74 of Law 9.430/96, in terms of the vote issued by Minister Rapporteur Edson Fachin.

Unanimously, the following thesis of judgment was established: "It is unconstitutional the isolated fine provided for by law to be levied on the mere denial of approval of tax offset request because it does not consist of an unlawful act with the ability to provide automatic pecuniary penalty."

As the rapporteur pointed out in his vote, the mere non-approval of the tax offset does not consist of an unlawful act capable of motivating a tax sanction. Thus, there is a clear lack of correlation between the 50% fine and the administrative offsetting request, since this is considered a legitimate exercise of the taxpayer's right of petition. In addition, the correlation violates due process and good faith.

On the same date, the judgment of the Direct Action of Unconstitutionality 4,905 (ADI 4,905), by the rapporteurship of Justice Gilmar Mendes, was also concluded. By a majority of votes, §17 of Law 9,430/96 was declared unconstitutional. It was understood that "the application of an isolated fine for the mere non-approval of an offset request, without being characterized by bad faith, falsehood, intent or fraud, violates the fundamental right of petition and the principle of proportionality".

Given this outcome, if the taxpayer is faced with the non-approval of an offset formalized before the Federal Revenue, only the moratorium fine of up to 20% provided for in article 61, caput and paragraph 2, of Law 9,430/96 will apply.

Considering that the Supreme Court, so far, has not modulated the effects of the decision, the precedent should be applied to all cases involving the imposition of the fine for non-approval of offsetting requests. The taxpayer may also claim the refund of amounts unduly paid in the last five years, under the terms of Law 9,430/96.

^[1] Art. 18. The official release referred  to in article 90 of Provisional Measure 2.158-35, of August 24, 2001, shall be limited to the imposition of an isolated fine due to the non-approval of compensation declared by the taxable person in the cases in which the practice of the offenses provided for in articles is characterized. 71 to 73 of Law 4.502,  of November 30, 1964.  (Text given by Law 11.051/04)

Art. 18. The official release referred to in Article 90 of Provisional Measure 2.158-35, of August 24, 2001, shall be limited to the imposition of an isolated fine due to non-approval of the compensation when the falsity of the declaration submitted by the taxable person is proved. (Text given by Law 11.488/07)

Category: Infrastructure and energy

The Federal Constitution instituted the Financial Compensation for Mineral Exploitation (CFEM) – more commonly known as "mining royalties" – as a consideration for the economic use of mineral resources (Union assets) to be collected by the National Mining Agency (ANM).

Currently, its collection is not only up to the holders of mining rights that carry out the mining activity, as originally conceived, but, more specifically:

• to the first purchaser of mineral extracted under the small scale mining consent;
• the purchaser of mineral auctioned off at public auction; and
• to those who exercise, for consideration or free of charge, the activity of exploitation of mineral resources on the basis of the rights of the original holder.

The current regime, introduced by Law 13,540/17, lists distinct situations that represent the taxable event of CFEM, based on the wording given to items I to V of article 2 of Law No. 8,001/90, all of them related to the exploitation of mineral resources.

Among these hypotheses, in two of them the amount due is calculated directly on the result of the commercialization of the production of the mining companies. This is what is provided for in items I and III, which determine the collection on the revenue from the sale and export of mineral production. [1]

In both cases, CFEM ends up following a typical methodology of indirect taxes that act on trading activities. Although it is not a tax, but a public price,[2]  the collection is also calculated on revenues, causing its economic effect on the sale price of the production.

In fact, the mechanics of tax charges that affect sales, whether of a tax nature or not, tend to obey a pattern, in which the value destined for the public treasury ends up being incorporated to the product price and borne by the purchaser.

The similarity between the institutes is also revealed to the extent that the legal entity responsible for CFEM acts as a kind of intermediary between the collecting agency (ANM) and the purchaser, since the amount of the charge, initially received by the mining company, is subsequently transferred to the public entity, not being incorporated into the company's assets.

The systematics described above leads to the reflection on whether CFEM could be considered part of the revenue of the explorer of the mining company or if it would be a simple cash inflow, as ICMS was interpreted by the Federal Supreme Court (STF) in the judgment  of Extraordinary Appeal 574.706, which resulted in the thesis of removal of ICMS from the calculation basis of PIS and Cofins.

On that occasion, the ministers recognized that the state tax would represent only a transitory cash inflow, to be transferred to the public entity, which is the final receiver of the cash. Therefore, it would not represent an equity income capable of generating revenue and, therefore, it was understood by the impossibility of composing the calculation basis of federal contributions.

As is well known, the prevailing legal understanding served as a basis for the emergence of subsidiary theses, or "offshoots", which claim the exclusion of other items from the calculation basis of PIS and Cofins. There are cases, for example, of judgments of the Federal Court of São Paulo[3] and the Federal Regional Court of the 3rd Region,[4] who admitted the exclusion of PIS and Cofins from their own basis, based on the line of rationale established in the Theme 69.

In this context, it seems appropriate to argue that, similarly to ICMS and other indirect taxes, CFEM does not constitute revenue of those who receive it, since these resources remain for a certain time in the possession of the individual and then are transferred to the treasury, which appropriates them definitively.

In addition, the requirement of PIS and Cofins on CFEM can be interpreted as a double burden imposed on mining companies that, in addition to the consideration for ore exploitation, would be subject to an increased tax burden.

Therefore, in our view, there is good evidence to support the exclusion of that item from the calculation basis of PIS and Cofins due by the companies exploiting mineral resources. In this scenario, it is observed that mining companies obliged to pay CFEM may, in given circumstances, seek alternatives to mitigate the tax impact by judicially questioning the obligation of this charge.

[1] Art. 2 The CFEM rates shall be those listed in the Annex to this Law, subject to the limit of 4% (four percent), and shall incur: (Wording given by Law 13.540, of 2017)

I - in the sale, on the gross revenue of the sale, less the taxes levied on its commercialization; (Included by Law 13,540, of 2017)

(....)  III - in exports, on the calculated revenue, considered as calculation basis, at least, the parameter price defined by the Brazilian Federal Revenue, based on article 19-A of Law 9,430, of December 27, 1996, and in the complementary legislation, or, in the event of non-existence of the parameter price,  the reference value shall be considered, subject to the provisions of §§ 10 and 14 of this article; (Included by Law 13,540, of 2017) Term

[2] As reaffirmed by the jurisprudence of the Supreme Court, most recently in ADI 4.146, of October 9, 2019.

[3] Writ of Mandamus 5003772-59.2021.4.03.6100, judged by the 14th Federal Civil Court of São Paulo, on August 11, 2021.

[4] TRF 3rd Region, 4th Class, ApReeNec - Appeal / Reexamination required - 5022842-67.2018.4.03.6100, rel. federal judge Andre Nabarrete Neto, judged on December 19, 2019, summons via system. Date: January 20, 2020

[5] Art. 3 From the amount calculated in the form of article 2 the legal entity may deduct credits calculated in relation to: (...) I - goods acquired for resale, except in relation to the goods and products referred to: (...) II - goods and services, used as inputs in the provision of services and in the production or manufacture of goods (....) §1 Subject to the provisions of § 15 of this article, the credit shall be determined by applying the rate provided for in the caput of article 2 of this Law on the value: I - of the items mentioned in items I and II of the caput, purchased in the month;

[6] According to the rules of article 3, paragraph 2, II, of Law 10,833 and article 3, paragraph 2, II, of Law 10,637/02.

[7] Appeal/Remittance Required – 08173623420204058300. Organ: Federal Regional Court of the 5th Region. Rel., Federal Judge Marcos Antonio Garapa De Carvalho (summoned). Tried July 20, 2021.

Category: White-Collar Crime

Law 14,540/23, promulgated on April 3, 2023, establishes the Program for the Prevention and Confrontation of Sexual Harassment and other Crimes against Sexual Dignity and Sexual Violence within the scope of the Public Administration, direct and indirect, federal, state, district and municipal.

Published in the Official Gazette on April 4, 2023, the law applies to all public entities and private entities that provide public services through concession, permission, authorization, or any other form of delegation.

The initiative shows the growing concern of the government with integrity issues.

The Program uses as parameters for the characterization of violence provided for in Law 14,540/23 the definitions of sexual crime contained in the Criminal Code and other crimes inserted in special laws, such as  Law 11,340/06 (Maria da Penha Law) and  Law 13,431/17 (Law of Guarantee of the  Child or Adolescent Victim or Witness of Violence).

The goals of the Program are:

• To prevent and address harassment and other forms of violence;
• To train the Public Administration agents in preventing and solving cases of violence; and
• To implement educational campaigns on harassment and other forms of violence.

To achieve these goals, the law sets the following guidelines:

• Clarification to Public Administration agents about the elements that characterize harassment and other forms of violence;
• Provision of educational and informative materials with examples of conduct that can be characterized as sexual harassment or other crime against sexual dignity, or any other form of sexual violence, in order to guide the actions of public agents and society in general;
• Implementation of good practices for the prevention of the conducts covered by the Program;
• Dissemination of relevant legislation on the subject and public policies for the protection, reception, assistance and guarantee of the victims’ rights;
• Disclosure of reporting channels accessible to servers, agencies, entities, and other actors involved;
• Establishment of procedures to forward complaints, ensuring confidentiality and due process; and
• Creation of training programs, in the face-to-face or distance modality, with specific mandatory content addressing victims' health, legal developments, victims' rights, mechanisms and whistleblowing channels ,and existing legal instruments for prevention and confrontation of sexual harassment and other violence.

The Program also contains provisions to provide efficiency to the prevention and mitigation of sexual violence by setting  practical measures, such as:

• Duty to report by any person who becomes aware of conducts related to  sexual harassment or violence ;
• Investigation and punishment of retaliation of victims, witnesses, and investigators; and
• Registration, physical or electronic, for five years of frequency of the training initiatives given, by all agencies and entities covered by the Program.

The monitoring of the development of the Program will be carried out by the Executive Branch, in order to subsidize the planning of future actions and the analysis and achievement of its objectives and guidelines.

The law shall enter into force on the date of its publication. However, its application to private entities is subject to the specific regulation of the matter by the federative entity responsible for the concession, permission, authorization or delegation.

Category: Infrastructure and energy

The National Electric Energy Agency (Aneel) approved, on February 14 of this year, the new Arbitration Convention of the Electric Energy Trading Chamber (CCEE), at the 4th Ordinary Public Meeting of the Board of Directors of 2023.

The text, which had been approved at the 68th Extraordinary General Meeting, becomes mandatory for CCEE and its agents, pursuant to article 44, sole paragraph of Aneel Normative Resolution 957/21^[1].

The new convention is applicable to all arbitration proceedings instituted since March 1 of this year, pursuant to article 3 of Ratifying Resolution 3,173/23. ^[2] Its objective is to modernize the resolution of disputes in the electricity sector, especially to provide greater legal certainty and freedom to the agents operating in the segment.

There are novelties in relation to the rules previously in force, such as the plurality of chambers, the clarification on the delimitation of the conflicts that must be submitted to arbitration, the possibility of requiring the provision of guarantee in the context of the dispute and the creation of a repertoire of jurisprudence.

In response to the request of agents who pleaded for the plurality of arbitration chambers that could also decide disputes arising from the CCEE Arbitration Convention, the FGV Mediation and Arbitration Chamber will no longer have exclusivity for the resolution of disputes within the scope of the CCEE. Now, any approved arbitration chamber can be elected by the agents of the CCEE. At the time of writing, Camarb, CBMA, Ciesp-Fiesp and CAM-CCBC had already integrated the list of arbitration chambers approved by the CCEE.

The new arbitration convention further clarifies that arbitration is dispensable in bilateral conflicts that do not affect the rights of third parties and do not affect the operations of the CCEE. Nor are measures to collect amounts delinquent by agents or non-agents mandatory, which can be pleaded through the courts. This clarification is salutary and seeks to resolve doubts that hovered over the need to submit to the arbitration agreement of the CCEE disputes of a mere private nature that do not have repercussions on the operations of the CCEE.

The provision that the delivery of monetary guarantee may be required by the arbitral tribunal, in the event that the arbitration has a potential impact on other agents, complies with the principles of market security, in particular in the context of the expansion of transactions in the free energy market.

In addition, the creation of a repository of jurisprudence is welcome, with the approved arbitral chambers obliged to create a public repository of menus of the decisions of the disputes involving the agents of the CCEE, respecting the privacy of the parties and the confidentiality attributed to the procedures.

Given the exponential arrival of new players in the energy sector, it is possible that the number of conflicts between free consumers (wholesalers and retailers), traders and retail traders – who will be governed by the new rules – will increase. According to data provided by CCEE, "the number of agents associated with CCEE has been growing significantly since 2016, reaching in 2022 the mark of 13,386 registrations, a growth of 10.6% compared to 2021."^[3]

In this context, the modernization of the convention, in addition to conferring greater autonomy and legal certainty to the parties, opens the door to the gradual opening of the power free market and, above all, moves towards the increased development of arbitration in the power sector.

It is worth remembering that the new convention repeals the Ratifying Resolution 531/07, previously in force. Only the arbitral proceedings that were in progress and/or the acts and facts that occurred during its validity remain under the rule of the old convention.^[4]

^[1]    Art. 44. The Agents of the CCEE and the CCEE shall resolve, through the Arbitration Chamber, all disputes involving available rights, under the terms of the Law 9,307, of September 23, 1996, in the following cases: I – conflict between two or more CCEE Agents that does not involve matters under the direct competence of ANEEL or, in the event of dealing, has already exhausted all administrative instances regarding the object of the matter in question; II – conflict between one or more CCEE Agents and CCEE that does not involve matters under the direct competence of ANEEL or, in the event of treatment, has already exhausted all administrative instances regarding the subject matter of the matter in question; and III – without prejudice to the provisions of a specific clause in the CCEARs, a conflict between CCEE Agents arising from Bilateral Contracts, provided that the event giving rise to the divergence arises from the respective contracts or from Marketing Rules and Procedures and has repercussions on the obligations of the contracting agents within the scope of the CCEE. Single paragraph. The Arbitration Agreement is an integral part of this Marketing Convention, as well as binding on all agents of CCEE and CCEE, as provided for in §§ 5, 6 and 7 of article 4 of Law 10,848 of 2004.

^[2]    Art. 3 This Resolution enters into force on March 1, 2023.

^[3]    Balance of Consumption and Generation 2022. Analysis of generation and consumption between the energy contracting environment, in the comparison between the years 2022 and 2021 <https://www.ccee.org.br/web/guest/dados-e-analises/estudos-especiais>. Accessed 22.03.2023.

^[4]    Art. 2, sole paragraph, of Ratifying Resolution 3,173/23: "The acts and facts that occurred during the validity of Ratifying Resolution No. 531, of August 7, 2007, remain governed by it, including the ongoing arbitration proceedings instituted in its validity."

Category: Environmental

Approved by the Legislative Power and sanctioned by the President after more than seven years in discussion, Federal Law No. 14,133/21 finally entered into force on April 1^st 2023, replacing the previous Federal Law No. 8,666/93.

After two years of vacatio legis, it can be said that the legislator opted for the creation of an innovative law from an environmental standpoint. Although it could have promoted  greater advances in several points, in the environmental field Federal Law No. 14,133/21 reinforces and brings harmony to a complex system of environmental policies in Brazil, making them more effective and guaranteeing greater legal security.

In line with the objectives established in the Federal Constitution of 1988, which established the defense of the environment as a fundamental right and basic principle of Brazilian economic order, under the terms of its articles 225 and 170, item VI, the new norm addresses the environmental and sustainability issues in  in a practical way , since it determines more specifically the environmental aspects that must be taken into account during Brazilian bidding proceedings.

Among the main changes introduced by Federal Law No. 14,133/21, eight points deserve to be highlighted with regard to its environmental variable:

1. In the preparatory phase, bidders must prepare a descriptive technical study of the possible environmental impacts and respective mitigating measures, including issues involving reverse logistics and consumption of energy and natural resources (article 18, paragraph 1, XII).
2. It will be possible to require the bidder to obtain environmental licenses, provided that such a hypothesis is provided for in the public notice (article 25, paragraph 5, I).
3. Priority will be given to the procedures for environmental licensing of engineering works and services before environmental agencies that are part of the National Environmental System – Sisnama (article 25, paragraph 6).
4. The criteria of best sustainable price will be used ^[1] (art. 34, paragraph 1).
5. It will be mandatory to comply with standards related to environmentally appropriate final disposal of waste, mitigation and compensation of environmental impacts and use of products, equipment and services that demonstrably reduce the consumption of energy and natural resources in bids for contracting works and engineering services (art. 45, I, II and III).
6. It will be possible to establish variable remuneration in the contracting of works and services – including engineering – linked to the bidders performance based on goals, quality standards and sustainability criteria (art. 144);
7. It will be allowed the exemption from the bidding proceedings of services of collection, processing and commercialization of recyclable or reusable municipal solid waste conducted by associations or cooperatives formed by low-income individuals; and
8. It will be possible to justify delay in environmental licensing procedures – due to circumstances beyond the control of the bidder – to change the contract and restore its economic and financial balance or extinguish it (art. 124, §2 c/c art. 137, VI).

As for the last point, Federal Law No. 14,133/21 intends to pacify the recurring discussions in the Judiciary regarding the impracticability of execution of contracts and bidding schedules, due to the complexity of environmental licensing procedures in the country.

Departing from the generality of the previous rule^[2],  Federal Law No. 14,133/21 – by placing environmental licensing as a determining variable in claims for economic and financial rebalancing or termination of contracts – adopts the majority understanding of the jurisprudence of the national courts, ensuring the balance of bidding contracts and the legal certainty of bidders.^[3]

At first, the new Federal Law seems to have managed to achieve a tenuous balance between the guarantees of environmental protection and the needs of the public interest (be it economic, social, political or cultural).

Armed with a spirit that reflects the global trend of requiring enterprises and entrepreneurs to get closer and closer to environmental, social and governance criteria, Federal Law No. 14,133/21unveils a scenario in which enterprises that show interest in winning bidding proceedings must increasingly adapt to environmental legislation in order to ensure a healthier and more efficient panorama of public procurement.

^[1] When dealing with the criteria for judging the bidding, it is established the possibility of giving preference to goods and services that have less environmental impact on the production process – provided that they are objectively measurable – to the detriment of the logic of the lowest price.

^[2] Established by article 65, II, "d" of Federal Law No. 8,666/93.

^[3] As a direct reflection of the new law, in bids whose responsibility for environmental licensing falls to the Public Administration, prior environmental licenses – when applicable – must be obtained by the public power before the disclosure of the notice (article 115, paragraph 4).

Category: Infrastructure and energy

Law 14,514/22, published on December 29, 2022, brought in two relevant changes to the mining sector: the possibility of establishing liens on exploration permits and a new set of rules applicable to research, mining, and marketing and sale of substances, ores, and nuclear minerals.

The new law, which was focused on changing the rules regarding the state-owned company Indústrias Nucleares do Brasil S.A. (INB) and the exploration of nuclear minerals and ores, also changed other rules in the mining sector.

Among them is the inclusion of article 92-A into Decree-Law 227/67 (the Mining Code). The new article expressly establishes the possibility of lien and offering as collateral of research authorizations, mining concessions, mineral licensing, mining permission, and the right to continue after the expiration of the research authorization and before the granting of the mining concession.

The offer of mining rights as collateral, a very important issue for the sector, was regulated by the National Mining Agency (ANM) through Resolution ANM 90/21, after a long period in which the subject was regulated only by Opinion JT-05. This opinion, binding on the entire Federal Administration because of its presidential approval, addressed only the possibility of creating a pledge and concluded that the lien would only apply to mining concessions.

As discussed in a prior article, the publication of ANM Resolution 90/21 brought about new possibilities and defined the mechanics for the creation of liens on mining rights as a collateral for the raising of funds by their holders, even without expressly addressing the possibility of lien on permits for research authorization or mining licenses.

With the inclusion of the new article 92-A in the Mining Code, it is expected that the ANM will publish supplementary regulations in order to receive the innovation brought about by the legislative change, which adds legal security to financing transactions in the mining industry and meets a long-standing request of the sector's players.

Changes also affect the nuclear minerals sector

As per the terms of article 1 of Law 4,118/62, the Federal Government has a monopoly on research, mining, enrichment, reprocessing, industrialization, and trade of nuclear minerals and ores and their derivatives, nuclear elements and their compounds, fissile and fertile materials, radioactive substances, and nuclear by-products.

In Brazil, mineral reserves belong to the Federal Government and can only be explored by private entities by means of concessions, licenses, or by the old legal concept of the manifested mine, extinct with the separation of ownership of the soil from that of the subsoil as of the Federal Constitution of 1934, but which remains in our legal system in observance of the principle of vested rights.

The new Law 14,514/22, together with Law 14,222/21, orders that if the holder of a right allowing exploration of mineral reserves identifies the occurrence of nuclear elements (such as, for example, uranium, thorium, plutonium, and others as determined by the competent authority), it must notify the ANM, the new National Authority for Nuclear Safety (ANSN), and the INB, pursuant to article 4 of Law 6,189/74.

INB, in turn, will evaluate the technical and economic feasibility of the nuclear mineral resources and determine how it will be explored, according to the criteria summarized below.

• If the economic potential of the nuclear elements found in the reserve is greater than that of the other substances researched or mined in the same deposit, the exploration of the deposit's resources may only be carried out through a partnership between INB and the company holding the concession (relationship subject to control of the benefits by the INB) or through expropriation of the mining rights by the INB (subject to prior compensation to the holder of the mining right).

• If the economic potential of the nuclear elements found in the reserve is lower than that of the other substances researched or mined in the same deposit, the mining right will be kept with the original holder.

In this case, if the use of the nuclear element is considered technically and economically feasible, the parties shall determine a way to deliver this nuclear element included in the mined ore to the INB according to a rule to be established in a future regulation.

If the benefits of the nuclear elements found are considered technically and economically unfeasible, the mining right holder must dispose of them in accordance with applicable environmental laws.

The new legislation, therefore, does not make clear the possibility that a private entity may freely and individually (without the INB's participation in the production or commercialization chain) explore and commercialize nuclear minerals.

There is, however, a sign that the INB may enter into contracts with private legal entities and remunerate them by means of the right to commercialize ores associated with nuclear ores or minerals, in addition to the right to purchase the product of mining with previously authorized exportation (in a form still to be defined in a future regulation), besides other forms established in a contract between the INB and the private entity.

This possibility is a legislative innovation, which should be further clarified by future regulations and a market practice to be developed.

There is also no clarity on the type of arrangement that can or should be established between the mineral rights holders and the INB for production and commercialization.

Considering that future laws are expected to regulate how the INB will receive elements intrinsic to the ores extracted by private entities, possibly new rules on the subject will be created so that the state-owned company can negotiate certain arrangements with private entities to allow greater participation in the production and commercialization of nuclear ores.

For more information, see the Mining Industry team and Machado Meyer's Banking, Insurance and Finance practice.