September 2019 Edition

In the current edition of our newsletter, we discuss the new CADE nominees; the approval of the Executive Order of Economic Freedom by the Brazilian Senate; and the Federal Decree No. 9,977/1, which is focused in Social Impact Businesses.

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New CADE nominees

Brazil’s Presidency has finally delivered nominations to compose CADE, in order to fill the four vacancies at the Tribunal as well as reappointing the General Superintendent (Alexandre Cordeiro) and the Chief Attorney (Walter de Agra Júnior). There was a withdraw by the Presidency in early August of two names previously appointed, and now practitioners and companies wait to see whether the new names will be confirmed. All nominees, including the ones already in office, need to be approved by the Commission for Economic Affairs of the Senate and by the Plenary of that House.

The nominees for the Administrative Tribunal are: Sérgio Costa Ravagnani, a law graduate from UnB, National Treasury Attorney and the current Deputy Chief of Economic Policy of the Presidency’s Secretariat of Legal Affairs; Luis Henrique Bertolino Braido, graduated in economics from USP, with a PhD from the University of Chicago in the same area, and a Professor at FGV/EPGE; Luiz Augusto Azevedo de Almeida Hoffmann, a law graduate from Mackenzie University in Sao Paulo, with a PhD in Civil Law from USP and Camerino University, he is the Director of the Young Entrepreneurs Committee of the Federation of Industries of the State of São Paulo (FIESP), as well as Chief Judge of the Tax Court (TIT) of São Paulo; Lenisa Rodrigues Prado, law graduate from UniCEUB and master in laws from IDP, was a commissioner of the Administrative Council of Tax Appeals in 2017. The term of office is four years.

Alexandre Cordeiro Macedo was reappointed to the position of General Superintendent (GS), which he has held since 2017. He joined CADE as a Commissioner in 2015. He holds a law degree from IESB and an economics degree from UniCEUB, a master’s degree in law from IDP and is currently a PhD candidate at UFMG. The GS’s term ends in two years. Walter Agra, for its part, holds a law degree from Paraíba State University, and a master’s degree in procedural law from the Catholic University of Pernambuco. From 2013 to 2017, he was a commissioner at the National Council of the Public Prosecuters office (CNMP).

The deadlines of several administrative proceedings at CADE, including the closing of notified mergers, are currently suspended due to the absence of quorum since mid-July.

 

Congress approves Executive Order of Economic Freedom

The Senate has approved the Executive Order n. 881/2019, known as the “Executive Order for Economic Freedom” — following the approval by the House of Representatives. Regarding the previous text, approved by the House, there were exclusions related to Labor Law. The text now awaits the final approval by the Presidency.

Overall, the text and provisions remain similar — with wording revisions. As previously highlighted, one interesting feature of the Executive Order is the combat against the “abuse of regulatory power”. The text lists public acts which could be deemed improper, for example, the ones which increase “transaction costs without the demonstration of benefits”. As this example illustrates, the Executive Order adopts general provisions, making it difficult to predict its effective impact.

 

Social Impact Businesses are the focus of Federal Decree No. 9,977/19

Federal Decree No. 9,977/19 was published on August 20 and provides for the National Investment and Social Impact Business Strategy (in the Brazilian acronym, “Enimpacto”) and the Investment and Social Impact Business Committee.

Enimpacto completed a year last February, consolidating the efforts and progress made by 16 government agencies and 41 civil society organizations that worked together over the first year of its term. The objective of the Strategy is to engage government agencies, the private sector and the civil society in the establishment of plans to articulate and promote a more favourable environment for the development of social impact businesses and social finance, capable of generating market solutions to social and environmental problems in Brazil. To this end, it was organized into four main axes, aimed at expanding the number of social impact businesses, increasing the volume of capital directed to such businesses, strengthening intermediary organizations and promoting a better institutional and regulatory environment.

The Decree, which repealed the previous one that created the Strategy and the Committee, brought only minor changes to the existing text, such as a new definition for “intermediate organizations”, change in the duration of the Committee and the definition of internal fronts. In the new text, intermediary organizations were defined as “institutions that facilitate and provide the connection between investors, donors, as well as managers offerings and capital demand for businesses that generate social and environmental impact”. Also, from now on, the Committee will operate as an advisory body to propose, monitor, evaluate and articulate the implementation of Enimpacto.