Publications

Category: Digital Law

The Brazilian Data Protection Authority (ANPD) published the regulation on February 27, establishing parameters and criteria for applying enforcement measures.

Besides providing specific rules for the application of sanctions, such as gradual, isolated, or cumulative application, the regulation also ensures that the ANPD will only apply an enforcement measure after an administrative procedure and based on a reasoned decision, ensuring the right to a full defense, adversarial proceedings and due process of law.

Infractions may be classified as severe, moderate, or mild. The violation significantly affecting data subjects’ interests and fundamental rights is considered moderate. The ANPD will consider severe infraction when there is an obstruction to the inspection activity and, in addition:

• involves the processing of personal data on a large scale.
• there is an economic advantage because of the offense committed.
• involves risk to data subjects’ lives.
• involves processing sensitive data or personal data of children, adolescents, or the elderly.
• carry out the processing of personal data without support in one of the legal bases provided in the Brazilian Personal Data Protection Law (Law 13.709/18 – “Lei Geral de Proteção de Dados”);
• data processing with illicit or abusive discriminatory effects; or
• continuous irregular practices by the offender.

An infraction that does not characterize one of the hypotheses above will be considered mild.

Although the LGPD already provided the sanctions for violation of the law, the ANPD presented more criteria for evaluating these sanctions:

• concerning the warning penalty, the ANPD will apply it for a mild or moderate infraction when it does not characterize specific recidivism or when there is a need to impose corrective measures.

• simple fine of up to 2% of the revenues – limited to BRL 50 million – per breach if one of the following occurs: (i) a severe infraction; (ii) lack of preventive or corrective measures; or (iii) due to the nature of the breach, processing activity or personal data and the circumstances of the particular case.

One of the appendixes to the regulation establishes the criteria for identifying the basis value for applying a fine. The same appendix provides classifications applicable to information, offender’s revenue, and degree of damage.

The regulation also provides specific rules for defining revenue, which may be considered the gross revenue, the total amount of funds earned, or a value determined by the ANPD for cases where the offender does not present supporting documentation according to regulation-established criteria.

In addition, the regulation establishes that the simple fine may be increased by up to 40% for cases of specific recidivism, up to 20% in cases of generic recidivism or for each non-compliance with guidance or preventive measures, and up to 30% for each non-compliance with corrective actions.

The ANPD can also reduce the fines up to 75% in cases of cessation of the infringement, implementation of a good practice and governance policy, demonstration of internal mechanisms and procedures capable of minimizing damage to data subjects, and proof of measures capable of reversing or mitigating the effects of the infringement on the personal data subjects affected.

• daily fine, applicable to ensure compliance with a non-pecuniary sanction or with a determination established by the ANPD, considering the time between the imposition of the fine and the fulfillment of the obligation, and considering the classification of the offense and the degree of harm to data subjects.

The ANPD may also apply this sanction after failure to adjust irregularities within the deadline, obstruction of the inspection activity, or the practice of permanent infraction that has not ceased until the decision. The fine may be reduced when the offender waives the right to appeal of the decision.

The offender must pay the daily fines within up to 20 working days, from the first working day of delay in complying with the enforcement measure, or from the working day after the notification of the decision. The absence or delay in payment will result in the applicable interest and a fine of 0.33%.

• blocking personal data related to the infraction until its regularization, which is the temporary suspension of any processing procedure with personal data until the conduct is regularized. In these cases, the offender must communicate the fulfillment of the obligation and prove the regularization for the unblocking.

• deleting personal data related to the infraction, which is the deletion of the data or set of data stored in a database. The fulfillment must also be communicated to the ANPD, except when communication is proven impossible or involves disproportionate effort.

• partial suspension of the usage of the database related to the infraction for a maximum period of six months, extendable for an equal period, until the controller regularizes the processing activity. For these cases, the offender must also prove the fulfillment to restore operation.

• suspension of personal data processing related to the infraction for a maximum period of six months, extendable for an equal period, considering the public interest, the impact on the rights of the data subjects, and the classification of the infraction.

• partial or total prohibition of personal data processing for cases where: there is recidivism of the infraction punished with a partial suspension of the database or the processing of personal data; processing personal data for illicit purposes or without legal support; or when it does not meet the technical and operational conditions to maintain the adequate processing of personal data.

The regulation does not establish more details about the sanction that determines the publication of the infraction after its occurrence. It only provides that it must be distinct from the publication of a decision to apply an administrative sanction in the Official Gazette or with the other acts carried out by the ANPD  to comply with the principle of administrative publicity.

In addition to the above, the regulation also establishes the following rules:

• the sanctions of partial suspension of database usage, suspension of personal data processing and partial or total prohibition of personal data processing will only be applied after at least one of the other sanctions has already been imposed for the same specific case.
  
  In these cases, the ANPD will inform the main sectoral regulatory body so that it can express its opinion, within 20 days, on any consequences of the imposition of sanctions for the economic activities;

• sanctions may be applied to public entities, except for sanctions that provide for the imposition of fines; and

• the parameters and criteria for defining the sanction must follow:

• the severeness and nature of the infringements and personal rights affected.
• the good faith of the offender.
• the advantage gained or intended by the offender.
• the economic condition of the offender.
• the specific recurrence.
• generic recurrence.
• the degree of damage.
• the offender’s cooperation.
• the repeated and demonstrated adoption of internal mechanisms and procedures capable of minimizing damage, aimed at the safe and adequate data processing, per the LGPD.
• the adoption of good practice and governance policy.
• prompt adoption of corrective measures; and
• proportionality between the seriousness of the fault and the intensity of the sanction.

The ANPD also describes the methodology for calculating fines in the appendixes to the regulation. For the simple fine, the total calculation includes the basis value of the fine multiplied by one plus the sum of aggravating percentages minus the sum of mitigating percentages.

It is necessary to define the basis rate for applying this formula, which ranges from 0.08%, the minimum rate for minor violations, to 1.5%, the maximum rate for severe violations.

After defining the rate, the ANPD must determine the degree of damage, classified from 0 to 3, which ranges from the absence of damage or insignificant impacts to the data subjects to injury or offense to diffuse, collective or individual rights or interests, as well as the minimum values and maximum for defining the basis value of the fine.

Once the ANPD determines the degree of damage, the basis rate for the fine must be determined, which considers the maximum rate based on the classification of the infraction minus the minimum rate, divided by three, multiplied by the degree of damage, and added to the minimum rate.

The basis value for applying the fine is calculated by multiplying the basis rate by gross revenue, excluding taxes. For cases where there is no billing, a calculation similar to that of the rate will be carried out, considering, however, a maximum and minimum value depending on the classification of the infraction.

The basis value may be at least BRL 1,500 for minor violations, up to BRL 15,750.00, for severe violations.

For cases where the advantage obtained is estimable, the fine amount will be double the advantage. For these cases, there will be an adjustment to the minimum and maximum limits of the fine: BRL 1,000 to BRL 4,000 for individual or legal entities without billing, and from BRL 3,000 to BRL 12,000, for other types of legal entities.

Category: Competition

In recent years, the Administrative Council of Economic Defense (Cade) analyzed several vertical mergers that could potentially lead to competition concerns in several markets, such as supplementary health, banking, payments, petrochemical, telecommunications and retail.

On some of these occasions, the authority imposed remedies to mitigate concerns. However, contrary to the experience in jurisdictions such as the United States and the European Union, so far there is no guideline in Brazil to instruct and organize the steps of the assessment of vertical mergers.

Vertical mergers are transactions involving the acquisition of equity or assets between two or more companies that offer products and/or services at different levels of the same supply chain.

Pursuant to Cade’s Resolution No. 33/22, if neither party has a stake above 30% of the vertically integrated markets, the merger filing shall be reviewed under the fast-track procedure. Otherwise, it will be subject to a longer and thorough assessment under the non-fast-track procedure.

These transactions can benefit competition when they generate efficiencies, such as double margin elimination, alignment of economic incentives between the parties, reduction of transaction costs, better allocation of resources and optimization of the production process.

However, they can also entail concerns, primarily related to the imposition of difficulties for the entry and expansion of the combined entity’s competitors, through strategies that hinder competitors’ access to inputs (such as refusal to deal and price discrimination) or to a significant share of the customer base.

In addition, there is a risk that such transactions may distort competition if the combined entity is able to access commercially sensitive information of competitors that are also suppliers or customers of its products or services.

Cade recently resumed plans to draft guidelines for the assessment of vertical mergers. To this end, it formed a working group in June 2022 and, in January 2023, started a proceeding to hire an external consultant to support the drafting of such guidelines.

This course of action follows an international trend of increased concerns regarding vertical mergers and can be influenced by ongoing discussions in other jurisdictions.

In the United States, for example, the Federal Trade Commission (FTC) is no longer enforcing the guidelines published in 2020, which, in its view, does not adequately reflects market reality and could be based on questionable economic theories. Currently, studies are being carried out to develop new guidelines, which may address topics such as the methodology for the assessment of digital markets and transaction involving the acquisition of nascent and disruptive companies (mavericks).

For now, in view of the absence of guidelines for the review of vertical mergers in Brazil, the risk assessment of this kind of transaction should be guided by elements already considered in Cade’s precedents, such as: the players’ market shares in vertically integrated markets; incentives and ability to hinder competitors' access to input or a significant share of customers; and access to information that may distort competition.

Category: Litigation

"In Brazil, even the past is uncertain." The phrase, whose authorship is attributed to both the former President of the Central Bank Gustavo Loyola and the former minister Pedro Malan, summarizes the action of the Supreme Court (STF) on February 8, by not applying the modulation of effects on the cessation of the effectiveness of the res judicata in tax matters.

Regardless of the specific tax issues of the judges, a point that drew attention concerns the possibility of automatic cessation of the effect of the res judicata from the weighting of constitutional principles and values at stake, with a departure from any modulation of the effects of the declaration of constitutionality/unconstitutionality, not only for reasons of legal certainty or exceptional social interest –^[1]  which could "authorize" the extension of this understanding to cases involving successive treaty obligations from several other areas.

Before addressing this issue specifically, it is important to remember the developments so far settled in the Supreme Court on the declaration of constitutionality or unconstitutionality of a rule.

The effectiveness of the declaration of constitutionality/unconstitutionality is divided into two species:

• normative effectiveness, related to the maintenance or exclusion of a certain normative precept of the legal system; and
• effectiveness, corresponding to the attribution of imposing force in relation to supervening acts.

In the judgment of RE 730.462 (Theme 733 of the general repercussion), of rapporteurs of the late Minister Teori Zavascki, the Supreme Court recognized that "the decision of the Supreme Court declaring the constitutionality or unconstitutionality of normative precept does not produce the automatic reform or termination of previous judgments that have adopted different understanding; for this to occur, it will be indispensable to file its own appeal or, if applicable, the purpose of the own termination action, pursuant to Art. 485, V, of the CPC, observing the respective period of procedure (CPC, art. 495)".^[2]

The reason behind the above understanding is that, once the  court decision is given observing the criteria provided for it to be considered valid (presenting one of the possible interpretations for the provisions applicable to the case), this will reflect an act of application of the law and, therefore, an individual and concrete rule, whose scope is to discipline the legal relationship between the subjects who have integrated the poles of the demand. Although the Brazilian system of precedents provides for situations in which the decision resulting from the judgment of some instruments has a binding effect, it cannot be denied that, in order to have the ability to regulate a particular legal relationship, it is essential that the understanding to be followed is reflected in an individual and concrete norm.

However, the scenario so far sedimented^[3] seems to have changed in recent weeks, from the judgment of RE 949.297 and RE 955.227.

This is because the judges define whether and how the decisions of the Supreme Court cease the future effects of the res judicata in tax matters, when the decision, with declaratory effects, is based on the constitutionality or unconstitutionality of a tax.

To exemplify, it is considered that a company X questions the collection of a certain tax by the Union. After obtaining a favorable decision, having become final, it ceases to pay the extradition. Subsequently, the Supreme Court decides on the constitutionality of the collection of the tax in concentrated or diffuse control with general repercussion.

What are the effects of this subsequent pronouncement of the Supreme Court in relation to the taxpayer who is the owner of the thing deemed to be excluded from the collection of the tax?  Is it still producing effects? Can it be reconstituted via rescission action? Do its effects cease from the conclusion of the judgment by the Supreme Court in concentrated or diffuse control of constitutionality nthe rite of general repercussion?

In the recent trial by the Supreme Court, the third option prevailed.  This means that, not atthe time when the Supreme Court decides for the constitutionality of the collection of the tax (in the specific case, this happened in 2007, through ADI), the res judicata that the taxpayer had ceases to produce effects for the future, regardless of the judgment of rescission action.  An observation was made: only the automatic cessation of  the effectiveness of the res judicata will occur when the subsequent decision of the Supreme Court was made in concentrated or diffuse control and concrete constitutionality according to the rite of general repercussion.

This understanding is based on two main grounds expressed in the Supreme Court's decision:

• "if it would be producing tax and economic injustice, because modulation in favor of those who, even knowing the very clear position of the Supreme Court, still persisted in not collecting"; and
• "the maintenance of final decisions that declare the unconstitutionality of the incidence of the Social Contribution on Net Income (CSLL) – in reaction to generating events after that year – reveals discrepancies that could violate tax equality in the face of unequal treatment as well as free competition. This is because the taxpayer exempted from the payment of tax by final decision has a competitive advantage over the others, since it does not allocate a portion of its resources for this purpose – a situation different from that of its competitors who are obliged to pay – in order to cheapen the costs of its structure and production."

Clearly, the Supreme Court has put in front of constitutional principles and values, to decide not only on the modulation or not of the effects of the declaration of constitutionality, but also to recognize the possibility of automatic cessation of the effectiveness of the res judicata. In the specific case, we have a clash. On the one hand, legal certainty (judged) on the other hand, equality and free competition.

One aspect that drew much attention, in a negative way, was the non-modulation of the effects of the decision and, therefore, the attribution of retroactive effects to the new understanding. Until the trial of the 949,297 RE and the 955,227 RE, the jurisprudence of the Supreme Court recognized that the res judicata would only have its effectiveness impeded if there was a rescission action, even though the position reflected in it was not in tune with the supervenient position of the Court (General rebound theme 733).

With the 2015 CPC edition, Article 927, § 3, was introduced^[4], which contains a wording similar to article 27 of Law 9,868/99, which authorizes the Supreme Court to modulate the effects of its decisions provided that its jurisprudence changes or in judgment of repetitive appeals. The reason for justifying the modulation of the effects should be social interest and legal certainty. And here, we are drawn to the fact that the decision to be modulated is no longer required to be that which has declared the unconstitutionality of a legal act or a normative act. The parameter becomes the case law of the court or the projustice of a decision in the judgment of repetitive appeals.

In any case, the premise is the existence of an understanding with broad scope and whose modification allows you to affect a significant number of legal relations, a reason that allows the effects of the decision to be calibrated, with the establishment of a specific moment from which the new interpretation should be observed.

to allow retroactive effects to the decision amending dominant case-law, such as that arising from the judgment of 949,297 RE and the 955,227 RE is an affront to legal certainty, in particular because taxpayers who behaved over many years according to the res judicata on their ownership have complied with valid, effective determinations in force emanating from the Judicial.

However, many years later, the same judiciary decides that those decisions should not take effect, even if those concerned have not used the instruments that the procedural system makes available to challenge decisions that have become final.

We have not reduced the importance of the primacy of isonomy and free competition, but it is extremely dangerous to sanction taxpayers who have behaved in accordance with a decision issued by the judiciary and which has set the limits of their legal relationship with the Union with regard to a specific tax.  Therefore, even if the cessation of the effectiveness of the res judicata by virtue of a retrial with binding force is authorized, the protection of legal certainty requires that the acts carried out in accordance with an order emanating from the judiciary itself be preserved, determining that the new orientation should apply for the future.

That is, there is a real innovation of the rule on the institute of the res judicata provided for in Article 502 of the Code of Civil Procedure, by admitting the  possibility of breaking its effectiveness from  the weighting of constitutional values, moving away from the need for employment from the rescission action.

Although the precedents discussed by the Supreme Court concern the  tax obligation of successive treatment, nothing prevents issues of this kind from other areas may suffer impacts (  for example, administrative or civil contracts of successive treatment that have constitutional repercussion, able to attract the jurisdiction of the Supreme Court to resolve any conflict)  . At this point lies the concern of all operators of the right to follow the future consequences of this decision, since its orientation may affect legal relations of various branches.

^[1] As recommended in Article 27 of Law 9,868/99 and Article 535, §6, of the CPC.

^[2] According to the opinion of Minister Teori Zavascki: "Normative effectiveness (= declaration of constitutionality or unconstitutionality) operates ex tunc, because the judgment of validity or nullity, by its nature, is directed to the very birth of the rule questioned. However, when it comes to executive effectiveness, it is not correct to say that it has been effective from the origin of the standard. It is that the binding effect, which supports it, does not stem from the validity or invalidity of the rule examined, but from the judgment examining it.

Deriving, the executive effectiveness, from the judgment (and not from the validity of the rule examined), its initial term is the date of publication of the judgment of the Supreme in the Official Gazette (art. 28 of Law 9.868/99). It is therefore effective that it achieves administrative acts and judicial decisions supervening to that publication, not previous acts. Previous acts, even when formed on the basis of an unconstitutional rule, can only be undone or terminated, if applicable, in their own process."

^[3] We cannot fail to bring to debate the provisions of Article 535, §§ 5 to 8 of the CPC, which also considers unenforceable the obligation recognized in judicial enforcement order founded on law or normative act considered unconstitutional by the Supreme Court, or founded on application or interpretation of the law or normative act taken by the Supreme Court as incompatible with the Federal Constitution,  concentrated or diffuse constitutionality control.

In addition, it authorizes that the effects of the decision of the Supreme Court can be modulated in time to promote legal certainty. Finally, it specifies that, if the decision is given after the final judgment of the decision under execution, it will be up to the rescission, the period of which will be counted from the final judgment of the decision given by the Supreme Court.

It is quite true that this provision deals with the declaration of unconstitutionality of the rule. However, for the sake of symmetry, it cannot be ruled out in cases of a certain enforcement order becoming inadmissible even if by the declaration of constitutionality of the rule, especially in the case of the specific case under that article, since the recipient undertakings had an enforcement order on an obligation not to pay in a successive agreement.

^[4] Art. 927. Judges and courts shall observe:

• 3 - In the event of a change in the dominant case law of the Supreme Federal Court and the higher courts or that arising from the judgment of repetitive cases, there may be modulation of the effects of the change on the social interest and legal certainty.

Category: Agribusiness

In force since November 1, 2022, Ordinance 501/22, published by the Ministry of Agriculture, Livestock and Supply (Mapa), aims to regulate issues related to the National Registry of Seeds and Seedlings (Renasem).

The ordinance complements Law 10.711/03 and Decree 10.586/20, the two main normative instruments that establish the National System of Seeds and Seedlings (SNSM), whose purpose is "to ensure the identity and quality of the material of multiplication and plant reproduction produced, marketed and used throughout the national territory".^[1]

According to Article 3 of Law 10.711/03, the SNSM covers several activities, such as production, certification, analysis, marketing and use of seeds and seedlings. Individuals or legal entities performing the activities included in the system must register with the National Registry of Seeds and Seedlings (Renasem).

Renasem is a single record, valid throughout the national territory, linked to a CPF or CNPJ. Its purpose is to enable on the Map people who "perform the activities of production, processing, repackaging, storage, analysis or trade of seeds or seedlings and the activities of technical responsibility, certification, sampling, collection or analysis of seeds or seedlings".^[2]

Ordinance 501/22 establishes the details, specificities and procedures for the registration and accreditation of all SNSM entities in Renasem. Among the regulations, we highlight the definition of the deadline for the survey prior to the granting of registration or accreditation and the definition of the validity period of registration and accreditation in Renasem.

Regarding the inspection deadline, the previous standard – regulated by Normative Instruction 9/05 and Normative Instruction 24/05, both of the Map – established that the inspection should take place no later than ten days after the legal requirements were meet. This period was extended to 30 days, to enable the previous technical evaluation, when necessary, after meeting the requirements related to the documents.

As for the validity of the registration and accreditation in  Renasem, the previous rule provided for three years, with the possibility of renewal. With the new standard, the term becomes five years, with the possibility of renewal successively for equal periods.

Ordinance 501/22 also details the requirements of the Map so that individuals and legal entities can register and obtain accreditation in Renasem. The standard presents all the information and documents necessary for registration in each of the activities provided for in Law 10.711/03 and Decree 10.586/20. Registration can be made via electronic system.

The determinations brought by the new standard are important updates for the operation of SNSM and Renasem, mainly due to the increase of the registration period for the qualified and the detailing of the previous surveys to be carried out.

^[1] Art. 1 of Law 10.711/03

^[2] Art. 4 of Decree 10,586/20

Category: White-Collar Crime

The performance of the Supreme Federal Court (STF) in 2022 was marked by a series of important trials and with repercussions in the economic criminal sphere.

With the arrival of a new year, the Supreme Court resumes the agenda of discussion of criminal cases of great impact on the routine of individuals and legal entities in Brazil.

Some of the following criminal cases are among the most awaited for court review in 2023:

1. International legal cooperation in criminal matters for access to internet data stored in providers abroad

The Declaratory Action of Constitutionality 51 (ADC 51), proposed by the Federation of Associations of Information Technology Companies, addresses access to data of internet users stored in providers abroad, as well as the procedure determined by the Legal Assistance Agreement in Criminal Matters signed between Brazil and the U.S. (MLAT – Decree 3,810/01)

The importance of the theme is due to the possibility provided by the agreement to request information and data considered relevant by the Brazilian authorities directly to content providers located abroad.

The case, which has wide practical repercussions for the investigation of cybercrimes in Brazil and has the participation of technology giants such as Facebook and Yahoo how amici curiae, is in a vote-view with The Minister Alexandre de Moraes of the Supreme Court since October 2022, but should return to the agenda of the plenary of the Supreme Court soon, according to the minister.

2. Limits of telephone secrecy in police investigations

Another highly anticipated trial, initially scheduled for mid-2022, is that of the Extraordinary Appeal 1,042,075 (ARE 1,042,075), which deals with the possibility of access to material contained in electronic device found fortuitously by the police authority at the crime scene.

More than that, the trial also determines the lawfulness of the evidence collected from this device, determining whether the performance of expertise in this case would constitute a violation of the confidentiality of communications and telephone secrecy.

In the corporate environment, the case has significant repercussions that go beyond the criminal sphere, starting with aspects related to data protection in the collection of evidence from electronic devices of executives of large companies involved in corruption scandals, for example.

For this reason, the expectation is that the Supreme Court delimits proportionality criteria in the collection of these means of evidence, establishing limits and guidelines for police action in these cases.

3. Constitutionality of criminalization of gambling in Brazil

With a long-awaited trial and pending since 2016, when the Supreme Court recognized the general repercussion of the matter, Extraordinary Appeal 966.177, which has as rapporteur Minister Luiz Fux, deals with the constitutionality of the typification of gambling in the country.

The theme, which has already been the subject of article on our website, has great relevance for the recognition of the legality of the operation of gaming and betting operators in the country. Currently, the practice of exploiting or establishing gambling constitutes an illicit act punishable by detention from three months to one year and a fine, as determined by Article 50 of the Criminal Misdemeanors Act (Decree-Law 3,688/41).

Based on an extraordinary appeal brought by the Public Prosecutor's Office of Rio Grande do Sul, however, the Supreme Court was urged to speak on the reception of the provision by the 1988 Constitution, which privileges economic freedom and free enterprise. The trial of the case, initially scheduled for April 7, 2022, was postponed by the Supreme Court and waits to be put back on the agenda.

4. ANPP retroactivity

There is also pending discussion on the retroactivity of the application of the Agreement on Non-Criminal Prosecution (ANPP) for crimes committed before the validity of the Anti-Crime Package (Law 13,964/19). That is, the Supreme Court must decide whether, for crimes committed before January 2020, it is possible to apply the ANPP.

Introduced in Brazilian legislation by Law 13.964/19 (which added Article 28a to the Code of Criminal Procedure), the ANPP represents an important decriminalizing mechanism for the extinction of punishability of individuals and/or legal entities involved in criminal proceedings, through compliance with requirements proposed by the Public Prosecutor's Office.

This is an innovative agreement for the national legal system, applicable for crimes whose minimum sentences are less than four years in detention.

Thus, from the validity of the Anti-Crime Package, it is possible to apply the ANPP for crimes such as swindle, corruption, embezzlement, use of counterfeit currency, as well as crimes against the environment and the tax order, for which, before the validity of the law, would not be applicable other decriminalizing institutes, such as the conditional suspension of the process and the criminal transaction.

In this sense, the Habeas Corpus 185,913, filed in May 2020, deals with the possibility of a proposal for an agreement to reverse the conviction of a defendant based on the principle of retroactivity of the most positive standard for the imputed.

With the retroactivity of the law, the defendant would be able to benefit from  ANPP and, if the agreement is executed, the conviction will be reversed. This would open scope for the review of other convictions, prior to 2020, pending final judgment, if the defendants meet the requirements for conclusion of the ANPP.

5. Impacts of award-winning collaboration on administrative misconduct actions

 Another important topic under consideration in the Supreme Court – and which had its judgment suspended in 2022 – refers to the Extraordinary Appeal 1,175,650 (ARE 1,175,650), which deals with the possibility of using an award-winning collaboration agreement to avoid sanctions imposed in a public civil action of liability for an act of administrative misconduct.

By mid-December 2022, the Court had resumed the trial of the case, the controversy of which refers to recent amendments in Article 17, § 1, of the Law of Administrative Improbity. This rule prohibited agreements and transactions for acts of administrative misconduct, but from 2021, it began to expressly provide for the possibility of concluding agreements, provided that the damage caused is fully reimbursed.

The issue affects companies and individuals involved in public civil lawsuits filed by the Public Prosecutor's Office, representing an important leading case for the establishment of limits on the applicability of collaboration agreements awarded in the Brazilian legal system.

Category: Agribusiness

Since President Luiz Inácio Lula da Silva was sworn in on January 1, 2023, attention turns to the campaign promises, which permeate various economic sectors. Specifically in agribusiness field, known to be the engine of the Brazilian economy in the external sector, Lula committed himself to the "strengthening of agricultural production, on the fronts of family agriculture, traditional agriculture and sustainable agribusiness", and with the "development of the agro-industrial complex".

Given the guidelines of the new government, it is essential that agribusiness agents, whether producers, investors, traders or even final consumers, be aware of the changes and set their expectations.

To monitor the evolution of the scenario in 2023 and evaluate the prospects for the future, we present some points that deserve attention.

Expectation of growth of agribusiness GDP

The Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV–Ibre) projected an 8% increase in agribusiness GDP in 2023 – the largest growth since 2017. The Confederation of Agriculture and Cattleraising of Brazil (CNA), more modestly, predicted a growth of up to 2.5% for the GDP of the sector in the same period.

One of the main factors for the high projections is the expectation of a record-breaking grain crop in 2023. According to the Brazilian Institute of Geography and Statistics (IBGE) calculations, the perspective is for an increase of 12.6% in relation to the 2022 result.

The optimistic expectations are also based on the launch of the 2022/2023 Crop Plan. The plan, released by the previous federal government on June 29, 2022, provides for the availability of R$ 340.88 billion for the sector by June 2023 – an increase of 36% compared to the previous Crop Plan. The resources are allocated not only for costing and marketing, but also for investments in general.

Environmental policy and surveillance

After years of more flexible and liberal environmental policy, the expectation is that the new management will strengthen environmental preservation agencies and combat illegal extractive practices.

The new government published Decree no. 11.373/23, which determines the transfer of 50% of the amounts collected with the application of fines by the Federal Government to the National Environment Fund (FNMA). Until the enactment of the Decree, only 20% of the resources went to the FNMA. The rest was split up among the Naval Fund, Municipal and State funds for the environment, and other related entities.

In addition, one of Lula's campaign promises is to establish international cooperation for the preservation of natural resources. Agreements are expected to be announced over the coming months with international agencies to ensure more resources for forest protection. The first signs of the resumption of international cooperation came with the announcement of the return of resources from Germany and Norway to the Amazon Fund.

From the point of view of agribusiness, it is essential that producers are up to date with environmental regulations, including keeping registers and information updated before federal and state environmental agencies, in order to avoid fines and other sanctions.

Changes in georeferencing technical standards

The National Institute of Colonization and Agrarian Reform (INCRA) published new rules for georeferencing rural properties, in force since December 30, 2022. They are mandatory for dismemberment, remembrance, land parceling or transfer of rural properties from areas above 100 hectares.

The rules allow the inclusion of new survey methodologies, such as remote sensing using drones. INCRA states that these procedures will not immediately affect rural property owners and may generate savings for the professionals responsible for georeferencing work.

This movement symbolizes a modernization of the techniques of enrollment and registration of rural properties, besides helping to avoid problems of demarcation and overlap of land and other obstacles related to possession.

In relation to rural properties that are not yet georeferenced, it is essential that the person responsible for the property provides georeferencing, to ensure and confirm the corresponding perimeter and area. For regularization before INCRA, it is necessary to observe the deadlines for each total area described in Decree no. 9.311/18, which establishes that all rural properties must be georeferenced by November 20, 2025.

Ministerial organization and public priorities

One of the first acts of the new administration established a ministerial reorganization concerning the agrarian affairs through Decree no. 11.338/23. The Ministry of Agriculture, Cattleraising and Supply (MAPA) was dismembered and its agrarian competencies were divided with the Ministry of Agrarian Development and Family Agriculture, recreated under Lula’s government.

This change demonstrates an interest in supporting small producers and settlements, reinforcing their importance in the agribusiness production process.

So far, there has been no relevant movement in the ministries and there is no expectation of any action to the detriment of monoculture for export, a relevant part of the production of Brazilian agribusiness. On the other hand, it is expected a boost in credit for small producers and, eventually, the expansion of social programs aimed at strengthening the production of family agriculture.

Conclusions and expectations

In these early days of the new government, the scenario is more of optimism than skepticism. Measures that are very relevant and impactful for the sector are under discussion (tax issues, for example).

In the coming years, the agents that operate in agribusiness should be mainly focused on the execution of the campaign promises of the new government. It is known that investment in agribusiness is inseparable from the Brazilian economic matrix. Investing is primordial and necessary.

In practical terms, the government, although committed to promoting family agriculture and encouraging the modernization of agro-industry, is already under pressure to show practical results. It will take some time to implement the measures that will make these policies effective.

From the market's point of view of expectation, there is some optimism about the rise in agribusiness GDP (based on a record harvest in 2023), which causes a ripple effect in all sectors linked to this industry. The confirmation of this optimism, however, is tied to a combination of factors ranging from favorable weather conditions to the serious and efficient implementation of economic and government policies.