Category: Life sciences and healthcare

The Collegiate Board of the National Health Surveillance Agency (Anvisa) decided, on August 30, to maintain, on a definitive basis, the permission for remote delivery of drugs subject to special control, including within the public health programs scope.

The new rule approved by Anvisa permanently modifies Ordinance SVS 344/98, which approves the technical regulation on substances and drugs subject to special control, and Anvisa RDC 4/2009, which establishes good practices for dispensing and marketing products in pharmacies and drugstores.

For context, it should be remember that due to the quarantine and social distancing measures adopted during the covid-19 pandemic, Anvisa published in March 2020 the Anvisa RDC 357/20. The goal was to temporarily increase the maximum quantities of drugs subject to special control and allow remote delivery during the Public Health Emergency of International Importance (PHEIC) period.

The pandemic period has brought significant changes in the behavior and the way products are consumed in the digital environment (via e-commerce platforms or marketplaces), including an increase in transactions involving drugs, medical devices, supplements and food.

The same happened with assistance services, which led to the approval of Law 14,510/22. This standard establishes guidelines for the practice of remote services by health professionals (so-called telehealth), including physicians, nurses, psychologists, physiotherapists, occupational therapists and speech therapists.

Definitive changes in the controlled medicinal products rules

The standard approved by Anvisa permanently modifies Ordinance SVS 344/98, which approves the technical regulation on substances and drugs subject to special control and Anvisa RDC 44/09, which establishes good practices for dispensing and marketing products in pharmacies and drugstores.

From now on, in order for pharmacies or drugstores to deliver drugs subject to special control remotely, including via government programs, the original copy of the corresponding prescription notification or special control prescription must be retained.

In addition, the dispensing establishment must provide pharmaceutical care to the patient and monitor the drugs remote dispensing.

Regarding the procedures that must be adopted, the regulation establishes that the prescription notification or special control prescription must be withdrawn at the address informed by the patient or received via electronic prescription – that is, a prescription that necessarily has a digital signature certified by the Brazilian Public Key Infrastructure system (ICP-Brasil) and can be forwarded to the patient or his legal representative via SMS, email or QR Code.

Online dispensing remains prohibited

Drugs subject to special control purchase and sale over the internet remains expressly prohibited, but is expected to be relaxed soon.

In 2021, Anvisa held an event to discuss the issue, recognizing the need to update the existing rules due to the evolution of consumer behavior and the adoption of technologies in recent years.

In the first half of 2022, the agency also created a working group, through Anvisa Ordinance 76/22, to review the technical requirements for remote request for drug dispensing, under the coordination of the Inspection and Supervision of Drugs and Pharmaceutical Supplies Management (Gimed).

The agency is currently preparing a Regulatory Impact Analysis, to be completed by the end of the current regulatory agenda. it is expected that a draft modernizing the current sanitary rule will be put out for public consultation in the coming months.

Category: Life sciences and healthcare

On August 18, the National Health Surveillance Agency (Anvisa) published Anvisa RDC 811/23, which establishes a new deadline for the technical analysis of priority requests involving drugs.

The new regulation – already in force – amends the Anvisa RDC 204/17, which addresses the rules for classifying petitions for registration, post-registration and prior approval in clinical drug research.

Another amended resolution was Anvisa RDC 205/17, which establishes a special procedure for approving/ clinical trials, certification of good manufacturing practices and registration of new drugs for the treatment, diagnosis or prevention of rare diseases.

Rare diseases are those that affect up to 65 people in every 100,000 individuals, as defined by the National Policy for Comprehensive Care for People with Rare Diseases. This definition is based on official national data or, in the absence thereof, on data published in technical-scientific documentation.

Dismissal of petitions

Anvisa RDC 204/17 stated that the petition would be rejected if the request for inclusion in the priority category was denied during the technical analysis.

The regulated sector, however, pointed out that the reasons for the rejection were not disclosed, as well as there was no forecast on how long it would take to analyze requests for prioritization.

Anvisa’s technical area, in turn, concluded that the possibility of rejection led to a decrease in applications that did not meet the prioritization criteria. The agency also found that the number of rejections recorded in the period from 2017 to 2023 – after the enactment of Anvisa RDC 204/17 and Anvisa RDC 205/17 – is less than 20%.

To avoid an excessive number of requests for prioritization, which would affect productivity and analysis time, Anvisa maintained, in the new resolution, the rejection of petitions that do not meet the criteria for inclusion in the priority category.

However, from now on Anvisa has established a maximum period of 45 days for such rejection, after which it will be sent to the ordinary analysis queue, in the position corresponding to the date on which the request was filed. This deadline change was extended to Anvisa RDC 205/17.

The rule will apply to petitions made after the new resolution comes into force, as well as to requests that had already been made and were still awaiting technical analysis.

Future changes

Anvisa recognized the need for future changes in order to address other issues, including:

• the possibility of submitting a Term of Commitment for other priority drugs, in addition to rare diseases; and
• expanding the possibility of submitting long-term stability studies for other priority biological drugs, in addition to rare diseases.

These issues, however, will be addressed in a specific regulatory process.

To learn more, check out our Life Sciences & Healthcare team.

Category: Life sciences and healthcare

On September 26, 2023, the Ministry of Health (“MoH”) announced the new strategy for strengthening the health economic industrial complex, applicable to medicines, APIs, vaccines, diagnostic reagents, treatments and health services (“New CEIS Policy”). The Brazilian government estimates R$42.1 billion in investments (new Growth Acceleration Program - “PAC” for the CEIS, via public and private funding).

Check out our special publication on the subject to see what will change for companies in the sector.

Category: White-Collar Crime

The Provisional Measure 1.182/23, published on 25 July, amends significant points of Law 13.756/18, which regulates the operation of the lottery of fixed-quota bets by the Union, such as sports betting. The aim is to create clearer rules for the functioning of the betting market in the country.

Although it modifies several provisions of Law 13,756/18, MP 1,182/23 does not yet regulate the betting market, which remains pending. For example, there is no express rule on how the Ministry of Finance will grant the authorization to operate companies in the sector in the country.

As a possible response to the criminal investigations initiated at the beginning of the year to investigate the practice of sports corruption in football matches (which constitutes a crime, in the form of Articles 41-C, 41-D, and 41-E of the Law 12.299/10), MP 1.182/23 also brings new devices to prevent practices of manipulation of sporting events by the betting market.

The provisional measure on sports betting prohibits the partner or controlling shareholder of a fixed-quota lottery operating company - individual or part of a control agreement - from holding a direct or indirect stake in a football corporation or in a professional sports organization, as well as prohibiting the person in these conditions from acting as a leader of a Brazilian sports team (art. 33-C).

The measure also requires the betting operator to adopt security and integrity mechanisms in performing lottery of fixed quota bets (art. 33-D), establishing the following measures:

• The sporting events linked to bets will have actions to mitigate the manipulation of results and corruption by the operating agent in the real sports event (art. 33-D, §1º);
• The operating agent shall be part of a national or international sports integrity monitoring body (article 33-D, paragraph 2);
• The Ministry of Finance may determine the suspension or prohibition, to all operating agents, of bets on intercurrent or specific events, occurring during the race or the match, other than the specific prognosis of the final result (article 33-D, paragraph 3); and
• The operating agent shall report suspected manipulation events to the Ministry of Finance within five working days, counted from the moment the operating agent became aware of the suspicious event (article 33-D, paragraph 4).

These measures are relevant to repress sports manipulation beyond the criminal sphere, as they create civil/administrative obligations to prevent these crimes in the betting market. The application of these measures is conditioned, however, to a pending regulation from the Ministry of Finance.

MP 1.182/23 reinforces that, although pending specific regulation, the practice of sports betting is no longer a criminal offense in the country, to the extent that there is a permissive norm of conduct. Thus, Article 50 of the Decree-Law 3.688/41 it may no longer be applied to punish such conduct.

However, this interpretation does not extend to other bets – such as casinos and other gambling – which remain formally classified as a criminal offense by Article 50 of Decree-Law 3,688/41. In any case, the typicality of the conduct of establishing and exploiting gambling may have its unconstitutionality recognized by the Federal Supreme Court in the context of the judgment of Extraordinary Appeal 966.177/RS, whose extraordinary repercussion has already been recognized (Theme 924 – reception of article 50 of Decree-Law 3.688/41 in view of the Constitution of the Republic of 1988).

Also pending approval is the bill that provides for the legalization of gambling and the reopening of casinos in the country (PL 186/14). The project contemplates the game of the animal; video bingo and video games; Bingos; casinos in integrated leisure complexes; sports and non-sports betting; and online casinos. In addition, there is a provision for accreditation for the exploitation of the game of bingo and video bingo for 20 years and casinos for 30 years, both of which can be renewed for the same period.

Category: White-Collar Crime

The plenary of the Federal Supreme Court (STF) dismissed the Direct Action of Unconstitutionality 4,273 (ADI 4,273). The ADI was presented by the Attorney General's Office (PGR) and challenged the constitutionality of articles 67, 68

These articles limit the power of the State to punish in case of payment of the tax debt. Thus, when the debt is paid in full, criminal liability is extinguished.

In the case of entering a tax debt installment program, the punitive claim of the State on tax crimes will be suspended during the payment of the installments. When all installments are paid, the criminal liability will be extinguished due to the full payment of the tax debt.

The Supreme Court sustained the decriminalizing measures on the grounds that the criminal sanction is the last resort to be used by the State. With the collection of due taxes, either by payment at once or in installments, the tax objective is achieved. Thus, it makes no sense to maintain such a severe measure as the imposition of a criminal penalty.

ADI 4,273 was presented in 2009 by the PGR, which claimed that these articles would be contrary to the State's duty to promote a fair society because they would impair the ability of the tax authorities to collect taxes.

The main argument the PGR makes is that the criminal protection given to the tax order and the threat of punishment are the main means of incentive for the payment of taxes. From this reasoning, it is inferred that the limitation of the threat of penalty, guaranteed by the challenged articles, would violate the fundamental rights to a fair, egalitarian, and free society provided for in articles 3 and 5 caput of the Federal Constitution.

According to the vote of the reporting justice, Kassio Nunes Marques, who was accompanied by all the other ministers, the challenged articles are not incompatible with the constitutional text.

The main points of his vote were:

• the tradition of the Brazilian criminal legislature of prioritizing the payment of the due tax and the reparation of the damage caused to the detriment of the criminal punishment of the taxpayer;
• the suspension of the punitive claim during the installment payment of the tax debt be recognized in other legal texts;
• the existence of several laws in Brazilian law that provide for the extinction of criminal the liability after the payment of the due taxes;
• the fact that tax crimes are not sufficiently offensive for the privileged application of the criminal law and, therefore, to require punishment even after reparation for the damage caused;
• Criminal law is the last resort (ultima ratio) as a means of protecting any legal asset, in this case the protection of the treasury. That is, criminal law is only necessary when the other norms do not achieve the objective sought by the law;
• the suspension of the punitive claim of the State and the extinction of the liability due to the payment of the tax debt fulfill the function of guaranteeing the collection, making unnecessary application of the criminal law. As such that, if the installment payment is not complied with, the punitive claim will be resumed; and
• The suspension of criminal punishment during installments, in addition to promoting tax collection, contributes to the promotion of economic activity and, consequently, the generation of jobs. Thus, contrary to what the PGR defends, the suspension and extinction of liability and the emphasis of the legislator on the reparation of damage to public property contribute to the fulfillment of the fundamental objectives expressed in Article 3 of the Federal Constitution.

This decision is extremely relevant for taxpayers, especially for business leaders who face an uphill battle with the tax authorities to comply with all the rules of collection in a complex tax system in which the courts themselves present divergent interpretations.

This is because, as legal entities cannot be held criminally responsible for tax crimes, the criminal exposure falls on their representatives and/or executives.

The confirmation of the constitutionality of the two decriminalizing measures – payment and installment of the due tax – makes it possible to close criminal proceedings initiated against individuals due to the alleged tax default of the legal entity.

^[1] Art. 67.  In the event of installment of the tax credit before the offer of the complaint, this can only be accepted in the event of default of the obligation object of the complaint.

Art. 68.  The punitive claim of the State, referring to the crimes provided for in the articles, is suspended. 1st and 2nd of Law No. 8,137, of December 27, 1990, and in the arts. 168-A and 337-A of Decree-Law No. 2,848, of December 7, 1940 – Penal Code, limited to suspension to debts that have been the subject of installment concession, until the installments referred to in the articles are rescinded. 1st to 3rd of this Law, subject to the provisions of Article 69 of this Law.

Single paragraph. The criminal statute of limitations does not run during the period of suspension of the punitive claim.

Art. 69. The punishability of the crimes referred to in article 68 is extinguished when the legal entity related to the agent makes full payment of debts arising from taxes and social contributions, including accessories, which have been the subject of installment payments.

Single paragraph. In the event of payment made by the natural person provided for in § 15 of article 1 of this Law, the extinction of punishability will occur with the full payment of the amounts corresponding to the criminal action.

^[2] Art. 9 The punitive claim of the State is suspended, referring to the crimes provided for in the articles. 1st and 2nd of Law No. 8,137, of December 27, 1990, and in the arts. 168A and 337A of Decree-Law No. 2,848, of December 7, 1940 – Penal Code, during the period in which the legal entity related to the agent of the aforementioned crimes is included in the installment payment regime.

• 1 the criminal prescription does not run during the period of suspension of the punitive claim.
• 2 Extinguishes the punishability of the crimes referred to in this article when the legal entity related to the agent make full payment of debts arising from taxes and social contributions, including accessories.

Category: Litigation

Among the various decisions that need to be taken in the corporate and business sphere, one of the most relevant is what should be done with the corporate participation of the individual partner or shareholder after his death. It is an issue that often goes unaddressed in companies' legal instruments and can give rise to huge disputes.

When a partner of a limited company dies, the general rule is, under Article 1.028, caput, of the Civil Code, to liquidate his share and partially dissolve the company. This involves calculating the value of his stake and paying the corresponding amount to the heirs.

However, as provided for in Article 1,028 of the Civil Code itself, the general rule of partial dissolution can be waived by:

• miscellaneous provision in the contract;
• option of the remaining partners to dissolve the partnership; and
• Agreement with the heirs, regulating the replacement of the deceased partner with the consequent entry of the heirs in the social framework.

On the other hand, in privately held corporations, the general rule is usually the transfer of shares to the heirs.

It is common (and recommended), however, for the parties to make a prior agreement on the subject to define specifically whether or not the heirs can remain in the partnership, how the value of his share will be calculated and what will happen to specific rights that the deceased had.

This type of arrangement, both in joint stock companies and in limited partnerships, usually occurs through a partners' agreement, but can be included directly in the contract or bylaws.

Under Article 118 of Law 6,404/76 (Lei das S.A.), shareholders' agreements must typically deal with purchase and sale, acquisition preference, voting rights and power of control. However, they may also deal with other related matters, such as non-compete clauses, rules for exercising the right to vote, and provisions on succession.

Given this, the question arises: with the death of the partner/shareholder, do the parasocial agreements signed by him bind his heirs? That is, is the heir contractually obliged to follow the provisions of the agreement signed by the deceased?

The basic principles of succession law indicate that it does. This happens because, with the opening of the succession upon the death, the inheritance is automatically transmitted to the heirs of the deceased (Article 1.784 of the Civil Code, known as the principle of saisine).

The heirs, however, have the prerogative to accept the inheritance or renounce it, provided that they do so completely. Legislation prohibits partial acceptance or waiver, under condition or term.

Inheritance is the set of assets, rights and obligations transmitted to heirs through succession. When the heirs accept the inheritance, they also assume all the obligations of the deceased, including those existing in the agreements entered into in relation to the companies in which he held a stake.

The heirs take the place of the deceased in the positions contractually assumed by him and are responsible for paying the debts left up to the limit of the value of the inheritance.

The share of each heir will only be delivered and the division materialized after the payment of the creditors and the extinction of the debts.

Thus, just as it is not possible to accept the inheritance "with conditions", it is not possible for the heir to assume the position of the deceased, receiving the shares/shares held by him, without agreeing and assuming parasocial agreements previously signed.

If there are very personal rights attributed to the deceased, it is necessary to make clear how they will be treated so that there is no doubt about what rights and duties will be transmitted to the successors.

Although there are legal provisions, the appropriate and specific treatment of the subject in the agreements of members and, when necessary, in the contracts or bylaws is relevant for all involved:

• for the company, it represents the regulation of the succession of its management, transition planning of decision-making and financial programming, considering that, depending on the treatment adopted, the death may represent the payment of assets to the heirs;
• for the heirs, it indicates clarity about the destination of the equity interests held by the deceased and guides the best way to conduct that business, either by sale or by joining the company; and
• For the remaining partners, it gives security to the fate of the company, especially with regard to the relevance of the personal participation of each partner for the conduct of activities.

The absence of adequate treatment opens the door to questions about the fate of the shareholdings, the value to be considered for their calculation and the exercise of rights.

Thus, it is essential to regulate the transfer of shares in the event of the death of the partners/shareholders for two reasons: in addition to helping plan the transition and the future of the company, the regulation binds any heirs who may become holders of the equity interest after the death of the owners.

Category: Succession planning

The intersection of several areas of law to ensure well-structured and legally secure estate and succession planning is not new. For instance, the fiscal analysis, one of the most relevant pillars of this work. With the recent approval of the Tax Reform by the Chamber of Deputies, it is expected a direct impact of such changes in the structuring of estate and succession planning.

We list below the most relevant topics of Tax Reform in these cases.

• PROGRESSIVE TAXATION OF ITCMD/ITD/ITCD

The ITCMD, ITCD or ITD, is the tax levied on the transmission of assets and rights as a result of death (inheritance) or free transfer of rights (donation) and its nomenclature may vary, depending on the state.

The tax will be levied on the value of the assets received, so that each heir (or donee) is responsible for the payment of their respective share.

In addition, the values of the assets will have as a base date the death of the author of the inheritance or the date of the donation.

The states have autonomy to legislate on the form of incidence, basis of calculation and value of the rate, in which the maximum is 8%, according to Federal Senate Resolution No. 09, of 1992.

The Tax Reform, despite maintaining the maximum rate at 8%, requires all states to institute a progression in the tax rate.

Consequence: states in which there is no provision for progressivity of the rate will have to modify their legislation to comply with the determination.

Some states already charge this tax in a staggered/progressive way, depending on the value of the goods transmitted, such as Rio de Janeiro and Santa Catarina, while others determine a fixed rate, as is the case of São Paulo and Minas Gerais.

• STATE COMPETENT FOR COLLECTION OF ITCMD/ITD/ITCD IN PROBATE PROCEEDINGS

Currently, inheritance tax is collected in the state in which the probate is processed, except in relation to immovable property,  in which tax must be collected at the place where the property is.

After the Tax Reform, the competence to collect the tax will be the state in which the deceased was domiciled, maintaining the exception for immovable property, in which the tax to be collected will be from the state in which the property is located.

Consequence: impossibility of collecting the tax based on the state legislation of the place where the probate is processed,  applying the laws of the state of domicile of the author of the inheritance, instead.

• INCIDENCE OF TAX ON INHERITANCES AND DONATIONS ABROAD

Currently, there is no taxation of the inheritances of:

• assets located abroad;
• deceased with residence abroad; and
• probate processed overseas.

This is because the Federal Supreme Court (STF) decided that the collection of ITCMD / ITD / ITCD is unconstitutional in relation to donations and inheritances instituted abroad, since the states and the Federal District would not have the competence to apply such taxation, due to the absence of a national complementary law to regulate the matter.

The Tax Reform provides rules for the incidence of the tax in the aforementioned situations (until the edition of a national complementary law. They are:

Donation:

• If the donor has domicile or residence abroad, the à competence of the state where the donee is domiciled.
• If the donee is domiciled or resides abroad, the à competence of the state in which the property is located.

Inheritance:

• Jurisdiction of the state where the author of the inheritance was domiciled.
• If the deceased was domiciled or resident abroad, the à competence of the state where the heir or legatee is domiciled.
  
  

• CURRENTLY	AFTER THE REFORM
  There is no taxation	Even without the edition of the complementary law, there will be incidence of ITCMD in relation to inheritance / donation abroad andthe competent state is indicated above.
  Texto do corpo	Texto do corpo
  Rodapé	Rodapé

Consequence: taxation on assets located abroad, deceased persons abroad and probate processed abroad.

Therefore, significant changes in taxation may occur with the Tax Reform and should be taken into account both in the review of existing structures and in future planning.

Category: Life sciences and healthcare

Just a few days after the announcement of the new strategy for the Industrial-Economic Health Complex (Ceis) by the Brazilian government (check out our special material on the subject here), the Federal Audit Court (TCU) decided that the Ministry of Health (MoH) must not celebrate new productive development partnerships (PDPs) until measures are adopted to evaluate technological transfers and objective criteria for the selection of private partners.

The PDP is a type of government partnership that aims to establish cooperation between public and private laboratories for the development, training and transfer of technologies considered strategic for the Unified Health System (SUS).

According to previous announcements made by the MoH, the current PDP framework is being reviewed and a new draft should be put to public consultation soon.

Since 2017, the TCU’s Specialized Health Audit Unit (AudSaúde) has been supervising the progress of the 88 PDPs (85 for medicines and 3 for health-related products) and had already issued recommendations to the MoH for the regulatory framework applicable to partnerships (TCU Judgment 730/17) to be improved.

However, in view of the authority’s inertia, the control body published a new decision (TCU Judgment 2.015/23) with the following

non-extendable determinations:

• within 60 days, the MoH must provide a schedule for the definition and implementation of the criteria and methodologies that must be observed to determine the technology transfer (know how) pricing. On this topic, the MoH reported that the Brazilian Institute of Applied Economic Research (Ipea) was hired to prepare a study on the subject;

• within the same period, public laboratories must also be informed about the need to conduct a selection or pre-qualification process of the private partner, adequately justifying when its realization is not feasible;

• within 180 days of the publication of a new interministerial normative act on partnership modalities – mainly PDPs, technological orders and compensation measures – the MoH must include the verification of compliance with the principles of public law among the criteria for approval of PDPs – in particular those of publicity, legality and morality. A draft of new regulation on the subject is already being made jointly by the MoH, the Ministry of Economy (ME) and the Ministry of Science, Technology and Innovations (MCTI); and

• in the same period, the PDP regulatory framework and the internal regulations of the Technical Evaluation Commission (CTA) and the Deliberative Committee (CD) should be reformulated, establishing:
  • objective parameters for the analysis of project proposals and the assignment of grades to proposals;
  • criteria for the division of responsibilities of public laboratories – when more than one PDP project proposal for the same product is approved; and
  • the need for the CTA to reanalyze proposals related to the same drug and tie-breaking criteria and to readjust market percentages.

It was recommended to the MoH that no new PDPs be concluded until the definition of objective mechanisms to evaluate the completion and effectiveness of the transfer of technologies object of partnership. The MoH was also recommended to:

• establish criteria for evaluation, definition and periodic re-evaluation of products deemed strategic to the public health system (“SUS”) and eligible for partnerships. In addition, future normative rules should mention products that are no longer relevant to the CIS and have been the subject of previous PDPs;
• define criteria for obtaining reference prices for acquisitions made after the PDP is in force, including:
  • studies that demonstrate the economic impact of technology transfer, as well as the benefits achieved with PDP;
  • cost of the active pharmaceutical input (API) produced in Brazil and comparative with values practiced in the international market; and
  • need for the API national production.
• include forecast of the changes in the demand percentages previously defined for a specifc product, considering the following criteria:
  • evaluation of the change in the demand percentages defined in previous PDP selection processes needs to be evaluated by the Secretariat of Science, Technology and Strategic Inputs (SCTIE / MS) and the CTA and deliberated within the scope of the DC;
  • conduction of a joint and detailed assessment of the impact of the new percentages on the forecast of prices broken down in the previously approved projects, since the prices established there consider not only the costs of the products manufactured, but also the technological contribution associated with internalization; and
  • whenever the modification of the public laboratory contemplated in the original selection process proves necessary, the opening of a process for the selection of new projects should be foreseen. This process should follow the ordinary route, with wide publicity and the possibility of participation of any public laboratory of the CIS that shows interest in the partnership. In addition, in these cases, when the annual publication of the SUS Strategic list of products occurs, it should be discriminated, among those that have already been the objects of previous PDPs, those that, justifiably, will have changed the demand percentages originally defined.
• establish the need for MoH’s Secretary of Science, Technology and Innovation to evaluate clauses of tech transfer contracts executed between the public laboratory and the private partner;
• define deadlines for: the performance of the technical team of the MoH’s Secretary of Science, Technology and Innovation in the scope of the extinction of projects; CTA and CD deliberations; analysis of follow-up reports; and conducting technical visits;
• establish a maximum deadline for the inclusion of public laboratory facilities in the sanitary registration of the product and use of locally produced pharmaceutical input; and
• define deadlines, procedures and standard documentation to be used to prove the technology transfer to the public laboratory.

It was also indicated to the MoH to increase the transparency of the acts related to the PDPs, with the disclosure of suspension dates, change of phase of each partnership, composition of the DC, history of the composition of the CTA and the CD, calendar, agenda and periodicity of the meetings of the evaluation and deliberation committees of the PDP.

In addition, comparative spreadsheets should be presented with the price of acquisitions of strategic products made by the MoH. The spreadsheets must include at least the last acquisition made before the PDP came into force, all acquisitions made during its term and the first five acquisitions made after the end of the PDP phase.

The practice of Life Sciences & Health can provide more information on the topic.

Category: Tax

On October 3, 2023, the Brazilian National Congress approved the bill of law n. 4,188/2021 (known as the “legal framework of guarantees”) that among other changes, modified the legal requirements for the application of 0% Withholding Income Tax rate for the earnings and capital gains derived by non-residents investors out of investments in private equity funds (Fundos de Investimento em Participações – FIPs).

The main changes can be summarized as follow:

• Extinguishment of the 40% test: The non-resident investor can hold any percentage of the fund’s quotas or hold the right to receive any percentage of the fund’s earnings.

• Alignment of portfolios’ rules with the regulations issued by the Brazilian Securities Commission regulation.

• Extension of the 0% tax rate benefit for non-resident investors that invest in infrastructure investment funds (FIP-IE) and to sovereign funds, even if such funds are located in tax havens.

• New requirement: the FIP must be qualified as an investment entity, in accordance with regulations to be issued by the National Monetary Council.

The original wording of the bill of law (and its version approved by the House of Representatives) provided that the 0% Withholding Income Tax rate would not be applicable to non-resident investors domiciliated in privileged tax regimes (in addition to the non-resident investors domiciliated in tax havens). Nevertheless, the Senate didn’t approve this restriction and, upon the new round of analysis, the House of Representatives, kept the non-inclusion of the restriction to non-resident investors domiciliated in privileged tax regimes.

The modifications proposed by the bill of law n. 4,188/2021 have previously been introduced by Provisional Measure 1,137/2022, but since it was not converted into law, it ended up losing its effectiveness. The bill of law n. 4,188/2021 will be sent for presidential sanction, which should take place within 15 working days of the receipt. If the President present any vetoes, the vetoes will be subject to consideration by the Congress, that can overturn the presidential vetoes. If sanctioned by the President, the law shall be published.

Category: Life sciences and healthcare

The Federal Council of Medicine (CFM) published on September 13, the Resolution CFM 2,336/23, which updates the ethical rules for medical advertising and publicity. The rule comes into force on March 11, 2024 and will replace CFM Resolution 1,974/11, which currently regulates the matter and imposes a series of limitations on the disclosure of procedures prices, payment modalities/installments and participation in ads, among others.

The new regulation defines medical advertising as the act of promoting physical structures, services and qualifications of the physician or physical or virtual health facilities. Medical advertising, on the other hand, is the act of publicizing matters and actions of medical interest.

Check out the main updates:

• Promotion in social media

CFM Resolution 2,336/23 innovated by setting requirements for the disclosure of doctors' skills and qualifications of physicians and their physical or virtual care environments, on doctors' and establishments' own social networks.  These are considered to be social networks in their own right: websites, blogs, Facebook, Twitter, Instagram, YouTube, WhatsApp, Telegram, Sygnal, TikTok, LinkedIn, Threads and other similar means that may be created.

Besides being informative, advertising and publicity may be aimed at forming, maintaining or expanding a clientele.

The rule also recognizes the possibility of publications and posts by third parties and/or patients praising the procedure’s technique and outcome. However, when they occur repeatedly and/or systematically, the publications will be subject to investigation by the Commission for the Disclosure of Medical Affairs (Codame) of the regional medical councils (CRMs). 

• Using patient images

The regulation also allows the use of patient images or image banks, provided they are for educational purposes and in the following contexts:

• Material on diseases and procedures or related to the specialty, allowing the use of images to inform about manifestations, signs and symptoms that recommend seeking medical evaluation, and may describe possible technical solutions.

• Demonstrations of technique and procedure results, provided that the use of images contains educational text with therapeutic indications, factors that influence possible results and a description of complications. Before and after demonstrations should mention indications, satisfactory and unsatisfactory progress and complications resulting from the intervention.

It is forbidden to use procedures’ images that identify the patient, as well as any editing, manipulation or improvement of the images.

Reposted patients’ self-portraits and testimonies about the doctor's performance should be straightforward, without adjectives that denote superiority or suggest a promise of result.

When the images are taken from the doctor's own files, it is necessary that the patient gives express authorization for the image’s use as well as that his anonymity is guaranteed.

• Commercial conditions disclosure

CFM Resolution 2,336/23 also authorizes the disclosure of commercial information on:

• consultations fee, means and methods of payment;
• rebates and discounts in promotional campaigns; and
• courses cost, consultancies and working groups, with access restricted to physicians to discuss clinical cases and/or updates in the field of medicine.

Professionals can advertise the use of orthoses, prostheses, drugs, supplies and similar, as long as they describe the characteristics and properties of the products used, in accordance with CFM Resolution 2, 316/22, which regulates the prescription of implantable materials, orthoses and prostheses.

The advertisement can also be made when the doctor is the creator or developer of the orthosis or supply, provided that they use the portfolio approved by the National Health Surveillance Agency (Anvisa) and are authorized by the CFM. However, it is forbidden to advertise commercial brands and manufacturers.

• Prohibitions maintained

Some prohibitions that were laid down in the previous resolution have been maintained. Doctors may not assign privileged capacity to devices and techniques, nor take part in advertising for medicines, medical supplies, equipment and any food. Nor can they grant quality seal to food, sports and personal or environments hygiene products, inducing a result guarantee.

 Machado Meyer's Life Sciences & Health practice can provide more information on the matter.

Category: Compliance, investigations and corporate governance

Amidst the celebrations of the 10-year anniversary of the Anti-Corruption Law (Law 12.846/13 – LAC), the Comptroller General’s Office (CGU) has organized and participated in several discussions on the balance of the law’s application so far and the next steps for its implementation.

In this brief article, we aim to clarify the initiatives already announced and discussed, as well as the highlights of the balance.

Review of the 10 years of the Anti-Corruption Law

Both business and government entities agree that the law has brought significant institutional advancements and that its first challenge – that of being enforced – has been so far fulfilled.

The numbers of punishments and the amounts of fines are impressive, and it is undeniable that LAC has encouraged private companies to adopt preventive programs. According to a survey conducted by Transparency International with executives of large companies, released on July 31 of this year, 95% of respondents stated that the law contributed to the adoption of compliance programs.

It is also consensus, nevertheless, that there are significant challenges to be faced. When “Lava Jato” began, the immaturity of LAC led to its application in complex cases before the necessary structure for it was in place. This brought asymmetries, especially in agency conflicts.

Moreover, there is little legal certainty regarding the interpretation of several provisions of the law. States and municipalities still struggle with the law’s regulation and enforcement, and the encouragement for integrity programs remains limited to large corporations and multinational corporations.

Key changes announced by CGU

• BNDES and CGU sign agreement on compliance requirements for borrowers with the bank.

BNDES will follow the example of the New Brazilian Public Procurement Law, which requires contractors in high-value bids to have integrity programs, and will require the bank's borrowers to have mature compliance initiatives.

The regulation that will govern this matter – a technical cooperation agreement between BNDES and CGU – has been announced, and the forthcoming text is expected to bring more details on practical implementation and the consequences for companies.

What is already clear is that the agreement will directly impact the bank's major financing operations. The statements of the president of BNDES at the signing of the agreement gave some clues about what will be in the text:

• BNDES will require a compliance program for any financing above R$300 million;
• This program should include not only anti-corruption controls, but also comprehensive measures of governance, transparency and, most importantly, promotion of human rights and sustainability;
• A mere self-declaration of conformity will not suffice. That is, there will be oversight to ensure compliance with the measures;
• The bank will act within its collegiates to advocate for similar norms to be adopted by private banks as well.

When the regulation is formally published, Legal Intelligence will provide further details. For now, it is already possible to point out that the cooperation agreement between CGU and BNDES serves as a warning to companies that do not yet have integrity initiatives, encouraging them to align with best market practices. This also demonstrates that there is still room for development and maturation of the Brazilian market on this topic. In recent years, there has been an increase in the number of laws that require companies to adopt compliance programs.

The provision will come into force already for the new PAC (Growth Acceleration Program) and is inspired by the French anti-corruption legislation, Sapin II, which includes regulatory agency audits of the compliance program of large companies in the country and establishes sanctions not only for acts of integrity breaches, but also for weaknesses in preventive programs.

On the other hand, oversight raises concern. It will be necessary to observe whether the text and the actions of regulatory bodies will allow for a substantial evaluation of these programs, that is, an assessment that goes beyond a checklist of formal measures. At the same time, the regulation cannot be so overly open-ended to the extent that it grants auditors excessive discretion, leading to legal uncertainty and opacity of the procedure.

• Pro-ethics seal will to encompass broader themes related to human rights

CGU has signed a cooperation agreement with the Ministry of Human Rights for the new Pro-ethics seal, historically awarded to companies with good anti-corruption compliance programs. Now, the seal will also cover topics related to the implementation of good practices in human rights, such as confronting conditions akin to slavery.

While this measure strengthens the human rights agenda, there is concern that CGU may further deepen a trend to broaden the application of the LAC to acts unrelated to corruption.

• Innovations in agreements in the context of accountability processes

The leniency agreement is one of LAC institutes that has faced criticism in its application. It was designed for cases in which a company would proactively disclose unknown issues to the authorities. However, this institute has been used in situations where a company seeks to reach a settlement without presenting new evidence or relevant information.

The CGU now seeks to distinguish two types of agreement:

• Leniency, in which the company has new information to provide, thereby gaining more benefits; and
• Term of commitment, which applies when the company does not have new elements of collaboration but wishes to waive its rights of defense to expedite the process.

The innovation is precisely regarding the term of commitment, a new legal figure that CGU has put up for consultation and that is expected to guide the cases of early judgment.

In addition, CGU announced the publication of a guide with guidelines for the negotiation of leniency agreements, something very similar to what CADE already does in competition matters. A public panel has also been created to ensure transparency to the fulfillment of agreements already signed with companies.

Category: Labor and employment

The Labor Reform (Law 13.467/17) changed, among other points, rules on the breaks for rest and feeding during the working day.

Before the Labor Reform, in force since November 11, 2017, there were discussions about whether the payment resulting from the suppression of the breaks for rest and meal would have a compensatory or salary nature.

Later, however, the Brazilian Labor Laws (CLT) expressly established that this payment has a compensatory nature, which results from the suppression of the employee's right to the rest and meal breaks. Since then, the case law of the Labor Court follows the new rule, characterizing this amount as compensation.

The legal security that is seen before the Labor Court does not seem to reach the taxpayers. Even with the compensatory nature of the amount arising from the suppression of the breaks for rest and meal, which is not part of the employee's salary, the Brazilian Federal Revenue Office (RFB) expressed the understanding that such payment would serve as basis for calculating social security contributions.

With this, the RFB attributes remunerative treatment – and not compensatory – to this amount, as evidenced in the Cosit 108 Consultation Solution, published on 06/14/2023 (SC 108/2023).

In the opinion of the RFB, without a legal provision to expressly establish that the payment in question does not fall within the concept of contribution salary defined by the , the change brought by the Labor Reform would have effects only in the labor/employment sphere, without tax consequences.

By concluding something expressly ruled with by law to the contrary, SC 108/2023:

• violates the hierarchy of norms;
• ignores the difference between non-incidence hypothesis and tax exemption; and
• disregards the fact that tax law is a right of overlap that cannot alter rights already regulated by their respective legal fields.

This is an issue that tends to be discussed by Brazilian courts, even if the discussion about it did not seem to exist.

Category: Tax

The discussion on the (non) taxation of revenues arising from investment subsidies granted by Brazilian states to taxpayers has recently taken on new contours with the judgment  of Theme 1,182 by the Superior Court of Justice (STJ).

The understanding issued by the court through the decision published on June 12 was that the generic benefits of the Tax on the Circulation of Goods or Services (ICMS) – ICMS benefits in the forms of exemption, deferral, reduction of the calculation basis or reduction of rate, that is, benefits that are not presumed tax credits – should not compose the calculation basis of  the Corporate Income Tax (IRPJ) and the Social Contribution on Net Income (CSLL).

For this, three requirements should be met (the last two, as established by article 30 of Law 12,973/14):

• Registration and deposit of the benefit in the Executive Secretariat of the National Council of Finance Policy (Confaz) – pursuant to article 10 of Complementary Law 160/17 (LC 160/17);
• Constitution and maintenance of the amounts related to the enjoyed benefits in the incentive reserve account in the company’s ’net equity; and
• Limitation in relation to the destination of the values, which cannot be distributed to the shareholders of the entity benefiting from the incentive .

The STJ confirmed the understanding that had already been adopted by both panels of the court, which was that the intention of the state in granting the tax benefit was no longer relevant since the edition of LC 160/17 – which inserted paragraphs 4 and 5 in article 30 of Law 12,973/14.

In other words, it would no longer be appropriate to question whether the state granted the benefit of ICMS with the objective of stimulating the implementation or expansion of economic enterprises (concept of subsidy for investment). This is so because the differentiation of the classification of benefits into investment subsidy (suitable for exclusion for purposes of calculating the IRPJ/CSLL) and costing subsidy (taxable by the IRPJ/CSLL) no longer mattered to define the possible non-taxability of these incentives granted by the states.

To benefit from the condition of non-taxability of generic benefits, therefore, it was enough to meet the three requirements mentioned above – and no other.

The STJ also ended up differentiating the benefits of presumed credits from generic benefits and established that only the former should receive the treatment provided for in EREsp 1,517,492/PR – which determined the non-taxation of presumed ICMS credits based exclusively on constitutional grounds, not analyzing any need to meet the requirements of the legislation. It was thus established that:

• the presumed credits could not be subject to taxation for offense to the federative pact and to reciprocal immunity (that is, they represent non-taxable revenues by themselves); and
• the other tax incentives could not be subject to taxation only when the requirements of article 30 of Law 12,973/14 and article 10 of LC 160/17, mentioned above, were met.

Taxpayers may have difficulties with the tax authorities

Although the understanding of the Superior Court seems very clear, taxpayers may still encounter resistance from the tax authorities in the application of the issued theses.

On June 12, shortly after the publication of the decision on Theme 1,182, the National Treasury Attorney General's Office (PGFN) released a public note informing, among other points, that the ICMS that was no longer paid due to the tax benefit cannot be incorporated into the company's profit. It must be registered in an incentive reserve account and subsequently reinvested in the expansion or implementation of an enterprise.

In our view, the PGFN's understanding of the need to reinvest the amounts in the expansion or implementation of an enterprise does not find support in the law or in the decision of Theme 1,182 issued by the STJ. However, it may represent an orientation on the matter that the Brazilian Federal Revenue Service (RFB) will adopt in future inspections.

We understand that the objective of the STJ in the judgment of Topic 1,182 was to ensure that the resources were not removed from the patrimonial sphere of the benefited legal entity, in reinforcement of the legal content expressed in paragraph 2 of article 30 of Law 12,973/14.

The paragraph is explicit in not allowing the exclusion of benefits from the calculation basis of IRPJ and CSLL if there is a different destination for the  benefits. It lists, in its paragraphs, examples of what should be considered as deviation – basically hypotheses of transfer of profits to the partners of the legal entity.

From no perspective did the legislator and the ministers of the STJ understand that the deviation of the destination would be characterized as the need for reinvestment in expansion or implementation of an enterprise, as the PGFN intends to make taxpayers believe. This is an attempt to reopen a long discussion, now pacified in the courts and definitively eliminated, on the mathematical proof of investment of resources in assets of the legal entity.

In addition, in recent inspection procedures, initiated after the publication of the decisions of Theme 1,182, the RFB sought to apply a second understanding on the decision of the STJ. This other position ends up restricting (or even making impossible) the application of the court's understanding to concrete cases.

In a specific precedent, the tax authorities sought to sustain that the STJ would have concluded that the exclusion of incentives from the calculation basis of IRPJ and CSLL would impose compliance with the requirements set forth in article 10 of LC 160/17 and in article 30 of Law 12,973/14. Among these requirements would be that there must be the occurrence of an effective tax benefit to the taxpayer resulting from the state rule that granted the ICMS benefit.

From this standpoint, the tax authorities considered that there would be no tax benefit for the seller of the merchandise that enjoyed generic benefits of ICMS. As an example, it was mentioned that there would be:

• the mere deferral of the collection of the tax to a later stage of the production chain, due to the recovery effect of the non-cumulative regime (that is, the value of the tax that the seller ceases to debit in the operation benefitted with exemption or reduction of calculation basis or rate is equal to the value that the buyer ceases to credit); or
• the tax benefit of the purchaser of the goods (final consumer), not of taxpayer of the tax.

In our view, therefore, the RFB's orientation is to seek to restrict the application of the decision of Theme1,182 of the STJ, initiating a discussion hitherto non-existent – and, mainly, not provided for in the law. In addition, the tax authorities seek to ignore the theses issued by the Superior Court on the possibility of excluding subsidized revenues in relation to generic ICMS benefits from the IRPJ/CSLL calculation bases, directly affronting the principle of legal certainty.

There are motions to clarify filed against the decision rendered in Theme 1.182 that are pending judgment. These motions seek to clarify, among other points, the inappropriateness of the requirement to apply the benefit in reinvestment in the expansion or implementation of the enterprise, so that it is clear that the RFB can only proceed with charging IRPJ and CSLL if, in an tax assessment procedure, it is verified that the taxpayer did not observe the legal requirements provided for in article 10 of LC 160/17 and in article 30 of Law 12,973/14.

The decision of the STJ in relation to this point may therefore remove the understanding issued by the PGFN in its public note – and, depending on the depth of the analysis, the understanding of the RFB mentioned above.

On August 7, the National Treasury filed challenges to the motions to clarify opposed by taxpayers and amicus curiae in the case and reinforced its understanding of the need for the gains obtained from the tax benefits of ICMS to be destined to the viability of the economic enterprise through the implementation of a new venture or expansion of an existing one.

According to the understanding of the tax authorities, the decision of the STJ only removed the need for prior proof that the state law had the intention to subsidize, maintaining the need for subsequent proof that the amounts related to the tax benefits of ICMS were invested in the economic enterprise (via implementation or expansion of these).

In addition, the PGFN confirmed in the records of the aforementioned challenges the position that has been adopted by the RFB in the inspections, as we mentioned above, having highlighted that "when the tax exemption occurs through exemption and reduction of ICMS, the taxpayers who are in the middle of the productive chain will not obtain any economic advantage, nor is there a waiver of revenue,  given that there will be a recovery in the subsequent stages [of the production chain]"

The tax authorities concluded that the tax benefits of ICMS granted in a generic, unconditional manner and that do not generate any gain are not subsidies and, therefore, would not be able to be excluded from the calculation basis of the IRPJ / CSLL upon proof of compliance with the requirements of article 30 of Law No. 12,973/2014.

We consider that both the position of the PGFN and the understanding of the RFB in the recent inspections of which we have heard are not supported by the judgment of Theme 1,182 or by the current legislation. Even so – and despite the fact that the decision of the STJ in Theme 1,182 was issued under the rite of repetitive appeals (systematic whose intention is, ironically, to confer isonomic treatment and legal certainty to its beneficiaries) – it is important that the taxpayer is alert to the possible resistance he will face as to the application of the thesis on the non-taxability of generic ICMS benefits.

If the different positions of the tax authorities on the restrictive interpretation of the application of the thesis issued in Theme 1,182 were not enough, there are discussions that were not addressed by the STJ in this repetitive appeal and that may directly impact the enjoyment of the tax credit originated from the exclusion of ICMS tax benefits from the calculation basis of IRPJ and CSLL.

The recognition and use of the aforementioned tax credit would be conditioned not only to the validation of the possibility of excluding subsidized revenues from the IRPJ/CSLL calculation bases, but also to the deductibility of the ICMS expenses recognized in the company's bookkeeping – with special attention to the accounting procedure determined by Technical Pronouncement 07 of the Accounting Pronouncements Committee (CPC).

According to this pronouncement, it should be recorded:

• an expense related to the ICMS that would be fully due in the operation, if there was no tax benefit; and
• the corresponding subsidized revenue.

Although they deal with different situations, we assess that the risk of the tax authorities considering the mentioned expenses non-deductible became greater with the publication of the Consultation Procedures  Cosit 15/20 and Cosit 12/22.

There are also controversies about the extent and measurement of the granted subsidies regarding ICMS presumed credits. It is discussed whether the recognized revenues could be fully excluded or whether the exclusion would be restricted to the portion that effectively exceeds the credits that could be recognized by the taxpayer from its acquisitions (in this case, granted credit minus recognized credit).

It can be seen, therefore, that despite the effort of taxpayers to pacify the issue, the non-taxability of revenues from investment subsidies is still a controversial matter and can generate clashes between taxpayers and the tax authorities.

Category: Tax

The State Treasury Office of the State of São Paulo published, on July 31, SRE Ordinance 51/23, which repeals CAT Ordinance 115/14, which may represent a setback in relation to the measures already in place for the exemption from the issuing of Tax Infraction Notices.

In the name of efficiency and reasonableness, CAT Ordinance 115/14 established the possibility that no Tax Infraction Notices would be issued, upon the acknowledgement of proof of the cumulative presence of certain requirements by a Quality Control Commission. By means of its Annex, CAT Ordinance 115/14 determined the hypothesis on which – due to its lesser offensive potential – no Tax Infraction Notices would be issued.

SRE Ordinance 51/2023 changes this situation.

The analysis of the fulfillment of the requirements for the exemption of Tax Infraction Notices is no longer the competence of the Quality Control Commissions– which are, essentially, extinguished. Although it is not explicit, in the new standard, it seems to us that this competence for analysis is now attributed to the fiscal agent responsible for the audit proceedings.

In reality, this means that there is no longer a document that formalizes this analysis, since the exemption from Tax Infraction Notices is a faculty guaranteed to the tax agent within the scope of the audit proceeding itself – and there is no provision demanding that the analysis of the exemption requirements is recorded in the Tax Infraction Notice itself.

Considering the optional nature of the exemption, it is possible that, with the end of the Quality Control Commissions, tax agents would opt not to check for these requirements and the exemption would always be waived by them.

Before, although often the access to the manifestation of the Quality Control Commission  was not granted to the taxpayer, the examination on the possibility of applying the exemption had, as a rule, a mandatory character. Moreover, there was a record of this analysis within the State Treasury Office of the State of São Paulo.

The new standard also changes the very requirements for waiving of Tax Infraction Notices, making them more restrictive.

Under the terms of item IV of Section 10 of CAT Ordinance 115/14, once the other requirements are met, only recidivism by the taxpayer would exclude the possibility of exemption from the notice of infringement, that is, the practice of the same infraction in the last five years. According to SRE Ordinance 51/23, the exemption is prohibited in the case of assessment for any of the infractions conveyed  in Sectione 85 of Law 6,374/89 in the last three years.

There is also no provision allowing for the notification of  taxpayer so that, in ten days, he regularizes his situation before the state of São Paulo or presents a guarantee, in case of open debts.

Another relevant point of SRE Ordinance 51/23 is the absence of  hypotheses in which the Tax Infraction Notice  "will cease" to be issued, as there was in the Annex and article 10, paragraph 3, of CAT Ordinance 115/14. This means that these conducts, despite their lower offensive potential acknowledged by the State Treasury Office, could once more be written up as punishable infractions,  subjected to penalties by São Paulo tax agents.

In general, the changes promoted by SRE Ordinance 51/23 can be understood as a setback in relation to the more conciliatory legislation hitherto in force and a return to a more antagonistic position between the State and the taxpayer, in opposition to the spirit of the repealed CAT Ordinance 115/14.

Category: Consumer relations

Consumers are defined as the final recipients of products or services, according to art. 2^nd of the Consumer Protection Code (CDC). However, art. 17 of the CDC states that people affected by damages caused by a product or service are also equated with consumers.

Thus, since its promulgation, the CDC allows the expansion of the concept of consumer to also include "collateral" victims caused in the context of the production and consumption chain.

The subject arouses the attention of companies and lawyers, including for its impacts on business in general, and each judgment of the Superior Court of Justice (STJ) on the issue rekindles the interest of scholars.

In several cases mentioned below, we can see how the STJ's precedents on the consumer by equivalence matter have been evolving over time.

In 2012, for example, when ruling a case involving a vehicle accident, one of them being a taxi, the STJ understood that "the subject of the consumer relationship does not necessarily have to be a contracting party, but may also be a third party victimized by this relationship that U.S. law – in which the institute originated – calls a bystander."^[1]

Although, in this case, there was no effective assimilation of the victim to a consumer because the taxi was not in service at the time of the collision, there was, as can be seen from the transcribed excerpt, recognition of the possibility of application of the institute.

Also in 2012, during the assessment of a famous case of aircraft accident, the STJ recognized that all those who were affected by the disaster, regardless of whether they were passengers of the affected airplane, should be considered consumers by equivalence.

The reporting minister in the case stressed that "the victims of air accidents located on the surface are consumers by equivalence (bystanders), and the rules of the Consumer Protection Code regarding damages due to the fact of the service (art. 17, CDC) should be extended to them."^[2]

In 2016, when faced with a case involving oil spill in an area of environmental protection, the STJ granted the application of the CDC to the victims of the harmful event by equivalence: "The authors were victims of a consumer accident, since their fishing activities were harmed by the oil spill that occurred in the State of Rio de Janeiro. The provisions of article 17 of the Consumer Protection Code shall apply to the case."^[3]

More recently, in 2020, the STJ's understanding was tested during the trial of a case about the running over of a street cleaner by a bus carrying passengers. That is, the victimized professional had no connection with the consumption relationship between passengers (all were unscathed from the accident) and the carrier.

Even so, the rapporteur judge of the case in STJ asserted the following: "The
circumstance that the only victim of the accident caused by the bus owned by the defendant, when providing services for the transport of persons in Rio de Janeiro, being a third party to the consumer relationship does not remove his condition as a consumer by equivalence, but exactly materializes the hypothesis of article 17 of the CDC,  which expanded the basic concept of consumer of article 2^nd of Law 8078/90".^[4]

Thus, the STJ understood that it is enough to have a consumer relationship and that the service or product is being offered within the scope of the CDC so that, in the accident resulting from this relationship, the consumer legislation and all its protective institutes apply to the victims, involved or not in the consumption chain itself.

In this context, although none of the carrier's direct consumers was injured, STJ decided to extend the CDC's protective measures to the street cleaner victimized by equivalence.

Finally, in 2023, STJ once again ruled on the possibility of equating accident victims to consumers: in an action for compensation of damages resulting from the exploitation of hydroelectric plants, it was questioned whether the victims of such damages could be considered consumers by equivalence.

In this opportunity, STJ alluded to the theory of enterprise risk adopted by the CDC, concluding that "in the event of individual damages arising from the exercise of business activity aimed at the manufacture of products or provision of services, it is possible, due to the characterization of the consumer accident, the recognition of the figure of the consumer by equivalence,  which attracts the incidence of the provisions of the Consumer Protection Code".^[5]

In analyzing these precedents, it is possible to observe a continuous evolution of the issue in the court. It is strategically important to closely monitor this evolution, since the correct and rapid identification of consumers by equivalence in concrete cases allows to determine whether consumer protection legislation can be applied with the aim of balancing the relationship between consumers, even those assimilated, and suppliers.

Identifying in each specific case who the potential consumers are (even if by equivalence) allows the supplier of products and services to anticipate crucial issues in disputes, such as the facilitated application of the reversal of the burden of proof, the competence for the processing of actions and even the rights to be observed by the judge.

^[1]REsp 1125276/RJ, rel. Minister Nancy Andrighi, Third Class, judged on 02/28/2012, DJe 03/07/2012.

^[2]REsp 1281090/SP, rel. Minister Luis Felipe Salomão, Fourth Class, judged on 07/02/2012, DJe 15.03.2012.

^[3] CC No. 143.204/RJ, rapporteur Minister Ricardo Villas Bôas Cueva, Second Section, judged on 02.29.2016. In the same sense, "According to the jurisprudence of this Superior Court, defined in a case similar to that of the case, in the present hypothesis, the authors are comparable to consumers, configuring the oil spill as a consumer accident, which, supposedly, would have harmed the fishing activity of the interested parties" (CC n. 132.505/RJ, rapporteur Minister Ricardo Villas Bôas Cueva, Second Section,  Judged on 03.02.2015).

^[4]REsp 178.731-8, rapporteur Minister Paulo De Tarso Sanseverino, Third Class, judged on 06/16/2020, DJe 06.18.2020.

^[5]REsp n. 2.018.386/BA, rapporteur Minister Nancy Andrighi, Second Section, judged on 10/5/2023, DJe of 12/5/2023.

Category: Real estate

The Municipal Complementary Law 260/23, published on May 23, establishes special conditions for licensing, legalization of constructions and additions in buildings in Rio de Janeiro upon payment of compensation to the city hall.

The new legislation allows, for example, the construction of a rooftop floor in buildings with three or more floors, upon payment of consideration for the area of this new floor, as well as horizontal extensions of the uncovered areas, such as balconies and roofs.

Buildings originally intended for lodging that were licensed for the 2014 World Cup and the 2016 Olympic and Paralympic Games and did not obtain the occupancy permit (Habite-se) within the established timeframe may also be legalized with the payment of compensation.

In addition, buildings licensed for these events that have obtained the specific building benefits for use as a hotel at the time of licensing may change their use to residential, hospital with or without inpatient care, outpatient clinic, and laboratory tests, or any other use permitted by the zoning regulations of the site.

It is important to note that the beginning of the works for the conversion of the building is conditioned to the full discharge of the compensation.

The amount of the fee will be defined based on a compensation report, which, depending on the location and characteristics of the project, will need to be approved by the competent municipal authorities.

The documentation to be submitted to the city hall must demonstrate compliance with the minimum safety, health, and habitability requirements , as well as lighting and ventilation conditions provided for in the applicable technical standards.

Those interested in taking advantage of these benefits have 180 days, extendable for another 90, from the publication of the law, to file the legalization request.

Many hotels were already considering the conversion of their buildings, mainly for residential use, due to an excess supply and a decrease in hotel demand in the city of Rio de Janeiro, influenced by the financial crisis. The new legislation comes as a stimulus to this transformation. With this move, the city hall hopes to increase its revenue, as well as generate jobs and new business opportunities.

At the moment in which changes in the Master Plan of the city of Rio de Janeiro are being discussed, there are many criticisms to the new legislation, especially in relation to the impact that the transformation of use could cause in noise and atmospheric pollution and in the local road system.

It is argued that this type of urbanistic change should be made in the Master Plan itself, which goes through a public hearing, to ensure greater reflection and discussion on the impacts of the  measures.

In any case, the new legislation is already in force and it is expected that the technical analysis to be conducted by the city hall on a case-by-case basis will be thorough, to meet the aspirations of different political and economic sectors and ensure the urban well-being of the city of Rio de Janeiro.