Publications

Category: Environmental

In October, the Federal Supreme Court (STF) concluded the judgment of Direct Action of Unconstitutionality (ADI) No. 4,619, filed by the National Confederation of Industries (CNI) against São Paulo State Law No. 14,274/2020, which governs the labeling of transgenic products.

CNI requested a declaration of unconstitutionality of the state law on two main arguments: (i) usurpation of residual and complementary jurisdiction, therefore the state is not allowed to deal with the issue in a general manner, but only on a regional basis; and (ii) invasion of exclusive jurisdiction of the Federal Government to legislate on interstate commerce.

STF dismissed the suit, pursuant to the opinion drafted by Justice Rosa Weber, and upheld the validity of the state rule. In general terms, the main discussion brought about by the suit was the question of legislative jurisdiction of the Federal Government and the states.

According to Justice Rosa Weber's opinion, the great difficulty in understanding the limits of each state to legislate lies in the lack of a definition of basic concepts such as general rules and special rules. Article 24 of the Federal Constitution provides for concurrent jurisdiction to legislate between the Federal Government, the states, and the Federal District, granting the Federal Government the prerogative to legislate on general rules and the states and the Federal District on special rules. Although there is no clear definition of these concepts, in a simplistic manner it is possible to conclude that the Federal Constitution sought to limit the purview of each state, with the states and the Federal District being responsible for complementing the federal rule.

In the specific case, the analysis revolves around identifying whether the state rule has replaced or supplemented the federal rule, considering that the matter subject to the state law at issue, the right to information and the duty to label food and food ingredients intended for animal or human consumption and produced from genetically modified organisms (GMOs), already finds a provision in federal norms, namely, the Biosafety Law and its regulatory decree (Law No. 11,105/05 and Decree No. 5,591/05), as well as Decree No. 4,680/03, which regulates the right to information (provided for in Law No. 8,078/90 - Consumer Protection Code) on food and food ingredients intended for human or animal consumption that contain or are produced from GMOs.

Among the federal rules mentioned, Decree No. 4,680/03 establishes the limits and criteria for the duty of information on the labels of products that contain or are derived from GMOs. While the federal decree establishes the duty of information on transgenic nature of products produced from GMOs when there is presence above 1% limit of the product, the state rule provides for the duty of information in the marketing of products intended for human or animal consumption, or, further, those used in agriculture, when the presence of GMOs is found in a proportion equal to or above the 1% limit.

According to Justice Rosa Weber's opinion, considering that products derived from transgenics or of transgenic origin offer potential risks to consumers’ health , they, as final recipients, must have their rights to choose ensured, through the right to information.

According to STF’s decision, it is incumbent on the states to establish requirements for labelling of genetically modified food, which does not mean legislating in a manner contrary to the federal rule.

As a parallel, Justice Rosa Weber made reference to Regulation No. 1.829/03 of the European Parliament and Council, which disciplines that labelling of genetically modified food and animal feed requires the presence of more than 0.9% in the products.

In addition, the Justice sets out the arguments by which she understands that the case under analysis is distinct from the precedent formed in judgment of ADI No. 3,645, handed down in 2006 and mentioned by CNI as an analogous case. STF granted ADI No. 3,645 for the purpose of declaring the unconstitutionality of a law of the state of Paraná that required consumers to be informed of the presence, in any percentage, of genetically modified ingredients in a product to be purchased.

The legal basis used by STF at the time was violation of article 24 of the Federal Constitution, as the state normative act, by establishing the obligation to label products intended for human and animal consumption containing GMOs, in any percentage, inaugurated parallel regulations explicitly opposed to the federal legislation in force (Federal Decree No. 4,680/03).

On the other hand, in this case, the legislation of São Paulo provides for the obligation to provide information on the label of products that contain GMOs in a percentage that is more protective for the right of consumers and human health - not in a generic manner and contrary to the federal rules -, unlike the Paraná law. In the conclusion of her opinion, Justice Rosa Weber contends that there is no usurpation of the Federal Government's jurisdiction to legislate on commercial law and interstate commerce since when legislating on consumer protection, São Paulo’s legislation deals with matters of concurrent jurisdiction.

The conclusion is that STF's understanding in the case of labelling of products containing GMOs appears to be in line with recent court rulings in the analysis of conflicts of legislative jurisdiction in environmental matters. As an example, on December 10, 2019, Justice Celso de Mello issued a sole judge decision rejecting a petition for in limine injunctive relief submitted by the Liberal Party in the record of ADI No. 6.218/RS, which deals with the suspension of the effects of Law No. 15.223/18 of the state of Rio Grande do Sul on prohibition of trawling in the coastal area of the state.

As in GMOs’ case , Justice Celso de Mello found that the state of Rio Grande do Sul has legislated on a matter of concurrent jurisdiction, establishing measures to protect the marine environment, such that there is nothing to be said of usurpation of legislative jurisdiction in matters exclusive to the Federal Government relating to maritime law and the rules of navigation.

These precedents are important in guiding the states when it comes to issuing laws on environmental matters, the subject of so many discussions.

Category: Competition

The approval of the Superintendence-General (SG) of Cade (Administrative Council for Economic Defence) is an important step for the parties to a merger filing to be able to close the deal, but it is not necessarily the last. This is because the Competition Law provides that, for 15 days after the publication of the SG's clearance decision in the Official Gazette, it may be challenged by means of appeals from interested third parties duly qualified in the proceeding or by a request from Cade’s Administrative Tribunal itself. For this reason, the parties must necessarily wait for this period to elapse before declaring the closing of the transaction, so as not to engage in a violation known as gun jumping.

Challenges by the tribunal were rare in the Brazilian experience. During approximately five years of the Competition Law, which instituted the pre-merger control regime, only three transactions had been called up for review by the tribunal. As of 2018, however, there has been a significant increase in the number of challenged cases: with 12 precedents in this direction today - three in 2020 alone -, the possibility of requests for review by Cade’s Administrative Tribunal can no longer be considered remote, especially in merger cases that are complex from a competition standpoint.

The vast majority of the challenged transactions to date involve merger filings reviewed under the non-fast track procedure, but transactions under the fast-track procedure may also be subject to being called up by the tribunal, which must take place at the request of one of Cade’s Commissioners in a reasoned dispatch, subject to ratification by CADE’s panel.

The order requesting the review of a merger case does not mean a ruling on the merits of the case, but only the existence of reasoned doubt as to whether the transaction can be approved. According to Cade’s case law, the tribunal’s justifications for challenging a merger case include: (i) a more careful review of the relevant markets affected, including markets rarely analyzed by Cade; (ii) discussions regarding the dismissal of transactions that may potentially affect competition; (iii) high market shares; (iv) inaccuracies in the data presented to the SG; and (v) facts supervening the SG's clearance.

When calling up a merger filing, the tribunal must decide whether to uphold the SG's decision for unconditional clearance, approve it with restrictions, or even block it. So far, the tribunal has upheld the SG's unconditional clearance decision in all cases called up for review, except for one that is still under analysis by Cade.

Companies should be aware that a merger filing may be reviewed by both bodies at Cade, which will entail a longer review period until the clearance decision, even going beyond the 30 days deadline for fast-track cases, and may postpone the date initially foreseen for closing the deal.

Category: Institutional

Caroline Valois, Maria Cecilia Santos, Natalia Fava de Almeida, Fernanda Quiroga and Patricia Brasil Massmann.

Who has never heard it said that women have no place in politics? That they do not understand or are not interested in the subject and cannot participate in the political environment? These ideas are rooted in the Brazilian common understanding and exercise a clear limiting function, as they contribute to maintaining the status quo of Brazilian politics, which is predominantly male, with laws made by men for men and based on male conceptions.[1]

The direct consequence of this scenario is that essential guidelines for women are little discussed from the experience of women themselves, since men are their official interpreters. As a result, the number of draft laws and/or public policies to give effect to women's rights and guarantees assured in the 1988 Federal Constitution is reduced and almost always ineffective, feeding the growth of numbers related to gender inequality and violence against women, which place Brazil today in 92nd position in the ranking of gender equality by the World Economic Forum.[2]

The scenario becomes even more critical in other comparisons with the rest of the world. According to the ranking of the Interparliamentary Union[3] on gender equality in parliament, Brazil ranks 143 out of 190 countries listed, with only 14.6% of women in the legislature. It is the second worst country in Latin America on the list, losing only to Haiti. According to the same ranking, Brazil is behind even countries with much more conservative religious traditions in relation to women, such as Rwanda, the Arab Emirates, Namibia, Mozambique, among so many others, information that compromises the very quality of the democracy.[4]

However, in the Federal Constitution, Brazil is expressly described as a Democratic State of Law,[5] in which "all power emanates from the people, who exercise it through elected representatives or directly"[6] and "men and women are equal in rights and obligations."[7] In view of this, it was to be expected that women would occupy political and power spaces in a manner equal with men or at least proportional to their presence in society.

Taking the 2018 elections as an example, women were elected to 16.11% of the political posts, although they represented 52.5% of the Brazilian electorate.[8] In the 2020 municipal elections, there was a sinle point of growth in women's representation in politics: the number of female candidates rose from 32% to 33.6% of the total of 557,389 registered, while the percentage of mayors elected rose from 11.57% to 12.2%.[9] This is still a far cry from a more equal representation in politics, which presupposes hard work ahead.

Historical context of achievements in women's rights in the world and in Brazil

Although the under-representation of women in politics and in areas of power still remains evident, there is no doubt that many achievements have been made over the last two centuries, particularly in recognizing women as subjects of rights for their inclusion in society and the exercise of citizenship. Another important milestone was the 1948 Universal Declaration of Human Rights, which recognized equal rights for men and women.

In this process, the conquest of the right to suffrage[11] and the effective exercise thereof was and continues to be fundamental. The first country to recognize the political rights of women was New Zealand in 1893. In the United Kingdom, this achievement was reached in 1918 with the passage of the Representation of the People Act, and in the United States in 1919 through the 19th Amendment to the U.S. Constitution. In these two countries, the right to vote was preceded by the first wave of the feminist movement, driven by the mass entry of women into the labor market, but under absolutely precarious conditions.[12]

In Brazil, this right was only recognized in 1932,[13] with the promulgation of the Electoral Code (Decree No. 21,076),[14] but in a partial manner, since the right to vote was not expressed and illiterate and poor women were prevented from voting.[15] The right to suffrage for all women was only widely instituted in Brazil with the promulgation of the Federal Constitution of 1946, which also finally provided for women's right to vote.[16] The fact that the achievement of full electoral capacity for women in Brazil is relatively recent (less than 80 years) also contributes to the current scenario of under-representation of women in Brazilian politics.

In the last decades of the 20th century, Brazil ratified the Convention for the Eradication of All Forms of Discrimination Against Women (CEDAW), which recognizes as discrimination the exclusion, distinction, or restriction of rights based on sex and imposes on the signatory countries the obligation to guarantee women's participation in politics. Brazil is also a signatory to the Beijing Conference, which addresses in greater detail the need to include women in politics. Both treaties have been integrated into the Brazilian legal system and are united in recognizing that women's participation in politics is a fundamental element in reducing inequality and, consequently, gender-based violence.

In addition to the constitutional provision and the international treaties mentioned above, it is also important to highlight the following women's rights milestones in Brazilian law.[17]

1962: The Married Woman's Statute allowed women to no longer need their husband's permission to work outside the home, receive an inheritance, buy or sell real estate, sign documents, and even travel.

1977: Marriage is no longer indissoluble with the Divorce Law.

1995: Prohibition of any discriminatory and restrictive practice for the purpose of access to or maintenance of the employment relationship on the grounds of sex, race, color etc. and criminalization of a requirement imposed by employers to undergo a pregnancy test.

2002: Lack of virginity is no longer a reason to annul a marriage with the Civil Code; men and women have been equated in relation to family power according to the New Civil Code.

2006: The Maria da Penha Law (Law No. 11,340) brought mechanisms to curb domestic and family violence against women.

2015: Law No. 13,112 is passed and amends the Law of Public Records to allow mothers to have the right to register their children at the registry office without the presence of the father.

2016: Law No. 13,104 amended the Penal Code to establish the qualifying circumstance of feminicide.

2019: Divorce priority for victims of domestic violence (Law No. 13,894/19).

As can be seen from this brief legislative chronology, it is true that there is a scenario of progressive improvement in the legal status of women in Brazilian society, with a view to, if not elimination, at least reduction in inequality between men and women. However, these initiatives are still insufficient to promote constitutionally declared equivalence, as laws that underestimate the needs of this part of the population still persist.

As an example, we highlight the criminal law, in which the minimum penalty for the crime of rape[18] is equivalent to the minimum penalty for the crime of extortion committed by restricting the liberty of the victim.[19]

Analysis of Brazilian law to include women in politics

 Based on international commitments and the 1988 Constitution, Brazil adopted some measures aimed at equal political participation. In September of 1995, Law No. 9,100 was approved, which established a minimum quota of 20% of applications for women for proportional positions. The provision did not speak of a reserve of spots, but of actual application. The Superior Electoral Court (TSE) ensured the effectiveness of the rule by ordering that it was impossible to replace female candidates with men during the course of the election.[20]

In 2009, Law No. 12,034 amended the third paragraph of article 10 of the General Election Law, which came into force with the following wording: "of the number of vacancies resulting from the rules provided for in this article, each party or coalition shall fill a minimum of thirty percent (30%) and a maximum of seventy percent (70%) for candidacies of each sex.” With regard to candidacies, that law made two important changes:

• By bringing the minimum quota of 30% for one of the sexes, not specifying which, it allowed a political party to run 70% male candidates and 30% female candidates, which is customary, or 70% female candidates and 30% male candidates, which, however, has never occurred.

• The second important change was to make it compulsory to fill the minimum vacancies, it not sufficing to reserve vacancies, otherwise the slate of candidates of the party will be rejected, or the number of candidates of the opposite sex will be reduced.

In practice, the quota policy for women's candidacy alone is not sufficient to promote the substantive equality expected in the political field. On the other hand, the quotas for women's candidacies have given rise to "women's wings" in the party associations, which in most parties, however, do not participate in deliberations and decision-making.

In addition to quotas for candidacies, Law No. 12,034/09 enacted changes to Law No. 9,096/97 (Law on Political Parties) to create institutional incentives for women's participation in politics. It mandated that the party should apply a minimum of 5% of the party's quotas for the creation and dissemination of programs that encourage women's political participation, or else, in the year following non-compliance, it will have to add a further 2.5% of the party's funds for this purpose. However, the law does not establish the possibility of losing percentages of such financing in the event of noncompliance, or mechanisms to ensure effective compliance.

The same law also provided that parties must use a minimum of 10% of their free party advertising hours to spread and promote women's political participation, allocating this time to women. Contrary to what happened with the quota for candidacies, we note significant concern on the part of the Electoral Courts in enforcing this specific time quota. Not a few judgments have been entered for loss of time for party advertising for non-compliance with this rule.

In order to reduce campaign costs, simplify party management, and encourage women's participation, Law No. 13,165/15 provides for the mandatory allocation of at least 5% of party fund resources to creating and maintaining programs to promote and disseminate political participation by women. This task falls to the women's bureau of the political party or, in the absence of such a bureau, to the institute or foundation for research and teaching and political education. In addition, according to the new wording of paragraph 7 of the same provision, resources may be pooled together in different fiscal years. It should be noted that the amendment to the paragraph creates an escape valve and justification for the parties not to deploy the funds year by year.

Law No. 13,165/15 also created the so-called Special Fund for Public Financing of Campaigns (FEFC), the public campaign financing instituted to compensate for the suppression of the possibility for there to be private financing by legal entities for electoral campaigns. This fund is based on a provision in article 9 of the law, which allocates between 5% and 15% of the amount of the fund to the financing of women's campaigns.

Even with all the difficulty in giving effect to the application of quotas and with them promoting women's full participation in political life in Brazil, the implementation of this provision in the 1990s and its improvement with the electoral mini-reforms in the 2000s at least gave rise to the necessary debate on political inclusion and its mechanisms. But even with the mandate to apply funds, the number of women in the Federal Senate remained unchanged since the 2010 elections. In the Chamber of Deputies there has been an increase in participation by women.

The increase in the number of female deputies, however, contrasts with recent complaints about the use of “sham candidates" to divert funds from the minimum FEFC percentage. The more the legislation is improved to promote women's political participation, the more some associations find subterfuges to circumvent it and maintain the male status quo in the exercise of political power. In addition, the legislation and debates on the subject have been silent regarding the establishment of quotas or any other action that favors greater participation by women in majority elections, as well as on the reservation of posts for women in parliament and political parties.

The small number of female parliamentarians also impacts on the performance of their mandate, since women's projects have little or no entry into the legal system and the majority of congresswomen are left out of the organization of steering committees and boards that hold power over the agenda of the Brazilian Congress.[21]

How to break the cycle of under-representation of women?

To answer this question, it is necessary to reflect on the causes of women's under-representation and, consequently, of gender inequality in politics and thus build a more collaborative, balanced, fair, and proportional political system for men and women. From this analysis, the break in the cycle of under-representation should begin with small family initiatives within Brazilian homes, go through the school curriculum, and include the implementation of public policies and incentives for private initiatives that also aim to promote the inclusion of women in the political debate.

In this sense, it is important to maintain and develop non-governmental or non-partisan institutions, such as the Women of Brazil Group,[22] currently chaired by the businesswoman Luíza Helena Trajano. It is a good example of a national organization that aims to engage civil society in achieving collective improvements and stimulate female protagonism.

Initiatives such as this are increasingly common, and it is up to women to take the lead in their own stories, so that it is possible to include the whole of humanity in politics.

Below are some suggestions on how to contribute to this change:

• Educate men and women in exactly the same way, and encourage and support girls who dream of having a professional and/or political career.

• Recognize that men and women complement each other in their different experiences.

• Listen to the women around you, give them room to speak and position themselves.

• Encourage discussion rounds in communities, associations, schools, and all environments, giving women a place for them to speak.

• Seek opportunities to contribute with the implementation of affirmative actions to achieve gender equality in their spheres of action, always keeping in mind that there are many women with the desire and potential for change and leadership.

• Study gender equality in order to have sensitive personal and professional performance and to be able to perceive, point out, and modify situations of inequality around you, seeking solutions for them.

• Encourage and support candidacies of women who advocate equality between men and women, seeking to familiarize yourself with the proposals presented and vote for these candidates.

Paraphrasing Bertha Lutz,[23] if it is in Parliament that laws that impact on everyday life are discussed, it should be recognized as the true home of every woman, and this will only be possible with the commitment of the whole society.

References Consulted

AMNESTY INTERNACIONAL Universal Declaration of Human Rights. Available at: https://www.ohchr.org/en/udhr/documents/udhr_translations/por.pdf. Accessed on: Oct. 5, 2020.

BERTOLIN, Patricia Tuma Martins; CARVALHO, Suzete. The Occupational Segregation of Women: is legal equality enough to overcome it? In: BERTOLIN, Patricia Tuma Martins; ANDREUCCI, Ana Claudia Pompeu Torezan (Org.). Women, Society, and Human Rights. São Paulo: Rideel, 2010.

BOBBIO, Norberto. The Future of Democracy: a defense of the rules of the game. São Paulo/Rio de Janeiro: Paz e Terra, 2015.

BRASIL. FEDERAL SENATE. More Women in Politics. Available at: https://www12.senado.leg.br/institucional/procuradoria/proc-publicacoes/2a-edicao-do-livreto-mais-mulheres-na-politica. Accessed on: Oct. 4, 2020.

____. PLANALTO. Constitution of the United States of Brazil. Available at: http://www.planalto.gov.br/ccivil_03/constituicao/constituicaocompilado.htm. Accessed on: Oct. 5, 2020.

____. CHAMBER OF DEPUTIES. DEC. No. 21,076, OF February 24, 1932. Available at: https://www2.camara.leg.br/legin/fed/decret/1930-1939/decreto-21076-24-fevereiro-1932-507583-publicacaooriginal-1-pe.html. Accessed on: Oct. 3, 2020.

____. FEDERAL SENATE. Advances in Brazilian Legislation. Available at: https://www.facebook.com/SenadoFederal/posts/3442028539146310/ Accessed on: Oct. 5, 2020.

____. SUPREME FEDERAL COURT. ADIN 5617. Available at: http://www.stf.jus.br/portal/peticaoInicial/verPeticaoInicial.asp?base=ADIN&s1=5617&processo=5617. Accessed on: Oct. 5, 2020.

____. SUPERIOR ELECTORAL COURT. Participation of Women: statistics. Available at: https://www.justicaeleitoral.jus.br/participa-mulher/#estatisticas. Accessed on: Oct. 4, 2020.

____.____. Election Fund and Radio and TV Time Must Reserve a Minimum of 30 Per Cent for Women Candidacies. Available at: http://www.tse.jus.br/imprensa/noticias-tse/2018/Maio/fundo-eleitoral-e-tempo-de-radio-e-tv-devem-reservar-o-minimo-de-30-para-candidaturas-femininas-afirma-tse. Accessed on: Oct. 5, 2020.

____. SÃO PAULO STATE ELECTORAL COURT OF APPEALS. Appellate Decision No. 3663-76.2010.6.26.0000, Class No. 38. 2010.

_____. FEDERAL PROSECUTOR’S OFFICE. TSE ADI Consultation 5617 Campaign of Candidates. Available at: http://www.mpf.mp.br/pgr/documentos/ConsultaTSEADI5617CAMPANHADECANDIDATASVersofinal1.pdf. Accessed on: Oct. 5, 2020.

BRASIL, Patricia C. The Gender of Brazilian Politics: a question of equality in the Federal Senate. Masters Thesis. Mackenzie Presbyterian University, 2016. Available at: http://tede.mackenzie.br/jspui/handle/tede/1181. Accessed on: Oct. 5, 2020.

CONSOLIM, Veronica Homsi. The History of the First Feminist Wave. Sept. 14, 2017. Justifying. Available at: https://www.justificando.com/2017/09/14/historia-da-primeira-onda-feminista/. Accessed on: Oct. 5, 2020.

FRASER, Nancy. Scales of Justice: remaining political space in a globalizing world. Cambridge: Polity Press, 2008.

INTER PARLIAMENTARY UNION. Ranking of Women in National Parliaments. Available at: https://data.ipu.org/women-ranking?month=10&year=2020. Accessed on: Oct. 4, 2020.

MASSMANN, Patricia C. Brasil; MACHADO, Monica Sapucaia. Grasping for the Wind: the situation of women in Brazilian party leaderships, 30 years after the Women's Letter to the Framers of the Constitution. In: BERTOLIN, Patricia Tuma Martins Bertolin; ANDRADE, Denise Almeida de; MACHADO, Monica Sapucaia. Women's Letter to the Framers of the Constitution 30 years later: balance and memory. São Paulo: Autonomia Literária, 2018.

MIGUEL, Luis Felipe; BIROLI, Flávia. Feminism and Politics. São Paulo: Boitempo, 2014.

WOMEN OF BRAZIL. Who Are We? Available at: https://noticias.grupomulheresdobrasil.org.br/grupo-mulheres-do-brasil/quem-somos/#:~:text=Hoje%20somos%20uma%20rede%20pol%C3%ADtica,profiss%C3%B5es%2C%20com%20os%20mesmos%20objetivos. Accessed on: Oct. 3, 2020.

PAIVA, Raquel. Politics: female in the grammatical gender. Rio de Janeiro: Mauad X, 2008.

POLITICIZE. Representativeness: what does it mean? Available at: https://www.politize.com.br/representatividade/. Accessed on: Oct. 4, 2020.

RANCIÉRE, Jacques. The Hate of Democracy. São Paulo: Boitempo, 2014.

____. Can One Still Talk About Democracy? Lisbon: KKYM, 2014.

SINEAU, Mariette. Law and Democracy. In:  DUBY, Georges; PERROT, Michelle (Dir.). History of Women in the West: the 20th Century. Porto: Edições Afrontamento, 1991.

UNION OF THE COUNCILMEMBERS OF THE STATE OF SÃO PAULO. Map of Women's Right to Vote in the World. Available at: https://uvesp.com.br/portal/noticias/este-mapa-mostra-o-ano-em-que-as-mulheres-tiveram-o-direito-de-votar-em-cada-pais-do-mundo/. Accessed on: Oct. 5, 2020.

WORLD ECONOMIC FORUM. Global Gender Gap Report 2020. Available at: https://www.weforum.org/reports. Accessed on: Oct. 5, 2020.

[1]For more details: “Mais Mulheres na Política” ["More Women in Politics”]. Available at: https://www12.senado.leg.br/institucional/procuradoria/proc-publicacoes/2a-edicao-do-livreto-mais-mulheres-na-politica. Accessed on: Oct. 4, 2020. For further details of these effects, see: Bertolin and Carvalho, "Mulher Sociedade e Direitos Humanos” [“Women, Society, and Human Rights”]. Redeel, 2010, p. 179).

[2] For more information, please see: WEF, Global Gender Gap Report 2020. Available at: http://www3.weforum.org/docs/WEF_GGGR_2020.pdf. Accessed on: Oct. 5, 2020.

[3] The Interparliamentary Union is an organization formed by national parliaments with the aim of empowering parliaments and parliamentarians to promote peace, democracy, and sustainable development, which among its various observatories maintains specific monitoring of the presence of women in parliament. To find out more, go to: https://data.ipu.org/women-ranking?month=10&year=2020wg. Accessed on: Oct. 5, 2020.

[4]In this regard, see Nancy Fraser, Scales of Justice: remaining political space in a globalizing world.

[5] “Article 1. The Federative Republic of Brazil is formed by an indissolvable union of States, Municipalities, and the Federal District, is a governed by a Democratic State governed by the Rule of Law and has as its founding principles:

[6] “Sole paragraph. All power emanates from the people, who exercise it through elected representatives or directly, in accordance with this Constitution."

[7] “Article 5. All are equal before the law, without distinction of any kind, and Brazilians and foreigners residing in the Country are guaranteed the inviolability of the right to life, liberty, equality, security, and property under the following terms:

I - men and women are equal in rights and obligations under this Constitution;"

[8] Electoral Justice. “Participa Mulher – Estatísticas” ["Women participate - Statistics”]. Available at: https://www.justicaeleitoral.jus.br/participa-mulher/#estatisticas. Accessed on: Oct. 5, 2020.

[9]For more details, go to: Senate Agency, “Cresce número de mulheres candidatas e eleitas no pleito de 2020” ["Growing number of female for candidacy and elected in the 2020 election”]. Available at: https://www12.senado.leg.br/noticias/materias/2020/11/16/cresce-numero-de-mulheres-candidatas-e-eleitas-no-pleito-de-2020

[10] “Article 2: Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty."

[11] The right to vote includes both active (to vote) and passive (to be voted for) electoral capacities.

[12] For more details, see Sineau in Duby; Perrot (2010, p. 551).

[13] Thereafter, the following year, the first federal deputy was elected, Carlota Pereira de Queiroz (BRASIL, 2016, p.99).

[14] “Article 2. A citizen over 21 years of age, without distinction of sex, is a voter enlisted in the form of this Code."

[15] See the map of women's right to vote in the world at: https://uvesp.com.br/portal/noticias/este-mapa-mostra-o-ano-em-que-as-mulheres-tiveram-o-direito-de-votar-em-cada-pais-do-mundo/ Accessed on: Oct. 5, 2020.

[16] “Article 133 - Enlistment and voting are mandatory for Brazilians of both sexes, except for the exceptions provided for by law."

[17] Federal Senate. "Women's rights in Brazilian legislation". Available at: https://www.facebook.com/SenadoFederal/posts/3442028539146310/. Accessed on: Oct. 5, 2020.

[18] Article 213 of the Penal Code.

[19] Paragraph 3 of article 158 of the Penal Code.

[20] Appellate Decision No. 16,632, of September 5, 2000

[21] More details in BRASIL (2016). Available at: http://tede.mackenzie.br/jspui/handle/tede/1181. Accessed on: Oct. 5, 2020.

[22] https://noticias.grupomulheresdobrasil.org.br/grupo-mulheres-do-brasil/quem-somos/#:~:text=Hoje%20somos%20uma%20rede%20pol%C3%ADtica,profiss%C3%B5es%2C%20com%20os%20mesmos%20objetivos.

[23] Bertha Lutz was one of the leading figures in the fight for women's right to political participation and, in 1937, assumed the position of deputy (BRASIL, 2016, p. 97).

Category: Corporate

The Brazilian Anti-Corruption Law (Law No. 12,846/13) provides for the administrative and civil liability of legal entities for acts against the public administration, sanctioning not only the entities that commit corruption acts, but also third parties that have some degree of connection with the corrupt conduct or the corrupting entity. In this sense, in certain circumstances, administrative and judicial sanctions may be extended to financial institutions providing financing to the corrupting entity in the context of corruption acts.

Article 5 of the Brazilian Anti-Corruption Law contains a list of acts that are harmful to the public administration and may lead to administrative and civil liability of legal entities. One of these items is subsection II, which deals with the liability of financing agents or sponsors for illicit acts under the Brazilian Anti-Corruption Law. To wit:

"Article 5 - For the purposes of this Law, acts harmful to the public administration, Brazilian or foreign, shall be all acts performed by the legal entities mentioned in the sole paragraph of article 1 that go against foreign or Brazilian public property, against principles of the public administration, or against international commitments assumed by Brazil, defined as follows:

[...]

II - to finance, fund, sponsor, or otherwise subsidize the commission of the illegal acts provided for in this Law.”

In view of this legal provision, some doubts arise for which, save better judgment, there is still no guidance in legal scholarship or case law: is lenders’ liability strict or fault-based? Which acts of financing, funding, or sponsorship are capable of generating the liability provided for in article 5, subsection II? Does the lender liability for corruption acts require its direct participation or knowledge (actual or presumed) of the illicit activity? In environmental matters, there are court decisions that extend the liability for environmental damages to financial institutions, creating the concept of the "indirect polluter". Similarly, in the context of the Brazilian Anti-Corruption Law, could lenders be classified as "indirect corrupters"? We intend to address these questions in this article.

Lender liability for environmental damages

Law No. 6,938/81 created the framework for the National Environmental Policy and created strict civil liability for environmental damages. Since its promulgation in 1981, there has been a remarkable development of scholarly theories and case law on the subject of environmental liability, especially with regard to the indirect causative agent of environmental damages.

The concept of “polluter” encompasses “individuals or legal entities, public or private, directly or indirectly responsible for activity causing environmental degradation” (article 3, subsection III and IV). Hence the concept of an indirect polluter. The concept of an indirect polluter has allowed for extension of civil liability to other agents whose conduct may represent some kind of contribution or incentive to environmental damage, including lenders. According to Herman Benjamin, Justice of the Superior Court of Appeals (STJ):

"Law No. 6,938/1981 defines a polluter as an individual or legal entity, governed by public or private law, responsible, directly or indirectly, for an activity causing environmental degradation. The concept is broad and includes those who directly cause the environmental damage (farmers, industrialists, loggers, miners, speculators), as well as those who indirectly contribute to it, facilitating or making viable the occurrence of the damage (banks, public licensing bodies, engineers, architects, developers, brokers, transporters, to name a few roles."[1]

The 2nd Panel of the STJ, dealing with the State's liability for environmental damages, settled an understanding that civil liability for environmental damages is strict, joint and several, and unlimited in nature. However, it made it clear that joint and several liability for indirect causation only applies when there is an omission in a legal duty to act. Note the opinion of the reporting judge Justice Herman Benjamin:

"In this context, it is necessary to recognize the joint and several liability of the State when, obliged to act in order to prevent environmental damages, it is inactive or acts deficiently or belatedly. Hence it is a case of nonperformance of an obligation to act by a party who had the duty to act. [...] For the purpose of ascertaining a causal link in urban-environmental damage and possible joint and several liability, those who act, those who fail to act when they should act, those who do not care that they do, those who remain silent when it is their duty to speak, those who fund those who act, and those who benefit when others act are all equated.”[2]

Thus, an indirect causal link in environmental law only occurs if there is an omission in a legal duty to act. The law professor Ana Maria Nusdeo summarizes the issue:

"I believe that the establishment of an indirect cause of an environmental damage that is not linked to the damage due to exercise of a risk activity must be linked to the damage by a causal link established: 1) by actual contribution to the damage and 2) by violation of a specific legal duty the fulfillment of which would have prevented the occurrence of the damage or promoted its mitigation."^[3]

So, if there was an indirect link of causation for the environmental damage, would the liability of the lender be applicable or not? Would it be strict or fault-based? A majority of the legal scholarship believes that the liability would be fault-based, or strict with the possibility of breaking the causal link by acts of diligence on the part of the lender. Thus, by demonstrating that the institution has fulfilled its legal duties and acted diligently and appropriately to confirm compliance with environmental legislation, as well as to identify and mitigate the environmental risks of its clients, lenders can eliminate their liability.[4]

The strict liability of financial institutions for indirect environmental damage, without the possibility of exclusion of liability for acts of diligence and good social and environmental practices, would create economic inefficiency for the entire financial and credit system and, ultimately, for society as a whole.

Lender liability in the Brazilian Anti-Corruption Law

With regard to the lenders’ liability for acts harmful to the public administration, the Brazilian Anti-Corruption Law represents a legal innovation, since article 5, subsection II, finds no parallel in the Penal Code or the Administrative Misconduct Law as an autonomous infraction.

Subsection II of article 5 deals with the liability of lenders who, in some way, contribute to the commission of illicit acts under the Brazilian Anti-Corruption Law. At first reading, the nuclear verbs "finance", "fund", "sponsor” or "subsidize" suggest that these infractions would depend exclusively on the conduct, without the need to evaluate the result of the infraction. However, in order to establish an unlawful act, it does not suffice simply to grant financing; it would also be necessary to verify the active participation or direct involvement in enabling the act of corruption. Thus, it would be necessary to prove not only the acts of commission attributable to the lender (financing, funding, sponsoring or subsidizing) but also the special intent to commit the illicit acts of article 5, acts committed by a third party (individual or legal entity) financed, sponsored or subsidized by the accomplice in the act of corruption.

Therefore, in order to establish the illicit act of subsection II of article 5 of the Brazilian Anti-Corruption Law, it is necessary to prove two requirements: (i) that the legal entity finances, funds, sponsors or subsidizes the commission of any act of corruption under article 5; and (ii) that these actions have the purpose (specific intent) of contributing to or instigating the commission by another party (individual or legal entity) of the harmful acts provided for in sections I, III, IV, and V of article 5.

In the analysis of the liability of indirect corruptors, a distinction must be made between the granting of loans (credit for general purposes, unrestricted use of proceeds without a specific allocation, such as working capital, line of credit, special check, etc.) and the granting of financing for a specific purpose, which is known, analyzed and approved by the bank in the context of project evaluation (such as infrastructure financing and project finance). In the first case, it would not be possible to assign liability under the Brazilian Anti-Corruption Law, since it would not be possible for the financial institution to know the use of the proceeds.

A case of an indirect corruptor, for example, would be a project financier (for example, a project finance for a large infrastructure construction) who, reviewing the project's cost spreadsheet and learning that one of the items to be financed is a bribe to be paid to environmental authorities for the project's licensing, nevertheless proceeds with the financing in order to make the project viable and, consequently, makes the payment of the bribe possible. Another example would be a bank offering credit to a bidder to finance the payment of a bribe to a public agent so that it can organize a fraudulent bid, knowing the fraudulent nature of the bid.

Having clarified that the liability of the financier arising from article 5, subsection II, depends on the specific intent to finance its client's act of corruption after actual knowledge of the act of corruption, or at least the possibility of knowing it after reasonable diligence, one wonders what the parameters would be for reasonable diligence by the financial institution. It can be argued that the parameters of reasonable diligence to be followed by a financial institution are those arising from banking laws and regulations, including the rules and regulations issued by the Central Bank of Brazil. Since this is a sanctions rule, where the principle of strict legality must be observed at all times, we cannot work with amorphous liability parameters, with broad and vague concepts. In other words, if the financier does not have actual knowledge of the use of the funds for the commission of illicit acts and has fulfilled its legal duties arising from money laundering regulations, identification of suspicious transactions, know your client procedures, risk management policies, implementation of internal control systems, among others, it would not be correct to hold such a financier administratively liable for acts of corruption by its clients as a result of article 5, subsection II, of the Brazilian Anti-Corruption Law.

In conclusion, lenders’ liability for acts of corruption of third parties seems to have a subjective nature, requiring proof of the purpose (specific intent) of contributing to or instigating the commission of the harmful acts provided for in the Brazilian Anti-Corruption Law, or at least disrespect for the duty of diligence imposed by law. The strict liability of financial institutions for acts of corruption would create economic inefficiency for the entire financial and credit system and, ultimately, for society as a whole. Excessive exposure to the legal risk of indirect liability in the Brazilian Anti-Corruption Law would have the potential to drive away institutions willing to finance activities and investments, resulting in increased costs with credit and an economic slowdown.

^[1] BENJAMIN, Antonio Herman Vasconcelos. Liability for environmental damages. Revista de Direito Ambiental [“Review of Environmental Law”], No. 9, p. 37, Jan./Mar. 1998.

^[2] REsp No. 1.071.741 -SP (2008/0146043-5), opinion drafted by Opinion drafted by Justice Herman Benjamim, decided on December 16, 2010.

^[3] MACHADO, Paulo Affonso Leme. Direito ambiental brasileiro [“Brazilian rnvironmental law”]. 19th ed. São Paulo, Malheiros, 2011; NUSDEO, Ana Maria de Oliveira. Financial institutions and environmental damages caused by financed activities. In: YOSHIDA, Consuelo Moromizato et al. (org.). Sustainable finance and the socio-environmental liability of financial institutions. Belo Horizonte: Forum, 2017, p. 36.

[4] FERREIRA, Eduardo de Campos; MADASI, Ana Cecília. The transdisciplinarity of the socio-environmental liability of financial institutions. In: YOSHIDA, Consuelo Moromizato et al. (org.). Sustainable finance and the socio-environmental liability of financial institutions. Belo Horizonte: Forum, 2017, p. 36; YOSHIDA, Consuelo Moromizato. Liability of financial institutions: from reactive to preventive action. In: OLIVEIRA, Carina Costa de (org.). Legal instruments for the implementation of sustainable development. Rio de Janeiro, FGV, 2012.

Category: White-Collar Crime

Recent years have brought significant changes in tax crime decisions issued  by higher courts. One of the recent innovations in the field of criminal tax offenses is the thesis set by the Federal Supreme Court (STF) withholding amounts related to state taxes (ICMS) and not transferring them to the government  constitutes the crime of tax misappropriation:[1]

The taxpayer who, in a contumacious manner and with the intention of misappropriation, fails to pay the ICMS levied from the purchaser of the goods or service incurs commits the crime established in article 2, subsection II, of Law No. 8,137, of 1990.

The STF issued the decision at the end of 2019 and has generated various criticisms and debates among legal scholars due to the court's failure to set a definition for “contumacious" or “intention of misappropriation.”

The jurisprudential answer to these questions became more concrete as of June 2020, when the STJ acquitted a defendant convicted at the trial level for the crime of "tax misappropriation" (article 2, II, of Law No. 8,137/1990). At the time, the 6th Panel of the STJ found that there was no contumacious delinquency or misappropriation in the conduct because it was "an isolated event in the company’s management, because it lasted a short period of time (four months).”[2]

More recently, in a session held on August 4, 2020, the Sixth Panel of the STJ decided to dismiss a tax misappropriation case  on the grounds that there was no contumacious delinquency, since the non-payment occurred only once. The court recognized the absence of intent on the basis of two main factors: (i) the non-payment was restricted to a single month; (ii) the debtor requested an installment payment for the tax, which, although not fulfilled, contributed to ruling out the intention for misappropriation.

The decision drew attention because the reporting judge in the case, Justice Rogério Schietti, had dismissed the appeal in an suit for habeas corpus filed by the defense in June of 2019. In a sole judge decision, the Justice argued that the "awareness of not paying" would suffice to ensure the continuance of the criminal proceeding.

In the latest decision published on August 14, Justice Schietti explains that he changed his mind because, when reviewing a case of non-payment of ICMS declared, it is necessary to analyze whether the omission was intended to obtain personal benefit, such as "possibility of reinvestment with higher return, obtaining higher profits, etc." There is an undeniable difference between not paying taxes due to circumstances beyond the will to pay and not paying to protect personal interests.

Further, on September 14, 2020, the 6th Panel of STJ, also with Justice Schietti writing for the court when ruling on Special Appeal No. 854.893, once again emphasized the need for intent in the agents’ conduct and the intent consists of violating tax regulations to obtain amounts for their own benefit or for the benefit of third parties by evading tax payments.

In the specific case, in which accounting operations were delegated without the supervision necessary, the action could, at most, constitute negligent or reckless conduct, which is not criminalized by the legal system.

The STJ has been judicious in analyzing the presence of contumacious violation and intent in the conducts, in an attempt to avoid criminalizing the debt. This careful and precautions approach moves in the opposite way to what had been previously built by the case law of that same court.

In the same direction of avoiding trivializing the criminalization of tax offenses, the STJ has also set the parameter for the application of the principle of insignificance in the event of state tax evasion. In a decision published on August 25 (HC No. 535.063-SP), the STJ ordered the suspension of a criminal action for evasion of the ICMS tax payable to the State of São Paulo in the total amount of BRL 4,813.11.

The 3rd Panel of the STJ argued that State Law No. 14,227/10 provides for unenforceability of tax enforcement for debts not exceeding 600 Tax Units in the State of São Paulo (Ufesps), that is, debts below BRL 10,470 are unenforceable by the tax authorities and, therefore, cannot be penalized. The judgment concerns a case of evasion of ICMS (article 1 of Law No. 8,137/90) and not of tax misappropriation. However, it is logical to argue that if debts below this limit are unenforceable, neither does it make sense to criminally prosecute the misappropriation of  ICMS in an amount below BRL 10,470.

In 2018, the STJ had already established the principle of insignificance in cases of evasion of federal taxes and set the limit of BRL 20,000, under this threshold the debts are unenforceable. Now, there is also a limit provided for the state of São Paulo, such that there can be no criminal prosecutions for evasion of amounts lower than BRL 10,470.

It is possible to note a guaranteed trend permeating the recent decisions of the STJ regarding tax crimes. Despite the fact that it stems mainly from a change in the understanding of the Supreme Court, the direction adopted seems to move towards an appropriate application of penal concepts, punishing only conducts that actually  fit the concept of a crime against the tax order.

However, although the STJ’s judgments already present more concrete contours for defining the criminally relevant cases, the state courts still focus only on tax defaults, leading to intense legal uncertainty.

In June of 2020, the São Paulo Court of Appeals (TJ-SP) dismissed an appeal filed by a defendant convicted in a criminal proceeding for failure to pay ICMS ("tax misappropriation") for eight consecutive months.[3] In the judgment, the 4th Criminal Chamber of the TJ-SP rejected the theory of lack of a prima facie case and held that the defendant, as officer of the tax-paying company during the period mentioned in the complaint, "took advantage of such tax evasion or reduction” and also "it was his duty to safeguard the orderliness of his business, including in the tax sphere."

The decisions by the TJ-SP are still pending appeal and  may be modified if the STJ maintains consistency in the definition of misappropriation and contumacious delinquency. It is clear from recent case law of the STJ that a management position at a company is not sufficient to establish tax misappropriation, since it does not in itself demonstrate the specific intent and delinquency essential for establishing the crime.

This clash between the state courts and the STJ should be monitored in order to achieve a minimum amount of legal certain in the discussion regarding the "crime of tax misappropriation," considering the most recent theories of the STF on the subject.

[1] RHC No. 163.334

[2] RE No. 1.852.129/SC

[3]TJSP, AP No. 0003615-44.2011.8.26.0347, 4th Criminal Law Chamber, Opinion drafted by Ivana David, decided on June 30, 2020.

Category: Capital markets

Many may be surprised at the strength of the Brazilian IPO market in 2020, even in the scenario of the covid-19 pandemic. So far, there have been 23 initial public offerings registered with the CVM in 2020, and another 39 applications under review, of which, it is quite true, a portion represents transactions that were interrupted and are awaiting better market conditions. However, in parallel with the significant increase in the number of transactions, there is also an increase in the volume of cancelations and cases in which securities show losses after their stock market debut.

The expectation regarding the Brazilian IPO market has been nourished since the end of 2019. Structural reforms and the prospect of a resumption of growth, coupled with falling interest rates, have created an environment conducive to accessing capital through equity offerings. Investors previously accustomed to lumpy returns linked to public securities now have to seek the desired return on equity, generating great potential demand for offerors. There was, therefore, a significant increase in domestic participation in share offerings, previously marked by the predominance of foreign capital.

On the other hand, the market has shown that it is not willing to pay any price for the shares, and this is reflected in the pricing of the offerings at the floor of the indicative ranges stated in the prospectuses (or below them) and even cancelations of transactions. Added to this scenario is the market volatility caused by the uncertainties regarding the course of the pandemic (for example, expectations about vaccines and the occurrence of new waves in various countries), the concern about fiscal policy, the interruption of structural reforms in Brazil and external tensions, such as that experienced during the heated election process for the presidency of the United States.

Although the capital markets continue to be an interesting option for the capitalization of companies, the scenario requires extra care regarding pricing and timing of transactions. Structured, high-growth companies that are solid in their fundamentals continue to be sought after and in demand. The importance of preparing and selecting advisors in the process becomes even more critical to the success of transactions. Machado Meyer has a highly specialized team prepared to assist businesses in this process, from the preparation phase to the post-IPO phase, with experience and relevant history with companies of all types, industries, and sizes.