Translation of Declaration of Rights of Economic Freedom

Below in italics is my translation of Chapter II of Law 13,874/2019, together with links. This Law marks a major shift in the way business law is to be interpreted in Brazil, so some readers may find it useful to read it in full.

Declaration of Rights of Economic Freedom

These are the rights of every person, whether natural or legal, essential for the economic development and growth of the country, subject to the provisions of the sole paragraph of article 170 of the Federal Constitution:

I – to conduct low-risk businesses, for which it exclusively relies on its private property or consensual third parties, without the need for any public approvals for the business activity;

II – to do business at any time or day of the week, including holidays, without being subject to additional charges or charges, subject to:

a) environmental protection rules, including those for the suppression of noise pollution and public disturbance;

b) restrictions arising from a contract, condominium regulation or other legal transaction, as well as those arising from the rules of real property law, including those of neighbourhood law; and

c) labour legislation;

III – to freely define, in unregulated markets, the price of products and services as a consequence of changes in supply and demand;

IV – to receive equal treatment of public administration bodies and entities regarding approvals for doing business, in which case the approval will be linked to the same interpretation criteria adopted in previous analogous administrative decisions, subject to the provisions set out in regulations;

V – to benefit from a presumption of good faith when doing things while conducting business activities, for which doubts concerning the interpretation of civil, corporate, economic and town planning laws will be resolved in such a way as to preserve private autonomy unless expressly provided for by a legal rule providing otherwise;

VI – to develop, perform, operate or market new types of products and services when the regulatory standards become outdated due to internationally consolidated technological development, under the terms established by regulation, which will regulate the requirements for assessing the actual situation, the procedures, the timing and conditions of the effects [of developing, performing, operating or marketing new types of products and services];

VII – [vetoed];

VIII – to be assured that the contracts made between companies with similar bargaining power will be freely stipulated by the contracting parties so that business law rules (except for mandatory rules) are only applied in a subsidiary manner to the agreed terms;

IX – to be assured that, in the requests for approvals to do business that are subject to the provisions of this Law, upon fulfilling all the necessary requirements for the commencing the application process, the individual will be immediately and expressly informed of the maximum period stipulated for the analysis of his [or her] request and that, after the deadline has elapsed, the silence of the competent authority will mean tacit approval for all purposes, except as expressly forbidden by law;

X – to store any document through microfilm or digitally, according to the techniques and requirements established by regulation, in which case it will be equated to a physical document for all legal purposes and for the proof of any act of public law;

XI – not to be demanded no abusive, compensatory or mitigating measure, as a result of impact studies or other permits for doing business in town planning law, understood as that which:

a) [vetoed];

b) requires a measure that was already planned for performance before the request made by the person, without the business activity changing the demand for performance of said measure;

c) uses the person to do things that compensate for impacts that would exist regardless of the enterprise or business conduct requested;

d) requires the performance or rendering of any kind for areas or situations other than those directly impacted by business activity; or

e) is unreasonable or disproportionate, including as a means of coercion or intimidation; and

XII – not be required by the direct or indirect government bodies certificate without express statutory provision.

Paragraph 1^st For the purposes of subparagraph I of the caption of this article:

I – regulations from the federal executive branch will provide for the classification of low-risk activities to be complied with, in the absence of specific state, district or municipal legislation;

II – in the event of absence of regulations from the federal executive branch referred to in subparagraph I of this paragraph, a resolution of the Management Committee of the National Network for the Simplification of Registration and Legalisation of Companies and Businesses (CGSIM) will be applied, regardless of the federative unit having previously agreed to comply with the National Network for the Simplification of Registration and Legalisation of Companies and Businesses (Redesim); and

III – in the event of the existence of state, district or municipal legislation on the classification of low-risk activities, the federative unit that issues or has issued a specific regulation will notify the Ministry of Economy about the issuing of its regulation.

Paragraph 2^nd The inspection of the exercise of the right referred to in subparagraph I of the caption of this article will be carried out later, by official letter or as a consequence of a complaint referred to the competent body.

Paragraph 3^rd The provisions of subparagraph III of the caption of this article will not apply:

I – to situations in which the price of products and services is used to reduce the amount of tax, to postpone tax collection or to remit profits abroad as expenses; and

II – to antitrust laws, consumer rights and other provisions protected by federal law.

Paragraph 4^th […]

Paragraph 5^th The provisions of subparagraph VIII of the caption of this article will not apply to the public company and the joint-stock company defined in articles 3 and 4 of Law 13,303/2016.

Paragraph 6^th Subparagraph IX of the caption of this article will not apply when:

I – it deals with tax issues of any kind or the granting trademark registration;

II – the decision amounts to a financial commitment of the government; and

III – there is an objection expressed in a treaty in force in Brazil.

Paragraph 7^th The tacit approval provided for in subparagraph IX of the caption of this article will not apply when the ownership of the request is from a public agent or from his or her spouse, partner or relative straight or collateral, by consanguinity or affinity, until the third degree addressed to the administrative or political authority of the public administration body or entity in which he performs his or her functional activities.

Paragraph 8^th The period referred to in subparagraph IX of the caption of this article will be defined by the requested public administration body or entity, adhering to the principles of impersonality and efficiency and the maximum limits established by regulation.

Paragraph 9^th [Vetoed.]

Paragraph 10^th The provisions of subparagraph XI of the caption of this article do not apply to situations of agreements that are made as a consequence of illegal acts.

Paragraph 11^th For the purposes of subparagraph XII of the caption to this article, it is unlawful to set the term of validity of a certificate issued on an unchangeable fact, including death.

Contact me if you require further information.

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Last modified: October 31, 2019