Publications

Category: Environmental

The Ministry of the Environment (MMA) instituted on July 2nd, by means of the Ordinance No. 288/20, the National Program of Payments for Environmental Services - also known as Forest + Program.

Payment for Environmental Services

Forest + Program  comes up in accordance with the Payment for Environmental Services (PSA in its acronym in Portuguese) initiative, which aims to stimulate the conservation of the so-called "environmental services", which can be understood as the set of activities for the improvement and conservation of native vegetation in all biomes, as per subsection I of the caption of article 41 of Law No. 12,651/12 (Forest Code). Those services are the ones that sustain life on  planet and benefit all society.

Article 41 of the Forest Code establishes, in this sense, the possibility for the Federal Executive Power to institute a "program to support and encourage environmental conservation," which involves the "payment or encouragement of environmental services as a retribution, whether monetary or not, for activities related to the conservation and improvement of ecosystems and that generate environmental services.”

The idea of the PSA is that the beneficiary or user of the environmental service somehow (monetarily or otherwise) give back to those who value the protection and preservation of the environment, enabling the provision of environmental servicesIt is a tool that aims to assist and stimulate proper conservation and management, valuing activities for protection and sustainable use of the environt. After all, an ecologically balanced environment is essential to life and to the proper functioning of society and the economy.

The initiative seeks to diversify current environmental policy instruments and propose the use of incentives rather than disincentives (such as sanctions, payment of taxes, etc.).

Although the fact that the PSA is already used by companies and/or individuals who seek to improve their images, or want to mitigate the impacts of their daily actions, legislation in Brazil is still not concrete in its relation . Forest + Program is the first step towards the consummation of such environmental instrument.

Forest + Program

As stipulated in Ordinance No. 288/20, Forest + Program aims to stimulate (i) the private market of payments for environmental services in areas in which native vegetation coverage are maintained; and (ii) the coordination of public policies for conservation and protection of native vegetation and climate change.

The program will be coordinated by the Forests and Sustainable Development Office of the MMA, which will seek to establish strategic partnerships with individuals or companies, governed by public or private law, family or community groups, at a national and possibly international level, with the intention to encourage the PSA for the ones who protect and preserve the environment. There will also be a stimulation to the signing of sectoral agreements, good practices, cooperation actions, etc.

Areas throughout the country will be targeted by the program, which will also encompass all Brazilian biomes. What is aimed is the maintenance of areas covered by native vegetation and the recovery of those areas that are already degraded. Brazilian territory has currently 560 million hectares of native forest.

At first, the expectation is that Forest+ will be implemented as a pilot project in the Legal Amazon region, which corresponds to 58.9% of the Brazilian territory and covers regions of the states of Acre, Amapá, Amazonas, Maranhão, Mato Grosso, Pará, Tocantins, Rondônia, and Roraima.

In order to map the reach of the program, it is planned the record and integration of the data related to environmental services developed under the scope of Floresta +, in addition to the development of a digital tool to systematize payment for such services.

The program already has R$ 500 million in funds, received from the Green Climate Fund [Fundo Verde do Clima]. This amount may be multiplied, considering that Brazil has the greatest biodiversity heritage in the world and has the potential to become one of the world's leading players in the implementation of the PSA.

Forest + Program is currently the bigger PSA program in the world.

National Policy of Payment for Environmental Services

In 2019, the Chamber of Representatives approved the Bill of Law No. 312/15, which proposes the institution of the National Policy of Payment for Environmental Services (PNPSA). The main purpose of the PNPSA, which will be managed by  the Brazilian Institute of the Environment and Renewable Natural Resources (Ibama), is along the  same purpose of the PSA: reward (monetarily or otherwise) those ones who implement measures related to the maintenance, recovery, or improvement the environment.

The bill of law went to the  Senate through Bill of Law No. 5,028/19 and is currently waiting to be scheduled  on the discussion agenda. The reporting senator, Fabiano Contarato, president of the Environmental Committee [Comissão de Meio Ambiente – CMA], had been conducting public hearings to support the project, which  were suspended on March 19 of the current year, due to the measures promulgated by the Senate to contain the covid-19 pandemic.

Bill of Law No. 3,791/19, also originated from the Senate, has same subject and has not been scheduled for discussions either. The reporting senator,  Acir Gurgacz, has already presented a favorable report, with an amendment of his own authorship.

The explanation for the creation of a federal legislation for this mechanism is that our legislative system is only conditioned  to punish offenders who degrade the environment, and not to benefit, in any way, the ones that act correctly. The expectation is that this new policy will bring some gains for a sustainable development with focus on the generation of jobs and income.

Category: Banking, insurance and finance

Rafael Carretero, Sofia Desinano e Gustavo Ceridorio

In line with the policy of economic and financial incentives to combat the effects of the covid-19 pandemic, the federal government issued Executive Order No. 992/20, on July 16 ("MP 992"), to regulate the possibility of sharing the guarantee for fiduciary sale of real estate between more than one credit transaction within the National Financial System (SFN). The measure, which amends federal laws No. 13,476/17 and 6,015/73 is mainly aimed at broadening access to credit for borrowing companies.

In its article 14, MP 992 includes articles 9-A to 9-D in Law No. 13,476/17 and expressly allows the fiduciary seller, with the consent of the fiduciary creditor, to use the real estate already fiduciarily sold as collateral for new and autonomous credit transactions of any nature, provided that they are contracted with the fiduciary creditor of the original credit transaction.

By allowing for the sharing of the fiduciary sale of real estate, MP 992 promises to facilitate consumers' access to financial products, in addition to ensuring stability to the SFN. Thus, due to the nature of the fiduciary sale, new transactions tend to present more beneficial term and interest conditions to the borrower, when compared to unsecured obligations. In addition, by establishing more rigor and transparency in contracting these transactions, the measure also brings benefits to the stability of the SFN.

Although driven by the current moment of crisis, the publication of MP 992 stems from an existing movement to expand access to credit through the fiduciary sale of real estate.

The concept of a fiduciary sale of real estate was introduced into the Brazilian legal system by Law No. 9,514/97, with the purpose of addressing a crisis in the housing sector. The main focus of the fiduciary sale of real estate was to help ordinary citizens negotiate better financing conditions for housing, since it limited the value of the financing to the value of the property subject to the security interest, even though it represented an effective guarantee of execution.

The experience confirmed the great effectiveness of the use of fiduciary sale as a guarantee and drove the demand for the expansion of the concept, always aiming at diffusion and cheapening of credit for other types of transactions. The response given by the Legislative Branch was the enactment of Law No. 10,931/04, which, in its article 518, established the possibility for obligations in general to be secured via fiduciary sale of real estate. Thus, the legislator made explicit its choice to allow the broad use of this instrument as an in rem guarantee in various types of obligations, with a political component to enable reduction of interest rates.

MP 992 arose to investigate important issues raised by the success of previously enacted laws. Its main debate is the possibility of sharing guarantees for fiduciary sales of real property for debts contracted with different financial institutions, expanding once again access to credit. However, the MP has some limits in its application, which represent important points of attention to be highlighted.

Although the new MP 992 does not expressly provide for the possibility of sharing debt guarantees by different financial institutions, it also does not completely prevent this possibility. In the inclusions made in Law No. 13,476/17, MP 992 mentions only the "original creditor" in relation to a credit transaction.

In this sense, we believe that it is still possible to create a guarantee for fiduciary sale of real estate for debts with different creditors, when this guarantee is created in favor of all creditors simultaneously, by means of the same instrument.

The new MP 992, however, was disappointing, as it established that the sharing of the guarantee for fiduciary sale of real estate is limited to transactions carried out under the SFN, since it excludes transactions carried out in the capital markets, among others. The regulators of the SFN are expected to take a position on whether or not to extend sharing of guarantees to transactions outside the SFN.

Although some changes proposed by MP 992 are in line with expansion of the use of fiduciary sale of real estate as a guarantee in credit transactions, others seem to go against this movement.

Category: Labor and employment

Gender identification issues are receiving increasing attention, especially in the workplace, where diversity initiatives, committees, and programs are becoming more common and necessary for the debate on this relevant topic. With the growing awareness of the importance of diversity in the work environment, doubts about the subject are also growing.

Exactly for this reason, before moving on to discuss the subject of this article, we think it is important to present some relevant concepts not yet fully known:

• The biological sex of an individual is a sexual determination based only on biological and physiological characteristics and chromosomal information.

• Gender identity is how an individual identifies with society, regardless of his or her biological sex.

• An individual’s sexual orientation is affective and sexual attraction, which can be to people of the same gender, of the opposite gender, or to both genders.

• A transgender is one who does not identify socially with the gender assigned to him/her based on his/her biological sex. That is, it is the individual whose biological sex is different from gender identity.

To illustrate the challenge faced by people who identify themselves as transgenders, in 2010 the Federal Medical Board defined a transgender as an individual who has discomfort with his or her biological sex, does not have "other" mental disorders, and expressly expresses, for at least two years, the desire to lose the characteristics of his or her biological sex and adopt those of the opposite sex. This concept followed the understanding of the World Health Organization (WHO), which mistakenly treated transsexuality as a mental disorder until June 18, 2018.

Evolving in its concepts, the WHO, during the 72nd World Health Assembly, held in 2019 in Geneva, removed so-called "gender identity disorder" from the official classification of diseases. One year before, the Federal Board of Psychology had already published CFP Resolution No. 01/2018, which guides professionals in psychology to not consider transvestility and transsexuality to be pathologies.

The removal of transgenderity from the WHO's list of diseases reflects the respect and maintenance of the dignity of people who identify themselves in this way. However, recognition of the scientific community is not enough; it is necessary that it is also contemplated and incorporated into the corporate culture of companies.

As increasing awareness and acceptance of diversity in the corporate world is noted, doubts also arise about forms of acceptance and conduct. One of the relevant issues that is in doubt is the use of restrooms by transgenders in the work environment.

When an employee identifies him or herself as a transgender, which bathroom will he or she use? Could imposing the use of restrooms according to biological sex, ignoring gender identity, be considered a restriction and end up generating the right to compensation?

The use of women's restrooms by transgender women and men's restrooms by transgender men is already a known topic in the Brazilian judiciary and has been under discussion by the Federal Supreme Court (STF) since 2015, but has yet to be concluded. It is Topic of General Repercussion 778 (Leading Case RE 845779): "Possibility that a person, considering the rights of personality and the dignity of the human person, being treated socially as belonging to a sex different from that with which he or she identifies and presents himself or herself publicly".

In November of 2015, after two votes in favor of using restrooms according to gender identity, Justice Luiz Fux asked for review of the record and the decision was adjourned, with no date for resumption thus far.

In the current context, without specific laws and regulations regulating the issue and without a decision by the STF, it is necessary to recognize the right of transgenders to the use of restrooms intended for the gender with which they identify, considering the importance of diversity and respect for any individual and their fundamental rights. Preventing a transgender employee from using the restroom according to his or her gender identity is a practice of discrimination, and also does injury to fundamental rights protected by the Federal Constitution, such as the right to intimacy, equality, autonomy, and the dignity of the human person.

It is important to be cautious, however, and to remember that isolated acts are not strong enough to change the mentality of everyone who lives and uses the facilities of a work environment. Moreover, the use of the restroom is only a small portion of the fight against transphobia in which society must engage.

In order to eliminate prejudice and stigmatization in the work environment, it is essential that companies implement affirmative actions to raise employee awareness, such as forming their own committees, implementing specific policies, and providing lectures on the most diverse of topics.

Meanwhile, a ruling by the STF is pending.

Category: Labor and employment

Since the enactment of Law No. 9,732/98, the rule of automatic cancellation of special retirement in the event that a worker works in a hazardous environment, provided for in paragraph 8[1] of article 57 of Law No. 8,213/91.

Special retirement is a social security benefit granted by the INSS (National Institute for Social Security) to workers who have contributed for 15, 20, or 25 years due to the performance of activities exposed to agents that are hazardous to health, continuously and uninterruptedly, at levels above the limits established by law. According to INSS data, over 2,000 special retirements were granted in Brazil in July of this year.

Even in the face of the incompatibility of providing services in a hazardous environment while receiving benefits resulting from special retirement, many workers continue to work in a hazardous activity, which has always been the subject of discussion in the Judiciary.

To put an end to this controversy, the Federal Supreme Court (STF) decided that the provision contained in paragraph 8 of article 57 of Law No. 8,213/91 is constitutional, according to a decision published on August 19, 2020, in the record of Extraordinary Appeal No. 791.961, which granted certiorari due to general repercussion of the subject matter (Topic 709).

The decision was handed down after an extraordinary appeal was filed by the INSS against a decision by the Federal Court of Appeals for the 4th Circuit, in which the application of article 57, paragraph 8, of Law No. 8,213/91 was ruled out, on the grounds that it would imply impediment to the free exercise of work. It was claimed, therefore, that the payment of social security benefits resulting from special retirement should be maintained for nursing professionals who had permanent contact with hazardous biological agents.

The STF, by a majority of 7 votes to 4, decided that workers who continue to work in hazardous conditions will suffer suspension of their benefit as a result of the special retirement.

The main basis used by Justice Dias Toffoli, writing for the court in the case, in sustaining the incompatibility of the performance of activity in an environment hazardous to health with the reciept of special retirement, was that the legislator, by granting workers early retirement for work in a hazardous environment in a presumed manner, intended to remove them from an environment unhealthy and hazardous to their physical safety.

According to the Justice, to allow return to special work or continuation thereof after obtaining retirement would be "unreasonable, illogical, and flagrantly contrary to the idea that guided the institution of the benefit.”

The Justice writing for the court also pointed out that retirees in the special arrangement are not prevented from working in other activities, such that if they work again in a hazardous environment by choice, since there is no prohibition in that regard, they will have their benefit suspended. For this reason, there is nothing to be said of an impediment to the free exercise of work or violation of article 5, XIII,[2] of the Federal Constitution.

If the employer is aware that an employee has started receiving special retirement benefits and cannot transfer him or her to an activity outside a hazardous environment, which is not an obligation of the employer and does not require proof of impossibility of transfer, the choice to maintain activities in a hazardous environment is the employee's. If the employee decides to keep the benefit even performing activities in a hazardous environment, the company is authorized to terminate the employment contract, and the employee is not entitled to the penalty of 40% of FGTS and compensated prior notice.

The majority opinion of the Superior Labor Court,[3] in cases of termination of employment due to receipt of special retirement, which derives from the law and not at the initiative of the employer, is that employees will not be entitled to payments arising from termination without cause, which include the penalty of 40% over the FGTS and compensated prior notice.

This specific case of termination by the employer is an exception to the rule instituted after the judgment of Direct Action of Unconstitutionality No. 170, through which the STF held that voluntary retirement does not entail termination of the employment relationship.

This is because, considering this understanding, the declaration of unconstitutionality under paragraph 1 of article 453 of CLT[4] and the cancellation of the Jurisprudential Guideline No. 177 of the SDI-I of the Superior Labor Court,[5] special retirement is incompatible with maintenance of the employment relationship in case the event of continuation of labor activities in a hazardous environment.

Law No. 8,213/91 does not provide for any penalty to employers who maintain an active employment contract with an employee who receives the benefit arising from special retirement and continues to work in a hazardous environment. To date, no decisions have been located in which a sanction has been imposed on the employer for this reason.

The current laws and regulations provide for penalties only for workers who continue to work in a hazardous environment. This is because, besides the employee having his benefit suspended, the INSS may also charge workers for amounts earned while working under these conditions, under the terms of article 255[6] of Normative Instruction No. 77/15, of the INSS. The legitimacy of such collection by the INSS was reiterated by Justice Dias Toffoli in his opinion in the judgment of Extraordinary Appeal No. 791.961. He added that the charge is retroactive, and should occur as of the date of granting of the benefit in cases where activity in a hazardous environment is maintained.

[1] Paragraph 8. The provisions of article 46 apply to insured persons who are retired under the terms of this article and who continue in the exercise of the activity or operation subjecting them to hazardous agents contained in the list referred to in article 58 of this Law.

[2] “The exercise of any work, trade, or profession is free, when the professional qualifications established by law have been met."

[3] Case TST-RR-11373-07.2014.5.15.0095

[4] “Spontaneous retirement of employees of publicly-traded companies and government-controlled companies is allowed as long as they meet the requirements of article 37, subsection XVI of the Constitution, and subject to the provision of an invitation conduct a public tender process."

[5] “Voluntary retirement terminates the employment contract, even when the employee continues to work at the company after the social security benefit is granted. Therefore, the penalty of 40% of the FGTS in relation to the period prior to retirement is not due."

[6] "The amounts unduly received shall be returned to the INSS, in the manner set forth in articles 154 and 365 of the RPS.”

Category: Aviation and shipping

Pedro Henrique Jardim, André Camargo Galvão and Leandro Lopes Zuffo

The federal government announced, on August 13th, the forwarding, as a matter of urgency, of Bill No. 4,199/20, in order to implement the changes proposed under the BR do Mar program (the Cabotage Bill). A result of long institutional discussions, BR do Mar aims to stimulate cabotage through the consolidation of logistics alternatives, the transformation of internal logistics means, and the reduction of the infrastructure deficit in Brazil, pointed out as barriers to investments and to the structuring of business ventures in Brazilian territory.

Since the second half year of 2019, the maritime sector, especially cabotage, was awaiting the positioning of the Ministries of Infrastructure and Economy on the subject, which indicated possible structuring of significant regulatory changes in the sector.

Currently, cabotage in Brazil is governed, among other rules, by Law No. 9,432/97, which restricts the operation of foreign vessels and companies in navigating domestic routes (cabotage, inland navigation, and port and maritime support). In the current scenario, in which the Cabotage bill is not yet applicable, Brazilian shipping companies (EBN) encounter specific difficulties in chartering and, consequently, operating foreign vessels. Among them, the following are highlighted:

• Chartering of foreign vessels with prior authorization from the National Waterway Transport Agency (Antaq), in some cases no prior authorization is required;

• Specific limitations on the number of foreign vessels that an EBN can charter;

• Compliance with current labor regulations applicable to vessels flying the Brazilian flag, which implies, for example, the hiring of Brazilians for the positions of captain and chief engineer, in addition to two thirds of the vessel's crew, except for situations in which the foreign vessel is chartered in the bareboat modality (in non-technical language, it can be said that the bareboat charter occurs when a vessel is “leased” without captain, crew, and other items that may be necessary for navigation), suspending flag and registered in the Brazilian Special Registry (REB), a structure that divides opinions in the Judiciary regarding the contract regime; and

• The restricted possibilities of using resources from the Merchant Marine Fund (FMM), arising from the collection of the Additional Freight for the Renewing of the Merchant Marine (AFRMM), provided for by Brazilian norms.

Within this regulatory framework, EBNs have argued that cabotage does not offer as many economic benefits to its operators as long-distance shipping operations and other modalities of freight transport. They also argue that, due to the restrictions of the current legislative framework, the operating and capital costs of cabotage are high when compared to the returns resulting from these investments.

According to executives of the sector, such facts occur because, in addition to the costs resulting from the acquisition of vessels, the cabotage sector is also significantly more expensive than the long-distance shipping sector because it has the majority of the crew composed of Brazilian workers (which increases labor costs) and because it bears more taxes on the use of bunker fuel (fuel specific to the vessels - the Tax on the Circulation of Goods and Services (ICMS), not applicable in long-distance shipping operations.

In August of 2019, the Federal Auditing Court (TCU) highlighted some of these inefficiencies, such as the variation in the ICMS collection on bunker fuel, and drew attention to the lack of standardization of procedures carried out by public agencies and entities and a simplified operation of multimodal transportation (that involving two or more modes of transportation). These aspects were pointed out as limitations to the exploration of the potential of cabotage, which at the time represented only about 5% of cargo transport operations in Brazil.

As a response to this situation, Resolution 70/2019 of the Partnerships and Investments Program Council (CPPI), published in the second half year of 2019, acknowledged that, when properly implemented, waterborne cargo transport "is comparatively more efficient, safer, and presents lower costs and environmental impacts than road or rail transport." Thus, the CPPI instituted a program to stimulate cabotage, called BR do Mar, led by seven guidelines:

         1. Allowing the use of foreign flag vessels to form part of an EBN's fleet;

         2. Adoption of Brazilian seafarers to train part of the crew on foreign flag vessels operating in cabotage;

         3. Reduction of barriers to entry in the cabotage market;

         4. Reduction of costs of investment in vessels;

         5. Equalization of operating costs in relation to the social benefits of cabotage;

         6.A reassessment of the Federal Government's policy of intervention in support of development of the merchant navy and the shipbuilding and ship-repair industry and the resulting burdens; and

         7. Support for investments in the safety of coastal navigation by the Brazilian Navy.

During the wait for definitive presentation of the Cabotage Bill, Senator Kátia Abreu (PP-TO) presented Bill No. 3,129/20, based on the notes made regarding the sector in Brazil by technical bodies such as the TCU, the Administrative Council for Economic Defense (Cade), and the CPPI. The bill brought in measures expected within BR do Mar, such as the possibility of chartering foreign vessels, in the bareboat charter modality , regardless of their size and type of use, and to implement procedures that favor multimodal transport, such as an  electronic system of unique documentation for multimodality.

Some other points of Bill 3,129, however, are different from what was expected in BR do Mar, such as progressive reduction of the AFRMM rate and the provision of the possibility of offshore register of vessels– being the local registry merely informative – and the determination of the applicability of foreign legislation on the property rights of the vessel, if desired (“os direitos reais e os ônus poderão ter foro estipulado fora do Brasil, caso no qual terá a respectiva lei de regência, sendo o registro realizado no Brasil apenas de caráter informativo “) In principle, this could reinforce the provisions regarding the granting of vessels as collaterals already provided for by article 287 of the Bustamante Code and substantially alter the rules governing the ownership of vessels. With the Cabotage Bill, recently forwarded by the federal government, it is expected that Bill 3,129 will be left aside in favor of the bill structured by the ministries of Infrastructure and Economy.

On the basis of public statements by members of the Ministry of Economy and the Ministry of Infrastructure, it was possible to nurture different expectations regarding the Cabotage Bill that went beyond the measures presented Bill PL 3,129. The presentation of the new bill made more concrete the specific measures directed at costs, fleets, ports, and the naval industry, which we summarize below by category:

Costs

• EBNs operating in cabotage shipping will have tax benefits on chartered vessels, entirely suspending the following federal taxes: Import Tax (II), Tax on Industrialized Products (IPI), contributions to the Social Integration and Public Servants' Equity Formation Programs (PIS/Pasep) levied on the import of foreign products or services, Contribution to the Social Integration and Public Servants' Equity Formation Programs (PIS/Pasep) levied on the import of foreign products or services, Contribution for Intervention in the Economic Domain - Fuels (Cide - Fuels), and AFRMM.

• Measures will be implemented to optimize bureaucratic procedures, with the objective of better integrating cabotage with multimodal transport, and to simplify routine procedures, such as those related to inspection and release of goods and products. It is speculated that the changes will mainly be made to the procedures concerning the customs arrangement applicable to cabotage.

Fleet

• The permission for EBNs to operate with foreign vessels owned or held by their wholly foreign subsidiaries (which would reduce not only CAPEX, but also the OPEX of these operations), by means of time charter contracts, within different situations governed by the Cabotage Bill.

• The amendment of article 10 of Law No. 9,432/97, making it possible for an EBN to charter a foreign vessel (only in the bare hull mode) without the need to obtain prior authorization from Antaq and to have a construction contract in effect with a Brazilian shipyard or to own the Brazilian vessel. As of the enactment of the changes provided for in the Cabotage Bill, EBNs may only charter a single foreign vessel in the modality indicated above. This limit will be progressively extended to two foreign vessels in 2021, three in 2022, and an unlimited number as of 2023, as proposed in the Cabotage Bill.

• The creation of a new legal type of EBN, which may operate only through investments in fleets, and may have as its activity the chartering of vessels for other EBNs and/or foreign shipping companies. This new modality will be called a Business Navigation Investment Company (Empresa Brasileira de Investimentos na Navegação - EBN-i), which will favor new players or smaller companies that do not have their own vessels and, in principle, will have the same requirements as EBNs for their organization (which will become, according to the Cabotage Bill, a legal entity organized in accordance with the provisions of Brazilian law and headquartered in Brazil).

• The provision that the minister of State of Infrastructure may establish the situations for the chartering of foreign vessels may be considered of "public interest", a competence currently assigned only to the plenary board of Antaq via Antaq Resolution No. 1/15, based on article 9, subsection II, of Law No. 9,432/97.

Ports

• The regulation of the authorization for temporary use of port areas and facilities in special cabotage operations - "those considered regular for the transport of cargo in type, route, or market not yet existing or consolidated" - it being Antaq's responsibility to have specific terms, deadlines, and conditions of use for port areas and facilities within the property of public ports, that is, within the organized port.

• Alignment with other measures of the Ministry of Infrastructure that offer incentives for the expansion and adaptation of existing ports so that they can attend to cabotage services. Ports such as Suape and Santos have already implemented changes to facilitate cabotage between the two, and the Ministry of Infrastructure has leased about 14 port areas since last year. The Ministry of Infrastructure also indicates that it has a plan to carry out bidding for 14 other port areas and grant authorization for 33 new terminals for private use. These adaptations and expansions of the port infrastructure seek to obtain new investments in the existing public and private terminal infrastructure.

Shipping Industry

• Permission for foreign companies to use the FMM to enable the construction, maintenance, and repair of foreign vessels in Brazil, encouring the docking of foreign vessels in Brazil and the development of shipyards.

Among the measures expected on the basis of public statements by members of the ministries and which were not fully covered under the Cabotage Bill, the following should be highlighted: (i) that the working arrangement of maritime workers in cabotage shipping should be regulated in accordance with the law of the flag the foreign chartered vessel flies; and (ii) that state taxation on bunker fuel (ICMS) should be resolved, in order to standardize its price and, consequently, avoid further negotiations with states.

The Cabotage Bill also establishes the minimum requirements for an EBN to qualify for the BR do Mar program. To be granted qualification, the EBN must meet the following requirements: be an EBN authorized to operate in the transportation of cargo via cabotage, have good tax standing at the federal level, and sign a commitment with the federal government, which will oblige it to submit information regarding the guidelines of BR do Mar and other specific provisions that will give the Ministry of Infrastructure greater accountability over the sector,[1] as provided for in the Cabotage Bill.

The regulatory changes proposed by the Cabotage Bill seem to aim at increasing cabotage navigation in Brazil. The government's expectation is to benefit the Brazilian logistics chain towards multimodality, diversification, competition, and efficiency. However, the impressions of the players in the sector regarding the possible regulatory impacts do not seem to be unanimous, and it would not be surprising to witness intense debates on the subject in Congress, where the bill will has a long way to go, even if it is possibly shortened due to the urgency imposed by the government.

[1] The Cabotage Bill lists that it will be mandatory to submit information regarding the following issues: "a) expansion, modernization and optimization of its activities and its operating fleet in Brazil; b) improvement in the quality and efficiency of cabotage transport in relation to the user experience; c) increase in the supply to the user of cabotage transport; d) creation and maintenance of regular cargo transport operation; e) valuation of employment and qualification of the Brazilian crew hired; f) development of activities in the value chain of cabotage navigation in operations performed in Brazil; g) innovation and scientific and technological development that promote the economic development of cabotage transport; h) safety in the transport of the goods transported; i) sustainable development; j) transparency as to shipping/freight prices; k) healthy competitive practices that ensure the competitiveness and conduct of the business in an ethically responsible manner; and l) promotion of integrity.”

Category: Tax

The marketing and sale of goods and products via the Internet grew exponentially during the period of social isolation caused by the covid-19 pandemic, highlighting how e-commerce is a modern and agile way to implement a legal deal. As there are no territorial boundaries or difficulties in the purchase and sale transaction, companies may be increasingly flexible and efficient in their operations in order to serve customers more dynamically.

The recent strong expansion shows how e-commerce has the potential to generate profits for companies and value for consumers, while generating an undeniable increase in tax impacts on the sector. One example is the promulgation of state norms to extend the responsibility of digital platforms with respect to the control and collection of ICMS on transactions carried out on digital platforms, in contrast with the economic protection measures adopted in the context of a pandemic.

This is the case of the State of Rio de Janeiro, which enacted Law No. 8,795/20 to, among other changes in the state's ICMS legislation, hold the legal entity holding the electronic platform and the financial intermediary liable for payment of ICMS in online commerce transactions. In other words, there will be a legal provision to require intermediation service providers and financial agents to pay the state tax, which is normally the responsibility of salesmen/shopkeepers who sell products on digital platforms.

Following this same logic, the State of São Paulo, through CAT Ordinance No. 156/10, has disciplined the compliance with ancillary obligations by providers of commercial intermediation services in a virtual environment and by providers of services related to e-commerce, making it clear, however, that compliance with these obligations rules out any joint and several liability for companies in the sector.

The legislation of the State of Rio de Janeiro and São Paulo is not, however, a novelty in the Brazilian legal system. Bahia, Ceará, and Mato Grosso, for example, have already published similar normative acts - laws No. 14,183/19, 16,904/19, and 11,081/20, respectively.

It is a fact, however, that the tax siege on the digital economy is not restricted to state policies. The discussions on the first part of the tax reform outlined by the federal government are also advancing in Congress. Bill No. 3,887/20, proposed by the Minister of Economy, Paulo Guedes, aims to unify the PIS and Cofins contributions, including on import transactions, through the institution of a new value-added tax, called the Social Contribution on Transactions with Goods and Services (CBS).

Specifically with regard to transactions carried out in e-commerce, article 5 of Bill 3,887/20 establishes that digital platforms are responsible for collecting the CBS in the event that the selling legal entity does not register the transaction by issuing an electronic tax document.

Moreover, article 65 of Bill 3,887/20 includes digital platforms domiciled abroad in transactions carried out through them as jointly and severally liable for the collection of the new CBS levied on imports of goods, among others. To this end, platforms will be responsible for registering with the tax administration in order to comply with the ancillary obligations related to the CBS (such obligations were not detailed in the bill).

The tax interference in the digital economy, especially with regard to tax liability in e-commerce, stems from the high relevance of this business model for the current globalized market. However, it is important to emphasize that it is not the tax law's role to prevent the development of a certain economic activity, but rather to always seek standards for neutral and effective taxation.

Therefore, not only should political authorities be careful when designing new propositions, but market players should pay extreme attention to changes imposed by legislation, since tax obligations have a high impact on an extremely fast, dynamic, and fluid business model.