Publications

Category: Tax

With the publication of Decree No. 47,332/20, Rio de Janeiro taxpayers can already apply for amnesty for tax debts under the terms set out in Law No. 9,041/20.

The program in question applies exclusively to overdue tax debts arising from levies or disallowances of tax debts for taxpayers active in the economic activities of oil and natural gas extraction and natural gas processing, classified under codes 0600-0/01 and 3520-4/01 of the National Classification of Economic Activities (CNAE), and manufacture of petroleum refining products (CNAE 1921-7/2000). The program includes both assessed and non assessed tax debts, whether or not enrolled as outstanding debt, including those assessed for taxable events that occurred up to September 30, 2020.

The percentage of reduction of interest and fines is 90%, not cumulative with any other reductions. The decree makes clear the possibility of including only part of the debts subject to a given infraction notice, notice of assessment, or outstanding debt certificate.

In addition to ICMS debts, debts for contribution to the State Fund for Combating Poverty (FECP), the State Tax Balance Fund (FEEF), and the Temporary Budget Fund (FOT) may be included in the amnesty program. It is possible to opt for payment in lumpsum or in installments, except for FECP, FEEF, and FOT debts that only allow for payment in lumpsum.

To formalize enrollment into the program, the taxpayer will have to submit by November 13th of this year a proposal for a Consent Order for the Specialized Oil and Fuel Tax Audit (AFE04). One must also submit forms, the models for which are included in the exhibits to the decree, in addition to the company’s corporate documents and documents relating to its procedural representation.

Once the application is submitted (accompanied by the required documents and forms), administrative proceedings will be initiated and AFE04 will be responsible for certifying compliance with the legal requirements. In the event of non-compliance with any of the conditions required, the taxpayer will be summoned to remedy the non-compliance within a non-extendable period of five days, under penalty of dismissal.

Once the taxpayer's application for membership has been certified as being in good standing, AFE04 will forward the case to the Sub-Bureau of Revenue and the Sub-Bureau of Legal Affairs of the State Treasury, which will confirm the existence of interpretative differences. The purpose is to delimit, in an opinion to be ratified by the secretary of finance and the attorney general of the state, the conduct to be indicated in the Consent Order to be submitted to the governor.

Once the Consent Order has been signed, AFE04 will certify if the taxpayer has renounced and irrevocably waived the cases whose debts it intends to include in the amnesty program. After that, the Consent Order will be published in the Official Gazette and, within two days, the corresponding payment forms will be issued.

The decree clarifies that the attorneys' fees, in the event of payment in cash or in installments, will be 3% for debts not brought in court and 4% for debts brought in court. If the installment method is chosen, the fees must be paid in full when the first installment is paid. The reduction in fees refers only to the work of analysis and collection of the debt as a result of registration as outstanding debt. Any other fees fixed in other claims will be due in full, as established in the respective proceedings.

With the regulations of this amnesty expected by the oil and gas companies segment, it is recommended that interested parties as soon as possible begin the procedures to gather the documentation necessary in order to avoid setbacks in formalizing adhesion to the program.

Category: Infrastructure and energy

Pedro Henrique Jardim, André Camargo Galvão and Leandro Lopes Zuffo

The Ministry of Infrastructure recently announced the possible creation of the BR dos Rios program, a new public sector policy focused on inland navigation. The director of the Department of Navigation and Waterways of the National Bureau of Ports and Waterway Transport (DNH-SNPTA), linked to the Ministry, released a note on internal debates and with participants from the inland navigation sector regarding the need for this new program, which is inspired by the BR do Mar project which is in legislative process, focused on cabotage navigation (Bill No. 4,199/2020).

According to the information disclosed, the BR dos Rios program is still under discussion with Brazilian shipping companies (EBNs), trade unions, and others interested in the matter. After this phase, if the way forward is similar to the BR do Mar project, priority guidelines will possibly be formulated to be presented in the form of a resolution by the Investment Partnership Program (PPI).

The specific measures, however, are not yet clear. It is not possible to know, for example, whether the movement towards relaxation in the charter system, which was dealt with by the BR do Mar program, will be mirrored in the BR dos Rios project. From the information available, it is possible to envisage specific measures to review the regulation of locks, which are necessary to make the operation of the hydroelectric power sector compatible with river navigation activities. Currently, locks are regulated by Law No. 13,081/15, but there is a noted need for more specific regulations and better delimitation of the possibly conflicting roles assigned to the National Water Agency (ANA), the National Water Transport Agency (Antaq), and the National Electric Energy Agency (Aneel). In this scenario, the director of the DNH-SNPTA believes one must still delimit a supervisory authority for river transport.

Although its potential has not yet been fully exploited nationwide, inland waterway shipping currently plays an important role in the Northern Region of Brazil. The Tapajós River alone is responsible for about 27% of transport in this modality, according to data presented by Antaq.

Inland waterway shipping is seen as strategic from the point of view of sustainability by the Ministry of Infrastructure, which has partnered with the World Bank to study alternatives for the management of the Madeira and Tapajós rivers. Due to positive environmental characteristics compared to other modes, river navigation projects may also benefit in the future from the ESG (environmental, social and governance) agenda that has been developed by the government in conjunction with the Climate Bonds Initiative (CBI).

For now, the joint agenda of the Ministry of Infrastructure and the CBI only presents more concrete results for the brazilian railway sector, in which the agenda is to structure projects that are already certified as sustainable at the time of auction.

Certification as a sustainable project may offer tax benefits to the issuer of securities that fall under the provisions of Bill No. 2,646/20 (the Green Bonds Bill), which, among other provisions, provides for the creation of a new type of incentivized debentures for financing sustainable projects, popularized with the term “green bonds”. According to the Green Bonds Bill, projects that receive national or international certification will be eligible for being considered as green bonds. Currently, the certifications available are provided by the CBI and the International Capital Market Association (ICMA). Also, according to the Plan, these issues will have access to a simplified procedure and greater tax benefits than those currently provided for infrastructure debentures.

In the navigation sector, there have already been issuances abroad based on the principles stipulated by the ICMA. In addition, the CBI plans to develop specific criteria by the end of this year for the shipping category, in the same way as was done for other sectors, observing the particular characteristics of each economic activity (e.g. railroad, electric or solar energy, basic sanitation, and construction).

Category: Tax

Since Constitutional Amendment no. 45/2004 (EC 45/2004) introduced the institute of general repercussion as another formal requirement to allow the trial of extraordinary appeals, the Federal Supreme Court (STF) only reviews a certain constitutional discussion when it has the ability to reach a large number of interested parties, not limited to the parties involved in that case.

The introduction of this new requirement helped to highlight the role of the STF as a constitutional court, not just one more and last level of review that may be appeal to resolve a given dispute.

This does not mean that, before EC 45/2004, the STF had the function of being just one more step in the structure of the Brazilian Judiciary to be traversed before complete exhaustion of all possibilities for appeal established in Brazilian law. The features of the STF as a constitutional court became more evident mainly after the enactment of the Federal Constitution of 1988 and with the creation of the Superior Court of Justice (STJ), through the prescription of strict requirements for certiorari of extraordinary appeals and review of the matter raised.

However, the lack of a requirement such as general repercussion, which reflects the adoption of a new conception of the country's legal system (abstraction of the trial of an extraordinary appeal), allowed many appeals to be brought before the STF on the same subject and, in most cases, of interest to a reduced number of individuals or companies (subjective transcendence).

With the introduction of the new requirement, the intention was to change the way the Court should be understood, from "one more level of appeal" in the structure of the Judiciary to the body competent to settle important constitutional controversies of interest to Brazilian society, not just a small number of interested parties.

The way to assess whether or not the matter raised in a given extraordinary appeal has general repercussion and the effects resulting from that assessment show a change in the Court's actions. Paragraph 3 of article 102 of the Federal Constitution itself provides that admission of extraordinary appeals is conditioned to prior assessment of the existence of general repercussion of the matter, and refusal requires a ruling by two thirds of the members of the Court. The procedure to be observed in the analysis of the existence of general repercussion is governed by the STF’s internal rules. In general terms, after the extraordinary appeal is assigned, the Justice writing for the Court will conduct a review and present his opinion, which will be submitted to the other Justices (currently in virtual environment) for a decision.

Once the STF has recognized that there is a general repercussion, the specific matter that will be reviewed by the Court is identified. As a result, the other courts will have to stay the progress of new extraordinary appeals filed on the same subject. Although paragraph 5 of article 1,035 of the CPC/2015 provides that all cases that raise an issue considered of general repercussion in progress in Brazilian territory must have their processing suspended, we believe that the most consistent position with the principles of procedural celerity and effectiveness of judicial relief is a stay of the proceeding after, and if any, the filing of an extraordinary appeal with the lower court.

With the adoption of this measure, it is ensured that, after the completion of the trial before the STF, the prevailing position can be applied to the other cases that deal with the issue quickly and without the possibility of filing new appeals that would only have the effect of unduly delaying the final and unappealable trial.

It follows, therefore, that with the recognition of the general repercussion of a matter, there is a detachment from the review of the subject of the trial of the specific case that made possible the arrival of the matter before the Court. In other words, recognizing the general repercussion, the STF submits the matter for consideration and to a great extent, as occurs in the trial of an lawsuit in concentrated and abstract control of constitutionality.

As a result, the STF will first decide on the constitutional issue that had general repercussion recognized, not limiting itself to the grounds set forth in the appeal submitted. The Court may also receive contributions from representative entities (amici curiae) with notorious knowledge on the subject. After the conclusion of the trial, the understanding reached to resolve the individual case will be applied. This is confirmed by the provisions of article 988, sole paragraph, of the CPC, which provides that, even if the party withdraws its appeal, matters with recognized general repercussion will be assessed by the STF.

This new model for trial of appeals is called abstraction of the trial of one-off extraordinary appeals. It deals with topics of great interest, separating the review of the theory itself and the consequent application of the understanding to the specific case that made its arrival at the STF possible, thus holding great similarity with the review inherent to the abstract and concentrated control of constitutionality.

The effects underlying the decisions rendered under this system are binding on the bodies of the Judiciary, either because, i) once applied by the 2^nd level of appeal, they will not admit the filing of a new extraordinary appeal, or because ii) there is a provision for the lodging of a claim against the decision by the 2^nd level of appeal that violates the STF's ruling, provided that the right to appeal has been exhausted.

In this order, it is possible to note an important change in the control of constitutionality exercised by the STF in recent years, since decisions handed down in the trial of subjective cases, but according to the system of general repercussion, they now have an effect similar to that arising from abstract and concentrated control.

This new way of viewing the constitutional court's actions stems from the assignment of the so-called transcendent effect to the STF’s decisions controlling diffuse constitutionality, especially when marked by abstraction. In the opinion handed down in the trial on Complaint 4,335, Justice Gilmar Mendes provides relevant support for the understanding of the subject in this new phase of control of constitutionality in Brazil:

The Federal Supreme Court realized that it could not fail to assign legal meaning to declarations of unconstitutionality done in the context of incidental control of constitutionality, and the adjudicatory panels of other Courts were exempted from the duty to submit declarations of unconstitutionality to the Court en banc or special bodies, in the manner set forth in article 97 of the Constitution. There is no doubt that the Court, in this case, ended up recognizing transcendent legal effect its decision. Although the grounds for this understanding refer to a breach of the presumption of constitutionality, it is true that the Supreme Court's guidance ended up giving its decision something like binding effect, regardless of the Senate's intervention. This understanding is now enshrined in the civil procedural law itself (Code of Civil Procedure, article 481, sole paragraph, final part, as amended by Law No. 9756, of December 17, 1998).

This is the guideline that seems to prevail over the understanding that deems as dispensable the application of article 97 of the Constitution by the lower Courts, if the Supreme Court has already declared the law unconstitutional, even incidentally.

(…)

In any case, the identical nature of control of constitutionality, as to its purposes and the dominant common procedures for the diffuse and concentrated models, no longer seems to legitimize the distinction as to the effects of the decisions entered in direct control and incidental control.

Only this new understanding seems able to explain the fact that the Court has come to recognize general effects for decisions handed down in the context of incidental control, regardless of the intervention of the Senate. The same should be said of the various legislative decisions that recognize transcendent effect for the decisions by the STF issued in the context of diffuse control.

Therefore, we conclude that the requirement of general repercussion as an additional element to be verified for extraordinary appeals to be granted certiorari by the STF, in addition to making the Court's review of the constitutional matter more challenging, by requiring that the decision to be rendered reach a large number of interested parties, contributes to the abstraction of the control of diffuse and concrete constitutionality.

At a time that requires the adoption of mechanisms to give more effectiveness to the STF’s decisions and provide legal certainty and equal protection to litigants who have identical matters in debate, concepts such as general repercussion and the mark of the abstraction of trials according to this proceeding deserve praise.

Category: Infrastructure and energy

Published on September 2 of this year, Executive Order (MP) No. 998/20 seeks to strengthen the opening of the free market for the sale of electricity and, among other measures, introduces improvements in the efforts to modernize the electricity sector led by the federal government.

The text provides that up to 70% of the funds for investment in research and development and energy efficiency not yet committed to projects will be allocated, between September 1, 2020, and December 31, 2025, to the Energy Development Account (Conta de Desenvolvimento Energético - CDE). The transfer is still subject to the regulations of the National Electrical Energy Agency (ANEEL). The objective is to promote fee moderation and reduce part of the impact on electricity fees for costs related to the Covid-Account, a mechanism to alleviate the effects of the pandemic for electricity distributors that was recently contracted by the Electric Energy Trading Chamber (Câmara de Comercialização de Energia Elétrica - CCEE) with domestic financial institutions.

Seeking to rationalize the policy of industry subsidies and also in the context of efforts to avoid future rate increases due to covid-19, MP 998 provides for the gradual abolition of discounts on Distribution System Use Fees (Tarifas de Uso do Sistema de Distribuição - TUSD) and Transmission System Use Fees (Tarifas de Uso do Sistema de Transmissão - TUST), commonly referred to as “wire-fee discounts", which currently benefit renewable energy projects.

With this measure, new renewable generation projects will only be entitled to this benefit if they have requested a grant or change in installed capacity by September 1, 2021, and are expected to enter into commercial operation within four years after the date of issuance of the grant.

As a counterpart to the phasing out of the wire fee subsidy, the MP provides that the Federal Executive Branch will define guidelines, by September 1, 2021, for the implementation of mechanisms that take into account the environmental benefits related to low emission of greenhouse gases brought about by renewable source generation projects.

The MP also brings in preparatory measures for possible privatization processes of public service energy concessionaires, such as extension to June 30, 2021, of the deadline for state-owned companies controlled by states, the Federal District, and municipalities to hold bids for the transfer of control and granting of new energy concessions. Another example is the provision for a simplified competitive process, in the event of unsuccessful bidding, to ensure the provision of emergency and temporary electricity distribution services until the provision is taken over by a concessionaire under the official public service arrangement. Other provisions seek to bring about greater efficiency in the allocation of industry costs borne by state-owned companies that hold energy utilities concessions, such as the use of resources from the Global Reversion Reserve (Reserva Global de Reversão – RGR) to indemnify part of the assets of the distributors that were already in operation at the time of privatization and had not been accounted for.

Also relevant is the change that involves the retailer's performance in the free contracting environment, in line with the federal government's energy policy objectives to open up the free market. For example, some guidelines were defined for retailer's actions in representing consumers, still subject to ANEEL regulations. In addition, MP 998 provides for the possibility of suspending the supply of electricity to consumer units modeled under a generator or retailer in the event of closure of their representation by a generator or retailer distributor in CCEE, if the consumer does not diligently ensure the continuity of its service.

MP 998 also establishes measures to promote the development of the Brazilian nuclear industry, such as the planned auction of reserve generation capacity for the Angra 3 Thermonuclear Plant, held by Eletrobras Termonuclear S.A. (Eletronuclear), which may receive a 50-year generation grant, with the possibility of renewal for another 20 years and benefit from a 40-year contract for the sale of electricity.

To this end, the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social – BNDES) is expected to develop an economic and financial feasibility study of Angra 3 and its financing, which will serve as the basis for defining the price of the Angra 3 energy sales contract.

Still in relation to the nuclear sector, the MP provides for the transfer of all shares held by the National Nuclear Energy Commission (CNEN) in the capital stock of Indústrias Nucleares do Brasil S.A. (INB) and Nuclebrás Equipamentos Pesados S.A. (Nuclep) to the Federal Government. INB and Nuclep will be transformed into public companies linked to the Ministry of Mines and Energy (Ministério de Minas e Energia - MME) through the redemption of all shares held by private shareholders.

Between September 2 and 5, 2020, the text received 205 proposed amendments from congressmen. Many of them are propositions that the power sector tries to insert in the main text, while others intend to modify or delete passages from the MP.

The section dealing with nuclear energy meets with strong resistance from members of different parties, especially the opposition. There are proposals to delete the article that gives the National Energy Policy Council (Conselho Nacional de Política Energética - CNPE) the prerogative to authorize the operation of Angra 3 for 50 years, extendable for another 20 years. There is also strong resistance regarding the transformation of INB and Nuclep into government-owned companies linked to the MME.

Various other amendments attempt to alter the percentage of use of resources of the Research and Development and Energy Efficiency programs. Some proposals attempt to maintain the discounts on the transmission and distribution system use fees granted to renewable source ventures, and there is even an amendment that extends the granting of subsidies to coal plants for longer.

In addition, proposals were submitted to extend the exemption from the social fee throughout the term of the state of public calamity, scheduled to end in December of 2020, in order to prohibit the cutting off of electricity supplies due to defaults by homes, essential services, consumers who depend on life support electrical equipment, and those who have had difficulty paying their bills.

There are also amendments specifically related to the contracting of the Covid-Account credit operation. One of them prohibits distributors from paying interest on equity and distributing dividends to shareholders until the loan is fully paid off. Another establishes that the distributors may not request Extraordinary Fee Review alleging economic and financial imbalance due to the coronavirus pandemic until December 31, 2025, the deadline for amortization of financing.

In view of the multiplicity of issues covered by Executive Order 998 and the large number of amendments presented, especially when other relevant bills involving the electricity sector, such as PLS 232, are already under discussion, it is expected that the processing of the text in Congress will face challenges. The risk of any lapse of the executive order due to the impossibility of deliberation in accordance with the constitutional procedures and time limits for conversion into law are not ruled out. It is certain, however, that some of the topics contemplated in MP 998 are on the agenda and are in harmony with the efforts to modernize the electricity sector and strengthen the free market for energy marketing and trading.

Category: Labor and employment

The new coronavirus pandemic has forced many companies to review their forms of organization, with impacts on labor relations and the day-to-day lives of employees.

According to data from the PNAD-Covid survey, conducted by the Brazilian Institute of Geography and Statistics (IBGE), in the week between May 3 and 9, approximately 16 million people were on leave from work due to social distancing.

There was also a significant expansion in teleworking, which, according to research data, has been constantly practiced since May of 2020 by approximately 8 million people in Brazil.

In this scenario, what about employers' responsibilities to their employees? Should the employer bear the costs of teleworking?

The Consolidated Labor Laws (CLT), by regulating the subject, expressly establish that employee and employer must agree on bearing costs related to telework (electricity, internet, telephone, among other items).

Unless the collective bargaining agreement applicable to the parties provides otherwise, the laws and regulations provide that they may agree upon who will bear the costs related to teleworking.

The laws and regulations in force (unless otherwise provided for in the applicable legal instrument) do not oblige the employer to bear such costs. However, this is a good practice that not only mitigates the risks of legal claims on the subject but also, to a certain extent, ensures that employees have adequate infrastructure to work.

If the company therefore opts to reimburse employees for costs related to teleworking, one option would be to make payments as reimbursement of expenses. In this case, employees must submit an expense report, with the respective receipts, to enable reimbursement of amounts by the employer.

Although apparently simple, reimbursement requires internal structures and control of receipts, which can generate overhead costs for employers. In addition, there are situations in which it is difficult to identify what proportion of a certain cost actually relate to professional activities and what is pertinent to employees' personal expenses, which will require greater scrutiny by employers and additional structure for review and approval of reimbursable expenses.

As a simpler alternative to reimbursement, employers can choose to pay a lump sum monthly cost allowance to employees to offset expenses incurred working, without the need for supporting documents.

There are relevant advantages to this alternative. Initially, and subject to the recommendations that will be addressed below, discussions on the nature of the expense being borne by the employer (if intended for strictly professional use or if it includes a percentage for personal purposes only) are avoided. The reimbursement of expenses of a strictly personal nature, not related to work, may generate labor, social security, and tax repercussions for employers even if, potentially, in non-material amounts.

Another advantage is that cost allowances, as a result of the changes introduced by Law No. 13,467/17 (the Labor Reform), as well as reimbursement of expenses, is not, as a rule, included in the employee's remuneration and, therefore, is not subject to labor and social security charges, although it is paid in a usual manner.

In addition, article 75-D of the CLT establishes, in its sole paragraph, that the infrastructure and technological equipment necessary and appropriate for the provision of remote work provided by employers are not part of employees' remuneration.

In any case, it is not only the title given to the payment that guarantees its compensatory nature. In order for the cost allowance not to have the nature of salary, the amounts should (i) be paid only to employees who incur expenses (for example, the internet allowance is only justified while the employee is working remotely); and (ii) keep a direct relationship with the employees' expenses, considering market averages.

In view of this, it is advisable to establish parameters for payment of the cost allowance if the company chooses to bear the costs arising from the remote work when drawing up internal policies to regulate remote work.

An alternative to regulating the payment of the daily allowance is negotiation of collective bargaining agreements with professional unions. Banco Bradesco, for example, entered into a collective bargaining agreement with the Bank Workers' Union which, in addition to regulating remote work, provides for the payment of a cost allowance to employees in this arrangement.[1]

Formalizing payment rules and criteria for defining the amounts to be paid as cost allowance reduces the risk of legal questioning as to the nature of the payment and is important to mitigate the risks involved.

Before reaching any decision regarding the implementation of one model or another, companies must analyze what is best for their business taking into consideration not only the labor and social security issues, but also the tax issues involved.

[1] https://spbancarios.com.br/09/2020/bancarios-do-bradesco-aprovam-acordo-de-teletrabalho-com-9335-dos-votos

Category: Environmental

Federal Law No. 14,066/20, published on September 30, establishes important changes in dam legislation in general, especially with changes to the National Dam Safety Policy (PNSB), instituted by Federal Law No. 12,334/10. Although the PNSB does not deal only with mining tailings dams, the legislative changes were proposed and received more attention after the dam breach events in Mariana (2015) and Brumadinho (2019).

In the state of Minas Gerais, some of the changes made to the PNSB had already been implemented through State Law No. 23.291/19, such as the prohibition of construction or raising of mining dams by the upstream method. Dams already built or raised by this method must be de-characterized by February 25, 2022, a deadline that may be extended by the supervisory authority and the licensing authority, subject to technical feasibility.

In addition, the construction method and the age of the dam will now be considered for classification of the structure by risk category. The risk classification may also take into account criteria established by the supervisory body, which may represent less safety for the developer, who will have the classification of its dams changed per criteria not provided for by law. The legal insecurity is accentuated with the provision that the supervisory body will require the developer to adopt measures leading to reduction of the dam's risk category, without making it explicit or having provided for how this will occur and what it may mean in practice.

The changes in the PNSB tried to better define some terms and expressions that have been used recurrently in recent years, technically or otherwise. In this sense, a de-characterized dam was defined as "one that does not operate as a sediment or tailings containment structure, not having characteristics of a dam, and that is intended for another purpose." In order to appease controversies and typical debates in crisis management cases, definitions of "accident", "incident”, and "disaster" have been added. As long as the accident is the result of total or partial collapse of the dam, the incident is an earlier step, where the integrity of the structure is compromised. Disaster, on the other hand, is the result of an adverse event, whether of natural origin or induced by human action, which causes significant human, material, or environmental damage, in addition to economic and social damage.

Various provisions have been added to the PNSB to ensure greater participation by and information to the general population, especially the population potentially impacted by the structures, and greater transparency of developers. An example is the prohibition of mining dams for which studies of breach scenarios identify the existence of a community in the Self-Rescue Zone (ZAS), a measure previously adopted in the state of Minas Gerais. In the case of dams that are already in this situation, installed or in operation, the developer should be heard, in order to choose, together with the public power, to de-characterize the structure, resettle the population, and safeguard cultural heritage, or perform reinforcement works that ensure the effective stability of the dam, factoring in the dam's prior existence in relation to the ZAS community and the technical and economic feasibility.

Also in an attempt to ensure greater transparency to ventures, Law No. 14,066/20 provides that, in the event of a change in the dam's safety conditions that may entail an accident or disaster, the developer must immediately notify the supervisory body, the environmental licensing authority, and the civil protection and defense agency. The developer must also provide the resources necessary to guarantee the safety of the dam and, in the event of an accident or disaster, to repair the damage to human life, the environment, and to public and private property until the structure is completely de-characterized. The time criterion imposed should be understood as a minimum period and it should not be interpreted that the repairs will only be due until the moment of de-characterization of the structure, since damage and repair activities may take much longer.

By placing greater emphasis on damage prevention, Law No. 14,066/20 also instituted the Emergency Action Plan (PAE) as a mandatory part of the Dam Safety Plan (PSB) for any mining dam, or dams in general of medium or high potential for damage, or high risk dams. In addition, the individual developer or the person with the largest position in the legal entity’s structure should sign and give notice to the PSB. The PAE should be available at the developer's website, contain the map of the flood area, with the leak points, and be updated until the structure is completely de-characterized.

Similarly, for some types of dam, especially those with medium and high risk, or medium and high potential for damage, the supervisory body may require, under the terms of the regulations, the submission of security, insurance, bond, or other financial or real guarantees to repair damage to human life, the environment, and public property. Once ordered by the supervisory body, existing dams will have two years to be adapted.

Some changes have also been made to the administrative procedure (and its sanctions) for violations. After some discussions in Congress, Law No. 14,066/20 provided for fines ranging from R$ 2,000 to R$ 1 billion, in addition to seizure of ore, assets, or equipment and suspension of mining activities, among other sanctions.