Publications

Category: Institutional

We live in the age of digital transformation and democratization of information. Technological advance is reshaping relations, and the modernization of telecommunications infrastructure has brought knowledge to one’s fingertips. Access to information from many different sources is a significant achievement of civilization. However, it is important to recognize that there is a significant difference between information and knowledge. While information is limited to facts or events, knowledge is the result of study on a given topic and makes it possible to construct arguments based on observations of a scientific nature.

This brief introduction may seem disconnected from the title of the text, but when we deal with a subject as sensitive as racism, it is important to point out that mere information is not enough for us to understand its complex effects on society.

We do not intend to exhaust in a short text the analysis of such an important issue. Our goal is to provoke the desire for knowledge and open the eyes of our interlocutor to the rich universe of studies on racism and racial theories. The concepts and ideas that will be briefly explored are the product of a series of debates on the work "Racismo Estrutural" (Structural Racism), by the jurist and philosopher Silvio Almeida.

What is race?

According to Silvio Almeida, the concept of race appears in the context of expansion of European colonialism, as an instrument for the classification of individuals, and is the basis of justification for the "submission and destruction of populations in the Americas, Africa, Asia, and Oceania.” The emergence of positivism, at the beginning of the 19th century, redefines the concept, as man becomes the object of analysis from the scientific perspective, gaining strength from scientific racism, a theory according to which physical/biological characteristics and place of birth are factors capable of explaining a supposed difference between races.

Already in the 20th century, the emergence of anthropology as a field of study helps us to understand that the concept of race is used as a political instrument for legitimization and naturalization or normalization of social inequalities.[2]

Is there a difference between prejudice, racism, and discrimination?

The understanding of any matter, regardless of area, is closely linked to understanding the meaning of each concept. Understanding the meaning given to terms is the first step towards quality study. As Silvio Almeida teaches us, although closely related, the concepts of racism, discrimination, and prejudice have different meanings:

Prejudice: means judging individuals belonging to a certain racial group based on preconceived concepts.

Racial discrimination: the power relationship is a central component of racial discrimination, which consists of the "granting of differential treatment to members of racially identified groups." Discrimination can occur directly or indirectly. Direct discrimination occurs when racial status generates an ostensive practice against a particular group, as has occurred in countries that have adopted explicit policies of segregationism.[3] In addressing indirect discrimination, the author turns to Adilson Moreira, a black jurist and intellectual who is a reference in anti-discrimination law that explains to us that this form of discrimination is "marked by the absence of explicit intentionality to discriminate against persons.”[4]

Racism: Racism is a process through which politics, economics, and everyday relationships replicate situations that create "conditions of subordination and privilege" among different racial groups.[5]

The philosopher and jurist whose thoughts inspire this text values rigor in the treatment of the different concepts. For him, racism can be analyzed from three different perspectives (individualistic, institutional, and structural), all of which are extremely relevant, but deserve different analyses since they have different consequences.

When analyzed from an individualistic perspective, racism is irrational or abnormal behavior directly linked to the behavior of individuals and fought by means of enforcement of criminal law.[6]

The greatest mistake that can be made when discussing racism is interpretation of facts exclusively in the light of the individualistic perspective. When we reduce racism solely to the practice of specific behavior by people, we create a false sense of non-existence of racist practices. Because they are harshly rejected by the public and legally punished, acts of direct discrimination end up becoming one-off, a fact that generates in the subconscious the idea that racism does not exist or that practice thereof is exclusive to small irrational groups. As Grada Kilomba explains, "in racism, denial is used to maintain and legitimize violent structures of social exclusion.”[7] This is the main reason why we advocate that the subject be addressed in its entirety, that is, that it be studied also from the institutional and structural point of view.

According to Almeida, institutional racism is a product of the dynamics that govern the functioning of institutions. Thus, the way in which institutions organize and act and adopt, even if indirectly and unintentionally, certain practices contributes to an increase in disadvantages that will significantly affect socially marginalized racial groups.[8] Institutions, when they do not pay attention to the historical and social context in which they are found, reproduce a relationship of power and domination that has historically been built to subjugate black populations.

Last but not least is the concept of structural racism, which can be understood as the normalization of political, economic, and legal practices that, to a greater or lesser extent, generate social disadvantages that specifically affect racial groups at the margins of society since the period of colonial expansion.

Structural racism, therefore, is the fruit of a historical, political, and economic process of systematic reproduction of social hierarchies based on the concept of race. It is the naturalization of social violence, marked by the stigmatization of black people and the imposition of negative characteristics and subordination.

The Federal Supreme Court (STF), when judging an action that discussed the crime of anti-Semitism, brought in an important analysis on the legal and constitutional interpretation of the term "racism.” Although the discussion in question was not discriminatory practices against black populations, the interpretation constructed by the STF is extremely relevant and closely connected to the concept of structural racism. According to case law released by the Court:

"The construction of a legal and constitutional definition of the term 'racism' requires a combination of historical, political, and social factors and circumstances that governed its formation and application. The crime of racism constitutes an attack on the principles on which human society is built and organized, based on the respectability and dignity of human beings and their peaceful coexistence."[9]

What can we do?

The question we all ask ourselves is: how do we combat racism? The answer is short but complex. We need to act urgently! Significant changes only happen when there is action by individuals and institutions (public and private).

Djamila Ribeiro teaches that "self-questioning - asking questions, understanding their place and doubting what seems 'natural' - is the first measure to avoid reproducing this type of violence, which privileges some and oppresses others."[10] This first measure - informing oneself about racism - is what enables one to understand the phenomenon so that it can then be combated.

Another measure is "organized resistance against growing manifestations of racist violence"[11] as Angela Davis teaches: from the knowledge of structural racism in society, all actors have a responsibility to take anti-racist actions.

Associated with this knowledge, it is necessary to reflect on the black presence in the space we occupy. Whether through art, education, politics, or culture, it is extremely fruitful to expand the range of references beyond those mostly derived from white individuals. Djamila Ribeiro points out: "it is important to keep in mind that, in order to think of solutions for a reality, we must draw from invisibility. So phrases like 'I don't see color' do not help. The problem is not the color, but its use as a justification to segregate and oppress."[12] Based on this, it is possible to outline actions that depend exclusively on engagement to promote changes. We will list some, among many, that can be adopted in everyday life:

• Recognize that racism exists in today's society and that it does not manifest itself only through isolated acts and direct discrimination.

• Promote debates and discussions on the problem in order to identify and correct inconsistencies.

• Dialog in an inseparable way with respect to issues of race, gender, class, and sexuality that intersect as different forms of structural oppression.

• Give a leading role to black intellectuals who study the subject.

• Encourage study on combating racism and ensuring access to quality information.

• Break the black community’s silence.

• Foster the entry and permanence of blacks in institutions, increasing their representativeness and diversity.

• Not tolerate racist and discriminatory practices and act to ensure that the environment within institutions is diverse and promotes opportunities for blacks.

• Foster policies and practices that provide individuals with the tools and opportunities necessary so that, if there is equality, objective criteria for choice are applied.

• Reducing structural inequalities in access to education will allow meritocracy in its fullness and flourishing of talent currently lost in our society.

• Implement policies aimed at repairing a historical debt and ensuring social equality.

The above initiatives are not the only ones, but every fight has a beginning.

Vitor Barbosa, Ana Carolina das Dores, and Ivan Fernandes are members of ID.AFRO, an aliance group spontaneously created by members of Machado Meyer, within the scope of the firm's Diversity & Inclusion Committee, with the objective of promoting debates on ethnic and racial issues.

[1] Almeida, Silvio Luiz de. Racismo estrutural [“Structural racism”]. São Paulo: Sueli Carneiro; Pólen, 2019.

[2] Idem

[3] Idem

[4] Excerpt taken from the work cited by Silvio Luiz de Almeida and originally contained in MOREIRA, Adilson José. O que é discriminação? [“What is discrimination?”] Belo Horizonte: Letramento, 2017. p.102

[5] Almeida, Silvio Luiz de. Racismo estrutural [“Structural racism”]. São Paulo: Sueli Carneiro; Pólen, 2019.

[6] Idem

[7] Kilomba, Grada. “Memórias da plantação: episódios de racismo cotidiano” ["Memories from the plantation: episodes of daily racism”]. Rio de Janeiro: Editora Livros Cobogó, 2019.

[8] Almeida, Silvio Luiz de. Racismo estrutural [“Structural racism”]. São Paulo: Sueli Carneiro; Pólen, 2019.

[9] Habeas Corpus No. 82,424 – Gazette of the Judiciary – March 19, 2004. Available at http://www2.stf.jus.br/portalStfInternacional/cms/verConteudo.php?sigla=portalStfJurisprudencia_pt_br&idConteudo=185077&modo=cms

[10] Ribeiro, Djamila. “Pequeno Manual Antirracista” [“Little Anti-Racist Manual”]. São Paulo: Companhia das Letras, 2019.

[11] Davis, Angela. “Mulheres, cultura e política” ["Women, culture, and politics”]. São Paulo: Boitempo, 2017.

[12] Ribeiro, Djamila. “Pequeno Manual Antirracista” [“Little Anti-Racist Manual”]. São Paulo: Companhia das Letras, 2019.

Category: Tax

The impacts of the crisis generated by the covid-19 pandemic on the economy as a result of the isolation measures imposed on the population and the shutdown of business activities led to the adoption of a series of tax measures to mitigate its effects by governments around the world.

In order to guide the actions that could be taken by countries in this scenario, the Organization for Economic Cooperation and Development (OECD) published a report with recommendations to be adopted in each of the four phases of the pandemic identified by the entity, from the initial phase, which involves the suspension of economic activities, a period in which the containment measures remain, with impacts on economic activity, through resumption, in which it would be necessary to stimulate the return to investment and consumption, until the last phase of recovery of public finances after the pandemic. Each of these phases would involve different measures to be taken.

In the early stage of the pandemic, where Brazil is currently, the OECD recognizes the need for immediate responses by governments to mitigate the first impacts suffered and recommends tax measures to provide relief to businesses and families and preserve jobs and economic activity.

An analysis of the international panorama shows that, among the tax measures recommended by the OECD, the one most adopted by countries involves deferment of tax payments. According to the OECD, 75% of the member countries of the entity and of the G-20 have adopted these measures, such as Germany, France, Italy, Spain, and the United States.

In line with the OECD’s recommendations, other tax measures widely adopted by the countries were: extension of the filing of ancillary obligations, flexibility in the payment of outstanding tax debts, a greater possibility for tax recovery, suspension of collection of default charges and penalties for non-payment of taxes, among others.

Several countries have also adopted measures to effectively reduce the tax burden in the early stages of the pandemic to preserve the cash flow of companies. In this context, the most common measures announced by the countries involved reductions in tax rates and payroll contributions, exemptions for priority sectors in the crisis (such as health), and those most impacted by the pandemic (such as tourism and airlines).

In addition, several countries have reduced the rate of their consumption tax (VAT) not only on products related to the fight against the pandemic, such as the United Kingdom, Norway, China, Colombia, and Turkey, among others.

Certain countries have introduced measures to offset tax losses for the year 2020 against profits earned in prior years, such as the United States, New Zealand, Norway, and Poland (carry back). Others have amended legislation to extend the tax loss use period for the year 2020 into the future, as is the case for China and the Slovakia (carry forward).

The rare exception to the rule for countries that have effectively sought to reduce the tax burden of their taxpayers is, for the time being, Saudi Arabia, which has increased the rate of its consumption tax (VAT) from 5% to 15%. The measure was adopted to deal with the impact of the coronavirus and the drop in the barrel price of oil in the world.

Measures adopted by Brazil

The actions of other countries in the tax area ended up influencing Brazil’s attitudes. The federal government, following the trend abroad, implemented the deferral of  tax payments, such as social security contributions on payroll and contributions to the Social Integration Program (PIS) and Social Security Financing (Cofins).

In the list of tax measures of a more administrative nature, Brazil decided to postpone the filing of a series of tax returns, suspend the performance of procedural acts before the Brazilian Federal Revenue Office (RFB), extend the expiration date of tax clearance certificates relating to federal tax debts and outstanding tax federal debts (CND), and suspend collection procedures by the Attorney General's Office (PGFN). It also published rules and procedures that must be observed by taxpayers when entering into settlements with the Tax Authorities, in order to extinguish administrative and judicial disputes.

With respect to tax policy measures, Brazil reduced to zero the rate for Tax on Financial Operations (IOF/Credit) in a series of credit operations contracted between April 3 and July 20, 2020, granted a reduction in the rate of the social security contributions due to the S System, and reduced to zero the rate of Import Tax (II) and Tax on Industrialized Products (IPI) for priority products in the fight against and prevention of the coronavirus.

Such tax measures were not as significant, however, as those adopted in other countries and may not reach the level of relief received by companies abroad. Thus far, for example, no reductions in Corporate Income Tax (IRPJ) rates have been granted, as seen in other jurisdictions. The rules on the use of tax losses have not been adjusted either. Although there was a reduction in the rate for contributions due to the S System  and deferral in the payment of the employer's social security contribution, there was no reduction in the rate for the employer's social security contribution, as seen in other countries, which may be crucial to maintaining jobs.

In addition, some tax proposals that go against what has been announced by other countries and recommended by the OECD draw attention. For example, while in the international experience the greatest concern of governments is to support the economic activity of companies, and not to increase taxes, in Brazil it is possible to identify in recent months a series of proposals for increasing collection of taxes both at the federal and state levels.

This is the case of the bills presented with the objective of instituting in Brazil the Tax on Large Fortunes (IGF). Currently there are more than 30 bills in the House of Representatives and the Federal Senate seeking the institution of this tax - nine of them were presented during the pandemic.

In recent months, nine bills have also been presented, currently in the House of Representatives and the Federal Senate, aiming the institution of compulsory loans to cover expenses generated by the state of public calamity related to the coronavirus.

Also at the federal level, a bill was presented with the purpose of increasing the Social Contribution on Net Profits (CSLL) rate for financial institutions.

At the state level, in turn, one highlight in São Paulo is Bill No. 250/20, which proposes changes in the Causa Mortis Transfer and Donation Tax (ITCMD) legislation with the objective of increasing the collection of such tax. The bill proposes a series of changes, such as a tax increase based on adoption of progressive rates of up to 8% and a levy on private pension plans and on earnings and income from estates and renunciation of inheritance, currently exempt. In the current scenario, with the significant number of deaths due to covid-19, increasing the tax rate on inheritance seems to us to be a contradiction.

Instead of discussing proposals such as those mentioned above, legislators should be concerned with discussing other relief measures that would further help Brazil reduce the impacts generated by the coronavirus. They could evaluate, for example, flexibilization of the rules on the use of tax losses, decrease in the rate of employer social security contributions, suspension of collection of penalties and interest due to non-payment of taxes, among other measures that would position Brazil alongside the more developed countries in combating the effects of the crisis (and not alongside Saudi Arabia, which increased taxes).

Category: Tecnology

Diego de Lima Gualda and Laura Aliende Da Matta

The covid-19 pandemic has not hindered the advancement of the privacy and data protection transformation agenda in Brazil. In fact, the use of technology as a tool to monitor and combat transmission of the virus has accelerated discussions about its technical benefits on the one hand and the risks of mass surveillance on the other.

In this context, very relevant institutional changes are being produced in the first half of 2020. Most of them are not yet fully hashed out, but it is already possible to point to a point of no return, in particular with the decision by the Federal Supreme Court (STF) to recognize the constitutionality of the guarantee to the protection of personal data and the right of self-determination.[1]

In this article, we analyze the impacts of the decision and other recent transformations in the public and private sectors, the uncertainties, and the debates that are already beginning to emerge, but first we present a brief history of the subject. Readers already familiar with the facts may proceed directly to the analysis.

Chronology

In March and April of 2020, the debate on the postponement of the General Personal Data Protection Law (LGPD) gained relevance because of the pandemic: with the perceived absence of the National Data Protection Authority (ANPD) and a context of unprecedented economic crisis, the postponement of the entry into force of the LGPD would be necessary to give the public and private sectors more time for the adjustment process. There was no lack of criticism from control agencies, such as the Federal Prosecutor's Office, and part of scholars, with their dose of reason, denounced the opportunism and leniency of governments and companies with the process of adaptation to the law.

It is in this context that Bill (PL) No. 1,179/20, authored by Senator Antonio Anastasia, initially proposed a 12-month postponement for the law to come into force, that is, to August of 2021. The bill was passed in the Senate, but with a different solution: almost all of the law would take effect on January 1, 2021, while only the administrative sanctions would be extended to August of 2021.

While PL 1,179/20 was still being processed in the House of Representatives and, apparently without further coordination with the Legislature, the federal government issued an executive order altering the entry into force of the LGPD to May 3, 2021. This change came about in the text of Executive Order (MP) 959/20, the scope of which concerned the placement into operation of the payment of the Emergency Benefit for Preservation of Employment and Income and the monthly emergency benefit.

PL 1,179/20 was finally approved by the Brazilian Congress, without postponement of the time limit for the LGPD, which would now be discussed under MP 959/20, taking into account two issues: the postponement of the LGPD administrative sanctions to August of 2021 and a message of dissatisfaction, especially from the Federal Senate, with the handling of the process by the Executive, which was marked by both inaction surrounding the formation of the ANPD and the postponement of the law to a time period different from that which was being discussed in Congress, without any coordination. There were even claims that the Brazilian Congress would have approved the early entry into force of the LGPD, a suggestion that MP 959/20 could lapse or even be rejected with respect to the law's provision for postponement.

Meanwhile, another executive order generated discussion. MP 954/20 mandated the obligatory sharing of registration data by telecommunications companies with the Brazilian Foundation Institute for Geography and Statistics (IBGE) to support official statistical production during the public emergency caused by the pandemic. The problem with MP 954/20 was less the merits and more the form. The sharing of data on consumers of telecommunications services was general and unrestricted, the purpose pointed out relatively indeterminate, and the mechanisms for security and accountability were practically nonexistant. It also drew attention to IBGE's own haste in implementing the executive order, which did not go unchallenged before the STF.

On April 24, Justice Rosa Weber suspended the effects of the executive order in an in limine injunction, alleging that the sharing violated the fundamental rights of intimacy, privacy, and honor recognized in the Federal Constitution. The vote in the en banc session of the Supreme Court took place on May 6, when the Justice again presented her vote to suspend MP 954/20, with almost all the Justices concurring. The only dissenting opinion was that of Justice Marco Aurélio, who defended the public interest in the sharing.

The opinion presented by Justice Rosa Weber was historic due to its recognizing, for the first time, some concepts introduced by the LGPD as a direct result of the fundamental rights provided for in the Constitution. Citing the LGPD, Justice Weger stressed the importance of observing the principles of information self-determination, adequacy, necessity, and transparency in relation to data processing activities. She also referred to the need to respect due process of law in its substantive dimension in public policy-making involving the processing of personal data.

On May 28, there was another relevant debate on the issue of privacy, this time also involving freedom of expression and the right of communication. It was the beginning of Direct Unconstitutionality Action (ADI) No. 5,527 and the Motion to Resolve Breach of a Fundamental Precept (ADPF) No. 403. Both have as subject matter the possibility of blocking services of message applications ordered by judicial decision in cases where companies refuse to share content related to their users, focusing on the constitutional interpretation of the provisions of the Brazilian Civil Rights Framework for the Internet. In the background, there is a relevant discussion regarding the legality of end-to-end encryption mechanisms, which would make it impossible to intercept or provide the content of communications to investigating authorities in such contexts, a rationale supported by applications when not complying with the measure.

ADI 5,527 involved a discussion of the constitutionality of articles 10, paragraph 2, and 12, subsections III and IV, of the Brazilian Civil Rights Framework for the Internet, which have grounded decisions mandating the suspension or blocking of message applications, specifically the blocking of WhatsApp. In turn, ADPF 403 was filed in response to a decision blocking the application WhatsApp due to the company's refusal to provide content that would serve as evidence in a criminal investigation.

In her opinion, Justice Rosa Weber pointed out that end-to-end encryption technology makes direct access to the content of messages unfeasible for the companies themselves, which makes it impossible for them to meet certain legal demands, but that this does not represent any illegality. The Justice was also emphatic in pointing out that the state cannot compel private agents to offer a less secure and vulnerable service, on the pretext that this vulnerability could perchance be used to fulfill a court order. To interpret it otherwise would be to make encryption illegal. In this context, the Justice argued that the provisions of the Brazilian Civil Rights Framework for the Internet were not unconstitutional, but rather the distorted interpretation followed by some authorities in order to use the sanction, the objective of which is protection of the privacy of these users, for the opposite purpose: to force applications to reduce the protection of privacy and communications of users of their services in order to comply with court orders in criminal investigation proceedings.

The next day, Justice Edson Fachin defended the unconstitutionality of orders to block the application WhatsApp blocking entered by trial level judges. First of all, he provided an important articulation of the right to freedom of expression and privacy in the context of the case, emphasizing the primacy of freedom of expression as a structural vector of pluralism and democracy. He carried out a long balancing exercise to assess the relevance of reducing the rights of freedom of expression, privacy and secrecy of communications, considering the requirement by the decisions contested to provide some mechanism to bypass encryption, in view of the potential benefits for public security that such relaxation would represent.

The Justice concluded not only that it was uncertain that there would be any advantage in making encryption more flexible, but also pointed out the contradiction between promoting measures to relax Internet security (making encryption vulnerable) in the name of public security. Finally, Justice Fachin recognized encryption and anonymity as useful tools for the expression of the rights of freedom of expression, communication, and privacy on the Internet, pointed to a restrictive interpretation of the prohibition of anonymity, and emphasized the inapplicability of the sanctions in the Brazilian Civil Rights Framework for the Internet for cases of nonperformance of wiretapping by applications based on end-to-end encryption. The judgment was interrupted by the request for review of the record made by Justice Alexandre de Moraes.

Another initiative worth emphasizing is PL 2,630/20, focusing on combating the spread of false news on the Internet, so called fake news. Discussions about the bill involve quite distinct issues, such as government investment in advertising on fake news sites; the CPI in the Brazilian Congress to investigate the issue, including with the involvement of members of the federal government and the President's family; an inquiry at the STF to investigate crimes committed against members of the Court; and the broader debate on how to develop public policy to combat the spread of false news on the Internet.

PL 2.630/20 was even put to vote, but it was eventually postponed. The text, which can be voted on at any time, lists rules and guidelines to ensure transparency on social networks and messaging services, with the intention of curbing their abusive and potentially harmful use for individuals or the community.

Despite the merits, the bill was received with protests by academic entities and civil organizations. According to them, without the proper process of review by experts in the field and without a response by interested members of civil society, there is a danger of restriction of the rights of freedom on the Internet. In its current form, the bill has profound impacts on the system of freedom of expression proposed by the Brazilian Civil Rights Framework for the Internet.

In the midst of the various debates on freedom of expression on the Internet and the privacy rights of users of platforms and applications, PL 2,630/20 involves "conceptual and technical complexities," as pointed out by the Brazilian Internet Steering Committee (CGI.br), which also recommended broadening and deepening public debates on the topic before approving any final version of the text.

Analysis

As seen, the agenda surrounding privacy and discussions related to data protection continues to be intense and there is no sign of cooling for the rest of the year. In our analysis of the issue, the first dimension considered is the constitutionalization of personal data protection and the right to information self-determination by virtue of the STF’s decision in the context of the actions for a declaration of unconstitutionality against MP 954/20.

This constitutionalization is an important recognition of the transformation of technological, economic, and social conditions, and overcomes old case law that founded the constitutional protection of data only on the communicative context. It is an important victory for the guarantees of personal data protection.

For the public sector, and for companies operating in the regulated market, this change will produce relevant consequences. If before the LGPD imposed revision of personal data processing practices, especially shared use of data under the law, the constitutionalization of data protection, with reinforcement of the principle of due process in its substantive dimension, will require regulatory review based on proportionality and relevance of the processing and sharing of personal data, even if for the implementation of public policies. The federal government that so feared and did so much to relaxe the requirements of the LGPD in the processing of personal data for public policies and by the public power suffered its greatest defeat, precisely because it failed to provide adequate guarantees for the protection of personal data in the promulgation of MP 954/20.

This constitutionalization will entail an even more lessened interpretation of the legal basis enshrined in article 7, subsection III, of the LGPD, as well as of Chapter IV of the law. The scrutiny of personal data protection processing by public authorities should be taken seriously. On the other hand, legislative or regulatory initiatives in all spheres of government now have a clear need to anchor themselves in concrete personal data protection assurance measures, and not just based on generic declarations of principles. In this context, the private sector operating in the regulated market must redouble its attention, caution, and the need to review current practices in the processing of personal data involving the public authorities, otherwise it will be held liable. Relying on laws and, especially, regulatory acts to support the processing of personal data, without further consideration, is not a recommended strategy.

For the private sector, more essentially, the STF decision relaxes in some sense the debate on the entry into force of the LGPD. This is because the recognition of the constitutional nature of a personal data protection system and the mention even of principles such as necessity and adequacy, which in some way were brought, according to Justice Rosa Weber, from infra-constitutional legislation into the constitutional standard of personal data protection, will have direct implications on the activities of companies as they are today. It must be said that, even if the LGPD were repealed, there is no longer any return to the prior normative reality, in which the protection of personal data was often not a relevant risk factor. The decision is not restricted to the context of the public authority. Companies should necessarily revise their personal data processing processes from the point of view of the transparency of the information given to data subjects, the necessity and adequacy of the processing, the proportionality of the processing of personal data, and the security measures strictly used for the protection of personal data. In view of the opinion issued by Justice Rosa Weber, these provisions enter into the constitutional terrain as principles deriving from equity itself, from the system of rights itself, and not as policy decisions. Thus, the strength of such principles will be felt in the application of infra-constitutional provisions already in force, including, for example, the Consumer Protection Code and the Brazilian Civil Rights Framework for the Internet, which may gain a renewed regulatory burden in the protection of personal data.

Somehow, subsequent votes in the case of blocking applications and encryption (ADI 5527 and ADPF 403) are already samples of this understanding. It is the recognition of a strong vision of privacy and data protection that tends to influence the interpretation of legal provisions in the Brazilian legal system. And if the initial theory of the opinions issued prevails, one can expect a strengthening of the primacy of freedom of expression and privacy in the weighing of conflicting principles.

This process has an important cost, however, in the absence of the ANPD and LGPD in force: legal security. Given the Brazilian context, we can anticipate a high degree of litigation and variation in the interpretation of the practical implications of the standards in the context of the rules that are already in force, which also makes concern with the administrative sanctions under the LGPD a secondary issue. Laws in force already provides very efficient instruments from the sanctions point of view, such as the aforementioned Consumer Protection Code and Brazilian Civil Rights Framework for the Internet. In addition, the possibility of filing public civil actions, in the current context, seems more impactful than the fines to be imposed by the ANPD.

These comments therefore refer us to the debate on the entry into force of the law. Today, it is not possible to determine when the LGPD will enter into force and with what. August 2020, May 2021, sanctions in August 2021, or any other combination seems possible at the moment. The current political climate, however, points to what we classify as the worst-case scenario: entering into force in August of 2020, without the ANPD and with the private sector weakened by the context of the pandemic. As mentioned above, the sum of all the ingredients seems to favor a high degree of indetermination, uncertainty, and legal insecurity.

There are positions, especially taken by academia, control agencies, and rights activists, to the effect that the best thing is for the LGPD to enter into force as soon as possible. It can be argued that, given the constitutionalization of the subject, having the specific rules will in fact bring about an increase in legal security. In addition, the entry into force of the law may be a push for the ANPD to finally be created, getting off of paper. On the other hand, those processing agents who have been lenient during the period of adaptation must in some way suffer the consequences of inaction. The whole process will result in greater protection of the rights of data subjects and more sophisticated legal instruments to deal with issues related to the processing of personal data, especially for companies that have prepared themselves.

For this optimistic view, a counterpoint can be established. The entry into force of the law, without the ANPD, in a context of economic crisis and institutional conflagration, added to the unsuitability of the processing agents and a known litigious environment will generate a profusion of disputes, inconsistencies, interpretative differences, and losses which, after all, will neither do good for the processing agents nor represent a substantive recognition of the rights of the holders. The absence of clearer direction for adaptation processes and the potential dispute between various control agencies over the ANPD vacuum may produce a context of dysfunction in the economic dimension of data protection, threatening the information flow itself, which is a condition of the protection regime.

In that case, two facts are worth pointing out. The first is the routing of PL 2,630/20. The same Brazilian Congress that suggested accelerated the entry into force of the LGPD in the context of the dispute with the Federal Executive is now discussing a bill that, among other measures, suggests the need for checking of government documents for authentication of profiles on social networks. It is curious to contrast some implications of PL 2,630/20 and issues pronounced in the opinion by Justice Edson Fachin related to the blocking of applications. Some aspects of the bill seem inevitably unconstitutional in view of the recognition of the primacy of freedom of expression and even anonymity as a tool for the exercise of rights in the context of the Internet. Even for this reason, the scenario of legal insecurity, at least in the short term, seems more likely than a cycle of positive reinforcement that tends to pacify conflicts in the sphere of privacy and data protection debates.

The second fact concerns the opinion of Justice Edson Fachin himself in the context of the discussion on blocking applications. Although it seems to be a minor issue, the Justice propvides an interpretation that is at least controversial on the fact that the application of the penalties provided for in article 12 of the Brazilian Civil Rights Framework for the Internet would be an attribution of the ANPD. The consequences are not well explored in the opinion, but the impression is that there would have been some kind of tacit change brought by the LGPD to the provision of the Brazilian Civil Rights Framework for the Internet, which, it must be said, has been in the legal system long before the ANPD even existed on paper. The problem is that the sanctions in article 12 of the Brazilian Civil rights Framework for the Internet do not only concern non-compliance with provisions related to the protection of personal data in the strict sense; they also include components such as freedom of expression and the right to communication itself, as recognized by the Justice. Would it make sense for the ANPD to win these assignments based on a STF decision?

This point opens the flank for another rather complex discussion. The Legislature reached the decision to expressly modify the Civil Brazilian Civil Rights Framework for the Internet in only two provisions, subsection X of article 7 and subsection II of article 16, leaving behind a series of unresolved tensions, which include the definition of personal data and processing of personal data, through the applicability of consent and arriving at the very debate of articles 10, 11 and 12 of the Brazilian Civil Rights Framework for the Internet. On this particular point, especially due to his not having included this issue in his opinion, Justice Edson Fachin seems to have contributed little to clarifying the issue, besides adding a scope to the ANPD that, save better judgment, would be beyond his initial proposal.

The above points seem to indicate that the optimistic scenario may not be the most likely. Companies are advised to follow the implications very closely, while already coordinating mitigation plans. It will be difficult to avoid a scenario of legal insecurity from now on, but rather conducting minimal coordination with a risk assessment strategy and prioritization of structuring actions is necessary to protect oneself from unpleasant surprises.

It is essential to observe and recognize this point of no return on the subject of data protection mentioned at the beginning of this article. The guarantees for the protection of personal data are constitutional matters. If anyone still had doubts that the issue of data protection would catch on, the time to resolve them has passed. This is a central topic on the institutional agenda, with clear and concrete repercussions on the design of public policy, public administration, public security forces, and the private sector. And the scenario that lies ahead does not seem to be one of decanting the process, but of increasing complexities and contingencies.

[1] Opinion by Justice Rosa Weber in the injunction in Direct Unconstitutionality Actions No. 6,387, 6,388, 6,389, 6,393, and 6,390 suspending the effectiveness of Executive Order No. 954/20. The opinion was approved by the STF en banc.

Category: Real estate

Law 14,010/2020, published in the Official Gazette on June 12, 2020, establishes the “Emergency and Transitional Legal Arrangement” applicable to private contracts during the Covid-19 pandemic. The law, which originated in Senate Bill 1,179, had part of its text vetoed by the President of Brazil, following a more conservative approach to legal effects of the pandemic in the real estate market.

In terms of the impact of Law 14,010/20 over real estate matters, it is worth mentioning that the vetoes were more relevant than the approved text. Without evaluating the advantages or disadvantages of the new law, it should be taken into account that while the Bill has proposed significant legislative changes to address the effects of the pandemic, some key provisions have been vetoed by Brazil’s president.

1. VETO – BLUE PENCILING OF CONTRACTS AND INJUNCTIONS IN LEASE CONTRACTS

In the real estate sphere, provisions relating to the possibility of blue penciling real estate contracts (articles 6 and 7, vetoed) and those that sought to prohibit the granting of certain injunctions provided for in Law 8,245/91 (provided for in article 59, paragraph 1, I, II, V, VII, VIII, and IX), for the eviction from urban real estate leased for commercial or residential purposes in eviction suits filed after March 20, 2020 (Article 9, vetoed), have been vetoed.

The President’s Office has reported that the Brazilian legal system already has appropriate mechanisms for the revision of contractual obligations in exceptional situations. Moreover, it would be contrary to public interest to prevent preliminary injunctions in leases, because this kind of restriction could lead to the suspension of contract enforcement provisions and could be an incentive to default. Therefore, the proposed limitation would be an excessive protection for debtors to the detriment of creditors.

When justifying the afore-mentioned vetoes, the President’s Office laid aside the possibility of setting a direction to discussions regarding flexibilization of lease obligations during the pandemic. This suggests that the President's Office is favorable to the enforceability of such contracts.

2. VETO –POWERS OF THE CONDOMINIUM MANAGER

Still within the scope of real estate and related development, the President’s Office has excluded provisions in the bill that intended to increase the condominium manager’s powers and to restrict the condo units occupants rights with regards to the use of common and private areas during the pandemic (the afore-mentioned vetoed provisions even limited meetings within real estate units).

When justifying the vetoes, the President’s Office demonstrated a conservative position in avoiding discussing conflicts among constitutional rights and assigning to the general condominium meetings the responsibility for restricting the use of such condominium areas.

Thus, any decision that intends to change the rules applicable to condominium member relationship should, as before, be submitted to prior approval by the general condominium meeting, to ensure its effectiveness.

3. APPROVALS – EXTENSION OF CONDOMINIUM MANAGER’S POWER OF ATTORNEY VALIDITY

With regard to approvals, the President’s Office has approved the text of article 12, which postpones mandatory general meetings, including the ones for the purpose of electing a condominium manager, to the end of October of 2020. The text also establishes the possibility of holding general or special meetings by videoconference or other virtual instruments – tools that have already been routinely adopted by condominiums.

In effect, the validity of powers of attorney issued to condominium managers may now be extended until October 31, 2020, or until the required condominium general meetings are held (these can be held through virtual means during the pandemic).

4. EFFECTS FOR THE REAL ESTATE MARKET

Regardless of valuing the excluded rules, the aforementioned vetoes direct the discussions about vetoes matters to Courts, as individual lawsuits, which has already happened. If, on the one hand, this can be positive in order to avoid generalization of solutions for cases that have distinct particularities, on the other hand it gives room for judicial decisions that, dealing with the common topic of the pandemic effects, may result in diverging decisions in different regions of Brazil.

Real estate market players are left to act in accordance with good practice when attempting to resolve disputes and to follow up on decisions regarding these matters during the pandemic, in order to establish standards for decision-making.

Category: Capital markets

Decree No. 10,387/20, published on June 5, is an important step towards the development of the green and social bonds market in Brazil. Green bonds are fixed-income securities issued in connection with the implementation, expansion, or refinancing of projects or assets that have a positive impact from an environmental or climate point of view. Social bonds are securities issued in connection with social projects with positive impacts for society in general.

The new rule extended the current priority treatment of infrastructure projects to those that generate relevant environmental or social benefits, which will now be entitled to the tax benefit of Law No. 12,431/11, as regulated by Decree No. 8,874/16.

According to these rules, the income from the incentivized debentures of a social or environmental nature will now be subject to income tax at the rate of 0%, when earned by individuals resident or domiciled in Brazil, and 15%, when earned by legal entities. The measure should attract more investors to finance infrastructure projects in Brazil.

According to Decree No. 10,387/20, projects that provide relevant environmental or social benefits are:

• in the urban mobility sector, the following non-motorized and low-carbon public transportation systems: (a) urban rail transportation systems (monorails, subways, urban trains, and light rail vehicles - LRV); (b) the acquisition of electric buses, including fuel cell and biofuel or biogas hybrids, for transportation systems; and (c) the implementation of Bus Rapid Transit - BRT infrastructure;

• in the energy sector, projects based on: (a) renewable technologies for solar, wind, and waste eletric power generation; and (b) small hydroelectric plants with a minimum power density of 4 W/m² of flooded area;

• in the basic sanitation sector, the systems of: (a) water supply; (b) sanitary sewage; (c) rainwater management and urban drainage; and (d) urban solid waste management; and

• projects carried out in subnormal agglomerations or isolated urban areas, as they are considered to have social benefits, according to the definition established by the Brazilian Institute of Geography and Statistics – IBGE (popularly known as “favelas” or slums).

Decree no. 10,387/20 also amended article 3 of Decree No. 8,874/16 to provide that ministerial ordinances governing projects with relevant environmental or social impacts considered a priority must necessarily establish:

• simplified requirements for approval, through verification of institutional requirements of the project owner and the legal entity responsible for implementation of the project, if they do not coincide; and

• the project's stages are monitored based on data self-reported by the project owner and reports periodically sent by it to the sector ministries responsible.

Category: Real estate

The environment created by the risks of contagion from the new coronavirus (covid-19) has led to the need for rapid adaptation of electronic notarial act systems in order to avoid, as much as possible, performing acts in person. In this context, the National Council of Justice (CNJ) issued Ordinance No. 100/2020, on May 26, to govern} the performance of electronic notarial acts in Brazilian territory.

Only part of the states have organized themselves to draw up deeds and perform notarial acts in a virtual environment following standard established by their judicial review boards. The standards they set, however, even differ. With the promulgation of the new ordinance, the CNJ systematized the procedures to be adopted at the national level, unifying the few existing ones through the revocation of all the standards promulgated by the states' judicial review boards to regulate the issue.

Electronic notarial acts in any state will be performed exclusively by the e-Notariado platform, which will be available 24 hours per day. It is expected to be implemented, in those cases where a technical schedule is needed, within a maximum time period of six months.

In order to perform electronic notarial acts, the notarial service must be registered in the e-Notariado platform. The signatory parties must, in turn, be in possession of the digital certificate, which will be issued free of charge at the notary offices registered.

The interested party must appear in person at the notary's office registered to request the issuance of the digital certificate, which will be used for a determined time and exclusively. There are studies being done, however, to make the certificate available remotely, thus avoiding physical travel by the interested party.

Ordinance No. 100/2020 established the following criteria for the performance of electronic notarial acts:

• Videoconference is essential and must contain, at least, identification of the parties, demonstration of their capacity and free manifestation of will to perform the act, consent of the parties to the public deed, description of the subject matter and the amount agreed upon, declaration of the date and time of the act, and an indication of the book, page, and notary office where the act will be drawn up.

• The notary will be responsible for drawing up the notices of the location of the property or the domicile of the competent purchaser. If the property and the buyer are in the same state, the buyer may choose any notary service in the state to carry out the act.

• All signatures will be exclusively via electronic certification provided by the notary service. Even the notary's signature must be via ICP-Brasil digital certificate.

The ordinance also provides for possible performance of hybrid notarial acts when one of the parties does not opt to use the electronic platform. In such cases, the notary will perform the procedure provided for electronic acts with one party and the traditional procedure with the other. Subsequently, the signed document will be submitted to the dematerialization process, that is, it will be converted into digital format without loss of its validity, effectiveness, and effects.

The parties are not exempted from submitting the documents customary for the act intended. At the end of the process, they may request transfer of the act performed, which will contain the information that it was performed electronically.

Ordinance No. 100/2020 represents continuity of the CNJ's work to digitize extrajudicial services, given the gradual transition of commercial relations into the virtual environment.

The immediate expectation is that the flow of electronic notarial acts in Brazilian territory will intensify. It is believed that the practice will survive the current scenario of social isolation and will be adopted regularly.