Restriction on Businesses

Brazil’s food industry – second only to its petroleum sector – is so substantial that it helps to anchor the country’s GDP and keep its unemployment rate stable. As a major supplier of much of the world’s soy, coffee, sugar, corn and oranges, the continued production of these goods is critical.

But, at what cost to the environment?

This is the question that recently spurred the Brazilian government into action, through the reform of the country’s Forest Code, which had been largely unchanged since 1965. The new law is intended to restore much of the treasured Amazon Rainforest, parts of which had been clearcut in order to account for crop growth.

Even though increased legal provisions against excessive deforestation – and the government’s reliance on satellite imagery – have helped slow devastation, Brazil’s government still felt that an overhaul to the Forest Cost was necessary.

Lawyers in Brazil understand the law’s new provisions

Last month, President Dilma Rousseff vetoed key provisions of the bill, toughening the law in such a way that increased reforestation will be mandatory. The government estimates that the total acreage that could be restored is equal to the size of Italy.

Still, the law is not without its critics.

“The presidential veto slightly improves the text approved by Congress, which was awful, but the new code is not tough enough for recovery of deforested areas and it reduces forest protection,” Greenpeace’s Paulo Adario told Sustainable Business News.

There is no question that many businesses have interests that will conflict with Brazil’s new environmental policies. To avoid government sanctions, businesses need to fully understand the terms of the Forest Code. Lawyers in Brazil can help them to reach the necessary level of comprehension and represent their interests in the country if necessary.

Foreign Direct Investments and Contract Law

In 2011, Cuba’s government called for reforms that would encourage more foreign investment in domestic industries. One of the largest businesses in Brazil has responded to that call by signing a 13-year contract to manage a Cuban sugar mill, ending a more than the 50-year absence of any foreign participation in the industry.

Odebrecht, headquartered in Brazil, is one of the world’s most far-reaching engineering, petrochemical and construction conglomerates. In this instance, it is ambitiously planning to triple per-harvest output from 30,000 to 90,000 tons.

Brazil’s involvement with foreign direct investments

At the other end of the spectrum from the insular Cuba is the country that is home to Odebrecht – Brazil, where foreign direct investment (FDI) is the third-highest in the world, with $48.5 billion in 2010. Given the current appeal of launching operations in Brazil, businesses headquartered outside of the country should gain a level of understanding of Brazilian contract law before engaging in operations within the country.

In fact, according to Corporate Compliance Insights, it is critical for businesses to partner with a Brazilian law firm with knowledge of local legal provisions in order to ensure that proper procedures are followed as contracts are formed. Brazilian contract law is somewhat more strict than its counterparts in other countries, including the United States.

“The United States allows parties leeway to contract for whatever the respective parties deem important,” according to the website. “In Brazil, however, the right to contract is much more narrow in scope because Brazilian laws pre-determine much of the parties’ rights and contractual obligations prior to contract formation.”

A Brazilian law firm will understand the nuances of these legal requirements, especially the fact that the country is governed by a civil law code and not a common law code. As such, legislation mandates more aspects of Brazilian life than Americans, for example, are accustomed to. When contracts are involved, there may be a more specific law that must be followed before an agreement is reached.

Clean Games for World Cup

Two years away from hosting the first of two of the most elaborate sporting events ever known to man, the Brazilian government is striving for one goal – “Logos Limpos.”

In 2014 and 2016, respectively, Brazil will welcome the entire world to its shores as it hosts the World Cup and the Summer Olympics. During the most recent Olympics in London, roughly 300,000 tourists, including athletes, flocked to England for the games – and this year was widely considered to be unusually low in terms of tourism.

Given the considerable infrastructure improvements that will be required for the events to take place without incident – from stadiums and highways to signage and parking lots – the country’s government has braced itself for the possibility of rampant corruption and bribery involving contracted work. These construction projects represent a potential boon for contractors and any organization that could benefit from the rash of spending necessary during the buildup to the two events.

The Brazilian government has tried to police itself through its Logos Limpos (“Clean Games”) initiative, but the index it is using to track the level of transparency in infrastructure upgrades has found that all 12 cities being assessed have not done yet enough to remain accountable, according to Trust Law.

Paulo Itacarambi, vice president of the organization tracking transparency levels, recently explained the metrics that are being applied to the cities.

“Are there information channels about the World Cup investments, are they effective, do they provide all the necessary information, and do they allow for social participation,” he said.

As companies mobilize in Brazil prior to the start of the World Cup, they should be aware of government oversight policies like Logos Limpos that could impact their business practices. A Brazilian law firm can protect these businesses’ interests, especially if they are headquartered outside of the country.

Dumping Investigations

In recent years, Brazil has been accused of carrying out increasingly protectionist trade policies. Critics point to Brazil’s reliance on tariffs, quotas and “dumping” investigations as evidence of its reliance on commercial defense measures.

Earlier this week, the World Trade Organization (WTO) drilled down deeper on the issue of the country’s dumping investigations, which, according to WTO, led all G20 countries from May to September 2012, with 27 cases. “Dumping” refers to the practice of selling products or services abroad for a lower cost than they would sell for domestically.

Folha speculates that Brazil is likely to soon become the world’s leader in dumping investigations – a title that has been held by India for the last five years. The volume of these investigations, coupled with Brazil’s recent pledge to temporarily raise import tariffs on 100 different items, has led to commercial uncertainty within the country.

How do Brazil’s trade policies impact local businesses and consumers?

“Brazil, South America’s largest economy, is also pushing the mantra of protecting local industry,” investments news source MarketMinder reported last month. “One wonders, though, how consumers of these goods ranging from paper to steel will feel about higher prices. The policy doesn’t target any specific nation, instead focusing on the products themselves – a blanket application meaning the increased tariffs would likely withstand WTO challenge.”

Given Brazil’s aggressive challenge to commercial outlets engaging in dumping, companies or individuals with commercial interests in Brazil must retain a Brazilian attorney to ensure that they remain apprised of local laws. As a general practice, any foreigner with commercial or personal interests in Brazil should partner with an experienced law office in Brazil, which can become an incomparable resource.

Marriages and Divorce Climb

It’s been said that in the United States, an estimated half of all marriages end in divorce. Although that figure isn’t quite as high in Brazil, it still climbed considerably in the previous decade, thus emphasizing the importance of couples contacting Brazilian law firms before getting married.

According to 2010 census data released last month by the Brazilian Institute of Geography and Statistics (IBGE), 15 percent of the Brazilian adult population has been divorced, which is 20 percent more than the figure observed in 2000. Just last week, we reported about a 2010 law that eliminated the legal mandate that couples needed to be separated one year before formally filing for divorce. The divorce rate could climb further as the effects of the new law continue to take effect.

Another group growing in prevalence is the number of Brazilians living in a consensual union – 36 percent, up from 29 percent in 2000. Conversely, the number of married individuals and religious and civil unions fell from 49 percent to 43 percent.

Given the increase in the number of divorces in Brazil, it’s critical for foreigners with Brazilian spouses to remember the important of prenuptial agreements. Should a marriage end in divorce, these documents will ensure that assets are divided in a way that is amenable to both parties. Prenuptial or antenuptial agreements that are crafted correctly will be recognized by courts in Brazil, the United States and elsewhere.

Brazilian attorneys with experience in family law can not only help couples draft these agreements, they can also assist with issues related to alimony, spousal support, child support and the division of marital property, should a prenuptial agreement not exist. With an experienced Brazil law firm on your side, you will be able to focus on rebuilding your life without worrying about legal questions.