VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

n As turns: n Infrastructure issues n Oil & gas in brief n Politics in brief n Diplomatic briefs n Firm news The government versus n Mining & metals n news n Defense issues n International trade n Client alerts everyone else n Banking & finance n Biofuels in brief n Legal issues n Publications n Economy in brief n Electricity sector n Social issues n Business news n Environmental news n Science & technology

VEIRANO ADVOGADOS’ REVIEW OF ECONOMIC, LEGAL, AND POLITICAL DEVELOPMENTS MARCH/APRIL 2016 PHOTOGRAPH: AGÊNCIA BRASIL/WIKIMEDIA COMMONS 1 18 As Brazil turns: The government versus everyone else

Brazilian politics these days are more gripping than It was also agreed that the party executive committee any soap opera. Massive street protests against President would decide within 30 days whether to withdraw have taken place throughout the past from the coalition. In the meantime, the PMDB in Santa month, and the latest Datafolha survey reveals that Catarina and Espírito Santo states decided not to wait for 65 percent of Brazilians think she should resign – plus that decision. Party members in these states resigned

a whopping 68 percent think she should be their federal posts immediately. MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 impeached. Just two weeks later, on 29 March, the PMDB officially At its annual convention in mid-March, the Brazilian announced that it was severing all ties with the Rousseff Democratic Movement Party (PMDB) signaled its rapidly government and ending its 13-year alliance with the weakening commitment to the ruling coalition by banning Workers’ Party (PT). The implications are massive: its members from accepting new government posts. some 600 politicians could stand down as a result of The party controlled seven of 31 ministries and seven of the decision, and it will almost certainly hasten the 27 state governorships. presidential impeachment proceedings. … Lula is a key factor in the unraveling of the administration VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

Minister of Tourism , a long- Chamber of Deputies, agreed on a 65-person committee time PMDB stalwart, was the first major figure to resign to consider whether to send a recommendation for as his party withdrew from the coalition. Alves reportedly impeachment up to the Senate. Rousseff is accused of submitted his resignation on 28 March, the day before manipulating government accounts in the run-up to her the official announcement. The party has decided that 2014 re-election. its six remaining cabinet ministers must resign or face ethics proceedings. Although most of the committee members belong VistaBrazil is published bi-monthly Produced by Blakeley Words+Pictures to the government rather than the opposition, they are Writer/editor: Camilla Blakeley Party president , who as vice-president reportedly almost evenly split between those who © 2016 · Veirano Advogados and Blakeley Words+Pictures would step in to the presidency in the event that Rousseff think Rousseff should be removed and those who All text rights reserved is impeached, is also apparently planning to streamline support her. VistaBrazil is sponsored by Veirano Advogados Founding Partner: Ronaldo C. Veirano the cabinet to a minimum of positions. Managing Partner: Ricardo C. Veirano What’s more, the committee rapporteur is Senator Jovair Rio de Janeiro Notably, Temer met with opposition leader and former Arantes of the Brazilian Labor Party (PTB). He is known Av. Presidente Wilson, 231 / 25º andar 20030-021 – RJ presidential candidate Senator Aécio Neves in late March as an ally of Chamber president , who is a (55 21) 3824 4747 Phone to discuss the political situation. Neves has reportedly primary architect of the impeachment move. 2 (55 21) 2262 4247 Fax [email protected] muted his calls for a new presidential election and now 18 www.veirano.com.br supports the impeachment process. Cunha, who himself is facing corruption charges, also São Paulo Av. Brigadeiro Faria Lima, managed to gather sufficient support for additional con- 3477 / 16º andar The nuts and bolts of impeachment gressional sessions to speed up the process. Rousseff 04538-133 - SP (55 11) 2313-5700 Phone Back in December, as reported by VistaBrazil (January- now has the chance to defend herself before the commit- (55 11) 2313-5990 Fax February 2016), the Supreme Court annulled the election tee, which will then deliberate and issue a recommenda- Porto Alegre of a special committee to consider impeachment proceed- tion to the full house. Rua Dona Laura, 320 / 13º andar ings against the president and established various condi- Rio Branco – 90430-090 – RS (55 51) 2121 7500 Phone tions for impeachment that worked in the president’s favor. At that point, if two-thirds of the Chamber votes in favor (55 51) 2121 7600 Fax of moving proceedings forward, the Senate must approve Brasília On 17 March, however, the Brazilian lower house, the by an absolute majority the lower house’s motion for … SCN Qd. 2 Ed. Corp. Financial Center – Bloco A 10º andar/Sala 1001 – 70712-900 – DF

(55 61) 2106 6600 Phone MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 (55 61) 2106 6699 Fax

Disclaimer This newsletter is intended to provide general information regarding recent events, developments, and trends in Brazil. It is not intended, nor should it be relied on, to provide legal analysis or legal advice on any of the information covered in the newsletter. Veirano Advogados and Blakeley Words+Pictures cannot ensure against or be held responsible for inaccuracies. To the full extent permissible by law Veirano Advogados VEIRANO ADVOGADOS shall have no liability for any damage or loss (including, without limitation, financial loss, loss of profits, loss of business, or any indirect or consequential loss), however it arises, resulting from the use of any material appearing in this publication or from any action or decision taken as a result of using information presented in the publication. Offices in Rio de Janeiro, São Paulo, Porto Alegre, and Brasília … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: AGÊNCIA BRASIL/WIKIMEDIA COMMONS an impeachment trial. Such a trial would be presided over by the chief justice of the (STF).

Notably, there are dozens of impeachment petitions on the table. Among them is one submitted by the Brazil- ian Bar Association (OAB) on 28 March. The OAB filed a request to impeach Rousseff for obstructing justice, among other allegations. The request alleges that the president has interfered in investigations into the Petro- bras scandal, a claim based in part on plea bargain tes- timony from Senator Delcídio do Amaral and in part on Rousseff’s appointment of former president Luiz Inácio Lula da Silva to cabinet.

Cunha can accept another impeachment petition in The case against Lula was strengthened by the plea bargain of fellow PT member Senator Delcídio do Amaral in early March tandem with the process now on-going, but he is likely to 3 do so only if the first case fails. The current proceedings of her opponents, shaping their cause as an assault on Lula’s problems come seemingly despite Rousseff’s best 18 against the president, on the grounds of fiscal irregularity democracy. efforts, as she gave him a cabinet post on 16 March, thus with respect to government accounts, thus have as a fail- providing him with ministerial immunity from all but the safe additional petitions based on additional allegations. And in response to the break with government by PMDB, highest court. Lula declared that he would help the president to put The Rousseff camp responds together a new coalition by bypassing the party leader- State prosecutors had requested the former president’s As the risk of impeachment grows, Rousseff has asked ship and securing the support of individual politicians. preventive custody after filing charges against him in con- her legal team to prepare an appeal to the STF, while con- nection with an apartment he owns that was allegedly tinuing to assert that the proceedings are “legally unsus- The case against Lula renovated free of charge, and the ownership of which tainable.” The goal is to block impeachment proceedings Lula himself is a key factor in the unraveling of the he allegedly concealed – which is tantamount to money in the courts. If the Senate votes against her, the president administration. The populist politician faces charges of laundering. would have to step down for the remainder of the process. money laundering and criminal misrepresentation but

got a temporary stay from criminal prosecution on 22 The prosecutors argued that custody was necessary in MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 Rousseff denies all wrong-doing and has vowed not to March, when Supreme Federal Court (STF) Justice Teori order to prevent Lula from destroying evidence and using resign, referring to the move to impeach her as a coup Zavascki asked federal judge Sérgio Moro to send him all his political network to evade the law. He was also asked d’état. She has also condemned the “fascist methods” the material he has regarding Lula’s alleged involvement to provide access to his bank accounts and to hand over in the Petrobras bribery scandal. his passport. VEIRANO ADVOGADOS Protesters banged pots and pans outside Zavascki’s The case against Lula was strengthened by the plea White-Collar Crimes … house in Brasília when the news was made public. bargain of fellow PT member Senator Delcídio do Amaral Zavascki was appointed by Rousseff in 2012. in early March. Amaral alleges that Lula specifically … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

The shape of conflict The widening political crisis is pitting the government against the judiciary, the police, and public opinion.

The government vs the judiciary

PHOTOGRAPH: PALACIODOPLANALTO/YOUTUBE PHOTOGRAPH: Tensions between the government and the judiciary have been rising in response to the sequence of events relating to Lula. First came the charges of money laundering, which the government has criticized. Then came the political appointment of the former president as an ad hoc chief of staff, which the judiciary reversed.

At the same time, the wiretaps released by the state Opposition politicians accuse Rousseff of nominating Lula explicitly to provide him with ministerial immunity from the corruption investigation prosecutor reveal Lula referring to the Supreme Court as “cowardly” and suggesting that he could put prosecutors “in asked him to help José Carlos Bumlai, who is reportedly with ministerial immunity from the massive corruption their place.” This has not been well received by the judiciary. 4 implicated in the plea bargain of former Petrobras investigation known as Operation Lava Jato and being 18 president Nestor Cerveró. prosecuted by Moro. The government vs the police Tensions between the government and the police have Amaral also said in an interview that Rousseff herself Moro then released recordings of wiretapped phone been exacerbated by the new justice minister. Eugênio “knew everything” about the Petrobras graft scheme, conversations between Lula and Rousseff that are said Aragão – appointed on 14 March as the third Brazilian accusing her of using some of its proceeds to fund her to corroborate these allegations. Zavascki’s ruling in turn minister in the post in just two weeks – reportedly last electoral campaign and of trying to buy his silence. delivered a rebuke to Moro, saying that there was no rea- threatened to close down the federal police team carrying Rousseff responded by ordering the government to press son to make the conversations public, particularly when out the Operation Lava Jato investigation and replace charges of defamation. some of them had no link to the investigation. That ruling it with an entirely new team if there was any hint that was upheld on 31 March by eight votes to two, meaning information was being leaked. But bringing the sorry tale back to the former president, on that the STF, rather than a lower court, will try the case 18 March, STF Justice blocked Rousseff’s against Lula. His lawyers have appealed the suspension of His belligerence has prompted police associations to

move to protect Lula, issuing a temporary injunction that his political appointment, and a decision is still pending. accuse the minister of attacking police autonomy. MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 stripped him of his new appointment as the president’s chief of staff and returning the case against him to Moro. The Supreme Court is filled with PT appointees, and many The government vs the people analysts believe it might show more leniency toward Finally, there are the long-suffering Brazilian people, The ruling indicated that the purpose of Rousseff’s Lula than lower courts have for that reason – but despite who have been taking to the streets in the hundreds of appointment of her predecessor and mentor was demonstrations by his many adoring supporters, the thousands to demonstrate for and against not just their evidently to prevent a lower court judge from issuing an former president’s popularity has slipped from almost government but their entire political system, which seems arrest warrant for him. Opposition politicians accuse 90 percent approval when he left office in 2010 to 57 more and more divorced from the business of serving Rousseff of nominating Lula explicitly to provide him percent disapproval today. their needs and aspirations. VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: PEDRO FRANÇA/AGÊNCIA SENADO/WIKIMEDIA COMMONS ECONOMY & BUSINESS

Infrastructure issues Ports expansion Minister of Ports Helder Barbalho has announced new investment of under the National Program of Ports Logistics (PNLP). The federal government plans to invest US$5.44 billion for new private terminals, US$4.49 billion for new leases, US$3.07 billion for contract renewals, and US$1.18 billion in dredging.

The volume of cargo handling is expected to increase by Minister of Ports Helder Barbalho has announced new investment of under the National Program of Ports Logistics (PNLP) 92 percent by 2042, reaching 1.8 billion tons. highways. The value of the transaction is speculated to be that may give Vale the option of not only undertaking joint 5 As a step in the right direction, the National Agency for roughly US$27 million over the next five years, although mining projects with Fortescue in Australia but also taking 18 Water Transport (ANTAQ) is hoping to hold an auc- the figure was not disclosed. a minority stake in Fortescue’s holding company. Vale may tion for the operation of six port terminals in Pará state, possibly buy up to 15 percent of Fortescue’s capital on mar- although on 31 March it was postponed for 30 days due BC2 is aiming to become the largest provided of transpor- ket and invest in its existing and prospective mines. Any to insufficient interest. The six were three areas for han- tation and infrastructure maintenance in Brazil over the deal remains subject to agreement on the final terms and dling and storage at Outeiro, two at Santarem, and one at period, expanding services to ports, airports, and railways. receipt of all required approvals. Vila do Conde port in the municipality of Barcarena. Rumo refinances Mining venture boosts CSN income ANTAQ has also announced that it will auction public Rail logistics operator Rumo has announced a US$1.07 Brazilian steelmaker CSN has reported a net profit of areas and infrastructure leasing in the Port of Salvador, billion capital increase and debt refinancing through a US$646 million for the fourth quarter of 2015, primarily Bahia state, on 24 May. common share offering to certain qualified Brazilian because of gains in mining operations. A US$16 billion investors. To refinance debts maturing between this year merger of the company’s mining and logistics units Highway maintenance

and 2018, the company will also offer seven-year non- with its Asian partners in the Namisa iron ore venture MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 Industrial maintenance and building management convertible bonds. was concluded on 30 November 2015 and created new company Vivante has purchased 40 percent of BC2, mining company, Congonhas Minérios. which provides maintenance services on privatized Mining & metals The integrated operation boasts a mine with high-quality VEIRANO ADVOGADOS iron ore reserves, a railway, and a port. Once the company Fortescue and Vale builds the rail link between its mines and the port, iron ore Infrastructure & Projects … Australian Fortescue Metals and Brazilian mining giant Vale output should increase 20 percent in the first year. CSN have signed a non-binding memorandum of understanding forecasts iron ore shipments of 31 million tonnes this year. VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: 4.BP.BLOGSPOT.COM Digging in at Seival Banking & finance The Seival mining complex, which will supply the Pampa Sul thermoelectric plant, will begin earthworks in May Downgraded, again and construction some time in 2016Q3, according to On 17 February, five months after taking investment news service Universo On-Line. If the mine structure is grade status away from Brazil, Standard & Poor’s ratings completed as planned by late 2017, coal mining should agency downgraded the country again. The move from start in 2018. BB+ to BB was justified by concern that the so-called fiscal adjustment will take longer than expected. Seival will provide around 2 million tonnes of coal for the Pampa Sul plant annually. The Pampa Sul project calls for How strong is too strong? the construction and operation of a 340 MW coal-fired After spending three years supporting the Brazilian thermoelectric plant in Rio Grande do Sul. currency, the Central Bank at the end of March stepped in to weaken it, according to Bloomberg. The real has New metals-processing plant strengthened by 8.6 percent so far this year, rising along Metals-processing company Alloys has signed a letter of with the possibility of the president’s impeachment. But Standard & Poor’s ratings agency has downgraded Brazil again intent with Pará state for the construction of a new plant currency weakness is good for exporters, making their 6 in the industrial hub of Barcarena city. The new facility will goods more competitively priced on the global market, so debts and 10 years to fulfill their obligations to the 18 house nine production units, with approximately US$90 the Central Bank is now trying to contain the appreciation National Bank of Social and Economic Development million invested in a first phase. Pará state is Brazil’s by auctioning off foreign-exchange reverse-swap (BNDES). In return for debt relief, the states and largest primary aluminum producer, and the first unit of contracts and not calling an auction for swap rollovers. municipalities would be required to cut spending on the plant will target aluminum recycling. current and former public employees.

Alloys intends to develop new materials for the aeronau- Economy in brief At the same time, the government announced on 22 tics and vehicle-manufacturing sectors over the long term. March that more budget cuts would be needed to meet Spending up or down? the 2016 fiscal targets. The Ministry of Planning, Budget, Steel production getting underway On 21 March, the Ministry of Finance submitted four and Management said cuts of US$5.88 billion are South Korean Dongkuk is planning to begin operations at proposals to allow increased public spending, subject to required because government revenues are coming in its US$4 billion Companhia Siderúrgica do Pecém (CSP) congressional approval. One significant proposal is to below expectations and inflation has risen more quickly.

steel project in May, despite the global slump in the steel relax the requirement to reduce public debt when the MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 sector. The plant is the second-largest private sector economy grows by less than 1 percent by exempting Squaring the circle, it seems the government has project in Brazil. certain essential expenses, such as health and education, actually abandoned the idea of balancing the budget, from budgetary cuts. Finance Minister Nelson Barbosa acknowledging on 24 March that the primary deficit Mining giant Vale holds a 50 percent stake in CSP, asserts that spending that generates employment and while steel producers Dongkuk and Posco have 30 and supports citizens’ well-being must be preserved. VEIRANO ADVOGADOS 20 percent, respectively. Posco will run the plant and Dongkuk will import steel products from the facility. The government also wants to permit states and Government & Regulatory … municipalities to take a further 20 years to clear their VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

Upcoming events

Title Date Place Sponsor Contact

Brazil Solar Energy Conference 12–13 April 2016 Rio de Janeiro Cleantech Investor Ltd. [email protected] Summit Imobiliário Brasil 2016 12 April 2016 São Paulo Estadão [email protected] (Real Estate Summit, in Portuguese) Biennial Conference of the IBA Section on Energy, 17–20 April 2016 New York Gowlings/IBA North American [email protected] Environment, Natural Resources and Infrastructure Regional Forum Law (SEERIL) 2016 14th Brazil Issuers and Investors Forum (BIIF) 19 April 2016 São Paulo Latin Finance www.latinfinanceevents.com/events 4th Annual Pension Fund & Fixed Income Brazil Forum 5 May 2016 São Paulo Markets Group www.marketsgroup.org/forums 3rd Annual Latin America Europe Investors Forum (LAEIF) 10 May 2016 London Latin Finance www.latinfinanceevents.com/events 7 Finding Hidden Value in Latam Private Equity 12 May 2016 New York Association for Corporate Growth www.acg.org 18 Private Wealth Brazil Forum 14 May 2016 São Paulo Markets Group www.marketsgroup.org/forums Power Brazil Events: three conferences and exhibition 2016 18–20 May 2016 São Paulo Power-Gen Brasil, [email protected] HydroVision Brasil, Distributech Brasil 2nd Latin America Japan Investors Forum (LAJIF) 1–2 June 2016 Tokyo Latin Finance www.latinfinanceevents.com/events Debtwire Brazil Forum 28 June 2016 São Paulo Debtwire [email protected]

could be US$27 billion, or 1.55 percent of GDP, by year Deficit and debt Interest payments on the public debt reached almost

end – in particular if state governors accept the federal The Brazilian current account deficit dropped from US$148 billion in the 12 months ended January. That MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 government’s proposed union–state debt renegotiation. US$4.817 billion in January to US$1.919 in February, represents a shift from 5.5 percent of GDP in 2014 to or Congress will have to approve any budgetary deficit. according to the Central Bank. That figure puts the 9.1 now. 12-month accumulated current account deficit at 2.67 per- Barbosa noted that an increased primary deficit would cent of GDP, down from 2.94 percent the previous month. Inflation and interest rates also allow the government to spend more on measures Despite its seemingly frenzied pace over the past months, to combat the Zika virus and to reinvigorate the Growth Even so, the federal public debt rose from US$744.02 annual inflation has actually decelerated for the first time Acceleration Program (PAC). million to US$762.96 million in February, according to the in 16 months, according to statistics released by the National Treasury on 28 March – a rise of 2.53 percent. Brazilian Institute of Geography and Statistics (IBGE) … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: MBUSA on 23 March. The PPCA index bumped down into single- digit territory with a slide from 10.84 to 9.95 percent.

The Central Bank has held the key Selic interest rate at 14.25 percent for its past five meetings, and policy makers expect inflation to ease as demand dwindles in response to recession. That said, inflation continues to spike through the ceiling of the bank’s target for the second year in a row, and no one expects it to tumble quickly. As of 24 March, analysts were forecasting inflation of 7.31 percent for 2016.

What does that mean for the Selic? With unruly inflation and one of the highest interest rates in the world in the midst of one of the worst recessions, the Brazilian Mercedes-Benz opened a new factory assembly line in Iracemápolis to produce 12,000 units per year beginning with the Class C sedan economy is between a rock and a hard place. So far, the 8 Central Bank has hewed to its restrictive rate policy to try Moody’s credit rating agency points to a 20 percent drop agreement with private-equity company Cambuhy and 18 to force inflation down, but while its directors indicate that in the housing market in 2015 – have pushed prices into OGX Petróleo e Gás. Eneva already had a 27.25 percent they are not yet considering a rate cut, some economists the deep discount realm. stake in PGN, which operates exploration and production expect to see some rate trimming later this year. blocks in the onshore Parnaíba basin. The risks remain high with the political and economic GDP shrinkage forecast landscape in such turmoil, and the domestic housing BTG Pactual holds a 49.57 percent controlling stake in The financial market has adjusted its forecast of economic market is expected to continue to contract through 2016, Eneva, with E.ON (12.25 percent), Itaú Unibanco (11.65 decline in Brazil, suggesting that GDP will shrink by 3.66 but those in search of bargains will certainly find them. percent), ICE Canyon (6.80 percent), Bullseye (6.53 percent in 2016 rather than 3.6 percent. GDP is now percent), and others (13.21 percent). expected to grow in 2017 by a paltry 0.35 percent, down Mercedes-Benz factory from the previous forecast of 0.44 percent. On 23 March, Mercedes-Benz opened a new factory Weg buys Bluffton assembly line in Iracemápolis, São Paulo. The initial Brazilian energy equipment maker Weg has acquired

investment was US$164 million, and the factory has 750 US-based manufacturer Bluffton Motor Works, obtaining MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 Business news workers. The intention is to produce 12,000 units per year an industrial machinery factory in Indiana as part of its beginning with the Class C sedan and later with the GLA planned global expansion, according to a 28 March press Shopping for bargains model. No plans to introduce a second shift have been release. The value of the transaction was not made public. Brazil may be on the brink of political and economic announced yet. implosion, but investors know an opportunity when they VEIRANO ADVOGADOS see one. The old adage of “buy low, sell high” seems Eneva acquires PNG particularly relevant, and especially in the real estate Brazilian company Eneva has acquired a 100 percent Labor & Employment … sector. Currency devaluation and a weak local market – stake in Parnaíba Gas Natural (PNG) after reaching an VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: MARCOS OLIVEIRA/AGÊNCIA SENADO/WIKIMEDIA COMMONS ENERGY & ENVIRONMENT Petrobras news Oil & gas in brief Record losses in 2015 Petrobras on 21 March reported a consolidated net loss Play or move on of US$9.6 billion in 2015. The result, following losses of On 9 March, the National Council on Energy Policy US$5.9 billion in 2014, is the worst since the company (CNPE) published a set of measures to stimulate oil and was founded in 1953 and reflects both the plunging gas exploration and production. The resolution authorizes oil price and the plummeting value of the company’s the National Petroleum, Natural Gas, and Biofuels Agency shares in response to increased economic risk. (ANP) to extend concessions that were contracted with Petrobras in 1998. It also requires ANP to notify oil field Share value took the greatest hit in exploration and operators that have not been producing over the past six extraction, which made up US$9.3 billion of the total months that they must do so within the next 12 months losses, according to Folha de São Paulo. Petrobras does or transfer the rights to companies that will do so. not plan to issue any dividends from 2015. Neverthe- less, the company’s shares were moving generally up Petrobras CEO Aldemir Bendine 9 The resolution also proposes an extension of the terms over February and March in a volatile market. 18 of REPETRO, a special customs regime that governs the that despite the losses Petrobras has demonstrated import and export of assets related to oil and gas sector The company now has a total debt of approximately that it can survive extremely difficult conditions, and activity. US$136 billion and net debt of US$100 billion, down 5 emphasized out that it is engaged in a four- to five-year percent from 2014. A press release pointed to write- project to regain a solid financial footing. Negotiations LNG supply deal offs as the cause of the 2015 loss, despite a 25 percent for planned asset sales are reportedly proceeding well. Anglo-Brazilian joint venture Golar GenPower has signed increase in adjusted EBITDA since 2014. Asset and a framework agreement with ExxonMobil Titan LNG investment impairment account for more than a third of Restructuring approval vote for the supply of LNG to the 1,500 MW Porto de Sergipe the company’s market capitalization. Petrobras will hold a shareholder meeting on 28 gas-fired power project. ExxonMobil will also supply April to vote on an overhaul of its administrative LNG for other Brazilian projects that Golar GenPower The 2015Q4 loss was particularly savage, at US$10.2 structure. Proposals include a reduction in the number is pursuing. billion, and two months after cutting management of board members and the centralization of activities

by 30 percent Petrobras announced that it would cut to reduce costs. MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 US sends LNG to Brazil another 12,000 jobs by 2020. The company is one The US has shipped its first export of shale gas, in of the largest employers in Brazil, with over 80,000 Sépia early production the form of liquefied natural gas, and it went to Brazil. employees. The early production system in the Sépia area has Cherniere Energy sent a cargo of 3 billion cubic feet of begun operations in the Santos basin pre-salt layer. LNG from its Sabine Pass terminal in Louisiana to an The Senate has asked Petrobras CEO Aldemir Bendine A floating platform is set to produce around 20,000 import terminal in Bahia state, from where it will be to appear before a committee to brief its members barrels of oil per day during a test period of 180 days, in converted to gas and piped to electricity generators. on the state-owned company. Bendine has noted waters approximately 2,200 meters deep. … Petrobras was the buyer. … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

Biofuels in brief mixture, and Congress has approved a law increasing the volume from 7 to 8 percent, rising to 10 percent by 2019. Price trumps performance Brazilian car owners are opting for cheaper, less efficient ethanol over gasoline. The biofuel extracted from sugar Electricity sector cane yields about 30 percent less energy per liter, but sales of hydrous ethanol rose 10 percent over the last Eletrobras divestment and investment three months compared to the same period last year, State-owned electric power utility Eletrobras reportedly while sales of gasoline shrank 9.3 percent. now plans to publish the bidding terms for the privatiza-

PHOTOGRAPH: DIVULGAÇÃO PETROBRAS/AGÊNCIA BRASIL/WIKIMEDIA COMMONS PETROBRAS/AGÊNCIA DIVULGAÇÃO PHOTOGRAPH: tion of Goiás state electricity distributor Celg-D in April, The price difference – the price of ethanol is typically after the details were delayed from February at the request The Sépia field was declared commercially viable in 2014 approximately 70 percent that of gasoline – has become of potential investors that want more time to prepare. a more important factor than performance as drivers, like The Sépia early production system is collecting all Brazilians, struggle to stretch their incomes. The company has also hired Credit Suisse to sell non- technical data on such issues as the behavior of the strategic assets belonging to its subsidiary Eletrosul, reservoirs and oil outflow through underwater pipes, The price parity against gasoline as of the end of March among them transmission lines and wind farms. 10 in order to support the development of the final was at a five-year high of almost 77 percent, but in these Eletrobras is hoping to raise approximately US$540 18 production system. The Sépia field, approximately lean times that’s enough to persuade many drivers to million from the transactions, according to Reuters, and is 180 km offshore Rio de Janeiro, was declared make the switch. Sales did fall nearly 7 percent year planning investments of US$3.38 billion in 2016. commercially viable in 2014 and the final production on year in February as prices rose, but demand is still system is scheduled to come on stream in 2020. expected to curb exports for the time being. Let the rain fall Higher rainfall has brought some relief to Brazilian power Petro Rio goes shopping, perhaps Over the past 12 months, ethanol sales have risen 36 distributors. About two-thirds of Brazil’s 141 GW installed Brazilian oil company Petro Rio (formerly HRT Partici- percent, to 17.8 billion liters, following a rise in gasoline generation capacity depends on hydropower, so the pacões em Petróleo SA) has said that it is in advanced taxes. When ethanol fell to as low as 60 percent of the replenishment of water reservoirs is a very welcome negotiations to buy an asset from Petrobras, though it gasoline price last August, consumers bought out the development. is unknown what that asset might be. The only details entire national inventory. thus far, as reported by Reuters on 24 March, are that In reaction, the Brazilian Electricity Regulatory Agency The biodiesel cocktail changes

it is offshore and in production. (ANEEL) is bringing back the green flag tariff, which will MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 The Brazilian government has authorized an increase reduce electricity prices by 1.5 reais (US$0.40) per 100 At the start of the month, Petrobras announced that it in the proportion of biodiesel in the diesel oil mixture. kWh compared to March. The flag tariff system allocates had canceled an agreement to sell its 20 percent share Brazilian law requires the use of some biodiesel within the red, yellow, or green flags – with corresponding rate levels of the Bijupirá and Selma fields, both in the Campos – to four regional subsystems. basin, to Petro Rio. This followed mid-February news VEIRANO ADVOGADOS that Shell had canceled an agreement to sell its 80 After assigning red flag status to much of the drought- percent stake in the same fields to the company. Oil, Gas & Biofuels … stricken country for the bulk of 2015, ANEEL last month deactivated seven backup thermoelectric plants with … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

Connecting the Amazon Environmental news The Brazilian government has announced plans to auction power transmission projects to link remote Amazon Elevated mercury levels communities to the national grid. The power lines will Hair samples taken from indigenous people in 19 Amazo- serve areas that have no access to electricity or that rely nian communities have revealed that 90 percent are suffer- on costly diesel and fuel oil-fired thermoelectric plants. ing from elevated levels of mercury, as reported by teleSUR. PHOTOGRAPH: US AIR FORCE/WIKIMEDIA COMMONS US AIR FORCE/WIKIMEDIA PHOTOGRAPH: The auction will take place before 31 July. The study, conducted by the Oswaldo Cruz Foundation Cooperating with the UK (Fiocruz), the Hutukara Yanomami Association, the Brazil and the UK have agreed on a US$1.4 billion credit Yekuana Association, and the Brazilian NGO Socio- facility to finance joint energy projects. Statements Environmental Institute (ISA) identifies illegal gold mining released on both sides suggested that Brazil could learn as the source of river pollution that then affects the fish from the UK with respect to storing electricity from solar and water that are consumed in these communities. Solar power is included in two reserve energy auctions and wind power plants, and the UK could draw on Brazilian expertise in renewable energy and oil and gas. Floating solar panels a total 2 GW of capacity and ushered in the yellow flag. In a hybrid energy scheme, Brazil has unveiled a pilot 11 Now, it’s given a green light to lower rates. Also up for discussion is cooperation in natural gas project that floats photovoltaic panels on the water 18 transport, unconventional gas production, ultra- surface of the Balbina Dam lake. According to the Reserve energy auctions deepwater exploration, and long-term planning for the Ministry of Mines and Energy, the project is a global Two reserve energy auctions, on 29 July and 28 October, electric power sector. first, using the technology in dam lakes instead of have been announced by the Ministry of Mines and regular reservoirs in order to take advantage of existing Energy. Project developers, who will bid for long-term Selling in a deregulated market hydroelectric plant capabilities. supply contracts from new projects, must register for the Brazilian utility Copel is preparing to sell electricity on the first by 20 April and the second by 1 July. deregulated market for the first time, amid concerns that The Balbina Dam reservoir was created by a notoriously the weak economy is depressing demand for electricity environmentally damaging dam near the city of Manaus, Solar power is included in both auctions, and successful and creating a surplus. Copel nonetheless also plans to in the central Amazon. The 1980s project flooded a mas- bidders in the first auction must begin commercial build 13 wind farms in Rio Grande do Norte, in northeast- sive area of pristine rainforest and forced the relocation of operations by July 2018 with supply terms of 20 years. ern Brazil. The company expects its expand its installed hundreds of people.

The first auction will also offer hydropower contracts with wind capacity from 332 MW to 664 MW by 2019. MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 30-year terms beginning in March 2020. In the second Now, the renewable power project is an attempt to auction, wind and solar power developers will be offered Wind farm gets license boost the capacity of the hydroelectric plant to permit 20-year contracts starting in July 2019. The Central Geradora de Energia Goiabeira wind farm, the generation of power for half a million homes, rather comprising 11 wind turbines, has received a license to than the meager 90,000 it now reaches. Minister of VEIRANO ADVOGADOS operate from the environmental regulator in Ceará state. Mines and Energy noted that the project The farm was developed by Energia dos Ventos and is is in some way an attempt to mitigate the cost of the Electric Energy … part of a 98.7 MW wind complex controlled by Alupar “environmental crime” that the original Balbina Dam Investimento. project committed. … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: REVISTAFORUM.COM.BR Science & technology New Antarctic station Four years ago, the Brazilian research station in Antarctica was destroyed in a fire. It had operated for 30 years. Now a symbolic cornerstone has been laid for a new, state-of-the-art research station that is expected to be completed by 2018. The station will have 17 laboratories and accommodation for 65 people.

Since the old station burned down, the Brazilian govern- ment has provided emergency operational modules and replaced all the site equipment, but researchers are concerned that the current climate of budget cuts might Vice-President Michel Temer could take over the presidency as soon as May if President Dilma Rousseff does not survive impeachment leave them with a brand new station but no funds to run new research projects. POLITICS, LAW, SOCIETY Specifically, PMDB wishes to allow more private-sector 12 participation in the oil and gas sector through a reduced 18 Israeli-built smart city for Brazil role for state-owned Petrobras. The party also wants full Three Israeli companies have won an international com- Politics in brief independence for the Central Bank, with fixed terms for petition to help create a pilot smart city in Brazil. The city, its directors. to be called Croatá Laguna Ecopark, will have housing for PMDB prepares 20,000 low-income residents, and will provide high-tech The Brazilian Democratic Movement Party (PMDB) is A Temer presidency? security, landscaping, and engineering solutions. reportedly already working on the policies it wants to put Vice-President Michel Temer is in a strange position. He in place if President Dilma Rousseff is impeached. The could conceivably take over the presidency as soon as May Magos, which won the competition, will provide afford- party would focus on controlling government spending if President Dilma Rousseff does not survive the impeach- able security that has a simple installation process. and would be likely to intervene in the economy far less ment process. But the 75-year-old is not expected to run in Runner-up Green IQ will offer smart management of than the leftist Workers’ Party (PT) has done. 2018, when the next presidential election is scheduled. green spaces that will use 50 percent less water than is

standard. Third-place company Pixtier will provide engi- According to Reuters, the party is considering making Does that make him a lame duck? Political and economic MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 neering to help plan and build the city. The idea of build- cuts to college tuition support, removing some tax analysts don’t seem to think so, although no one expects ing such a city from scratch is an innovative one, as smart exemptions for industries, curbing the Minha Casa, him to turn the economy around quickly. Where he could technology is more often retrofitted to existing cities. Minha Vida housing program, and imposing limits on make a big difference is in boosting investor confidence the Bolsa Família social welfare program. A policy paper and building political consensus. The business-friendly VEIRANO ADVOGADOS it issued last October favors private investment, a higher Temer is expected to be supported by centrist politicians retirement age, and an easing of the constitutional and opposition parties, and that could mean forming a Commercial Contracts … mandate on some types of spending so that resources unity government that functions well enough to enact can be more effectively allocated. some constitutional and economic reforms. … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: FRANKLIN SANTANA/WIKIMEDIA COMMONS On the other hand, as Rousseff’s running mate in 2014, his position could prove untenable. If the juggernaut Opera- tion Lava Jato investigation uncovers that the 2014 cam- paign was funded by kickbacks from Petrobras, the courts could annul the election and trigger a new one or a con- gressional vote for president that Temer might not win.

A revolving door for justice The Brazilian Ministry of Justice seems to have added a revolving door recently. At the end of February, Justice Minister José Eduardo Cardozo left his post to become Attorney-General of the Union (AGU), and was replaced by Wellington César Lima.

Cardozo reportedly left under pressure from the Workers’ Party (PT) because of his failure to curb the federal police 13 investigation of corruption. The justice minister is also the The Brazilian Armed Forces have acquired a new firearms support simulation system (SIMAF) for training use 18 head of the federal police. Defense issues Motorcycle escorts at the Games Lima then lasted just 11 days before resigning because The Brazilian Armed Forces will provide military a Supreme Court ruling made him choose between the New firearms simulator motorcycle escorts to Olympic delegations and heads Cabinet position and his role as state prosecutor in Bahia. The Brazilian Armed Forces have acquired a new of state. The army is in discussion with the Rio traffic He was replaced by Eugênio Aragão, who has already firearms support simulation system (SIMAF) for authorities to ensure that the there is as little disruption taken a confrontational attitude with the police. training use. The system creates an accurate, virtual as possible to the flow of 2.9 million vehicles on the reproduction of any scenario or combat conditions, roads of the city. Sports portfolio switch based on defined real variables such as day or night, Five months before the Rio Olympics begin, the sports temperature, wind speed, and relative air humidity. Nearly 170 heads of state have confirmed that they will minister has lost his job because his party, the Brazilian This enables soldiers to train under the precise battle attend the Olympic Games, and the army will deploy

Republican Party (PRB), has broken with the governing conditions that they are expected to encounter, from 160 convoy motorcyclists to escort their motorcades. MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 coalition and his effort to switch to the Republican Party areas in the Amazon to urban zones. The highly trained and skilled riders fulfill the triple role of Social Order (PROS) did not gain traction. of motorcyclist, traffic officer, and security agent. One of the simulator unit is now operational at the Fortunately, Ricardo Leyser, a senior ministry official who Military Academy in Agulhas Negras (AMAN) in the VEIRANO ADVOGADOS has been managing the preparation for the Games and city of Resende, Rio de Janeiro state, and another is has far more experience in the sports sector, has replaced expected to become operational in April at the EB Dispute Resolution … the fallen minister. Training Camp in Santa Maria, Rio Grande do Sul. VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

Legal issues persuade Senator Delcídio do Amaral not to agree to a An all-in-one vaccine to prevent four different strains plea bargain over the Petrobras bribery case. of Dengue, plus Zika, is in development but may not be Cunha defiant ready until 2018. At the beginning of March, the Supreme Federal Court With respect to the latter, a complaint was brought by (STF) voted unanimously to authorize a trial of Chamber the Brazilian Bar Association (OAB) to the effect that What about the Olympics? of Deputies president Eduardo Cunha on charges of cor- Cardozo used his position to make a partisan defense of The economic rout that is gripping Brazil does not bode ruption and money laundering. Cunha allegedly profited President Dilma Rousseff and her allies. well for the Olympics. Rio has rescinded contracts on at from the Petrobras bribery scheme and stands accused least two Olympic venues and delays have been reported of accepting at least US$5 million from suppliers that The administrating proceedings will investigate the on at least four other projects. wanted to do business with the state-owned oil company. conduct of both ministers and give them an opportunity to respond and to provide any pertinent information. Security is also becoming a growing concern. The head Yet Cunha is still in his post, presiding over the lower of the Rio state police has had his budget cut by US$720 house and thus determining when legislation is intro- Railway corruption investigation million, which is bound to affect Olympic security. And on duced and steering the impeachment proceedings Operation Recebedor (Receiver), part of the larger Opera- 21 March, the federal government cut its security budget against President Dilma Rousseff. Attorney General tion Lava Jato investigation, is focusing on 23 companies by more than 30 percent. Although much of that is related Rodrigo Janot has asked the court to remove Cunha from that were involved in constructing the Norte–Sul and to future investment the cut will delay a plan to establish a 14 office but it has not yet deliberated on that point. Leste–Oeste railways. Evidence of alleged overpricing of specialized Urban Pacification Police unit in the Maré slum 18 public works, bribery, and money laundering has been complex near the Rio airport until after the Games. The Chamber president has claimed that the Ethics uncovered, according to news service EBC. Committee, which decided to move forward with his The Rio Olympic security force will comprise 48,000 investigation, has not given him an adequate opportunity A long list police and firefighters, supported by 38,000 soldiers, to prepare his own defense and that the investigation The federal police have indicated that they have a list roughly double the security detail for the 2012 Games in against him should therefore be halted. At this point, of more than 200 politicians from 18 different political London, but the concern is that investment in technology that seems unlikely as his influence is running out amid parties who received illegal financial support for their and equipment has been insufficient. calls for his resignation. Of course, the Brazilian political campaigns in the 2012 and 2014 municipal and national landscape is a nesting ground for the phoenix, so one elections. Joblessness rising never knows… Unemployment is on the rise as the economy lost 1.75 million jobs over the 12 months ending in February. This Misconduct proceedings Social issues was twice the median forecast of economists surveyed by MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 The Public Ethics Office has filed misconduct proceedings Bloomberg and the worst 12-month result in over a dozen against two cabinet ministers, Minister of Education Combating Zika and Dengue years. In the three months to January, some 9.6 million Aloizio Mercadante and Attorney General José Eduardo On 23 March at the presidential palace, President Dilma people – 9.5 percent of the workforce – were jobless. … Cardozo. Rousseff announced new investment of US$180 million to tackle the spread of the mosquito that transmits the VEIRANO ADVOGADOS With respect to the former, the proceedings are based Zika virus and Dengue fever. The number of Dengue on a complaint from the opposition Brazilian Social cases has already risen by 170,000 so far this year, after Insolvency & Restructuring … Democracy Party (PSDB) that Mercadante attempted to hitting a record 1.6 million in 2016. VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM PHOTOGRAPH: PETE SOUZA/WHITE HOUSE/WIKIMEDIA COMMONS In February alone, the number of unemployed increased by 135,000, according to the Brazilian Institute of Geography and Statistics (IBGE), increasing by 0.6 percent month on month and 2.4 percent year on year, to reach 8.2 percent. Most of the losses have been suffered in the industrial and civil construction sectors. And for the first time since 2007, more than 20 percent of 18- to 24-year-olds are unemployed.

At the same time, average wages dropped 1.5 percent month on month and 7.5 percent year on year.

Domestic work, if you’re lucky With Brazil in its deepest recession in 20 years, women In Buenos Aires US President Barack Obama commented about the Brazilian political crisis are turning to domestic work to pay the bills. More than 6 million people in the country are domestic workers, INTERNATIONAL AFFAIRS “The good news … is that their [Brazilians’] democracy is 15 and 90 percent of those are women. As recently as 2011, sufficiently mature, their systems of laws and structures 18 however, many women were leaving domestic work I think are strong enough that this will get resolved in a behind and entering the industrial and retail sectors, Diplomatic briefs way that allows Brazil ultimately to prosper and be the where they could develop skills and earn higher wages. significant world leader that it is,” Obama told a press Rousseff stays home conference. Now, some are returning to the domestic sector and On 29 March, the day that the Brazilian Democratic others are seeking domestic employment for the first Movement Party (PMDB) abandoned its alliance with Damning with faint praise? time as layoffs increase. In just one year, from November the government, President Dilma Rousseff canceled an A bid by Uruguay to draft a strong resolution expressing 2014 to November 2015, the number of unemployed impending trip to Washington, DC, where she had been the support of Mercosur and Unasur for President Dilma nationwide went from 6.4 million to 9.1 million, a jump of going to attend the 4th Nuclear Security Summit. Rousseff has failed. Paraguay has said that it does not 41 percent. At the same time, inflation rose almost twice interfere in the internal affairs of other countries, while as quickly as wages. Under the Brazilian Constitution, the vice-president Argentina is reportedly prepared only to express support

assumes the president’s position whenever the leader Brazilian institutions, rather than the president herself. MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 As more and more women seek domestic positions, leaves the national territory. Rousseff most likely wished Uruguay holds the rotating chair of both Mercosur however, fewer middle-income families can afford to to prevent PMDB leader Michel Temer from assuming and Unasur. hire them – or afford to do so formally. Increased legal her role for the two days she would be away. protection for domestic workers has raised the cost of Israel backs off hiring, and a black market for domestic service – in which Obama praises Brazilian democracy Israel has backed off from insisting that its nominee for workers get lower wages and have no social security – In Buenos Aires to meet Argentinean President Mauricio ambassador to Brazil be accepted. Israel had said that has expanded accordingly. Macri, US President Barack Obama commented about it would not replace Dani Dayan – whom the Brazilian the Brazilian political crisis. government had refused to accept because he is a … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

meat processors. They are expected to import 500,000 tonnes of corn for the 2015–16 cycle.

PHOTOGRAPH: ACGC.ORG.AU PHOTOGRAPH: EU offer meets skepticism The EU and Mercosur plan to exchange new trade offers in early April is meeting resistance from most EU member states.

The EU proposal increases quotas on sensitive agricultural products since its 2004 offer, and at a Special Committee on Agriculture (SCA) meeting on 21 March, 16 members states opposed the deal. Beef is considered a particularly sensitive farm sector, and the plan would open the EU to As Brazil is the largest poultry exporter in the world the global market will feel the effects of domestic corn prices soaring Mercosur beef.

former settler leader in the occupied territories – and Wheat imports from Mercosur Negotiations between the two trade blocs have 16 that Brazil could go without an ambassador if it did not Brazil imported 2.9 million tonnes of wheat between warmed up since Argentina replaced Cristina Fernández 18 accept him. August 2015 and February 2016, about 58 percent of it de Kirchner with Mauricio Macri as president. The from Argentina, 22 percent from Paraguay, and 10 per- Argentinean position has been a drag on the ability of Dayan will now became the consul general for Israel in cent from Uruguay. The elimination of export restrictions Mercosur to advance the talks. New York. Brazil supports the international position that in Argentina and good harvests in Paraguay allowed 90 the settlements are illegal, and in 2014 withdrew its own percent of Brazilian wheat imports to originate from A taste for beef ambassador from Israel over the level of force used by Mercosur countries, according to Valor International. Eight months after Brazilian beef exports were resumed Israel in an offensive in Gaza. in June 2015, China has become their biggest consumer, Corn out, corn in spending US$517 million on the product over the period. It seems that Brazilian agricultural sector has created a According to the Ministry of Development, Industry, and International trade bit of a chicken-and-egg situation. Earlier in the season, Foreign Trade, sales to China were responsible for 16 farmers rushed to export their record corn crop, send- percent of total revenue from beef exports. If Hong Kong Auto parts get tariff breaks

ing over 11 million tonnes of corn overseas in the last two consumption is added, the total is US$906 million, or 28 MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 The Brazilian government has put over 60 more auto- months of 2015. That caused domestic corn prices to percent of the total. motive parts on a list of parts for which domestic auto soar, which in turn is driving up poultry prices. producers pay less import tax because there are no Ratifying the WTO agreement equivalent domestic items. The measure is a response to As Brazil is the largest poultry exporter in the world, the Brazil has ratified the World Trade Organization the needs of high-end auto makers such as Mercedes- global market will feel the effects. (WTO) Trade Facilitation Agreement, which was signed Benz, Audi, BMW, and Jaguar Land Rover that are build- in Indonesia in 2013. The agreement is intended to ing Brazilian plants but need technologies that are not yet Not only that, but the situation has created a corn remove administrative barriers to trade and to reduce available domestically. shortage in the country, and that’s putting the squeeze on bureaucracy with respect to foreign commerce. VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

VERBATIM institutional strength, international outlook, financial New paternity leave regulations health, and social responsibility. On 8 March 2016, the president enacted Law 13,257. The Verbatim reports on recent developments at Veirano law amends provisions with respect to public policies Advogados, offers timely client alerts on new legislation According to the editors, the Firm leadership has made it related to the early childhood, including innovations in and related information, lists publications authored by more than clear that it is willing to undergo fundamental labor law. Two new items in the Brazilian Labor Code now members of the Firm’s team of specialists, and provides change to compete in the top tier of the Brazilian legal grant a father or soon-to-be father paid leave of up to two other current and pertinent content. market. Continue reading… days to escort his spouse to medical appointments during pregnancy and one day per year to escort his child under 2016 Chambers Global six to a medical appointment. Paid paternity leave has Firm news The 2016 Chambers Global has recognized Veirano also been extended by 15 days. Continue reading… Advogados as a leading firm in 15 categories or practice IBA Latin American conference areas, the highest number among Brazilian firms listed in Brazilian Civil Procedure Code Veirano Advogados was an active member of the host this edition. The publication also highlighted 27 partners On March 2, 2016, the Brazilian Superior Court of Justice committee responsible for organizing the International and associates, and gave 31 leading lawyer recognitions. set forth that the New Brazilian Civil Procedure Code will Bar Association (IBA) Latin American Regional Forum Continue reading… enter into force on March 18, 2016. The new code will Conference in Rio de Janeiro last March. apply immediately to all on-going and new lawsuits. 17 Continue reading… 18 The event brought together over 600 attendees from Client alerts around the world for thorough discussions on the theme Author rights in the digital environment ‘Living in interesting times: How to find the opportunities Repatriation of funds A draft version has been published of the normative ruling while avoiding the pitfalls.’ Continue reading… The Brazilian Federal Revenue published Normative that sets forth specific provisions related to the collection Ruling 1,627 on 15 March 2016. Its purpose is to regulate of fees arising from authorial rights to works available on Praise from Latin Lawyer Law 13,254/2016, which relates to the Special Regime the Internet. Continue reading… In March, Veirano Advogados was recognized by two for the Tax and Exchange Regularization (RERCT). leading publications that rank law firms in Latin America. RERCT permits the repatriation of hitherto undeclared or The Internet Act Latin Lawyer 250 once again recommended Veirano as a inappropriately declared funds, assets, or rights of lawful The Brazilian Ministry of Justice has launched a second leading business law firm in the region, highlighting that it origin that are held outside Brazil by Brazilian individuals round of public consultation on important aspects of ‘has a reputation among the general counsel community or by entities headquartered in Brazil. Continue reading… the Internet Act and presented a draft decree for public

as being open, direct, hands-on and available.’ The LL250 comments and suggestions. Topics include net neutrality, MARCH/APRIL 2016 · VOLUME 05 · NUMBER 02 editors praised 20 practice areas, mentioning 40 lawyers. Declaration of Brazilian capital abroad log storage, and the use of personal data. Continue reading… In accordance with Resolution 3,854/2010, all individuals Continue reading… or legal entities resident, domiciled, or headquartered Elite firms of 2015 in Brazil, who, as of 31 December each year, possess Environmental compliance and rural areas Latin Lawyer released a new ranking in March that assets, goods, and rights abroad equaling or more than The São Paulo State Secretaries of the Environment and recognized Veirano Advogados as a Latin Lawyer Elite US$100,000 must submit a Declaration of Brazilian Agriculture and Food Supply have approved Ordinance firm for 2015, based on its leaders’ commitment to Capital Abroad to the Brazilian Central Bank. SMA/SAA 1/2016. The ordinance sets forth corrective maintaining a competitive edge in five core areas: service, Continue reading… measures related to the environmental compliance of … VIEWPOINT ECONOMY & BUSINESS ENERGY & ENVIRONMENT POLITICS, LAW, SOCIETY INTERNATIONAL AFFAIRS VERBATIM

rural properties under the Environmental Compliance Publications governing sensitive advertising, especially with respect to Program (PRA). It establishes detailed guidelines for alcohol, tobacco, and other controlled substances. applications to the PRA. Continue reading… A new era of shareholder activism Veirano associate Alan Parker has contributed an article Veirano partner Valdir Rocha and associate Adriana Rollo Foreign documents in national territory to The Network blog, published by the Berkeley Center have contributed an article on the topic to a recent edition The Brazilian government has ratified the Hague for Law, Business, and the Economy. The article discusses of GALA Gazette. Continue reading… Convention Abolishing the Requirement of Legalization the growing trend of investor activism in Silicon Valley. for Foreign Public Documents, facilitating the use of Continue reading… VEIRANO ADVOGADOS foreign documents in national territory. The government deposited an instrument of ratification with the Ministry Brazilian regulation of alcohol advertising VistaBrazil March/April 2016 of Foreign Affairs of the Netherlands. Continue reading… As in most countries, Brazil has strict regulations

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