Category: Tecnology

Law No. 13,709/18, or the General Data Protection Law (LGPD), expressly consolidates the principles and rules of a positive framework for data protection in Brazil. Although it will only take effect on August 16, 2020, many of its rules are based on the current legal system. Practically all economic activities will be subject to the application of the LGPD, since the performance of any data processing operation^[1] is enough for the standard to find factual support. In this article we specifically analyze the advertising industry,^[2] more specifically children's advertising, and the processing of personal data of minors for this purpose.

The subject is quite controversial, because some currents take the position that children's advertising itself is abusive. Considering that the most modern techniques of advertising use contextual and behavioral analyses, based on the profile of users, to direct advertising to children (especially under 12 years old), it is increasingly important to discuss these practices from a legal and ethical point of view.

The LGPD should be applied in a manner consistent with the legal system in force as a whole, establishing a normative efficiency not only restricted to a specific branch, but also functional in relation to the entire legal system, in order to avoid regulatory antinomy and incompatibilities. The idea is to complement the system with the protection of personal data and the rights of the data subjects, taking into account the existing rules.

In this sense, the subject of children's advertising is already regulated by established rules, such as Law No. 8,069/90 (Child and Adolescent Statute), Decree No. 99,710/90, which promulgated the United Nations Convention on the Rights of the Child, Law No. 8,078/90 (Consumer Defense Code - CDC), Resolution No. 163/14, of the National Council of the Rights of the Child and Adolescent (Conanda), although both the competence and the obligation of this rule are a source of controversy, and the Brazilian Code of Advertising Self-Regulation, of the Advertising Self-Regulation Board (Conar).

A fundamental difference, and one that may generate discussions in the implementation of LGPD, is the framework applicable to children, distinct from that of adolescents. To make it clear, the concepts of children and adolescents are those established in the Child and Adolescent Statute: the former refers to persons up to 12 years in age, while the latter covers individuals between 12 and 18 years of age.

The system for protection of minors, established by Law No. 8,069/90, is based on the principles of full protection and their best interest, recognizing respect for their integrity as a person, allow for the possibility of full human development. These principles ensure the prevalence and primacy of the interests of the minor as a beneficiary of rights, and are guided by a concern for the full development of the minor's physical, psychological, and personality capacities, especially those of children.

Under the Brazilian Advertising Self-Regulation Code, which establishes parameters and guidelines for advertising aimed at children and adolescents, no advertisement shall address an imperative appeal to consumption directly to children.

In this sense, the code defines in its article 37 the guidelines for advertising aimed at this audience. Advertisements should reflect special care with regard to safety and good manners and should also refrain from: (i) undermining positive social values; (ii) deliberately provoking any type of discrimination, particularly against those who, for whatever reason, are not consumers of the product; (iii) associating children and adolescents with situations incompatible with their condition; (iv) imposing the notion that consumption of the product provides superiority or, in the absence thereof, inferiority; (v) causing situations of embarrassment to parents or guardians, or molesting others, with the purpose of encouraging consumption; (vi) employing children and adolescents as models to vocalize a direct appeal, recommendation, or suggestion to use or consumption; (vii) using a journalistic format, in order to avoid having the advertisement be confused with news; (viii) proclaiming that the product intended for consumption by children and adolescents contains peculiar characteristics that, in fact, are found in all similar products; and (ix) using situations of psychological pressure or violence that are capable of instilling fear.

The controversy was created, however, with the promulgation of Conanda Resolution No. 163/014, which establishes as abusive, due to the national policy of care for children and adolescents, the targeting of advertising and marketing communications to children, with the intention of persuading them to consume any product or service. The resolution prohibits any form of advertising to minors using: (a) children's language, special effects, and excessive color; (b) soundtracks of children's songs or sung by children's voices; (c) representation of children; (d) people or celebrities with appeal to children; (e) children's characters or presenters; (f) cartoons or animation; (g) dolls or the like; (h) promotion with the distribution of prizes or collectible gifts or with appeals to children; and (i) promotion with competitions or games with appeal to children, as a way of establishing proximity to children, taking^[3] advantage of their inexperience.

These rules are aligned with the part of the legal scholarship that defends as abusive and unconstitutional in the Brazilian legal system any and all advertising directed at children,^[4] considering that the CDC provides in its article 37, second paragraph: "discriminatory advertising of any nature, among others, is abusive when it [...] takes advantage of the deficiency in judgment and experience of children, [...] or is capable of inducing consumers to behave in a way that is harmful or dangerous to their health or safety.”

Likewise, the STJ has been emphatic when deciding on the matter, delimiting the matter on the basis of the specific case presented. In deciding REsp 1.558.086/SP in a public civil action regarding illegality in the purchase of watches conditioned on the purchase of food products, the STJ expressly stated that "marketing (advertising or sales promotions) of food directed, directly or indirectly, to children is abusive. The decision to buy and consume food, especially in times of an obesity crisis, must reside with the parents", notably because minors have “their discernment incomplete, but on the other hand, have an enormous capacity to convince their parents, caretakers, or family members, to buy those products that interest them."

This was also the guidance of the STJ in REsp 1.613.561/SP on a campaign aimed at children and the youth public, which encouraged minors to exchange stamps printed on food packages for uniformed plush mascots.

Both the self-regulation of the advertising sector, represented by the Conar code, and Conanda Resolution 163/14 claim validity of application in our legal system. Conanda’s position is that advertising aimed at children is abusive and that advertisements should be directed to parents and guardians. Conar, on the other hand, which prohibits imperative appeals to consume directed to children, establishes guidelines for validity, in theory, of advertisements that could be released to minors. On January 24 of this year, the National Consumer Bureau, an agency linked to the Ministry of Justice, released a public consultation by submitting for discussion a draft of a new ordinance to be issued to regulate the matter.

The content under analysis seems to be in line with Conar's guidelines, to the effect of regulating, and not prohibiting, these types of advertisements, but it is possible to find points in common, such as: the presence of the paradigm of the principles of full protection and the best interest of the minor, and the principle of more comprehensive protection for the public under 12 of age, i.e. children.

But how can the issue of data processing be thought about in that context?

The LGPD establishes as a rule that the processing of personal data of minors (children and adolescents) must also obey the best interest principle. Thus, the standards cited above must be obeyed.

In relation specifically to children, any form of processing should be carried out with the specific and clear consent of at least one of the parents or the legal guardian. One observes, therefore, greater protection for children. It is also noted that, in addition to the legal bases for processing personal data indicated in articles 7 and 11 of the LGPD, the data controller must be subject to article 14 of the law when there is data relating to children.

There are two possible exceptions to the specific and clear consent rule from the child's legal guardian: when the collection of the data is necessary to contact the parents or legal guardian (such data must be used only once and must not be stored) or for the protection of the child. Under no circumstances may the child's data be passed on to a third party without the consent of guardians.

The LGPD does not, however, address the legal basis for the processing data regarding adolescents, which could establish a debate on the application thereof. Is the consent of the guardian, as expressly indicated for children, also necessary for adolescents?

For the purposes of exercising consent, individuals over the age of 16 and under the age of 18 are incapable with respect to certain civil acts or with respect to the manner in which they consent to them and need the assistance of their guardians. On the other hand, minors under 16 years of age are absolutely incapable of personally performing acts of civic life, requiring representation for the performance of any act.

The Civil Code also states that "no one may claim what, by an annulled obligation, he has paid to an unfit person, if he does not prove that the amount paid reverted to such person." In other words, in order for the effects of a legal transaction entered into with a minor to be maintained, it must be proved that such effects reverted to that minor. Thus, assuming that, in a scenario of processing of personal data of adolescents, this processing is reverted to the benefit of the adolescent himself, it would be possible to argue that this action would dispense with the consent of the adolescent’s guardian.

Upon establishing a restriction to the effect of requiring the specific and clear consent of at least one of the parents or legal guardian, the legislator did so specifically for children, excluding adolescents from this rule. It is not, therefore, a gap, but eloquent silence. Thus, there does not appear to be an additional requirement beyond the consent of the adolescent and/or the use of any of the legal bases of articles 7 or 11 of the LGPD in the case of data processing, including in the context of advertising.

However, the question is raised in the data protection system, with part of the legal scholarship indicating the need for guardian consent for both children and adolescents.^[5] It is hoped that the National Data Protection Authority can help to settle the issue by establishing clearer criteria regarding the processing of personal data regarding adolescents, including in contexts such as advertising.

^[1] Per the terms of article 5, subsection X, of the LGPD, processing is all operations carried out with personal data, such as those relating to the collection, production, reception, classification, use, access, reproduction, transmission, distribution, processing, filing, storage, discarding, assessment, or control of the information, modification, dissemination, transfer, diffusion, or extraction.

^[2] See Resolution No. 163/2014 of the National Council for the Rights of Children and Adolescents (Conanda).

^[3] Article 2 of Conanda Resolution No. 163/2014.

^[4] As an example, we have Prof. Diogo Coutinho, in a recently published article: “Publicidade Infantil: ilegal e ponto final” [“Advertising to Children: illegal, period”], available at https://www.jota.info/opiniao-e-analise/artigos/publicidade-infantil-ilegal-e-ponto-final-03022020 Accessed on: February 9, 2020.

^[5] In that sense, Rosana Leal da Silva in "A Infância Conectada: A Proteção de Dados Pessoais de Crianças e Adolescentes em Perspectiva Comparada entre a União Europeia e o Brasil” [“The Protection of Personal Data of Children and Adolescents in a Comparative Perspective between the European Union and Brazil”], found in Direito e Internet IV [“Law and Internet IV”] (São Paulo: Quartier Latin, 2019), indicates that "according to the Brazilian civil law system, children and adolescents are incapable of performing valid legal acts, an incapacity that will be remedied by the representation or assistance of their parents or guardian. Requirement of consent correct and appropriate", pg. 279.

Category: Labor and employment

Faced with the covid-19 pandemic, companies have discussed possible actions to help stop the spread of the virus. We highlight below the main options for corporate environments and some precautions that should be taken from a legal point of view.

Home office

This is the option to work from a distance, usually at the worker's home. It must be instituted in an internal policy and does not require formalization in an employment contract.

Implementing it is an alternative in the current scenario, and it is advisable to make it clear to employees that the measure is temporary and exceptional.

It is also advisable to provide guidance on health and safety standards for exercising activities at home and to adjust the means of controlling work hours for employees who usually have their work hours recorded.

Teleworking or Remote Work

This is also an option for distance working (provided for in articles 75-A and 75-E of the Consolidated Labor Laws) which has as its main characteristic the performance of activities by the worker predominantly outside the premises of the company.

Even if teleworking or remote work is only stipulated temporarily due to the covid-19 outbreak, there is no prohibition on having it agreed upon between the company and employee for a certain period of time, as long as, in the meantime, the activities are provided predominantly outside the corporate environment.

Unlike with the home office option, the choice to telework or work remotely must be formalized individually with the employee, in a document that contains the specifications of the activities to be performed and an agreement on who will be responsible for costs related to equipment and infrastructure needed in this regard.

In addition, as provided for in article 75-E of the Consolidated Labor Laws, the company must guide its employees on preventing occupational diseases and accidents.

Unlike with the case of a home office, teleworking or remote work dispenses with control of work hours.

Individual and collective vacation

As a rule, individual vacation must be granted to employees who are enjoying the period granted, upon 30 days advance notice.

To grant collective or company-wide vacation, the employer must notify the Ministry of Labor (currently, the Department of Labor) and the trade union 15 days in advance. Collective or company-wide vacation must cover all employees or all employees in (a) certain sector(s).

For both vacation arrangements, failure to comply with the legal requirements may result in a fine against the company of R$ 170.25 per employee.[1]

Considering the exceptionality of the covid-19 pandemic situation, however, there are good arguments to justify relaxation of these deadlines and non-application of fines.

Any change in the work regime unilaterally undertaken by the employer during this period must be done with caution and reasonableness. The change may be justified as a measure caused by force majeure,[2] since employers are responsible for ensuring good health and safety conditions for their employees, under penalty of being held liable for any acts of negligence that are shown to expose them to risk.

In this context, an employee who refuses to follow the guidelines or changes proposed by the employer during this period may be penalized with a warning, suspension, or even termination for cause.

In accordance with the rules enacted[3] by the government to contain and prevent the advance of the disease, workers who undergo clinical and laboratory investigation of the disease must remain in isolation, preferably at home, for a period of 14 days.

If isolation is recommended by a doctor or epidemiological surveillance agent, the employee may not come to work, without affecting salary, and may work under one of the arrangements for distance working (home office or teleworking).

If the suspicion of the illness is confirmed, employees may be put on leave if they present a medical affidavit, in which case the general rules for medical leave must be applied; it is not possible to treat this period as vacation or even require that the employee work in a home office or teleworking arrangement.

¹ Executive Order No. 905/19 appreciably altered the fines for labor infractions, in rules that will take effect after an act of the Executive Branch. If this occurs, fines calculated per employee affected (as occurs with violations related to vacation) may vary between R$ 1,000 and R$ 10,000 per employee.

[2]Article 501 of the CLT: "Force majeure is understood to be any inevitable event, in relation to the will of the employer, and for the occurrence of which it did not contribute, directly or indirectly."

[3] Law No. 13,979/20, published on February 7, 2020, provides specifically for measures to deal with the public health emergency caused by covid-19. The law was regulated by the Ministry of Health through Ordinance No. 356, published in the Official Gazette on March 12, 2020.

Category: Corporate

The recommendations of the Brazilian government authorities to avoid meetings and crowds of people to combat the spread of COVID-19 in Brazil concern publicly-held companies and the market in general in relation to the deadline required for the ordinary shareholders’ meetings to resolve on the company’s financial statements. According to article 132 of Law No. 6,404/76 (the Brazilian Corporations Law), such ordinary shareholders’ meetings shall be held within the first four months after the end of the last fiscal year.

The Brazilian Securities and Exchange Commission (CVM) has not yet formally expressed its opinion on the matter, whether so as to not impose administrative sanctions against companies which have not held their ordinary shareholders’ meetings within the aforementioned deadline, whether to confirm and guide companies that wish to hold them virtually. In this article, we examine the second scenario.

Currently, shareholders’ general meetings of are held at the companies' headquarters, mostly in person, with all formalities imposed by the applicable laws and regulations for their validity, such as registration of the shareholders' attendance in the proper book, transcription of the minutes of the meeting in the proper book, and preparation of certified copy of the respective minutes of the meeting for presentation before the boards of trade. These formalities generally requires the physical presence of shareholders.

Regarding the current coronavirus pandemic, however, such meetings do not comply with the recommendations of health professionals and government authorities, since shareholders and advisors often need to travel (often by plane) to the places where the meetings are to be held. Given this situation, would it be possible, from the corporate point of view, to hold entirely electronic or virtual meetings?

Electronic or virtual meetings are those "that occur entirely electronically, without the physical presence of or need for meetings by shareholders. Shareholders remotely access a platform by means of which they register their presence through digitalsignature certificates, discuss the agenda, and then vote. This whole process takes place virtually, allowing shareholders in different places around the world to participate at the same time in the same meeting, without the need to travel to a particular location."

On this subject, the first paragraph of article 121 of the Brazilian Corporations Law provides that "in publicly-held companies, the shareholder may participate and vote virtually in a general meeting, in accordance with the regulations of the Brazilian Securities and Exchange Commission." Likewise, the first paragraph of article 127 of the Brazilian Corporations Law, which addresses concerns related to the attendance book, states that "for all the purposes of this law, shareholders who record their presence remotely shall be deemed to be present at the general meeting, in the manner provided for in the regulations of the Brazilian Securities and Exchange Commission." Both provisions were the result of amendments to the Brazilian Corporations Law by Law No. 12,431/11, which aimed not only to accept the possibility that shareholders vote remotely, but also to embrace the possibility of "providing systems that would enable shareholders to participate and vote remotely and in real time."

CVM Normative Ruling No. 481/19 ("ICVM 481"), however, included as an obligation for companies to make available only the vote the remote ballot. Such ballot allows shareholders to vote remotely on matters to be resolved on at the meeting, by filling it out and sending it to the company a certain amount of time in advance. The submission may be provided directly to the company by shareholders or through the custody agent or bookkeeping agent of the shares issued by the company in question.

But even though it represented a great advance, especially to avoid massive absence of the shareholders, the ballot provided for in ICVM 481 is a limited instrument, since it does not allow shareholders to participate in the debates and discussions held during the meeting. The ballot must not be confused with holding the meeting of shareholders itself virtuallly, which should allow shareholders to effectively participate in the meeting, discussing the topics presented, posing questions to the management members, and casting their vote remotely in real time.

Since 2015, CVM has pointed to the possibility of holding virtual meetings. The subject was discussed through the report on the public hearing SDM No. 09/14 upon which amendments to ICVM 481 were discussed. The conclusion of the report, however, was to leave virtual meetings as an option for companies, since, in the understanding of CVM, there was not yet, at the time, sufficient technology to hold them: "In the process of preparing the draft, studies were conducted on the existing technologies for holding virtual meetings and electronic transmission of votes at the time of the meeting. The conclusion of these studies was that, although they are evolving rapidly, there are no technologies that have been sufficiently tested in order to ensure that a virtual meeting may be held efficiently. Therefore, the CVM believed that it would not be advisable to require companies to adopt these technologies at this time. It is possible that in the future, with the increase in the degree of reliability of these platforms, CVM will review this decision. For the time being, and even so as not to inhibit the development of appropriate technologies, virtual meetings will remain an option for companies.

Reinforcing this position, article 21-C, paragraphs 1 and 2, of ICVM 481 expressly states that "without prejudice to the provisions of article 21-B [remote ballot], the company may make available to shareholders an electronic system [...] for remote participation during the meeting [...] and, if it makes an electronic system for remote participation during the meeting available, the company must provide the shareholder with an alternative for participating and voting."

In other words, both the Brazilian Corporations Law and ICVM 481 allow companies to structure the means to hold their ordinary shareholders’ meetings virtually. In addition to complying with recent public health recommendations from government authorities, the measure may help promote increased shareholder participation in these discussion forums.

The most complicated issues to be faced in the implementation of meetings of shareholders virtually are those related to technology, since the platforms used should ensure that shareholders are able to: (i) identify themselves appropriately (through a digital signature certificate); (ii) send proxy documents and other documents requested from them in the usual manner by digital means, if they have not sent them in advance; and (iii) participate and vote remotely, in real time.

There are still other legal issues to be addressed, but for which companies can structure solutions, especially considering the current emergency scenario. They are:

1. The need to hold the meeting at the company's headquarters: article 124, paragraph 2, of the Brazilian Corporations Law states that meetings must be held at the company's headquarters and, in any case, never outside the locality of the headquarters. As a solution the company may delegate a responsible professional to be present at the headquarters and assume the function of secretary and/or chairman to conduct the meeting in house, even if the discussions and votes occur virtually.

2. Company’s Regular Disclosure Documents (Formulário de Referência): Annex 24 of ICVM 480/09 provides a separate field ("if the company provides an electronic system for remote receipt of the ballot or remote participation") in its item 12(h) for companies to report whether they have a system that allows remote participation by shareholders (and not mere exercise of voting rights) at general meetings. For the time being, as companies wishing to hold virtual meetings will not have time to include the procedures involved in their regular disclosure documents, we believe that shareholders may be guided by the information provided by the company in a notice to shareholders and in the instructions provided for in the management proposal for the meeting.

3. Registration of attendance in the proper book: An electronic document that mirrors the physical shareholders' attendance book could be made available in the virtual platform developed by the company, with access restricted to those have been previously accredited upon proof of shareholder status. It must be signed with the digital signature certificate.

4. Conduct of the proceedings: by means of the virtual signature of the attendance book, shareholders would receive a password to access the videoconference where the discussions of the general meeting will be conducted by the chairman and secretary.

5. Transcription of the minutes in the proper book with the signature of those in attendance: by means of the declaration of adjournment of the meeting, the minutes would be drawn up during the videoconference and, once approved by all, would be available for signature with the digital signature certificate in the same virtual platform of the company as referred to in item 2 above; and

6. Preparation of certified copy of the minutes to be filed: the company's management would prepare a digitally signed certified copy of the minutes and present it for file before the applicable board of trade. Only the certified copy of the minutes authenticated by the chairman and secretary shall be presented to the board of trade. Therefore, it could be signed in a physical copy if there is a regulatory barrier to filing it with only the digital signatures of the chairman and secretary.

The members of the management, the company's independent auditors, and shareholders would participate remotely. However, it should be noted that the possibility of holding a general meeting of shareholders electronically does not require the shareholder to choose to participate in the meeting by virtual means. Thus, companies should be prepared to receive shareholders who wish to appear in person at their headquarters. For this reason, it will be necessary to designate a professional responsible for receiving and verifying the documents of such shareholders, assuming the role of secretary and/or chairman of the meeting.

The measure also avoids allegations that the meeting was held outside the location of the company’s headquarters. In other words, general meetings held on a virtual basis open up a new possibility for participation by shareholders, which in no way excludes in-person participation. Companies must be ready to reconcile the participation of all in both virtual and in-person meeting arrangements.

It is possible to conclude that CVM's legal and regulatory framework allows Brazilian publicly-held companies to hold virtual meetings. Until the present date, however, no company has tested this model. If COVID-19 continues to advance, the market expects CVM to formally express its opinion on the matter. This opinion could come in the form of both guidance to companies wishing to test the virtual meeting model and suspension of penalties for those who fail to hold such meetings within the dealine provided for by the laws and regulations. The latter option may not solve the problem of companies that depend on financing or are participating in bids, situations which require that the ordinary shareholders’ meeting be held.

Category: Environmental

Joint Normative Instruction (IN) No. 2/20, published on January 29 by the Ministry of the Environment (MMA), the Brazilian Institute of Environment and Natural Resources (Ibama), and the Chico Mendes Institute for Biodiversity Conservation (ICMBio), brought in new regulations on the federal administrative procedure for investigating administrative environmental violations. The standard seeks to consolidate administrative procedures at Ibama and ICMBio, repealing prior instruments.

Following the trend of judicial proceedings, the IN established an electronic administrative proceeding, i.e., all the process will be done via the online system of federal agencies as of the drafting of the infraction notice. Access to the electronic process will be ensured to the defendants and their attorneys upon written request, regardless of power of attorney. This access will be considered a valid way to acknowledge the infraction notice or any decision within the administrative proceeding.

An important aspect of the new regulations is the inclusion of a conciliation hearing as an initial step in the administrative proceeding. The conciliation hearing had been introduced as a dispute resolution method within the Federal Environmental Public Administration by Federal Decree No. 9,760/19.

Even this hearing may be conducted electronically, provided that there is agreement by the defendant and adequate infrastructure and technology at the environmental administrative unit in question. Equal procedures and guarantees given to respondents in relation to hearings in person should be guaranteed. Hearings of an electronic type should preferably be used, at the discretion of the Environmental Conciliation Nucleus (Nucam), to enable the presence of respondents who face difficulty in appearing or when a complementary hearing is held, in order to expedite the procedure.

Once the agreement by the respondent has been expressed, the hearing will be automatically scheduled for at least 30 days after the infraction notice is drawn up. The time limit for submitting a defense shall be suspended until the date of the hearing.

The respondent may also waive the right to participate in the environmental conciliation hearing by means of a written declaration filed by the scheduled date of the session. In that case, the time limit for presentation of the defense shall start to run as of the filing of that brief.

The submission of a partial defense is allowed if, in the environmental conciliation, the defendant disagrees with one or more precautionary administrative measures and penalties which have been applied.

When regulating Nucam's operation, the IN divided it into two distinct teams: the Preliminary Analysis Team (PEA) and the Conciliation Hearing Conduct Team (ECAC).

It is incumbent on the EAP to validate infraction notices presenting a curable error, to declare null and void infraction notices that present an incurable flaw, in order to analyze the appropriateness of converting the fine into services of preservation, improvement, and recovery of the quality of the environment, as well as to decide on whether to maintain the application of the precautionary administrative measures and the application of the other sanctions.

The preliminary review of the assessment shall be formalized by the EAP in a reasoned opinion and sent to the relevant ECAC at least seven days in advance. The opinion of the EAP, however, is not binding.

The ECAC will be responsible for conducting the conciliation hearing, presided over by a full-time public servant who does not belong to the staff of the federal environmental agency responsible for the assessment. The ECAC will also take the measures necessary after the hearing has taken place, both in cases of successful conciliation and in cases where the environmental inspection continues.

In the event that the proceeding continues due to lack of conciliation or environmental conciliation with disagreement by the respondent regarding one or more injunctive administrative measures and sanctions applied, the Investigation Team (EI) will continue the process.

Another highlight of IN is the express provision that the inspection report must demonstrate the subjective element of the environmental infraction, that is, it is required that the conduct have been committed by the offender with intent or willful misconduct. This inclusion changes the practice of environmental agencies in the administrative environmental liability sphere and is in line with the understanding of the Superior Court of Appeals (STJ) that administrative environmental liability is subjective, i.e., it requires on proof of intent or willful misconduct (STJ). (Motion to Resolve Divergence in Special Appeal: EREsp 1.318.051-RJ, Reporting Opinion drafted by Justice Mauro Campbell Marques, First Section, unanimously, decided on May 8, 2019, published in the Electronic Gazette of the Judiciary on June 12, 2019).

Seeking to modernize inspection at the federal level, the IN innovated by allowing an environmental agency that has seized assets in inspection actions to install tracking equipment on the items seized with the purpose of monitoring their location and use during the time the seizure measure is in effect. In addition, the inspection agent may request the installation of trackers as a condition for the deposit or use of the asset by the offender after the seizure. These measures are unprecedented in federal administrative sanctions procedure.

The rule also allows the respondent to request revision of the infraction notice after the infraction notice has been definitively issued. This request for revision is intended to undo or modify the judgment, which will only be admitted when the respondent alleges new facts or relevant circumstances that justify the inadequacy of the sanctions applied. In this case, it will be incumbent on the authority that delivered the final judgment to examine the request for revision. It will not be possible to harshen the penalty or restrictive legal sanction already imposed. Therefore, a request for revision gives the respondent one more chance to fight the case still in the administrative sphere, which may avoid prolonging the litigation in the judicial sphere.

Category: Environmental

Federal Decree No. 10,240/20, published in February, implements the reverse logistics system for electronic products and their components for domestic use. The regulation was expected, since important players in the marketing cycle of these products, especially the retail sector, had not adhered to the industry agreement on the subject signed on October 31, 2019. At the time, various sectors assumed obligations before the public authorities to implement appropriate reverse logistics of waste arising from the market of electrical and electronic products and their components, on a voluntary basis, due to the contractual nature of the agreement.

Rules to ensure equal protection in the inspection and compliance with the obligations imputed by article 33 of the National Solid Waste Policy (PNRS, instituted by Law No. 12,305/10) had already been established by Federal Decree No. 9,177/17 for non-signatories of an industry agreement or consent order. Now, Decree No. 10,240/20 adopts another instrument provided for in the PNRS and in article 15 of Regulatory Decree No. 7,404/10.

The objective is to impose obligations very similar to those provided for in the industry agreement for all manufacturers, importers, distributors, and dealers of household electrical and electronic products and their components, who will also have to establish and implement reverse logistics systems for their electrical and electronic waste independently of the public collection system.

The decree applies to electrical and electronic products for domestic use whose operation requires electric supply with a maximum voltage of 240 volts. Domestic use is defined as own or personal, residential or family use exclusively by individuals. The decree also allows companies or management entities to receive electrical or electronic products and their components with characteristics similar to those of domestic use, but discarded by micro or small businesses.

As established in the industry agreement signed in October, the first phase of the structuring and implementation of the reverse logistics system is underway and is expected to be completed by December 31, 2020. In this phase, the Monitoring and Performance Group (GAP) will be created, responsible for monitoring and disseminating the implementation of the reverse logistics system. Manufacturers, importers, traders, and distributors must adhere to management entities or submit an individual model for implementation of the system.

Still in the first phase, a financial mechanism will be established to ensure the system, in addition to another mechanism that will allow the collection of the data necessary for monitoring and follow-up on the system through the GAP. On the part of the Public Administration, the Ministry of the Environment should respond, vis-à-vis state agencies, in favor of tax measures to simplify the transport of waste and support measures to facilitate the installation of waste reception and consolidation points. It is Ibama's responsibility to regulate interstate transportation in order to recognize electrical and electronic waste as non-hazardous and, consequently, allow transit thereof.

The second phase, scheduled to begin in 2021, will include qualification of service providers, development of communication and environmental education plans, leadership training, and installation of reception or consolidation points.

One issue that was much debated was the possibility of remuneration, compensation, or payment to consumers who deliver electrical or electronic products at reception points. The decree vetoed this point, but allowed the adoption of incentive mechanisms by companies or managing entities.

The reverse logistics system will be fully financed by companies in proportion to their market share. Financial resources will also be differentiated for each type of product and defined according to technical and economic criteria and the particularities of the product in question. The decree provides for possible costs related to the necessary arrangements for disposal of the waste. It is understood, therefore, that expenses related to transportation of the waste to the collection points will not be covered by the system, but solely and exclusively by the consumer or the person who performs the disposal. Considering the prohibition on compensation, remuneration, or payment to the consumer, this may be a point of discussion, because in the case of larger waste, the return may represent a cost that consumers will not want to bear, despite their shared responsibility.

The decree stipulates that manufacturers and importers are obliged to provide for environmentally sound final disposal for all waste received by the system, with preference for recycling. Although the PNRS imposes a hierarchy in solid waste management that must be observed^,[1] the preference for recycling is due to the particularities and difficulties of reuse of electrical and electronic products. If re-use is feasible, however, companies should not hesitate to opt for this form of destination.

For importers, the decree mandates participation in reverse logistic systems as a requirement for compliance in the performance of their activities. The Import Declaration must also contain information on who is responsible for structuring, implementing, and operating the reverse logistics system, otherwise the license to import electrical and electronic products will not be granted.

Distributors should be encouraged to join the management entities or establish their own reverse logistic systems, as well as make physical spaces available for consolidation points, where waste will be stored pending its transfer for environmentally appropriate disposal.

Closing the cycle of the companies involved are the merchants who work in physical stores, in distance sales, or by e-commerce. It is up to them to receive, package, and temporarily store the electrical and electronic products discarded by consumers and return them to importers and manufacturers. Merchants should also be involved in the implementation of communication and non-formal environmental education plans. These obligations also apply to companies providing mobile telephony services that sell electrical and electronic products subject to the decree.

Decree No. 10,240/20 maintained the goals and deadlines of the industry agreement signed in October of 2019: at the end of the fifth year of operation of the system (2025), 17% of the electrical and electronic products placed in the Brazilian market for domestic use should have an environmentally appropriate destination. The target is calculated from the base year of 2018 in 400 cities across Brazil, but may be changed, however, by providing technical justifications supported by the life cycle particularities of each product.

As for the packaging of electrical and electronic products, the decree provides that it will be received at collection points and destined in an environmentally appropriate manner. The standard makes it clear, however, that companies will be able to sign legal instruments with other reverse packaging logistics systems, in a clear reference to those already operating in Brazil. The targets for recovery of packaging will be equivalent to those set in any of the industry agreements, decrees, or consent orders themselves, as defined by Decree No. 7,404/10 and Decree No. 9,177/17.

^[1] The PNRS provides for the prevalence of non-generation or the reduction of generation as initial strategies to be adopted for solid waste management.

Category: Banking, insurance and finance

Individuals and legal entities resident, domiciled or with headquarters in Brazil, as provided for in tax law, must report to the Central Bank of Brazil the assets and amounts held by them outside the country. The reporting is mandatory to those holding assets abroad (assets and rights, including corporate interests in companies, fixed-income securities, shares, real properties, deposits, loans investments, among others) amounting to or exceeding the equivalent to US$100,000.00 (one hundred thousand US Dollars) on December 31, 2019.

Furthermore, the individuals and legal entities mentioned above holding assets abroad must also deliver to the Central Bank of Brazil a quarterly report relating to assets held abroad on March 31, June 30 and September 30 of each year, in case the total amount of such assets reaches or exceeds the equivalent to US$100,000,000.00 (one hundred million US Dollars).

The report referring to December 31, 2019 must be delivered by means of the Brazilian Capital Abroad (CBE) reporting form available in the internet website of the Central Bank of Brazil at: www.bcb.gov.br, from February 17^th, 2020 through 6PM of April 6^th, 2020.

The manual containing detailed information about the content and requirements of the reporting is also available in the website of the Central Bank of Brazil.

The late delivery, lack of reporting, or the submission of false, inaccurate or incomplete information subjects the violator to a fine of up to R$ 250,000 (two hundred thousand Brazilian reais).

(CMN Resolution 3,854, of May 27, 2010, BCB Circular 3,624, of February 6, 2013, and BCB Circular 3,857, of November 14, 2017, as amended).