Category: Real estate

In the judgment of the Special Appeal 2.003.209/PR (REsp 2.003.20/PR), the STJ decided that the shopkeeper has the right to demand from the lessor the accountability of the amounts paid (rent, condominium, promotion fund, etc.) every 60 days.

The discussion began with an action filed by a shopkeeper against the administrator and the lessor of the shopping center demanding the accountability. The purpose was to verify if the charges made were right, under the allegation that the releases that were provided were not detailed.

Although the rental of stores in shopping centers have a special rule that prioritizes the freely agreed conditions between the parties and expressed in the lease agreement, such lease is still typical and is subject to the procedural rules provided for in the Leases Law.

The enterprising lessor of a shopping center must comply with the obligations imposed in the Lease Law (Law 8.245/91), including the accountability of the amounts paid and to exhibit  the proof of the expenses paid, when requested by the lessee. It is also the obligation of the lessor to detail the charges made to the lessee, which must be provided for in the shopping center budget and in the general rules of the enterprise.

In the present case, the lessee claimed that, although the lease agreement provided the payment of the expenses inherent to the shopping center, the carried out collection did not break down the charges paid.

The lessor was ordered to execute the accountability of the amounts in the first instance, but appealed on the grounds that the lessee could only require proof of expenses for the 60 days prior to the request. As the deadline was not respected, there would have been the loss of the procedural right and, therefore, the proof was no longer due.

In the judgment of REsp 2.003.20/PR, the STJ confirmed that the requirement of accountability by extrajudicial means is a faculty of the lessee. It also noted that due to the complexity of lease relationships in shopping centers, the deadline provided for in the legislation concerning lease agreements is only a minimum interval to be respected by the lessee between one and another request.

As for the loss of the procedural right, the 3rd Panel of the STJ understands that the preclusive period provided for in the Brazilian Civil Code for filing the action for accountability is unequivocal and that the term foreseen at the federal legislation concerning lease agreements is not applicable to demand accountability to the lessor.

We understand that the interpretation of the STJ was correct. Therefore, we recommend that entrepreneurial landlords of shopping centers that are not following this legal obligation organize their accountability procedures internally. In this way, they can prevent shopkeepers from judicially demanding that they present the accounts in a detailed and complete way.

Bibliography

BORGES, Marcus Vinicius Motter (coord.). Course in Brazilian Real Estate Law. Sao Paulo: Thomson Reuters, 2021.

SCAVONE, Luiz Antônio. Real Estate Law: theory and practice. 16. ed. – Rio de Janeiro: Forense, 2021.

SOUZA, Sylvio Capanema. The law of the tenant commented: article by article. 12. ed. – [2. Reimpr.] – Rio de Janeiro: Forense, 2021.

Category: Environmental

Created to contribute to the reduction of greenhouse gases (GHG) in the production, commercialization, and use of biofuels, the National Biofuels Policy (Política Nacional de Biocombustíveis or “RenovaBio”), established by Federal Law 13,576/17 and regulated by Federal Decree 9,888/19, has proved to be one of the most important policies to promote the decarbonization of the Brazilian energy matrix.

In summary, RenovaBio is based on three pillars:

• The fulfillment of annual mandatory GHG reduction targets by fossil fuel distributors, considered as obligated parties by RenovaBio. These targets are determined by the National Agency of Petroleum, Natural Gas and Biofuels (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis or “ANP”) taking under consideration the carbon intensity in the fuel market projected by the National Energy Policy Council (Conselho Nacional de Política Energética or “CNPE”) for the period of ten years, as well as based on the participation of the distributor in the commercialization of fossil fuels in the previous year;

• The certification of the efficient production or import of biofuels by inspection firms accredited by ANP. Inspection firms assess the products’ life cycle to verify whether biofuels emit less GHG than their substitute fossil fuels, which results in the issuance of an Energy and Environmental Efficiency Score (Nota de Eficiência Energético-Ambiental). Then, a Certificate of Efficient Production of Biofuel (Certificado de Produção Eficiente de Biocombustível) is issued, a document necessary for the participation of producers and importers of biofuels in RenovaBio; and

• The issuance of Decarbonization Credits (CBIOs), which is considered the link between the two aforementioned steps. CBIOs represent one metric ton of carbon dioxide equivalent that was not emitted into the atmosphere. The calculation is made from the difference between the GHG emissions in the life cycle of a biofuel and the emissions of its substitute fossil fuel.

Credits are issued by biofuels producers and importers duly certified by ANP after fuels sales, based on the invoices of purchase and sale of the product. Subsequently, credits are traded on the Brazilian stock exchange. Fossil fuel distributors must acquire CBIOs to meet their goals.

In 2022, there was intense discussions about the CBIO market between stakeholders, including the change of the deadline for distributors to prove the fulfillment of individual goals. In July, Federal Decree 11,141/22 amended Federal Decree 9,888/19 and determined that fossil fuel distributors shall prove compliance with their targets by March 31 of the following year.

Exceptionally, the proof of compliance with the individual 2022 target has been extended to September 30, 2023. The change was justified mainly due to the impacts caused by the covid-19 pandemic on the fossil fuel, biofuels, and CBIOs markets.

Recently, CBIOs were again at the forefront of discussions related to GHG removals. On December 8, 2022, the Ministry of Mines and Energy (Ministério de Minas e Energia or “MME”) presented proposals of new rules for the transitional government within the Mines and Energy Market Initiative (Iniciativa Mercado Minas e Energia or “IMME”). Measures related to fuel, natural gas, and biofuels were included.

Among these instruments, MME presented a proposal to amend RenovaBio, aiming to establish, among others:

• the creation of CBIOs+, considered fungible assets, allowing parties obliged by RenovaBio to meet their individual targets with investment in various GHG reduction projects, not restricted to emission reductions from the biofuels sector;
• the gradual alteration of the obligated parties, replacing distributors with producers and importers of fossil fuels. In theory, MME argued that this replacement would make monitoring compliance with targets easier for the competent authorities; and
• the possibility of the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários or “CVM”) supervising the CBIOs market, which could represent an important precedent for the Brazilian market.

According to the proposal and as a result of one of the public hearings with the largest number of contributions, CVM published, on December 23, 2022, CVM Resolution 175/22, which provides for the constitution, operation, and disclosure of information from investment funds.

Through this rule, which will come into force on April 3, 2023, CVM reinforced the understanding that CBIOs are financial assets, provided that they are registered in a system of registration and financial settlement of assets authorized by CVMor by the Central Bank of Brazil (Banco Central do Brasil), or traded in a market managed by an organized market management entity authorized by CVM.

It is important to mention that RenovaBio has been widely discussed in Brazil to ensure that national policies are coordinated with international negotiations.

This policy is especially important for Brazil to meet its GHG reduction targets. For instance, it was mentioned in the Brazilian Nationally Determined Contribution (NDC),^[1] submitted to the United Nations Framework Convention on Climate Change (UNFCCC) following the United Nations Conference on Climate Change held in 2021 (COP 26).

In addition, there is growing international concern about energy issues. The last United Nations Conference on Climate Change (COP 27), held in Egypt in 2022, for example, had a day dedicated to the theme, called "Decarbonization Day". This undoubtedly influences countries' internal decision-making in relation to fighting climate change.

Considering the above and the importance given by Brazil to the matter, it is expected that the proposed amendment of RenovaBio will be debated throughout this year. In case Renovabio is amended, program participants and investors will need to adjust.

^[1] NDCs are voluntary commitments made by countries that ratified the Paris Agreement to reduce GHG emissions. Brazil has committed to reducing its emissions by 37% by 2025 and by 50% by 2030 – taking as a reference the emission levels of 2005 – and achieving carbon neutrality by 2050.

Category: Arbitration

Aline Omena Gomes de Barros

The purchase of a property that is under a lease agreement may require legal action by the new owner to govern direct possession of the property.

Despite the recurrent use of an action to take possession to guarantee the purchaser's rights, the Tenancy Law (Law 8,245/91) expressly provides for the use of eviction proceedings in the event of the existence of a prior lease agreement.

It is established in the head paragraph of article 5 of the law that, in lease cases, eviction is the appropriate action to recover the property, whatever the reason for the termination of contract.

Article 8 of the same law, in turn, provides that, in the event of sale during the lease, the purchaser may terminate the contract, with the legally prescribed period for vacating.

The termination must be filed within 90 days of registration of the sale or commitment. If it is not done by this deadline, it will be assumed that there is an agreement to continue the lease.

If done correctly, respecting the deadlines and the appropriate form, the termination does not need specific grounds. It is the so-called empty termination. In other words, the purchaser will have no duty to respect the lease agreement entered into, whether or not for residential purposes, because he was not a party to it. He can, therefore, terminate the contract, giving a period of 90 days to vacate, without any justification.

There is, however, an exception: when the lease agreement is for a fixed term and contains a validity clause in the event of sale and is registered in the property's records.

These limits protect the tenant and transfer the lessor’s obligations to the purchaser, and also give the purchaser standing to bring the action.

The matter was recently decided by the Third Panel of the Superior Court of Appeals, in the case of Special Appeal 1.864.878/AM.

Reporting judge in the case, Justice Ricardo Villas Bôas Cueva emphasized that, "if there is no validity clause or registration, the new purchaser is not obliged to abide by the contract, and may freely exercise his right to terminate it, but, in order to take direct possession of the property, he must follow the appropriate procedural pathway, using an eviction proceeding.

A similar position has been taken by the STJ in other judgments: Special Appeal 1.590.765/RN and Special Appeal 265254/SP.

Considering that the contract's validity is a relevant point in the analysis of the choice for eviction, the form and term of the agreement must also be observed.

In residential leases entered into in writing for a term equal to or longer than 30 months, the termination of the contract will occur at the end of the term stipulated, regardless of notice or warning.

At the end of the agreed-upon term, if the tenant continues to be in possession of the leased property for more than 30 days without opposition from the lessor, the lease will be presumed to have been extended for an undetermined term and the other terms and conditions of the contract will be maintained. In the event of an extension, however, the lessor may terminate the contract at any time, giving him 30 days to vacate.

In the case of residential leases that were agreed upon verbally or in writing and have a term of less than 30 months, when the established term has ended, the lease is automatically extended for an indefinite period. The property, in this case, can only be repossessed in the case provided for in article 47 of the Tenancy Law.

Once the eviction action is granted, the judge will order the issuance of an eviction warrant, which will contain a 30-day term for voluntary vacating of the property, except if more than four months have elapsed between service of process and the trial ruling. In this case, the deadline will be 15 days.

Category: Tax

The Federal Supreme Court (STF) concluded, on March 17, the judgment of Extraordinary Appeal 796,939/RS (Theme 736 of the General Repercussion) in the virtual plenary. At the time, the Court analyzed the constitutionality of the isolated fine of 50% provided for in article 74, §§ 15 and 17, of Law 9,430/96.

Under the terms of the law, the taxpayer who ascertains a credit related to a tax or contribution administered by the Federal Revenue Service that can be refunded or reimbursed – including credit resulting from a final court decision – may use it to offset their own debts, due or yet to fall due, within five years of the undue payment (article 168 of the National Tax Code – CTN).

This procedure is subject to the analysis and approval of the Federal Revenue Service. If the body does not recognize the credit claim, even partially, it will formalize the rejection of the tax reclaim or the non-approval of the offset made.

In case of non-approval, the amounts subject to offset will be charged, plus interest and a 20% moratorium fine (article 61, paragraph 2, of Law 9,430/96). This decision paves the way for administrative litigation and permits presenting a manifestation of nonconformity with suspensive effect (article 74, paragraph 9, of Law 9,430/96).

In addition, in a separate procedure, the Federal Revenue Service draws up a tax assessment notice to demand the collection of the isolated 50% fine on the credit that originated the unapproved offset request (Law 12,249/10), with interest accrual (article 74, §17, of Law 9,430/96).

The isolated fine is launched indistinctly, when there are no legal grounds for the penalty, and even before the final term of the administrative proceeding in which the legitimacy of the offsetting procedure is discussed.

The tax legislation itself determines that the taxpayer presents an offset request for subsequent approval by the Tax Authority but, at the same time, establishes the imposition of a punitive fine on any debt that may not be approved.

What was discussed, in addition to the creditory right, is that the application of an isolated fine in these situations represents a double penalty for the taxpayer, in breach of the right to full defense and to a fair hearing, as well as the right of petition provided for in article 5, XXXIV, paragraph “a”, of the Federal Constitution.

In that sense, it was argued that the isolated fine represents an undue political sanction that aims to prevent the taxpayer from recovering the amounts unduly collected from the tax authorities, constituting a confiscatory practice by the Public Administration, which is prohibited by the Federal Constitution (article 150, inc. IV, of CF/88) and by Precedents 70, 323 and 547 of the Federal Supreme Court.

The procedure would present an obstacle to the right to recover improperly collected taxes, capable of generating a very high financial risk to the taxpayer who acted in good faith when determining indebtedness before the Federal Revenue Service and proceeding with offsetting such amounts, as provided for in the tax legislation.

Not for any other reason, §17 of the law, in its original wording^[1], determined that the penalty should be applied only to taxpayers who utilized the offsetting request to evade the collection of amounts owed, acting in bad faith, deceit, fraud or simulation.

In many cases, the non-approval of the offset results from the non-recognition by the tax authorities of rectifications in the fiscal bookkeeping (DCTF and SPED Fiscal – ECF and EFD-Contributions) by the taxpayers for mere mistake in the calculation basis.

The isolated fine, therefore, ends up discouraging the rest of the taxpayers who, in good faith, present offsetting requests, exercising the right to recover amounts unduly paid.

Thus, it was neither reasonable nor proportionate to impose the penalty, which, in reality, aims to increase tax collection and punish bad taxpayers rather than discourage them from engaging in improper offsets.

In line with the understanding mentioned above and confirming the Court’s historical position on this matter, in the judgment of RE 796,639/RS, STF dismissed the Union’s Extraordinary Appeal, recognizing as unconstitutional both the previously repealed §15 (Law 13,137/15) – relating to the imposition of an isolated fine on denied restitution requests – and the current §17 of article 74 of Law 9,430/96, as stated in the vote issued by Minister Rapporteur Edson Fachin.

Unanimously, the following judgment thesis was established: “It is unconstitutional for the isolated fine provided for by law to be levied based on the mere non-approval of a tax offset request because it does not consist of an unlawful act capable of automatically triggering a pecuniary penalty”.

As the rapporteur pointed out in his vote, the mere non-approval of the tax offset is not an unlawful act capable of motivating a tax sanction. Thus, there is a clear lack of correlation between the 50% fine and the administrative offsetting request, since this is considered a legitimate exercise of the taxpayer’s right of petition. In addition, the correlation violates due process and good faith.

On the same date, the judgment of the Direct Action of Unconstitutionality 4,905 (ADI 4,905) was also concluded, with Minister Gilmar Mendes serving as the rapporteur. By majority vote, §17 of Law 9,430/96 was declared unconstitutional. It was understood that “the application of an isolated fine for the mere non-approval of an offset request, without being characterized by bad faith, falsehood, intent or fraud, violates the fundamental right of petition and the principle of proportionality”.

Given this outcome, if the taxpayer faces the non-approval of an offset formalized before the Federal Revenue Service, only the moratorium fine of up to 20% provided for in article 61, caput and paragraph 2, of Law 9,430/96 will apply.

Considering that the Supreme Court, so far, has not modulated the effects of the decision, the precedent should be applied to all cases involving the imposition of the fine for non-approval of offsetting requests. The taxpayer may also claim the refund of amounts unduly paid in the last five years under the terms of Law 9,430/96.

^[1] Art. 18. The official release referred to in article 90 of Provisional Measure 2,158-35, of August 24, 2001, shall be limited to the imposition of an isolated fine due to the non-approval of an offset request declared by the taxable person in the cases in which the practice of the offenses provided for in articles is characterized. 71 to 73 of Law 4,502, of November 30, 1964. (Text given by Law 11,051/04)

Art. 18. The official release referred to in Article 90 of Provisional Measure 2,158-35, of August 24, 2001, shall be limited to the imposition of an isolated fine due to non-approval of the offset request when the falsity of the declaration submitted by the taxable person is proved. (Text given by Law 11,488/07)

Category: Arbitration

Débora Chaves Martines Fernandes, Bruna de Godoy Marques das Neves, and Barbara de Souza Braz

It is no surprise that in Brazil, where there are about 66.43 million delinquent debtors,^[1] normative acts aimed at fighting the population's indebtedness are gaining popularity. An example of this is the discussions that surrounded Law 14,181/21, the so-called Over-indebtedness Law, which was received by the interpreters of the law and by consumers with optimism, but also with relevant doubts about its reach and practical application.

Law 14,181/21 made additions to the Consumer Protection Code (CDC) to introduce a consumer credit microsystem,^[2] with the objective of preventing and treating the phenomenon of over-indebtedness. One of the pillars of the law is the safeguarding of the so-called "existential minimum”, that is, the amount that must be kept safe from creditors to ensure the debtor's livelihood. The Over-indebtedness Law, however, did not specify the amount of this existential minimum, leaving the task to complementary regulations.

Effectively, the existential minimum was regulated via Presidential Decree 11,150/22, promulgated on July 26, 2022, in the following terms:

"Article 3. In the scope of prevention, treatment, and administrative or judicial conciliation of situations of over-indebtedness, the existential minimum is considered to be the consumer's monthly income equivalent to twenty-five percent of the minimum wage in effect on the date of publication of this Decree."

This definition assigned to the existential minimum the nominal value of R$303, equivalent to 25% of the minimum wage at the time. This amount is fixed, since the decree itself established that minimum wage adjustments will not have an impact on the amount of the existential minimum (article 3, paragraph 2). It will be incumbent on the National Monetary Council to make any changes to the sum (article 3, paragraph 3).

On the one hand, the definition of a fixed value for the existential minimum provides predictability for both consumers and suppliers and defines objective parameters for application of the Over-indebtedness Law.

On the other hand, the amount of R$303 was the target of severe criticism on the other hand, because it is considered negligible and incapable of meeting the basic needs of Brazilian citizens, besides creating possible distortions between debtors who receive the minimum wage and those who receive much higher amounts.

Other criticisms were directed at debts that are not protected by the reserve of the existential minimum, such as real estate financing and debts related to entrepreneurial activity.^[3] In the view of some scholars, this would harm lower income consumers.

The effervescence of the topic, in part, is linked to the heat of Brazil's political environment, and there are signs that the alternation of power that occurred in the 2022 elections may interfere with the limits of the consumer credit microsystem.

New political landscape and impacts on the amount of the existential minimum

Since the promulgation of Presidential Decree 11,150/22, members of the Legislative Branch had already been moving to change the provision that established the amount of the existential minimum. The main pivot of this movement is Legislative Decree Bill 306/22 (PDL 306/22), currently in progress in the House of Representatives.

This bill aims to suspend the effects of Presidential Decree 11,150/22, under the justification that the advances of the Over-indebtedness Law were compromised by the presidential normative act.

It is argued that, despite filling the gap left by the legislator in the Over-indebtedness Law, the decree impacts mainly on the poorest population in Brazil, since the amount guaranteed by law as a reserve for the consumer is very small and does not help in reducing family indebtedness, which had an increase of about 6.54% compared to 2021.

In addition, the author of the legislative proposal, representative Gustavo Fruet, considers that in a context of rising interest rates, rising inflation, high unemployment rates, and increasing extreme poverty, default rates have been steadily rising in Brazil, reaching about 4 out of every 10 Brazilians in 2022.

In the current economic circumstances, setting the value of R$303 for the existential minimum could compromise survival itself, by reducing family income, increasing indebtedness, and transferring resources from citizens to creditors. For these reasons, the proposal requests that the House of Representatives vote to annul the presidential act, seen as "clearly damaging to the public interest.”

PDL 306/22 has been in the progress since August 1, 2022. Currently, it awaits the designation of a reporting judge to be review by the Consumer Protection Commission. As it is an ordinary proceeding proposal, if approved by the commission in question, it will still be forwarded to the Constitution and Justice Committee for review of its constitutionality.

The text will then be put on the agenda for a vote on the floor of the House of Representatives. Once this legislative house has concluded its review, the proposal still has to be approved by the Senate before it can enter into effect.

During its course in the Congress, the proposal may be amended by the relevant subject-matter committees. It is therefore not possible to guarantee that the legislative decree intended will be enacted in the terms currently proposed, nor whether it will be enacted at all.

What we have is that, according to the terms of the proposal, the new legislative act would reestablish the status quo prior to the enactment of the decree, to reconstitute the legal gap in the definition of the existential minimum, which is also not the ideal scenario, since it creates legal insecurity regarding the parameters of the application of the law in each of the country's courts.

Besides the questions raised by PDL 306/22 and the possibility of a declaration of unconstitutionality or violation of a fundamental precept by the Federal Supreme Court,^[4] the decree can also be revoked, extinguished, or changed by a new normative act of the same authority, that is, by a new presidential decree.

The head of the federal executive branch can establish a new value for the existential minimum by means of a presidential act. The new president can also simply revoke the act of his predecessor, in order to reestablish the previously existing legal loophole, to be closed by a new normative act.

There is news that the current government is studying the possibility of overturning the decree promulgated in 2022, as indicated by the head of the National Consumer Bureau, Wadih Damous.^[5] The possible change in the existential minimum, if compatible with the government's objectives, would be part of the debt reduction program that the government intends to launch, called Desenrola Brasil [“Untangle Brazil”].

There are, therefore, at least three distinct and plausible ways to repeal or change Decree 11,150/22, each of them under the responsibility of one of the branches of the Government.

Aside from the discussion regarding the sufficiency of the amount of the existential minimum currently in effect, the indetermination of its continuation and its form of application has a direct impact on the implementation of public policies for the protection of indebted consumers, the main focus of the Over-indebtedness Law, and prevents all players in the consumer market from fully enjoying their rights.

The importance of the topic justifies the engagement of entities representing suppliers and consumers, in addition to the close and critical monitoring of interpreters of the law, such that a balance can be reached that is capable of guaranteeing consumer protection, without neglecting the impact of the policies implemented on the supply of credit, which is indispensable to the smooth running of the country's economy.

^[1] Data from the Map of Delinquency and Renegotiation of Debts made available by Serasa.

^[2] BERTONCELLO, Káren Rick Danilevicz.  “O processo judicial de repactuação das dívidas: modelo brasileiro de mínimo existencial instrumental” ["The judicial process of debt renegotiatio: a Brazilian model of the instrumental existential minimum”]. Revista de Direito Consumidor, Vol. 144/2022, pp. 17-35.

^[3] DUQUE, Marcelo Schenk. “Parecer sobre a inconstitucionalidade do Decreto 11.150, de julho de 2022” ["Opinion about the unconstitutionality of Decree 11,150, of July of 2022”]. Revista de Direito do Consumidor, Vol. 143/2022, pp. 407-416.

^[4] Currently up for completion is ADPF 1005 (reporting Justice André Mendonça) and ADPF 1006 (reporting Justice André Mendonça).

Category: Intellectual property

• 1) Introduction

The Brazilian Patents and Trademarks Office (National Institute of Industrial Property  “INPI”) has been executing, in recent years, important changes in relation to the registrer of contracts subject to its competence, such as contracts for licensing and sublicensing of industrial property rights (trademarks, patents, etc.) and technology supply.

On January 1st, 2023, the INPI became part of the structure of the Ministry of Development, Industry, Trade and Services. At the end of last year, at a INPI’s board meeting held on December 28th, with minutes published on the INPI portal on December 30th, proposals for relevant changes to the register of contracts subject to the competence of the INPI were approved, especially those involving technology transfer.

The changes aim to simplify bureaucratic procedures and update the historical positions of the INPI to recognize the private autonomy of contractors, continuing the INPI's tendency to reduce its interference in agreements between individuals.

In the table below we summarize the change proposals approved at the meeting and compared them with the previous positions of the INPI. After that, we will comment more closely some aspects of these change proposals:

• 2) Acceptance of the registration of the know-how licensing agreement

Law 9.279/96 (Industrial Property Law – LPI) addresses technology transfer contracts in a very generic way, only mentioning, in article 211, that the INPI will register contracts involving technology transfer, franchise agreements, etc., to produce effects in relation to third parties. LPI does not conceptualize or define technology transfer agreements.

Law 10.168/00, of a tax nature, brings a definition of technology transfer contracts in its article 2, § 1. For the purposes of that law, technology transfer contracts are those relating to the exploitation of patents or the use of trademarks and those for the provision of technology and technical assistance.

Considering its institutional purpose provided for in Article 2 of Law 5.648/70, as amended by Article 240 of the LPI, the INPI began to enact norms dealing with the concept and definition of technology transfer contracts. And it did so, more recently, through Normative Instruction 70/17 (IN 70) and Resolution 199/17 (Resolution 199).

In Article 2, III "a" of IN 70, it was established that the contract for the supply of know-how would be framed as a type of technology transfer contract. Article 8, I of Resolution 199  defined that the technology supply contract is a type of technology transfer contract.

Also in Resolution 199, in its article 10, IV, it is stated that the parts of the technology supply contract are the assignor company, which owns the technology not protected under a right of industrial property, and the assignee company, which is the recipient of the technology.

According to this position of the INPI, the know-how would not be an industrial property right and could only be subject to a definitive transfer. Thus, it would not be appropriate to simply license or any form of temporary authorization of use.

The General Coordination of Technology Contracts of the INPI (CGTEC) makes this position clear, through the Technical Note/SEI 8/2020/INPI/CGTEC/PR, emphasizing that,  because the know-how is not  typified as an industrial property right, it would not be provided for in Brazilian law. Consequently, a know-how licensing agreement would be null and void in accordance with Article 166, II and IV of the Civil Code.

The Specialized Public Prosecutor's Office of the INPI (PFE), still in 2021, through the Opinion 00031/2021/CGPI/PFE-INPI/PGF/AGU, expressed its opinion in the opposite direction to CGTEC's understanding, because the mere fact that there is no express legal provision for the treatment of know-how  as an industrial property right or express authorization for the contracting of know-how licensing would not mean the illegality and nullity of the respective contract.

For such illegality or nullity, it would be necessary that, in Brazilian law, existed a legal prohibition on the conclusion of this type of business, which does not exist. Thus, Article 425 of the Civil Code would apply, which allows the execution of atypical contracts, as well as Article 104 of the Civil Code, which establishes the possibility of concluding legal transactions whose object is not prohibited by law.

The PFE also recognized the impacts of the Economic Freedom Law (Law 13,874/19) on the Civil Code, especially with the inclusion of the single paragraph in Article 421, which establishes the principle of minimum intervention and the exceptionality of contractual review in private contractual relations, a device that must also be observed by the Public Administration and, consequently, by the INPI.

This was not the first time that the INPI has interpreted its role, including the independent way of amending the applicable legislation. The IN 70 itself and Resolution 199 changed the understanding that the INPI would act as a delegate agent of the Brazilian Internal Revenue Service (Receita Federal) and the Central Bank of Brazil. Currently, the INPI no longer examines applications for registration of technology transfer contract based on tax and remittance of capital abroad legislation.

This understanding of PFE and Opinion 00031/2021/CGPI/PFE-INPI/PGF/AGU were expressly cited at the meeting of December 28th and served as a legal basis for the proposal that the registration  of the know-how licensing agreement could be unequivocally accepted by the INPI. We understand this proposal as very positive, for meeting the wishes of private sectors and the primacy of the will of the parties in legal transactions.

• 3) Recognition of the possibility of paying royalties for applications for registration of industrial property rights

The PFE, through Opinion 00035/2020/CGPI/PFE-INPI/PGF/AGU, analyzed the possibility of paying royalties for applications for registration of industrial property rights, a possibility historically not accepted by the INPI.

By analyzing the legal nature of trademark registration applications, PFE considered that these are intangible assets with property value, protected by Articles 130 and 195, III, of LPI. It also considered that they are possible rights, subject to the resolutive condition of not obtaining the register.

Thus, from the moment the trademark registration application is made, it becomes part of the assets of its owner and thus generate its effects. One of such effects is the possibility of concluding a license agreement.

IN 70 and Resolution 199 do not prohibit the registration of a license agreement with trademark registrater application. Resolution 199, in Article 13, § 3, and Article 14, IV, however, establishes some conditions in relation to the conclusion of its effects:

• the period for the beginning of the registration of applications will be the date of publication of the approval of the dispatch of the certificate of registration of the trademarkmark in the Journal of Industrial Property (RPI); and
• in relation to trademark registration applications, the certificate of registration of the contract shall be issued with the information that the license has been concluded on free of charge basis. Thus, Resolution 199, in practice, prohibited the payment of royalties for licensing or register applications.

In understanding that there is no legal basis for the prohibition imposed by the INPI, the PEF expressed itself in the following sense:

• the date to be considered by the certificate of registration as the initial date of the contract is that declared in the contract; and
• Articles 13, § 3, and 14, IV, of Resolution 199 shall be revised or repealed.

At the meeting of December 28, the understanding of PFE regarding trademark registration applications was cited and it was proposed that this understanding would be expanded to contracts whose objects are patent applications, industrial designs and other industrial property assets, as it should be, and a consultation with PEF should be forwarded in a short term on this possibility of extension of the understanding.

In RPI No 2716, of January 24, 2023, the order of the Presidency of January 23, 2023, which includes Opinion 00035/2020/CGPI/PFE-INPI/PGF/AGU, and the Approval Order 00137/2020/PROCGAB/PFE-INPI/PGF/AGU, were published to produce its effects and decisions related to the meeting on December 28.

That is, when performing the analysis of license agreements with trademark registers applications, the INPI should consider as the effective start date the date that was declared in the contract.

With regard to Articles 13, § 3, and 14, IV, of Resolution 199, it is still unclear whether the order of the presidency would have led to its repeal or revision. Opinion 00035/2020/CGPI/PFE-INPI/PGF/AGU does not clarify the issue (differently from what it did in relation to the initial of the agreement term to be considered), and the INPI needs to revoke or expressly revise Articles 13, § 3 and 14, IV of Resolution 199.

One way to understand this scope will be to monitor the Decisions of the INPI on the subject, which may reveal the adoption of this provision regardless of the revocation or express revision.

Even if it is necessary to take further measures to effect the change in practice, we understand that it is a positive change for the market, precisely because it respects the autonomy of private agents and their economic decisions, without harming the public interest and disrespecting the national legal system.

• 4) Procedural changes

The proposals for procedural changes aim to facilitate the registration of contracts in the INPI.

The possibility of using other digital certificates besides the certificates issued by the ICP-Brazil, according to criteria still under evaluation, and the removal of the mandatory e-apostilation or e-notarization of digital signatures by foreign parties are a natural result of the increased use of digital signatures caused by the pandemic.

The adoption of these measures by the INPI was already more than necessary. At the meeting of December 28, it was emphasized that immediate procedures for the implementation of this decision should be initiated by the technical area of the INPI.

The proposal to end the mandatory signatures (initials) on all pages of contracts aims to be compatible with procedures already adopted by the trademark and patent boards of the INPI.

At the meeting, it was established that the mandatory obligation of of singnatures (initials) in all pages of the contracts  should be abolished immediately and that it will be up to the technical area of the INPI to immediately implement the functionality in the relevant electronic forms. Until implementation takes place, the attorney of the applicant for registration may present a statement warranting the authenticity of the information and documents, under the penalties of the law.

The insertion of signatures of two witnesses in private contracts is not a requirement of the Brazilian legal system, but only a possibility, and article 784, III of the Code of Civil Procedure is not applicable to this situation, since this rule concerns only extrajudicial executive titles. At the meeting, it was established that this measure should be implemented immediately.

The last proposal for a procedural change is about the end of the requirement to present statute, articles of association or constitutive act of the legal entity, as well as the last amendment on consolidated corporate object and legal representation of the legal entity of the transferee, franchised or licensed, domiciled or resident in Brazil. At the meeting of 28 December, it was assumed that the technical area of the INPI should, in the short term, adjust the systems of the INPI to this end.

• 5) Final considerations

We understand as very positive the changes related to the register of contracts in the INPI described in this article.

In addition to simplifying various procedures, these measures demonstrate more respect for private sector and contractual freedom and meet the historical longings of companies operating in the most diverse segments of the economy, both of foreign technology and national companies that receive technological knowledge often essential for their business.

These are important aspects in the evolutionary scale of the INPI's performance, which considers the current context of society, the global relevance of technology, the reduction of borders between countries and the creation of new forms of relationship, including legal relationships, between intellectual property developers and investors.

Although the expression "immediate" used at the meeting on December 28 could imply that the deliberations taken there would have direct effect and immediate application, we understand that, in fact, the use of the term, in that context, referred to the additional measures that the INPI should take immediately to give effect to the deliberations made during the meeting. An example was the publication of the order of the presidency, which dealt with the term of the license agreement for the application for registration of trademark.

We will continue to follow this matter and publish new developments through this channel.

Category: Digital Law

The Brazilian Data Protection Authority (ANPD) published the regulation on February 27, establishing parameters and criteria for applying enforcement measures.

Besides providing specific rules for the application of sanctions, such as gradual, isolated, or cumulative application, the regulation also ensures that the ANPD will only apply an enforcement measure after an administrative procedure and based on a reasoned decision, ensuring the right to a full defense, adversarial proceedings and due process of law.

Infractions may be classified as severe, moderate, or mild. The violation significantly affecting data subjects’ interests and fundamental rights is considered moderate. The ANPD will consider severe infraction when there is an obstruction to the inspection activity and, in addition:

• involves the processing of personal data on a large scale.
• there is an economic advantage because of the offense committed.
• involves risk to data subjects’ lives.
• involves processing sensitive data or personal data of children, adolescents, or the elderly.
• carry out the processing of personal data without support in one of the legal bases provided in the Brazilian Personal Data Protection Law (Law 13.709/18 – “Lei Geral de Proteção de Dados”);
• data processing with illicit or abusive discriminatory effects; or
• continuous irregular practices by the offender.

An infraction that does not characterize one of the hypotheses above will be considered mild.

Although the LGPD already provided the sanctions for violation of the law, the ANPD presented more criteria for evaluating these sanctions:

• concerning the warning penalty, the ANPD will apply it for a mild or moderate infraction when it does not characterize specific recidivism or when there is a need to impose corrective measures.

• simple fine of up to 2% of the revenues – limited to BRL 50 million – per breach if one of the following occurs: (i) a severe infraction; (ii) lack of preventive or corrective measures; or (iii) due to the nature of the breach, processing activity or personal data and the circumstances of the particular case.

One of the appendixes to the regulation establishes the criteria for identifying the basis value for applying a fine. The same appendix provides classifications applicable to information, offender’s revenue, and degree of damage.

The regulation also provides specific rules for defining revenue, which may be considered the gross revenue, the total amount of funds earned, or a value determined by the ANPD for cases where the offender does not present supporting documentation according to regulation-established criteria.

In addition, the regulation establishes that the simple fine may be increased by up to 40% for cases of specific recidivism, up to 20% in cases of generic recidivism or for each non-compliance with guidance or preventive measures, and up to 30% for each non-compliance with corrective actions.

The ANPD can also reduce the fines up to 75% in cases of cessation of the infringement, implementation of a good practice and governance policy, demonstration of internal mechanisms and procedures capable of minimizing damage to data subjects, and proof of measures capable of reversing or mitigating the effects of the infringement on the personal data subjects affected.

• daily fine, applicable to ensure compliance with a non-pecuniary sanction or with a determination established by the ANPD, considering the time between the imposition of the fine and the fulfillment of the obligation, and considering the classification of the offense and the degree of harm to data subjects.

The ANPD may also apply this sanction after failure to adjust irregularities within the deadline, obstruction of the inspection activity, or the practice of permanent infraction that has not ceased until the decision. The fine may be reduced when the offender waives the right to appeal of the decision.

The offender must pay the daily fines within up to 20 working days, from the first working day of delay in complying with the enforcement measure, or from the working day after the notification of the decision. The absence or delay in payment will result in the applicable interest and a fine of 0.33%.

• blocking personal data related to the infraction until its regularization, which is the temporary suspension of any processing procedure with personal data until the conduct is regularized. In these cases, the offender must communicate the fulfillment of the obligation and prove the regularization for the unblocking.

• deleting personal data related to the infraction, which is the deletion of the data or set of data stored in a database. The fulfillment must also be communicated to the ANPD, except when communication is proven impossible or involves disproportionate effort.

• partial suspension of the usage of the database related to the infraction for a maximum period of six months, extendable for an equal period, until the controller regularizes the processing activity. For these cases, the offender must also prove the fulfillment to restore operation.

• suspension of personal data processing related to the infraction for a maximum period of six months, extendable for an equal period, considering the public interest, the impact on the rights of the data subjects, and the classification of the infraction.

• partial or total prohibition of personal data processing for cases where: there is recidivism of the infraction punished with a partial suspension of the database or the processing of personal data; processing personal data for illicit purposes or without legal support; or when it does not meet the technical and operational conditions to maintain the adequate processing of personal data.

The regulation does not establish more details about the sanction that determines the publication of the infraction after its occurrence. It only provides that it must be distinct from the publication of a decision to apply an administrative sanction in the Official Gazette or with the other acts carried out by the ANPD  to comply with the principle of administrative publicity.

In addition to the above, the regulation also establishes the following rules:

• the sanctions of partial suspension of database usage, suspension of personal data processing and partial or total prohibition of personal data processing will only be applied after at least one of the other sanctions has already been imposed for the same specific case.
  
  In these cases, the ANPD will inform the main sectoral regulatory body so that it can express its opinion, within 20 days, on any consequences of the imposition of sanctions for the economic activities;

• sanctions may be applied to public entities, except for sanctions that provide for the imposition of fines; and

• the parameters and criteria for defining the sanction must follow:

• the severeness and nature of the infringements and personal rights affected.
• the good faith of the offender.
• the advantage gained or intended by the offender.
• the economic condition of the offender.
• the specific recurrence.
• generic recurrence.
• the degree of damage.
• the offender’s cooperation.
• the repeated and demonstrated adoption of internal mechanisms and procedures capable of minimizing damage, aimed at the safe and adequate data processing, per the LGPD.
• the adoption of good practice and governance policy.
• prompt adoption of corrective measures; and
• proportionality between the seriousness of the fault and the intensity of the sanction.

The ANPD also describes the methodology for calculating fines in the appendixes to the regulation. For the simple fine, the total calculation includes the basis value of the fine multiplied by one plus the sum of aggravating percentages minus the sum of mitigating percentages.

It is necessary to define the basis rate for applying this formula, which ranges from 0.08%, the minimum rate for minor violations, to 1.5%, the maximum rate for severe violations.

After defining the rate, the ANPD must determine the degree of damage, classified from 0 to 3, which ranges from the absence of damage or insignificant impacts to the data subjects to injury or offense to diffuse, collective or individual rights or interests, as well as the minimum values and maximum for defining the basis value of the fine.

Once the ANPD determines the degree of damage, the basis rate for the fine must be determined, which considers the maximum rate based on the classification of the infraction minus the minimum rate, divided by three, multiplied by the degree of damage, and added to the minimum rate.

The basis value for applying the fine is calculated by multiplying the basis rate by gross revenue, excluding taxes. For cases where there is no billing, a calculation similar to that of the rate will be carried out, considering, however, a maximum and minimum value depending on the classification of the infraction.

The basis value may be at least BRL 1,500 for minor violations, up to BRL 15,750.00, for severe violations.

For cases where the advantage obtained is estimable, the fine amount will be double the advantage. For these cases, there will be an adjustment to the minimum and maximum limits of the fine: BRL 1,000 to BRL 4,000 for individual or legal entities without billing, and from BRL 3,000 to BRL 12,000, for other types of legal entities.

Category: Competition

In recent years, the Administrative Council of Economic Defense (Cade) analyzed several vertical mergers that could potentially lead to competition concerns in several markets, such as supplementary health, banking, payments, petrochemical, telecommunications and retail.

On some of these occasions, the authority imposed remedies to mitigate concerns. However, contrary to the experience in jurisdictions such as the United States and the European Union, so far there is no guideline in Brazil to instruct and organize the steps of the assessment of vertical mergers.

Vertical mergers are transactions involving the acquisition of equity or assets between two or more companies that offer products and/or services at different levels of the same supply chain.

Pursuant to Cade’s Resolution No. 33/22, if neither party has a stake above 30% of the vertically integrated markets, the merger filing shall be reviewed under the fast-track procedure. Otherwise, it will be subject to a longer and thorough assessment under the non-fast-track procedure.

These transactions can benefit competition when they generate efficiencies, such as double margin elimination, alignment of economic incentives between the parties, reduction of transaction costs, better allocation of resources and optimization of the production process.

However, they can also entail concerns, primarily related to the imposition of difficulties for the entry and expansion of the combined entity’s competitors, through strategies that hinder competitors’ access to inputs (such as refusal to deal and price discrimination) or to a significant share of the customer base.

In addition, there is a risk that such transactions may distort competition if the combined entity is able to access commercially sensitive information of competitors that are also suppliers or customers of its products or services.

Cade recently resumed plans to draft guidelines for the assessment of vertical mergers. To this end, it formed a working group in June 2022 and, in January 2023, started a proceeding to hire an external consultant to support the drafting of such guidelines.

This course of action follows an international trend of increased concerns regarding vertical mergers and can be influenced by ongoing discussions in other jurisdictions.

In the United States, for example, the Federal Trade Commission (FTC) is no longer enforcing the guidelines published in 2020, which, in its view, does not adequately reflects market reality and could be based on questionable economic theories. Currently, studies are being carried out to develop new guidelines, which may address topics such as the methodology for the assessment of digital markets and transaction involving the acquisition of nascent and disruptive companies (mavericks).

For now, in view of the absence of guidelines for the review of vertical mergers in Brazil, the risk assessment of this kind of transaction should be guided by elements already considered in Cade’s precedents, such as: the players’ market shares in vertically integrated markets; incentives and ability to hinder competitors' access to input or a significant share of customers; and access to information that may distort competition.

Category: Litigation

"In Brazil, even the past is uncertain." The phrase, whose authorship is attributed to both the former President of the Central Bank Gustavo Loyola and the former minister Pedro Malan, summarizes the action of the Supreme Court (STF) on February 8, by not applying the modulation of effects on the cessation of the effectiveness of the res judicata in tax matters.

Regardless of the specific tax issues of the judges, a point that drew attention concerns the possibility of automatic cessation of the effect of the res judicata from the weighting of constitutional principles and values at stake, with a departure from any modulation of the effects of the declaration of constitutionality/unconstitutionality, not only for reasons of legal certainty or exceptional social interest –^[1]  which could "authorize" the extension of this understanding to cases involving successive treaty obligations from several other areas.

Before addressing this issue specifically, it is important to remember the developments so far settled in the Supreme Court on the declaration of constitutionality or unconstitutionality of a rule.

The effectiveness of the declaration of constitutionality/unconstitutionality is divided into two species:

• normative effectiveness, related to the maintenance or exclusion of a certain normative precept of the legal system; and
• effectiveness, corresponding to the attribution of imposing force in relation to supervening acts.

In the judgment of RE 730.462 (Theme 733 of the general repercussion), of rapporteurs of the late Minister Teori Zavascki, the Supreme Court recognized that "the decision of the Supreme Court declaring the constitutionality or unconstitutionality of normative precept does not produce the automatic reform or termination of previous judgments that have adopted different understanding; for this to occur, it will be indispensable to file its own appeal or, if applicable, the purpose of the own termination action, pursuant to Art. 485, V, of the CPC, observing the respective period of procedure (CPC, art. 495)".^[2]

The reason behind the above understanding is that, once the  court decision is given observing the criteria provided for it to be considered valid (presenting one of the possible interpretations for the provisions applicable to the case), this will reflect an act of application of the law and, therefore, an individual and concrete rule, whose scope is to discipline the legal relationship between the subjects who have integrated the poles of the demand. Although the Brazilian system of precedents provides for situations in which the decision resulting from the judgment of some instruments has a binding effect, it cannot be denied that, in order to have the ability to regulate a particular legal relationship, it is essential that the understanding to be followed is reflected in an individual and concrete norm.

However, the scenario so far sedimented^[3] seems to have changed in recent weeks, from the judgment of RE 949.297 and RE 955.227.

This is because the judges define whether and how the decisions of the Supreme Court cease the future effects of the res judicata in tax matters, when the decision, with declaratory effects, is based on the constitutionality or unconstitutionality of a tax.

To exemplify, it is considered that a company X questions the collection of a certain tax by the Union. After obtaining a favorable decision, having become final, it ceases to pay the extradition. Subsequently, the Supreme Court decides on the constitutionality of the collection of the tax in concentrated or diffuse control with general repercussion.

What are the effects of this subsequent pronouncement of the Supreme Court in relation to the taxpayer who is the owner of the thing deemed to be excluded from the collection of the tax?  Is it still producing effects? Can it be reconstituted via rescission action? Do its effects cease from the conclusion of the judgment by the Supreme Court in concentrated or diffuse control of constitutionality nthe rite of general repercussion?

In the recent trial by the Supreme Court, the third option prevailed.  This means that, not atthe time when the Supreme Court decides for the constitutionality of the collection of the tax (in the specific case, this happened in 2007, through ADI), the res judicata that the taxpayer had ceases to produce effects for the future, regardless of the judgment of rescission action.  An observation was made: only the automatic cessation of  the effectiveness of the res judicata will occur when the subsequent decision of the Supreme Court was made in concentrated or diffuse control and concrete constitutionality according to the rite of general repercussion.

This understanding is based on two main grounds expressed in the Supreme Court's decision:

• "if it would be producing tax and economic injustice, because modulation in favor of those who, even knowing the very clear position of the Supreme Court, still persisted in not collecting"; and
• "the maintenance of final decisions that declare the unconstitutionality of the incidence of the Social Contribution on Net Income (CSLL) – in reaction to generating events after that year – reveals discrepancies that could violate tax equality in the face of unequal treatment as well as free competition. This is because the taxpayer exempted from the payment of tax by final decision has a competitive advantage over the others, since it does not allocate a portion of its resources for this purpose – a situation different from that of its competitors who are obliged to pay – in order to cheapen the costs of its structure and production."

Clearly, the Supreme Court has put in front of constitutional principles and values, to decide not only on the modulation or not of the effects of the declaration of constitutionality, but also to recognize the possibility of automatic cessation of the effectiveness of the res judicata. In the specific case, we have a clash. On the one hand, legal certainty (judged) on the other hand, equality and free competition.

One aspect that drew much attention, in a negative way, was the non-modulation of the effects of the decision and, therefore, the attribution of retroactive effects to the new understanding. Until the trial of the 949,297 RE and the 955,227 RE, the jurisprudence of the Supreme Court recognized that the res judicata would only have its effectiveness impeded if there was a rescission action, even though the position reflected in it was not in tune with the supervenient position of the Court (General rebound theme 733).

With the 2015 CPC edition, Article 927, § 3, was introduced^[4], which contains a wording similar to article 27 of Law 9,868/99, which authorizes the Supreme Court to modulate the effects of its decisions provided that its jurisprudence changes or in judgment of repetitive appeals. The reason for justifying the modulation of the effects should be social interest and legal certainty. And here, we are drawn to the fact that the decision to be modulated is no longer required to be that which has declared the unconstitutionality of a legal act or a normative act. The parameter becomes the case law of the court or the projustice of a decision in the judgment of repetitive appeals.

In any case, the premise is the existence of an understanding with broad scope and whose modification allows you to affect a significant number of legal relations, a reason that allows the effects of the decision to be calibrated, with the establishment of a specific moment from which the new interpretation should be observed.

to allow retroactive effects to the decision amending dominant case-law, such as that arising from the judgment of 949,297 RE and the 955,227 RE is an affront to legal certainty, in particular because taxpayers who behaved over many years according to the res judicata on their ownership have complied with valid, effective determinations in force emanating from the Judicial.

However, many years later, the same judiciary decides that those decisions should not take effect, even if those concerned have not used the instruments that the procedural system makes available to challenge decisions that have become final.

We have not reduced the importance of the primacy of isonomy and free competition, but it is extremely dangerous to sanction taxpayers who have behaved in accordance with a decision issued by the judiciary and which has set the limits of their legal relationship with the Union with regard to a specific tax.  Therefore, even if the cessation of the effectiveness of the res judicata by virtue of a retrial with binding force is authorized, the protection of legal certainty requires that the acts carried out in accordance with an order emanating from the judiciary itself be preserved, determining that the new orientation should apply for the future.

That is, there is a real innovation of the rule on the institute of the res judicata provided for in Article 502 of the Code of Civil Procedure, by admitting the  possibility of breaking its effectiveness from  the weighting of constitutional values, moving away from the need for employment from the rescission action.

Although the precedents discussed by the Supreme Court concern the  tax obligation of successive treatment, nothing prevents issues of this kind from other areas may suffer impacts (  for example, administrative or civil contracts of successive treatment that have constitutional repercussion, able to attract the jurisdiction of the Supreme Court to resolve any conflict)  . At this point lies the concern of all operators of the right to follow the future consequences of this decision, since its orientation may affect legal relations of various branches.

^[1] As recommended in Article 27 of Law 9,868/99 and Article 535, §6, of the CPC.

^[2] According to the opinion of Minister Teori Zavascki: "Normative effectiveness (= declaration of constitutionality or unconstitutionality) operates ex tunc, because the judgment of validity or nullity, by its nature, is directed to the very birth of the rule questioned. However, when it comes to executive effectiveness, it is not correct to say that it has been effective from the origin of the standard. It is that the binding effect, which supports it, does not stem from the validity or invalidity of the rule examined, but from the judgment examining it.

Deriving, the executive effectiveness, from the judgment (and not from the validity of the rule examined), its initial term is the date of publication of the judgment of the Supreme in the Official Gazette (art. 28 of Law 9.868/99). It is therefore effective that it achieves administrative acts and judicial decisions supervening to that publication, not previous acts. Previous acts, even when formed on the basis of an unconstitutional rule, can only be undone or terminated, if applicable, in their own process."

^[3] We cannot fail to bring to debate the provisions of Article 535, §§ 5 to 8 of the CPC, which also considers unenforceable the obligation recognized in judicial enforcement order founded on law or normative act considered unconstitutional by the Supreme Court, or founded on application or interpretation of the law or normative act taken by the Supreme Court as incompatible with the Federal Constitution,  concentrated or diffuse constitutionality control.

In addition, it authorizes that the effects of the decision of the Supreme Court can be modulated in time to promote legal certainty. Finally, it specifies that, if the decision is given after the final judgment of the decision under execution, it will be up to the rescission, the period of which will be counted from the final judgment of the decision given by the Supreme Court.

It is quite true that this provision deals with the declaration of unconstitutionality of the rule. However, for the sake of symmetry, it cannot be ruled out in cases of a certain enforcement order becoming inadmissible even if by the declaration of constitutionality of the rule, especially in the case of the specific case under that article, since the recipient undertakings had an enforcement order on an obligation not to pay in a successive agreement.

^[4] Art. 927. Judges and courts shall observe:

• 3 - In the event of a change in the dominant case law of the Supreme Federal Court and the higher courts or that arising from the judgment of repetitive cases, there may be modulation of the effects of the change on the social interest and legal certainty.

Category: Agribusiness

In force since November 1, 2022, Ordinance 501/22, published by the Ministry of Agriculture, Livestock and Supply (Mapa), aims to regulate issues related to the National Registry of Seeds and Seedlings (Renasem).

The ordinance complements Law 10.711/03 and Decree 10.586/20, the two main normative instruments that establish the National System of Seeds and Seedlings (SNSM), whose purpose is "to ensure the identity and quality of the material of multiplication and plant reproduction produced, marketed and used throughout the national territory".^[1]

According to Article 3 of Law 10.711/03, the SNSM covers several activities, such as production, certification, analysis, marketing and use of seeds and seedlings. Individuals or legal entities performing the activities included in the system must register with the National Registry of Seeds and Seedlings (Renasem).

Renasem is a single record, valid throughout the national territory, linked to a CPF or CNPJ. Its purpose is to enable on the Map people who "perform the activities of production, processing, repackaging, storage, analysis or trade of seeds or seedlings and the activities of technical responsibility, certification, sampling, collection or analysis of seeds or seedlings".^[2]

Ordinance 501/22 establishes the details, specificities and procedures for the registration and accreditation of all SNSM entities in Renasem. Among the regulations, we highlight the definition of the deadline for the survey prior to the granting of registration or accreditation and the definition of the validity period of registration and accreditation in Renasem.

Regarding the inspection deadline, the previous standard – regulated by Normative Instruction 9/05 and Normative Instruction 24/05, both of the Map – established that the inspection should take place no later than ten days after the legal requirements were meet. This period was extended to 30 days, to enable the previous technical evaluation, when necessary, after meeting the requirements related to the documents.

As for the validity of the registration and accreditation in  Renasem, the previous rule provided for three years, with the possibility of renewal. With the new standard, the term becomes five years, with the possibility of renewal successively for equal periods.

Ordinance 501/22 also details the requirements of the Map so that individuals and legal entities can register and obtain accreditation in Renasem. The standard presents all the information and documents necessary for registration in each of the activities provided for in Law 10.711/03 and Decree 10.586/20. Registration can be made via electronic system.

The determinations brought by the new standard are important updates for the operation of SNSM and Renasem, mainly due to the increase of the registration period for the qualified and the detailing of the previous surveys to be carried out.

^[1] Art. 1 of Law 10.711/03

^[2] Art. 4 of Decree 10,586/20

Category: White-Collar Crime

The performance of the Supreme Federal Court (STF) in 2022 was marked by a series of important trials and with repercussions in the economic criminal sphere.

With the arrival of a new year, the Supreme Court resumes the agenda of discussion of criminal cases of great impact on the routine of individuals and legal entities in Brazil.

Some of the following criminal cases are among the most awaited for court review in 2023:

1. International legal cooperation in criminal matters for access to internet data stored in providers abroad

The Declaratory Action of Constitutionality 51 (ADC 51), proposed by the Federation of Associations of Information Technology Companies, addresses access to data of internet users stored in providers abroad, as well as the procedure determined by the Legal Assistance Agreement in Criminal Matters signed between Brazil and the U.S. (MLAT – Decree 3,810/01)

The importance of the theme is due to the possibility provided by the agreement to request information and data considered relevant by the Brazilian authorities directly to content providers located abroad.

The case, which has wide practical repercussions for the investigation of cybercrimes in Brazil and has the participation of technology giants such as Facebook and Yahoo how amici curiae, is in a vote-view with The Minister Alexandre de Moraes of the Supreme Court since October 2022, but should return to the agenda of the plenary of the Supreme Court soon, according to the minister.

2. Limits of telephone secrecy in police investigations

Another highly anticipated trial, initially scheduled for mid-2022, is that of the Extraordinary Appeal 1,042,075 (ARE 1,042,075), which deals with the possibility of access to material contained in electronic device found fortuitously by the police authority at the crime scene.

More than that, the trial also determines the lawfulness of the evidence collected from this device, determining whether the performance of expertise in this case would constitute a violation of the confidentiality of communications and telephone secrecy.

In the corporate environment, the case has significant repercussions that go beyond the criminal sphere, starting with aspects related to data protection in the collection of evidence from electronic devices of executives of large companies involved in corruption scandals, for example.

For this reason, the expectation is that the Supreme Court delimits proportionality criteria in the collection of these means of evidence, establishing limits and guidelines for police action in these cases.

3. Constitutionality of criminalization of gambling in Brazil

With a long-awaited trial and pending since 2016, when the Supreme Court recognized the general repercussion of the matter, Extraordinary Appeal 966.177, which has as rapporteur Minister Luiz Fux, deals with the constitutionality of the typification of gambling in the country.

The theme, which has already been the subject of article on our website, has great relevance for the recognition of the legality of the operation of gaming and betting operators in the country. Currently, the practice of exploiting or establishing gambling constitutes an illicit act punishable by detention from three months to one year and a fine, as determined by Article 50 of the Criminal Misdemeanors Act (Decree-Law 3,688/41).

Based on an extraordinary appeal brought by the Public Prosecutor's Office of Rio Grande do Sul, however, the Supreme Court was urged to speak on the reception of the provision by the 1988 Constitution, which privileges economic freedom and free enterprise. The trial of the case, initially scheduled for April 7, 2022, was postponed by the Supreme Court and waits to be put back on the agenda.

4. ANPP retroactivity

There is also pending discussion on the retroactivity of the application of the Agreement on Non-Criminal Prosecution (ANPP) for crimes committed before the validity of the Anti-Crime Package (Law 13,964/19). That is, the Supreme Court must decide whether, for crimes committed before January 2020, it is possible to apply the ANPP.

Introduced in Brazilian legislation by Law 13.964/19 (which added Article 28a to the Code of Criminal Procedure), the ANPP represents an important decriminalizing mechanism for the extinction of punishability of individuals and/or legal entities involved in criminal proceedings, through compliance with requirements proposed by the Public Prosecutor's Office.

This is an innovative agreement for the national legal system, applicable for crimes whose minimum sentences are less than four years in detention.

Thus, from the validity of the Anti-Crime Package, it is possible to apply the ANPP for crimes such as swindle, corruption, embezzlement, use of counterfeit currency, as well as crimes against the environment and the tax order, for which, before the validity of the law, would not be applicable other decriminalizing institutes, such as the conditional suspension of the process and the criminal transaction.

In this sense, the Habeas Corpus 185,913, filed in May 2020, deals with the possibility of a proposal for an agreement to reverse the conviction of a defendant based on the principle of retroactivity of the most positive standard for the imputed.

With the retroactivity of the law, the defendant would be able to benefit from  ANPP and, if the agreement is executed, the conviction will be reversed. This would open scope for the review of other convictions, prior to 2020, pending final judgment, if the defendants meet the requirements for conclusion of the ANPP.

5. Impacts of award-winning collaboration on administrative misconduct actions

 Another important topic under consideration in the Supreme Court – and which had its judgment suspended in 2022 – refers to the Extraordinary Appeal 1,175,650 (ARE 1,175,650), which deals with the possibility of using an award-winning collaboration agreement to avoid sanctions imposed in a public civil action of liability for an act of administrative misconduct.

By mid-December 2022, the Court had resumed the trial of the case, the controversy of which refers to recent amendments in Article 17, § 1, of the Law of Administrative Improbity. This rule prohibited agreements and transactions for acts of administrative misconduct, but from 2021, it began to expressly provide for the possibility of concluding agreements, provided that the damage caused is fully reimbursed.

The issue affects companies and individuals involved in public civil lawsuits filed by the Public Prosecutor's Office, representing an important leading case for the establishment of limits on the applicability of collaboration agreements awarded in the Brazilian legal system.

Category: Agribusiness

Since President Luiz Inácio Lula da Silva was sworn in on January 1, 2023, attention turns to the campaign promises, which permeate various economic sectors. Specifically in agribusiness field, known to be the engine of the Brazilian economy in the external sector, Lula committed himself to the "strengthening of agricultural production, on the fronts of family agriculture, traditional agriculture and sustainable agribusiness", and with the "development of the agro-industrial complex".

Given the guidelines of the new government, it is essential that agribusiness agents, whether producers, investors, traders or even final consumers, be aware of the changes and set their expectations.

To monitor the evolution of the scenario in 2023 and evaluate the prospects for the future, we present some points that deserve attention.

Expectation of growth of agribusiness GDP

The Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV–Ibre) projected an 8% increase in agribusiness GDP in 2023 – the largest growth since 2017. The Confederation of Agriculture and Cattleraising of Brazil (CNA), more modestly, predicted a growth of up to 2.5% for the GDP of the sector in the same period.

One of the main factors for the high projections is the expectation of a record-breaking grain crop in 2023. According to the Brazilian Institute of Geography and Statistics (IBGE) calculations, the perspective is for an increase of 12.6% in relation to the 2022 result.

The optimistic expectations are also based on the launch of the 2022/2023 Crop Plan. The plan, released by the previous federal government on June 29, 2022, provides for the availability of R$ 340.88 billion for the sector by June 2023 – an increase of 36% compared to the previous Crop Plan. The resources are allocated not only for costing and marketing, but also for investments in general.

Environmental policy and surveillance

After years of more flexible and liberal environmental policy, the expectation is that the new management will strengthen environmental preservation agencies and combat illegal extractive practices.

The new government published Decree no. 11.373/23, which determines the transfer of 50% of the amounts collected with the application of fines by the Federal Government to the National Environment Fund (FNMA). Until the enactment of the Decree, only 20% of the resources went to the FNMA. The rest was split up among the Naval Fund, Municipal and State funds for the environment, and other related entities.

In addition, one of Lula's campaign promises is to establish international cooperation for the preservation of natural resources. Agreements are expected to be announced over the coming months with international agencies to ensure more resources for forest protection. The first signs of the resumption of international cooperation came with the announcement of the return of resources from Germany and Norway to the Amazon Fund.

From the point of view of agribusiness, it is essential that producers are up to date with environmental regulations, including keeping registers and information updated before federal and state environmental agencies, in order to avoid fines and other sanctions.

Changes in georeferencing technical standards

The National Institute of Colonization and Agrarian Reform (INCRA) published new rules for georeferencing rural properties, in force since December 30, 2022. They are mandatory for dismemberment, remembrance, land parceling or transfer of rural properties from areas above 100 hectares.

The rules allow the inclusion of new survey methodologies, such as remote sensing using drones. INCRA states that these procedures will not immediately affect rural property owners and may generate savings for the professionals responsible for georeferencing work.

This movement symbolizes a modernization of the techniques of enrollment and registration of rural properties, besides helping to avoid problems of demarcation and overlap of land and other obstacles related to possession.

In relation to rural properties that are not yet georeferenced, it is essential that the person responsible for the property provides georeferencing, to ensure and confirm the corresponding perimeter and area. For regularization before INCRA, it is necessary to observe the deadlines for each total area described in Decree no. 9.311/18, which establishes that all rural properties must be georeferenced by November 20, 2025.

Ministerial organization and public priorities

One of the first acts of the new administration established a ministerial reorganization concerning the agrarian affairs through Decree no. 11.338/23. The Ministry of Agriculture, Cattleraising and Supply (MAPA) was dismembered and its agrarian competencies were divided with the Ministry of Agrarian Development and Family Agriculture, recreated under Lula’s government.

This change demonstrates an interest in supporting small producers and settlements, reinforcing their importance in the agribusiness production process.

So far, there has been no relevant movement in the ministries and there is no expectation of any action to the detriment of monoculture for export, a relevant part of the production of Brazilian agribusiness. On the other hand, it is expected a boost in credit for small producers and, eventually, the expansion of social programs aimed at strengthening the production of family agriculture.

Conclusions and expectations

In these early days of the new government, the scenario is more of optimism than skepticism. Measures that are very relevant and impactful for the sector are under discussion (tax issues, for example).

In the coming years, the agents that operate in agribusiness should be mainly focused on the execution of the campaign promises of the new government. It is known that investment in agribusiness is inseparable from the Brazilian economic matrix. Investing is primordial and necessary.

In practical terms, the government, although committed to promoting family agriculture and encouraging the modernization of agro-industry, is already under pressure to show practical results. It will take some time to implement the measures that will make these policies effective.

From the market's point of view of expectation, there is some optimism about the rise in agribusiness GDP (based on a record harvest in 2023), which causes a ripple effect in all sectors linked to this industry. The confirmation of this optimism, however, is tied to a combination of factors ranging from favorable weather conditions to the serious and efficient implementation of economic and government policies.

Category: Real estate

The 2nd Panel of the Superior Court of Justice (STJ) confirmed in the ruling of AREsp 1.760.009/SP, by unanimity of votes, that the event that generates the Real Estate Transfer Tax (ITBI) only occurs with the effective registration of the acquisitive title in the competent land registry, even in cases of transfer of real estate via spin-off of companies.

Since the publication of the decision on June 27, 2022, motions for clarification of judgment have been submitted by the requesting company, on which the Superior Court of Justice (STJ) has already decided – amending the previous judgment – expressing the way in which the claim for refund of undue payment should be executed. The municipality present in the passive pole of the action did not present resources.

In the case decided by the STJ, the company filed a claim for refund of undue payment against the municipality of São Manuel / SP, requiring the repayment of ITBI amounts paid improperly to another municipality, and it was not known this fact at the time of its payment.

The company claims that, as the collection of the ITBI occurred in advance to the registration of the corporate act of spin-off in the property’s title record, at the time of its payment the transmission of the property had not yet occurred and, consequently, the tax triggering event.

The effective registration of the acquisitive title was only verified after georeferencing the property, necessary for the registration of the referred title. The procedure concluded that the property was located in a different municipality than the one in favor of which the ITBI was paid.

The controversies about the timing of the ITBI tax triggering event are many, although the Brazilian Civil Code, in article 1.245, is clear in relation to the fact that the transfer of real estate property only occurs with the registration of the acquisitive title in the competent land registry, and not with the mere signing of the title.

It is the popular saying: "the one who does not register, is not the owner".

The Brazilian Federal Constitution of 1988 (CF/88), in article 156, item II, provides that the ITBI is a tax of municipal jurisdiction charged before the "inter-living transmission, in any capacity, of real estate property, by nature or physical accession, and of in rem rights, except as collateral, as well as the assignment of rights to its acquisition”.

A considerable part of the Brazilian notary offices and land registries, however, does not act in this way.

To prenote the title for registration in the land registry, that is, prior to the registration of the security itself, it is necessary to present the ITBI payment slips or the tax exemption document.

In the specific case of the transmission of real estate via spin-off of companies, for example, there are many municipalities that argue that the constitution of the company on the date of registration of its corporate act in the commercial registry, by itself, would represent the occurrence of the tax triggering event.

There are also municipal laws establishing that, in the case of the transfer of real estate via private instruments (as happens in the division of companies that do not depend on public deed), the ITBI must be collected before the signature of the private instrument or up to 30 days after its signature, which, in our view, contradicts the legal provision of the CF/88 and Brazilian Civil Code.

As stated on Article 110 of the National Tax Code, the tax law cannot change the definition of institutes and concepts of private law to define or limit tax powers. Therefore, if civil law determines that the transfer of real estate property only occurs with the effective registration of the purchase title in the land registry, the tax authorities cannot use another concept to demand payment of the ITBI.

The 2nd Panel of STJ, when evaluating the issue, understood that the event that generates the ITBI only occurs with the registration of the title in the land registry, effective moment of the transfer of the real right. In 2019, in a case analogous to the presently analyzed judgment, STJ had already decided in a similar manner:

FISCAL. INTERNAL APPEAL IN THE REMEDY OF SPECIAL APPEAL. ITBI. TRANSMISSION OF THE PROPERTY. TAX TRIGGERING EVENT. REGISTRATION OF THE LEGAL BUSINESS IN THE COMPETENT LAND REGISTRY. RECURSIABLE FEES PROVIDED FOR IN ART. 85, §11 OF THE FUX CODE. SPECIAL APPEAL BROUGHT UNDER THE CPC/1973. NOT APPLICABLE. INTERNAL APPEAL OF THE MUNICIPALITY OF PORTO ALEGRE/RS TO WHICH IS DENIED.

1. According to the jurisprudential guidance of this Superior Court, even in case of spin-off, the tax triggering event of ITBI is the registration in the competent land registry of the property, in accordance with civil law. Therefore, there is no way to consider as a fact that the date of the companies' constitution by the registration of corporate act in the Commercial Registry. Previous: AgRg in REsp. 798.794/SP, rel. min. FRANCISCO FALCÃO, DJ 6.3.2006; RMS 10.650/DF, rel. min. FRANCISCO PEÇANHA MARTINS, DJ 4.9.2000; AgRg on REsp. 982.625/RJ, rel. min. HUMBERTO MARTINS, DJe 16.6.2008. [...] (AgInt no AREsp 794.303/RS, reporting judge Minister Napoleon Nunes Maia Filho, First Panel, DJe of 13/6/2019.)

It can therefore be concluded that the transfer of real estate via the spin-off of an entrepreneurial company is in no way an exception to the rule. The incidence of ITBI derives only from the effective transfer of ownership or other in rem right over the property (which is not the case of the mere signature or registration of corporate acts in the competent commercial registry, for example).

We perceive as correct the understanding of STJ that the generating fact of ITBI is the moment of registration of the title, regardless of the nature of the purchase title, whether public deed of sale and purchase or corporate act. You don't have to make any kind of differentiation. This ensures the legal certainty of real estate transactions.

In cases where the collection of ITBI is due to corporate transactions, therefore, the only date to be considered for the occurrence of the event that generates the ITBI should be the registration of the corporate act in the transferred property’s title record, and not the date of signature of the corporate instrument or its registration in the commercial registry or civil registration of legal entities.

Taxpayers, however, need to be aware of the specificities of applicable municipal legislation and local internal affairs regulations. It is quite common that the practice of municipal financial departments and land registries is not in accordance with the position stated by STJ and it is necessary to file preventive lawsuits, to be able to proceed with the registration of the title without having to pay the ITBI in advance or not pay the tax plus fine and interest.

Those who have already paid the ITBI due to the mere registration in the commercial registry of the corporate act of spin-off, without the effective transmission of property or other in rem right on the property, can thus judicially postulate the refund of the undue payment.

Category: Real estate

The Supreme Federal Court (STF), through the Extraordinary Appeal with Aggravation (ARE) 1,294,969, discusses whether there is or not the incidence of the Real Estate Property Transfer Tax (ITBI) on the assignment of rights to purchase and sale real estate property and, if so, when should be collected . The return of the theme to debate shows that the understandings already consolidated at the Court have not yet been definitively pacified.

The discussion began in 2018, when, in view of the assignment of rights to promise to purchase and sale an autonomous unit, the City of São Paulo raised the need to collect the ITBI as a condition for the drafting of the Public Deed for the assignees of rights. The assignees filed a writ of mandamus, which was upheld based on the premise that "the mere assignment of rights, carried out by a deed of purchase and sale, without its necessary registration, does not constitute a generating fact of the ITBI".^[1]

The city appealed, but the first instance decision was upheld. An extraordinary appeal was then interposed, tried on 11 February 2021. In the trial, Minister Luiz Fux proposed the following thesis for the purposes of general repercussion: "The event that generates the Real Estate Property Transfer Tax (ITBI) only occurs with the effective transfer of real estate property, which occurs through registration."

At first, therefore, when judging the issue, the Supreme Court reaffirmed the understanding that the generating fact of the ITBI is the transfer of the real estate property, which is only effective with the registration of the title in the real estate registry office. The municipality of São Paulo, however, appealed again through a motion for clarification, claiming that the case refers to the assignment of rights related to the commitment to purchase and sale of the real estate property, while the pacified jurisprudence only refers to deals with the transmission of the real estate property.

The municipality relies on the argument that the assignment of rights in the acquisition of real estate property is a hypothesis of the incidence of the ITBI expressly provided for in Article 156, II, of the Federal Constitution, while the jurisprudence refers to the transmission of the property, and not to the rights related to it.

Indeed, the Constitution recommends that the assignment of rights related to the transmission of real estate property is configured as a fact that generates ITBI. The municipality, therefore, argues that the registration of the title is irrelevant to the incidence of the tax on the rights of the acquisition of real estate property.

The reporting minister Luiz Fux voted to reject the motion, clarifying that the Supreme Court, in a previous decision, analyzed the legal controversy raised by the application of the dominant jurisprudence in such Court. According to the minister, the event that generates the ITBI "is only perfected with the effective transfer of the real estate property, which occurs through registration before the real estate registry office". Three other ministers followed the vote of the reporting minister.

Minister Dias Toffoli, however, pointed out that, in fact, the mentioned precedents, which consolidated the dominant jurisprudence in the Court, are related to inter-living transfer of real estate property or real estate property rights, while the case under discussion refers only to the assignment of rights related to the commitment to purchase and sell the real estate property.

The Minister also noted that the Federal Constitution provides, in item II of Article 156, the collection of ITBI in the assignment of rights related to the transfer of real estate property. He argued, thus, that the fixed thesis does not cover the hypothesis discussed in the present case.

Six other ministers followed the vote of Minister Dias Toffoli, and the Supreme Court, by a majority, accepted the motion for clarification to recognize the existence of constitutional matter and, therefore, its general repercussion, without, however, reaffirm jurisprudence.

Currently the Extraordinary Appeal with Aggravation (ARE) 1,294,969 is pending of judgment on its merits with the reporting minister André Mendonça .

Although so far the decisions on the ITBI were related to the matter if the incidence of the tax should occur only at the registration of the title, it is verified that the Supreme Court is positioning to rediscuss the theme and judge it definitively.

In this way, there are chances that new understandings on the subject shall be consolidated in the courts and that, consequently, there are relevant financial impacts on real estate transactions, even if they only referred to the transmission of rights, and not property.

^[1] J.J. J.J. 13th Court of Public Finance. Civil warrant - Extinction of the tax credit, Autos 1008285-73.2018.8.26.0053. Trial date: July 27, 2019. Release date: July 31, 2019.

Category: Environmental

Published on January 1, 2023, Decree 11,373/23 amended Decree 6,514/08, which regulates the procedure for environmental administrative violations and sanctions at the federal level.

In its 14 years of validity, Decree 6,514/08 was subject to repeated changes, the most recent – until now – made by Decree 11,080/22, which entered into force last May . Many of the alterations introduced in 2022 have now been amended or repealed by Decree 11,373/23.

Among the main changes brought  by the new decree is the exclusion of the conciliation hearing as a stage of the administrative process resulting from the issuance of infringement notices relating to environmental administrative violations.

Decree 6,514/08, in the form amended by Decree 11,080/22, established that the defendant, before presenting his defense and if he had not expressed his disinterest in conciliation, would participate in a conciliation hearing, to be informed of possible solutions aimed at ending the proceedings. Said solutions are:

• discount for payment of the fine;
• installment plan for payment of the fine; and
• conversion of fines into environmental quality preservation, improvement, and recovery services.

The conciliation hearing also resulted in the interruption of the deadline for submission of defense by the defendant . With the end of the conciliation hearing stage, there is no longer interruption of said deadline, which was maintained in 20 days.

With new wording given by Decree 11,373/23, the possible legal solutions to end environmental administrative proceedings are available regardless of holding a conciliation hearing.

The defendant may require the conversion of the fine into services of preservation, improvement and recovery of the quality of the environment, until the presentation of his closing statements.

The conversion can lead to the application of discounts to the total amount of the fine, depending on the time of the request for conversion and whether the accused entrepreneur is considered to be responsible for the execution of the project to be financed by the conversion of the fine.

In cases where the entrepreneur is responsible for carrying out the project – called direct conversion – the discount on the amount of the fine will be 40%, if the request for conversion is made until the filing of administrative defense by the defendant, and 35% for requests made until the submission of the closing statements.

In indirect conversion, when the entrepreneur adheres to a project previously selected by the entity who issued the fine, the discount will be 60%, if the request for conversion is made until the filing of administrative defense, and 50%, if made until the submission of the closing statements.

Also, in regards to the amount gathered through fine payments, changes were made to the portion that will be allocated to the National Fund for the Environment (Fundo Nacional do Meio Ambiente or FNMA).

Decree 11,373/23 now establishes that50% of the amount gathered by environmental administrative fines is to be reverted to the FNMA. In previous wording, given by Decree 11,080/22, only 20% was destined to the FNMA.

This particular point relates to another decree published on the same date: Decree 11,372/23, which regulates  Federal Law 7,799/89 – which established the FNMA.

In addition to the procedural changes, we see that Decree 11,373/23 and Decree 11,372/23 seek to revitalize the FNMA.

Based on these procedural changes, it is worth monitoring the procedures resulting from environmental administrative infractions, to evaluate the impacts of  Decree 11,373/23, especially regarding the time elapsed for ending discussions in the administrative sphere.

Category: Labor and employment

After the extension of the deadline for launching labor lawsuits events on eSocial, a new consolidated version of the eSocial Guidance Manual was made available on January 24, with new changes.

This latest version extends to April 1 the initial milestone of the information to be transmitted.

Therefore, for the purpose of posting information regarding labor proceedings, only decisions or agreements that have become final or concluded from April 1st should be considered.

For events S-2500 and S-2501, the new wording of the manual included the possibility of anticipating the sending of information for compliance with obligations arising from a court decision.

This forecast includes cases in which the employer will have to comply with court decisions in a period lower than that normally stipulated for the insertion of information in eSocial.

eSocial also provided a guidance note indicating all changes made to the manual.

Further changes may still be made by eSocial and will be duly informed.

With the latest changes, the deadlines become:

• Date of entry of labor proceedings events: April 1, 2023
• Initial milestone of the information to be transmitted: April 1, 2023
• First deadline for transmission of events: May 15, 2023