The Brazilian Senate is discussing a Bill of Law named Brazilian Law on the Liberty,  Responsibility and Transparence at the Internet.

We are against such Bill of Law because it imposes censorship on the freedom of opinion and speech.

One may simply ask this question: Who will decide whether a news is or it not a fake news? Who will be the censor?

Additionaly, how can the individual or the corporate conductor be deemed liable for the content of the news item that he, she or it merely relays on behalf of his, hers or its client?

One knows that there is no hypothesis of solidarity  nor of liability therein for acts or omissions of any third party. Nor of joint liability.

Comparatively,  how can a taxi driver  be deemed liable for the opinions expressed for their passengers? No, he may not!

The internet is a free territory. For good, or for bad.

The digital platforms which make the posting of messages possible among internauts are the taxis which conduct them. No more, no less than this.

Imposing on such platforms restrictive measures on the circulation of opinions under the penalties of the law is equivalent to transforming such platforms into legalized censors. What is not addmitted under the Brazilian Constitution, considering the fact that censorship whether previous or “a posteriore” is not compatible with the  Democratic State of Law.

There is a saying that the hell is full of good intentions.

So, one must repell this Bill of Law which would hinder the right of free speech via the internet.

The IPI tax increase of 30 percentage points adopted by the Brazilian government this September of 2011 for some imported vehicles is utterly unconstitutional.

The IPI tax is based on two principles: selectivity and essentiality. Discrimination is not allowed on the basis of origin of the product.

Importers and their customers in Brazil are therefore entitled to file a writ of mandamus against such tax increase. The judge must issue an order to clear the import from customs if the petitioner shall previously post a deposit corresponding to the amount of the tax increase. The deposit will revert to petioner upon a final and favorable grant of the the writ.

However, if you already have paid the tax increase on any such imports from abroad, you are nonetheless entitled to file a suit for recovery of the tax excess paid.

Dr. Claudia Barmann Bernard

Rechtsanwältin / Consultant 

             I.      Introduction

Globalization and international trade as well as Brazils growing economy have increased companies’ activities in the country including the needs to enforce judgments or arbitral decisions awarded in their favor.

Foreign judgments can only be enforced or will have any other effects in Brazil after recognition by the Superior Federal Court (Superior Tribunal de Justiça). This procedure is called “Homologação de sentenças estrangeiras”.  

          II.      Recognition of Foreign Judgments

Any kind of foreign judgment is recognized by the STJ, whether the decision is granting affirmative relief, altering a legal relationship or solely declaratory.

The characterization as a judgment is thereby determined according to Brazilian law independent of how a foreign decision is named by the issuing court. Thus, certain administrative or extrajudicial decisions that are rendered in accordance to the law of the country of origin must be recognized by the STJ prior to any enforcement proceedings or any other legal effects for being characterized as judgments by Brazilian legal standards.

On the other hand, any foreign extrajudicial enforceable titles that are equally considered as such by the Brazilian law do not depend on prior recognition to be enforced in Brazil.

Foreign arbitral awards are also subject to recognition by the STJ to be enforceable and to have any other legal effects in Brazil.

Please see under III.) for a detailed description of the requirements and procedures for the recognition of foreign arbitral awards. 

The Brazilian Superior Federal Court (Superior Tribunal de Justiça – STJ) has recently decided that the jurisdiction of Brazilian courts can not be excluded in contracts executed in Brazil even if the contract contains a valid choice of venue and forum selection clause.


It should be noted that the Brazilian Supreme Court (Supremo Tribunal Federal – STF) generally recognizes the validity of contractual choice of venue and forum clauses.

According to the STJ’s recent ruling, a contractual choice of venue and forum clause will, however, only be valid if there was no disadvantage or damage to the defending party. In this case, the Court affirmed said disadvantage or damage because the choice of venue clause precluded jurisdiction of Brazilian courts and, consequently denied the Brazilian contracting party access to the Brazilian courts.


The court further ruled payments effected abroad irrelevant as long as the contract is effectively performed and executed in Brazil. 


The Court’s decision stands in accordance with Brazilian law. Article 9 of the Introductory Law to the Brazilian Civil Code determines that any contractual choice of venue and forum clause in contracts determining jurisdiction of a foreign court constitute a violation of public policy if the contract is executed in Brazil.  When drafting a contract with Brazilian business partners, choice of venue and choice of forum clauses should be drafted with care to avoid potential problems in the future.

We at Prado Garcia Advogados have extensive experience in drafting national and international contracts. Should you require any further information or have any questions please do not hesitate to contact us at or by phone +55 11 3242 8799. 

According to the Supreme Court ruling social security tax debt can only be claimed during a period of five years, not ten years as currently practiced by the administration.

In its Session on June 11, 2008, the Court declared articles 45 and 46 of the law nº 8.212/91 unconstitutional. Articles 45 and 46 established a time line for claiming social security contributions as well as a statutory period of limitation of ten years.

This ruling is binding for all lower courts. As a consequence, social security taxes will follow the standard five-year term.

Regarding the effects of the ruling, the court determined that social security taxes cannot be claimed by the administration using the ten-year term. This effect is valid for all taxpayers whether they filed a refund claim via administrative or judicial proceedings or not. It also applies to possible future claims of social security taxes.

Regarding a refund of social security tax payments assessed under the regulations now declared unconstitutional, the Court determines a more restrictive effect of unconstitutionality.

A refund of such social security taxes will only be granted to those taxpayers who have filed a refund claim through administrative or judicial proceedings no later than June 11, 2008, the date of the Courts decision. All other taxpayers who did not challenge assessed social security contributions or filed a refund claim after June 11, 2008, are not eligible for a refund.

We at Prado Garcia Advogados welcome the Supreme Court decision in favor of the taxpayers. However, it is our opinion that the restitution of unlawful assessed and paid taxes may only be limited under specific circumstances.

According to the Court ruling, taxpayers who did not file for a refund until the date of the Court decision, June 11, 2008, are not entitled to a refund.Instead of a refund the taxpayer may be entitled to offsetting against another tax debit balance. He may reduce or pay off debt deducting his credit from the debt.

Refund is the alternative for taxpayers who have a right to a credit and owe no tax debts to offset that amount against. Refund and offsetting are distinct legal figures.  

In any case, Ministro Gilmar Mendes who delivered the opinion of the court extended the restrictive effects of unconstitutionality and rejects not only a refund but also the possibility of offsetting for all taxpayers who did not file for a refund until June 11, 2008.

Although the Supreme Court may stipulate restrictions on the effects of unconstitutionality, those restrictions may not violate individual taxpayers’ rights granted by the constitution, especially considering the constitutional legality principle according to which the judiciary may not legislate.

This latest Supreme Court decision shows the importance of challenging any unlawful and unconstitutional taxes and contributions, preserving personal rights and, consequently, enabling a possible refund.

After S&P upgraded Brazil’s credit rating to investment grade on April 30, Fitch Ratings followed on May 29 granting Brazil investment grade status. The upgrades by both agencies recognize the country’s fiscal stability and debt management policies and reflect, amongst other factors, economic growth and the governments control over inflation.


S&P raised the country’s long-term foreign currency sovereign debt rating from BB+ to BBB-, while the long-term local currency sovereign credit was upgraded from BBB to BBB+. In addition, the agency upgraded the rating of ten Brazilian entities. The banks Bradesco, Itau and Itau BBA, already at investment grade, were upgrated from BBB- to BBB. Furthermore, the banks Banco do Brasil, Unibanco, Santander Banespa, BNDES and Banco do Nordeste do Brasil as well as the energy company Eletrobrás were elevated to investment grade, passing from BB+ to BBB-.


Fitch Ratings on the other hand raised the country’s rating from BB+ to BBB-, passing from speculative grade to investment grade.

The upgrade to investment grade status will make Brazil more attractive to investors and result in an increasing capital inflow. A broader range of investors, especially more conservative investors, pensions funds etc, whose statutes require investment grades from one or more rating agencies, will now be able to invest in Brazil.

The investment grade may additionally lower risk premiums and funding costs for investments.

As mentioned above, the upgrade of Brazil’s rating to investment grade shows the country’s sucessful fiscal and economic policies. The economy is expected to maintain its growth rhythm at about 4.5%, following a 5.4% growth in 2007. Foreign direct investments reached 34.6 Billion U$ last year, a number expected to be matched in 2008. In January, Brazil became a net foreign creditor for the first time. For the future, the government has to continue its efforts to control public debt and government spending as well as rising inflation.

The third major rating agency, Moody’s Investors Service, rates Brazil currently at Ba1, one level below investment grade. However, an upgrade to investment grade is expected still for this year.

Our team at Prado Garcia Advogados has been assisting companies and investors for many years. For further information and assistance please do not hesitate to contact us at or by phone at +55 11 3242 8799. 

The Brazilian Government has launched a new development program named Productive Development Policy (PDP).

PDP has three purposes: 

1.- To foster investments in 25 strategic sectors and to increase Brazilian  exports 

2.- To stimulate development in the informatics and in the biotechnology industries 

3.- To consolidate the Brazilian leadership in agribusiness, civil aviation and mining  

PDP points to four targets: 

1.- To yearly increase the investment levels from the present level of 450 billion Real (18% of the GDP) to 620 billion Real (21% of the GDP) until 2010 

2.- To increase expenditures in technological research from 12 billion Real to 18.2 billion Real until 2010 

3.- To raise the level of Brazilian exports from 1,18% to 1,25% of the world total 

4.- To promote a 10% increase in the number of small and medium exporting companies  

PDP implementation is based on 5 instruments in order to reach its goals: 

1.- 210 billion Real in loans from BNDES (The Brazilian Bank for the National Economic and Social Development) to be granted until 2010

 2.- 21 billion Real in tax exemptions 

3.- Increased maturity terms in BNDES loans and financing operations  

4.- Reduction in labor costs for software exporting companies 

 5.- Creation of a Brazilian Sovereign Fund 

Private Investments 

Despite the fact that the financing of the projects contemplated under PDP shall come from public funds, most of the investments therein foreseen shall be made by private companies and individuals. 

Less Taxes and Less Bureaucracy 

In addition to reduce tax levies, PDP relieves to some extent the bureaucracy in the exports sector. 

 The Brazilian Sovereign Fund 

It is purported to render financial assistance to Brazilian companies going abroad. 

The 25 sectors contemplated by PDP: 

The health industrial complex  

Technology in the information and communication areas

Nuclear energy Industries devoted to national defense products



Automotive industry

Capital assets

Textile and clothing

Woods and furniture


Parfums and cosmetics

Civil construction

Service areas related to the naval and coastal shipping industries; leather, shoes and handcraft






Natural gas and petrochemical



Steel industry

Paper mills

Beef produces  

Prado Garcia Advogados is pleased to announce that Dr. Claudia Bärmann Bernard has joined our team as consultant for international, European and German Law, expanding our legal services in international commercial and corporate matters. 

Dr. Claudia Bärmann Bernard is a German lawyer and former judge with a doctorate of law. She is fluent in German, English and Portuguese. 

Dr. Claudia Bärmann Bernard has extensive experience in international corporate and commercial issues as well as Intellectual Property matters based on her activities in Germany, Brazil and the USA.  In addition, she has a solid background in negotiating and drafting domestic and international contracts, such as trademark and patent license agreements, technology transfer and technical assistance agreements as well as services, sales representative and distribution agreements.  

 Her practice will focus on guiding and advising international entrepreneurs and companies on all aspects of founding and administrating a company in Brazil, including but not limited to negotiating and drafting all relevant contracts and documents. 

You can reach Dr. Bärmann Bernard via email at or by phone at +55 (11) 3242-8799. 

Stock Exchange:New Disclosure Requirements

The Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) has just established a new requirement whereby corporations with stock traded in the Brazilian Stock Exchange must disclose the identity of their individual shareholders provided that any such individual shall hold at least a 5% participation in the stock capital of the corporation.

The determination is also compelling to shareholders who directly or indirectly hold a controlling position in any such corporation. The command is extensive to foreign individual shareholders.

Corporate shareholders have been since long subject to such disclosure requirements.

The Brazilian real estate market is booming. Not only in the big cities.

Many Brazilian construction companies are opening up to joint ventures with foreign investors or are going public as corporations with their stocks being issued and traded at the Stock Exchange (BOVESPA).

What would seem impossible some decades ago has become a reality: real estate financing for as long as 30 years. Lower interest rates also play a significant role in this new era for investments in this trade.

The laws have also been changed in order to assure sellers the rign to immediately take back the property if buyer becomes insolvent.

The opportunities are not limited to home construction. Industrial and commercial  buildings, including industrial complexes and plants are on demand.

Residencial complexes, new neighborhoods with all sorts of recreational facilities are popping up in many of the most important cities of the country.

However, it goes without saying that a good business is as good as the individuals and the partners involved in its execution. This is why Prado Garcia Advogados is always attempt to the legal and business aspects of all negotiations involving its clients.