Agricultural law in Brazil: overview

A Q&A guide to agricultural law in Brazil.

The Q&A gives a high level overview of agricultural law, including acquiring agricultural companies and co-operatives, competition law, land ownership and usage rights, pricing and tender processes, tax and financing, crop seed business, importing crop seeds, commercial crop production and distribution, plant variety right protection, GM crops, GM foods, importing animals, gene patents, and product liability.

To compare answers across multiple jurisdictions, visit the Agriculture Country Q&A tool.

This Q&A is part of the Agricultural Law Global Guide. For a full list of jurisdictional Q&As visit www.practicallaw.com/agriculture-guide.

Contents

Agricultural policy

1. State whether and when your jurisdiction has joined the following:
  • The World Trade Organization.

  • The Food and Agriculture Organization of the United Nations.

  • The International Plant Protection Convention.

  • The Office International des Epizooties, also known as the World Animal Health Organization.

World Trade Organization (WTO)

Brazil has been a member of the WTO since 1995 (Decree 1355/1994).

Food and Agriculture Organization of the United Nations (FAO)

The FAO was ratified in 1965. Promulgation of the FAO occurred in 2012 (Decree 7752/2012).

International Plant Protection Convention (IPPC)

The IPPC was signed in 1951 and ratified in 1961 (Decree 51.342/1961).

Office International des Epizooties (IOE)/World Animal Health Organization

Brazil is a member of the IOE/World Animal Health Organization.

 
2. Describe the most recent national agricultural policy of your jurisdiction, in particular with respect to biotech crops and new crop growing technologies.

Regarding Genetically Modified Crops (GMC), Brazilian Biosecurity Law No. 11,105/ 2005 governs safety, monitoring, and cultivation, among other activities. It also created the National Technical Commission for Biosecurity (CTNBio) and the National Council of Biosecurity (CNBS), the authorities behind the National Policy on Biosecurity.

Since CTNBio was created, it has already granted field testing permits for 58 different kinds of crops and, out of that number, 19 reached mature test levels and are awaiting cultivation grant, as of 15 August 2016. In June 2015, Brazil was ranked the second largest producer of GM soybean, corn and cotton, with 44.2 million hectares of plantation, according to the International Service for the Acquisition of Agri-bitech Applications (ISAAA). Despite the recent Brazilian economic crisis, the country had the highest increase in absolute hectarage growth in any country in the year of 2015, with 2 million hectares growth in comparison to the same period of 2014.

Brazilian current Biotechnology Development Policy (PBD) was enacted through Decree 6,041, of 8 February 2007, which also created the National Committee of Biotechnology (CNB). The CNB is in charge of proposing and implementing mechanisms for monitoring and evaluating the programmes and activities established in the goals defined in the policy. Composed by members of several ministries, the CNB is also formed by representatives of the Brazilian Patent and Trademark Office (INPI), the Brazilian National Surveillance Agency (ANVISA), research entities and financing institutions.

The PBD is focused on the promotion and performance of actions to establish an appropriate scenario for the development of innovative biotech products and procedures. The PBD prioritises four main sectors, human health, agriculture and cattle breeding, industry and environment.

The main goal established in the PBD for the health sector is to stimulate the development and control of new technologies and the consequent production by the national industry of strategic products in the human health sector.

Regarding household farming, Law 11,326/2006, fosters credit and funds to small-scale farmers, sustainability, enhanced technical and rural assistance and research. It also outlines foresters, fishers, certain indigenous people and members of quilombola communities (former slave colonies) who are subject to the provisions of the statute.

 

Acquisition of agricultural companies

3. Is the acquisition of domestic agricultural companies by foreign investors subject to special prior government approval(s)? Set out the approval procedures and the authorities involved.

Acquisition of agricultural companies by foreign investors is subject to restrictions if the target Brazilian company owns or leases rural property (see Question 6).

The foreign investor must first obtain approval for its investment project from a federal government entity regulating the relevant industry:

  • The Ministry of Agriculture, Cattle Breeding and Food Supply (MAPA) for agricultural projects.

  • The President's National Defence Counsel (if the project comprises borderline zones).

  • Local development agencies, for example, SUDAM, SUDENE and SUDECO, if the area is located in its jurisdiction.

  • The Ministry of Development, Industry and Foreign Trade (for projects involving general and agricultural industries).

  • The Tourism Ministry.

After submitting the project and obtaining approval from the respective government entity, the foreign investor must address an authorisation request to the National Institute of Land Settlement and Agrarian Reform (INCRA), a federal government agency, linked to the Special Secretary of Family Agriculture and Agrarian Development of the Presidency of the Civil House (SEAD) and responsible for implementing the national agrarian reform policy, as mainly set by the Rural Land Statute, enacted by Federal Law No. 4,504/1964.

 
4. Describe if specific legal forms (such as co-operatives) are regulated or used in the agricultural sector and whether they are open to foreign investment.

One of the alternatives available for foreign investors to invest in agricultural companies in Brazil is through the use of a Brazilian Private Equity Investment Fund (FIP) which is a closed-ended fund regulated by the Brazilian Securities Commission. The purpose of a FIP is to buy shares and securities convertible into shares issued by Brazilian corporations, which can either be closely-held corporations (unlisted companies) or publicly traded corporations (listed companies). A FIP must allocate and maintain at least 90% of its net asset value (NAV) in the above-mentioned assets. The investment period of a FIP will be determined by its bye-laws, which can be shortened or extended by the shareholders. Investments must also comply with the fund's investment policy. Otherwise, the administrator or the portfolio manager of the FIP will be held liable for any losses suffered by the fund.

There is no specific legal form for operating in the Brazilian agricultural sector. Brazilian co-operatives are non-profit institutions with the specific purpose of providing services to its associates. This structure is not indicated for foreign investment in this sector due to its peculiarities, including the:

  • Impossibility of transferring the quotas to third parties outside the society.

  • Quorum for the operation and resolution of general meetings is based on the number of members and not on the portion of capital.

Therefore the most common structures used in the agricultural sector are the limited liability company (limitada) and the corporation (sociedade anônima).

 
5. To what extent does competition (anti-trust) law apply to agriculture?

The agricultural sector is subject to the application of anti-trust rules in Brazil. There are a number of precedents in the industry from the Brazilian anti-trust authority, not only relating to mergers and acquisitions in the sector but also concerning licence agreements (mainly for genetically modified seeds).

Brazilian competition law, covering both repression of anti-competitive practices and merger control, does not exempt any sector of the economy from the anti-trust rules. The legislation applies to every practice performed in full or in part in the Brazilian territory, or that produces or may produce effects in that territory.

Pre-merger notification to CADE (the Brazilian anti-trust agency) is mandatory for acts of concentration that produce any effects in Brazil (with a target of sales, assets or a local subsidiary), and meet the double turnover threshold (gross turnover in Brazil by one of the parties exceeds R$750 million, and R$75 million by the other, with parties considered as the consolidated economic groups to which they belong). Acts of concentration covers mergers, acquisitions, incorporations and any type of association between companies.

 

Acquisition of agricultural land

Sale and transfer of usage rights and ownership

6. Set out the domestic laws that apply to the acquisition of:
  • Usage rights to agricultural land.

  • Ownership of agricultural land.

Ownership acquisition of agricultural land in Brazil is governed by a set of statutory laws. The main laws are the:

  • Brazilian Civil Code.

  • Public Registry Law.

  • Rural Land Statute.

  • Federal Law No. 5,709/1971(ruling on ownership acquisition of rural land by foreign individuals, foreign entities and Brazilian entities owned or controlled by foreigners).

Being subject to a public real estate registry system, all real estate in Brazil must be registered under a record file (matrícula) kept with a local Real Estate Registry Office (RERO) with jurisdiction over the property's location. Acquisition of ownership requires the registration of a transfer document (for example, a sale and purchase agreement or a corporate transfer act) in the matricula. Real estate transfers will mostly require a deed to be drawn up by a public notary for its registration in the matricula.

Acquisition of ownership of rural real estate in Brazil also depends on the property's compliance with INCRA registry requirements. Federal Law No. 10,267/2001 makes the acquisition of rural land conditional on a valid Certificate of Rural Land Record (CCIR) with INCRA and, in some cases, a certified geo-referenced perimeter description of the area.

Acquisition of agricultural property can also occur by means of adverse possession (usucapião), which is the acquisition of ownership by occupying (possessing) real estate for an uninterrupted period of time without being challenged. The period of time needed for acquiring land by means of adverse possession varies from five to 15 years, depending on the type of land usage and other statutory conditions.

Usage rights in Brazil are divided into two main groups:

  • In rem rights that remain linked to the real estate regardless of further ownership transfers.

  • Obligation rights that are set between contractual parties.

In rem usage rights are subject to prior registration and consist of usufruct, surface rights, use and easements. Possession (posse), which is the de facto occupation of real estate regardless of reasonable or legal grounds, may also be subject to legal protection.

Usage rights of obligation type regarding rural properties are governed by the Rural Land Statute and consist of two types:

  • Rural lease (arrendamento rural).

  • Rural partnership (parceria rural).

Both are acquired by executing the respective agreement with no need for further registration.

Rural lease (arrendamento rural)

The rural lease is the most common structure used by large corporations for purposes of agricultural production in Brazil. The rural lease refers to an agreement by which the rural landowner grants the rural lessee the right to use rural real estate during a given period of time upon annual rent. The rent amount must be adjusted based on monetary criteria (indexes or others) although the rent payment can be made by way of production goods. Rural lessees have the right of first refusal in acquiring the leased land.

Rural partnership (parceria rural)

Rural partnership involves different sets of contributions by each party (land, equipment, crops, structures and labour), with one party responsible for providing the agricultural land. At the end of the determined harvest or partnership period, the partners share the distribution of production, goods and benefits that have arisen from the performed agricultural activity in the property. This is within the maximum thresholds provided in statutory law and vary from 20% to 75% (depending on the shared structures).

 
7. Are there any legal restrictions on the acquisition of agricultural land (or usage rights) by a foreign (or foreign invested) party?

Federal Laws No. 5,709/1971 and No. 8,629/1993 apply restrictions to both ownership and rural lease right acquisition of rural land in Brazil in relation to:

  • Foreign individuals.

  • Foreign entities.

  • Brazilian entities owned or controlled by foreign individuals or by legal entities headquartered abroad.

Some restrictions apply differently for individuals and companies.

Acquisition of rural property in Brazil is only available to foreign entities or individuals for the purposes of engaging in agriculture, stock living, raising or industrial agricultural projects and must always be preceded by the approval of federal government agencies (see Question 3) and authorisation of INCRA (with the exception of acquisitions by foreign individuals of areas of up to three Unidentified Exploitation Module units (MEI). MEI is an area unit defined according to location by INCRA.

In addition to the approvals, the acquisition of rural lands larger than 50 MEI by foreign individuals and larger than 100 MEI by foreign entities is also subject to prior authorisation of the National Congress.

With respect to the size of the land, the restrictions apply based on MEI. The amount of rural property owned by foreigners in Brazil cannot exceed 25% of the surface area of the city where the property is located and individuals or entities of the same nationality cannot own more than 40% of the available area.

Until August 2010, Brazilian companies that were owned or controlled by foreign nationals were free to acquire rural properties without having to comply with the restrictions. However, the Brazilian Attorney General (AGU) has reviewed its previous legal opinion and reapplied the restrictions to Brazilian companies. Currently, the matter is set to be ruled by the Brazilian Federal Supreme Court (STF).

In 2013, INCRA issued the first authorisations for the acquisition of rural lands by foreigners in Brazil (see Question 3).

The legal restrictions apply only to the acquisition of ownership and leasing of rural property, meaning that other investment structures are not affected by the restrictions. Other types of usage rights, especially in rem usage rights (see Question 6) are viable alternatives to the use and occupation of rural lands by foreigners interested in investing in Brazil.

 
8. Are there any compulsory tendering or prior approval procedures required for a sale and purchase of agricultural land? Briefly describe these procedures and the approval authorities (if any).

With the exception of acquisition by foreign investors (see Question3) there are no prior procedures or approvals for the acquisition of rural lands in Brazil. However, if the rural land is leased (see Question 6) the landowner must grant the lessee a right of first refusal.

 
9. Does the law and/or regulations prescribe minimum land purchase prices if the (local) government sells agricultural land?

The minimum price for the government to sell agricultural land must be set at market levels. To assess market levels, the government hires or performs a real estate appraisal based on:

  • Sales comparison.

  • Cost approach.

In addition, public bid procedures may apply.

 
10. Is there a maximum term applicable to the lease (or use) of agricultural land?

There is no maximum term, except in relation to the usufruct (see Question 6) granted to legal entities, which cannot be set for more than 30 years.

 
11. In which circumstances can the government authorities expropriate agricultural land?

Government authorities in Brazil can expropriate land agricultural due to:

  • Public interest.

  • Social interest.

Public interest expropriation cases cover matters including national security, national defence, public health, improvement in public structures, provision of public services, public transport and other similar matters. Despite the extensive case list, the most usual expropriation for public interest concerns the passage of roads, electrical power lines and sewer, gas and water pipelines.

For the expropriation of land for social interest, the Brazilian Constitution provides that all real estate must meet its social purpose. Rural properties meet their social purpose when compliant with:

  • Rational and adequate use.

  • Adequate use of available natural resources and preservation of the environment.

  • The provisions that regulate labour relations.

  • Any use that favours the well-being of the owners and employees.

The government is also empowered to expropriate any rural property due to social interest for the purposes of agrarian reform (in case the property is not meeting its social function).

Rural lands complying with an 80% land occupation rate and 100% production efficiency rate are considered productive and therefore not eligible for expropriation due to inadequate use, although other circumstances (for example, slave labour) may lead to expropriation due to social interest. For assessing productivity rates, INCRA establishes additional indexes and criteria.

In both types of expropriation (public interest and social interest) prior monetary compensation must be granted to the property owner, usually during the course of an expropriation lawsuit filed by the government.

According to statistics provided by INCRA, a total of 30,466,875 hectares have already been subject to decrees of expropriation due to social interest as of 2013, regarding both small and large properties. The region most affected by the expropriations was Brazil's north-east, followed by its mid-west.

 

Tax and financing

12. Which taxes apply with respect to the sale and transfer of land ownership (or usage rights)?

Taxes

The Brazilian tax system is very complex reflecting a large number of taxes (approximately 85) levied at three levels (municipal, state and federal) with many ancillary obligations, commonly leading to litigation and high levels of taxation (approximately 36% of Brazilian GDP).

On the sale and transfer of land ownership, several taxes are due:

  • Income taxes on the capital gains deriving from the transfer (IR, IRRF and CSLL).

  • Taxes on transfer of immovable property (ITBI).

  • Social contributions on gross revenues (PIS and COFINS).

For IR, IRRF and CSLL, capital gains correspond to the difference between the sale price and the acquisition price registered in the real estate registration with the Real Estate Registry Office. Any capital gains earned by resident individuals are subject to income tax at a rate of 15%, local legal entities are subject to a combined IRPJ and CSLL rate of 34%, and non-residents are subject to IRRF at a 15% rate (25% if the beneficiary is resident in a blacklisted jurisdiction).

For ITBI, it is levied on the sale and transfer of land ownership, to change ownership with the Real Estate Registry Office, at rates ranging from 2% to 6%.

PIS and COFINS are due on the sale of real estate properties held by Brazilian legal entities at combined rates of 3.65% and 9.25%, depending on the tax regime adopted by the taxpayer.

Financing

The most commonly used vehicle for foreigners to invest in real estate in Brazil is the Private Equity Investment Fund (FIP), which must hold shares and securities convertible into shares issued by Brazilian corporations.

Any gains obtained on the sale or redemption of quotas of a FIP is generally subject to withholding income tax (WHT) at a rate of 15%. However, tax exemptions can be achieved by foreign investors holding less than 40% of the FIP's quotas, if not located in blacklisted jurisdictions. ITBI does not apply to the sale of shares of Brazilian corporations holding real estate investments.

Another alternative vehicle to invest in Brazil is the Real Estate Fund (FII) which has the purpose of acquiring real estate, rights in connection with real estate and certain assets and securities issued by public listed companies. As a general rule, the payment of income and gains to the quotaholder will be subject to WHT at a rate of 20%, with exemptions available to Brazilian individuals. The FII portfolio also enjoys tax exemption limited to assets related to real estate investments.

For foreign investors resident in countries with which Brazil has signed a tax treaty, the standard clause about immovable property establishes that the gains from the alienation of the immovable property must be taxed in the state where the property is situated.

Therefore, if a foreign investor sells (directly or indirectly) an immovable property in Brazil, the capital gain arising from the sale can be considered by Brazilian Tax Authorities to be taxable for Brazilian income tax purposes.

In addition, the owner of a rural property in Brazil is subject to tax on rural property (ITR), which is due annually. The tax rates can vary between 0.03% and 20%, according to the utilisation of the land. The more the land is exploited the lower the applicable tax rate.

 
13. Does your jurisdiction have special regulated agri/green-parks and is (foreign) investment in such parks incentivised? If so, what incentives apply in general?

The concept of a green park in Brazil relates to zoning, allowance and credit rather than as a tax incentive programme. Despite still emerging in Brazil, zoning procedures are being inserted in future and promising policies in the country.

MAPA is responsible for the Agricultural Zoning Programme that consists of a special policy for mitigating agricultural risks in developing areas. Most of the risks relate to climatic changes and the Agricultural Zoning Programme aims at collecting data that will enable local projects to face specific climate patterns.

Once the programme gathers information about a certain special zone, the programme co-ordination fosters local projects by creating special lines of insurance and credit (Rural Credit and the Insurance Programme for Agricultural Activity (PROAGRO)) for specific plantations. The benefits are only granted to farmers who engage in the cultivation of certain crops, in certain seasons, volumes and places, considering the local characteristics of the special zone. However, this programme does not take into account tax incentives.

The federal government has also created superintendence bureaus for the development of certain critical areas, SUDENE, SUDAM and SUDECO. Their special finance programmes and tax incentives create a friendly environment for projects in critical areas. However, these programmes are not designed for agricultural projects only and are actually more industry and commerce focused.

 
14. Briefly describe the procedures to mortgage/pledge agricultural land rights in order to acquire domestic financing.

Historically, the types of security interests most used in agricultural finance in Brazil are mortgages and rural pledges.

Mortgage

A mortgage is a security interest created over real estate or other certain assets specified by law. Under a mortgage structure, if the debtor fails to pay the relevant debt, the creditor will have the right to sell the collateral asset through a judicial sale and use the proceeds to pay the debt. Under Brazilian law, mortgage agreements cannot provide that secured creditors are entitled to keep the collateral assets if debtors fail to pay. Mortgages over real estate automatically include constructions, buildings, and accessions to the property. More than one mortgage can be created over the same collateral asset. Therefore, a preference order is established between secured creditors, so that a lower rank mortgage will become effective only to the extent that the credit related to the higher ranked mortgage is paid. In most cases, the mortgage agreement must be executed through a public deed, and in all cases, it must be registered before the Real Estate Registry Office with jurisdiction to ensure perfection of the security interest.

Pledge

A pledge is a security interest created over movable assets (including intangible assets). Under a pledge structure, if the debtor fails to pay the relevant debt, the creditor will have the right to sell the collateral asset through a judicial sale or, if authorised by the pledge agreement, through a private sale, and use the proceeds to pay the debt. Under Brazilian law, pledge agreements cannot provide that secured creditors are entitled to keep the collateral assets if debtors fail to pay. Unlike mortgages, Brazilian law does not provide for more than one pledge over the same asset, except in the case of pledges over credit rights and certain types of rural pledges.

For rural pledges, the assets being pledged must consist of examples listed in the Brazilian Civil Code, including agricultural machinery, crops to be harvested, fruit in warehouses, charcoal or animals used in the daily labour of the agricultural establishment. The rural pledge agreement must be registered before the Real Estate Registry Office with jurisdiction over the real property where the pledged goods are located to ensure perfection of the security interest.

Traditionally, the agricultural sector in Brazil has been financed by the Brazilian government, private banks, trading companies and input (seed, fertiliser and agrochemicals) suppliers. In addition, since 2004, new agri-business negotiable instruments are available to the agricultural sector:

  • Agricultural and Cattle Breeding Deposit Certificate (CDA).

  • Agricultural and Cattle Breeding Warrant (WA) (issued by warehouses).

  • Agribusiness Credit Rights Certificate (CDCA) (issued by rural producers' co-operatives and certain legal entities engaged in the agribusiness sector).

  • Agribusiness Credit Note (LCA) (issued by financial institutions).

  • Agribusiness Receivables Certificate (CRA) (issued by securitisation companies).

Income and gains derived from the instruments are exempted from income tax for Brazilian individuals, while companies are subject to income tax at a rate of 34%. For non-residents, income tax is levied at the rate of 15% or 25% (if the beneficiary is resident in a tax haven jurisdiction). Qualified investors may enjoy some tax benefits.

In addition, the investments are subject to tax on transactions with bonds and securities (IOF/TVM) at a rate of 0%.

Due to the huge production and productivity gains over the last two decades, the agricultural sector in Brazil has been looking for alternative financing sources from the capital markets, in particular through public offerings of CRA and shares of Agribusiness Receivables Investment Fund (FIDC) in accordance with the rules of the Brazilian Securities Commission. Both CRA and FIDC are structured finance products which have agribusiness receivables as their underlying assets.

 

Crop seed business

15. Which domestic laws and regulations regulate the crop seed industry and which domestic authorities/agencies supervise this sector?

Brazilian laws and regulations related to the importation of plants and propagation materials are intended to restrict the entry of illegal and dangerous products, the uncontrolled extraction of native products and the application of duties and fees that are projected to protect the national industry.

In this sense, Brazil imposes strict controls over imports and exports of plants and propagation materials. The general import and export controls are regulated by several legal and administrative statutes.

The current definition of plant variety rights and the applicable registration aspects are defined in the Plant Variety Law of 1997. The law also creates the National Service of Plant Variety Protection (SNPC). The SNPC is the competent authority for the protection and granting of registration of plant varieties in Brazil and also part of MAPA.

The Seeds and Plants National System Law of 2003 created the National System of Seeds and Plants that foresaw the provision of certain aspects for the identity and quality of multiplication materials and of vegetal reproduction that are used and marketed in Brazil. The law also creates two relevant registration authorities:

  • The National Registry of Seeds and Plants (Renasem).

  • The National Registry of Plant Varieties (RNC).

Depending on each product, the competent authorities administratively control all operations through import and export licensing. In Brazil, MAPA is the competent authority for control operations regarding plants and propagation materials.

When the importation or exportation is subject to licensing, a company must provide within the Computerised Integrated Foreign Trade System (SISCOMEX) the information required by the competent authority prior to the shipment of goods.

Prior to the shipment of goods, the importer must request that MAPA provide an import licence indicating the products and details of the operation. MAPA's technical body for seeds and seedlings must:

  • Review the request.

  • Issue its opinion in five business days.

  • Submit the request to the technical body for phytosanitary matters (this must also issue its opinion in five business days).

If the request does not meet MAPA's requirements, MAPA must notify the importer to remedy it within five business days. Once the analysis is concluded, the technical body for seeds and seedlings must authorise the importation with SISCOMEX. The authorisation is valid for 180 days. To request an import licence from MAPA, importers must also have previously registered with RENASEM and all seeds and seedlings that will be imported or exported must be registered with RNC.

The importer must also request an import licence through SISCOMEX. In general, this must be prior to the shipment and indicating the products and details of the transaction. The import licence is to be issued within 60 days from the date that the request was filed in SISCOMEX.

The process of analysis will be conducted based on the data provided on the products, their registration with RNC and the information on the importer and respective authorisation to trade plants and propagation materials.

If the appropriate import or export licence is not registered with SISCOMEX and approved, the import or export customs clearance of the goods cannot be completed.

Brazil is a member of the WTO, meaning that the country's sanitary and phytosanitary measures are in compliance with the relevant WTO Agreement and the IPPC guidelines. Brazil adopts the standards developed by the Secretariat of the International Plant Protection and all domestic legislation is based on these standards.

Brazil performs a risk analysis that takes into account the characteristics and origin of the product in order to determine the necessary requirements for the importation of the product. Risk assessments for plant pests are also in accordance with IPPC standards. Brazil may, in some cases, seek compliance with higher standards than the ones settled by IPPC in order to assure market access in countries that impose such requirements.

 
16. State the approvals/licences that are required to engage in the following activities:
  • Import of new plant species or varieties and import of crop growing technologies.

  • Set up of R&D centres and use of test plots of new crops.

  • Crop seed production.

  • Commercial crop production.

  • Distribution of seeds or crops (wholesale/retail/e-commerce).

The importation of new plant species or varieties and of crop growing technologies is subject to the analysis of the competent authority on the licensing process for the approval of operations in Brazil (see Question 15). In general, the importer must be registered with Renasem and the products to be imported registered with RNC, both under MAPA.

In addition, all companies that intend to export or to import goods to Brazil must be registered with the Internal Revenue Service (IRS). Registration with the IRS is known as Registry and Tracking of Performance of the Customs Intervenient (RADAR). The enrolment provides access to SISCOMEX, which is important because all import and export transactions in Brazil must be made through SISCOMEX. Normative Instruction 1,603/2015 of the IRS, and, Portaria COANA 123/2015, regulates RADAR.

Once enrolled, the individual responsible for the company before SISCOMEX receives a password to operate SISCOMEX and the company can import quantities limited to the modality of RADAR granted (limited or unlimited), which is based on its financial capacity. The enrollment with SISCOMEX is always granted on a temporary basis, and it may be reviewed and/or cancelled at any moment by the IRS.

Companies and institutions engaged in the activities listed above (whether national or foreign) must be registered before the National Register of Seeds and Seedlings (NRSS). In addition, the importation of new plant species or varieties will only be allowed after:

  • The new cultivar is registered before the National Registry of Cultivars (after being tested for verification if its value of growing and use (VCU) meets MAPA's VCU parameters).

  • Its production camp is registered before the respective local federal Superintendence of Agriculture (agency responsible for inspection of seed production).

Overall, the importation and exportation of seeds and seedlings are also subject to a prior authorisation issued by MAPA.

 
17. Set out the domestic labelling requirements in the crop business sector.

For labelling requirements, Section 39 of Decree No. 5,153/2003 establishes that the seed identification must be in Portuguese, placed in a visible place of the package and contain at least the following information:

  • Breed's name, cultivar and category.

  • Batch identification.

  • National standard of pure seed (in terms of a percentage).

  • National standard for germination or viable seeds (in terms of a percentage).

  • Classification by sieve.

  • Production harvest.

  • Germination tests validity term.

  • Weight and quantity of seed per package.

The package should also contain the name, the inscription number in the National Registry of Legal Entities (Cadastro Nacional da Pessoa Jurídica) (CNPJ), and the address and inscription number for the seeds producer.

In addition, the seedlings packages, which must also be in Portuguese, and placed in a visible place of the package, must contain at least the following information:

  • Name of the company.

  • Batch identification.

  • Category and common name of the breed.

  • Cultivar's name.

  • Rootstock identification.

  • The expression ungrafted seedling (whenever applicable).

 
18. Are there any restrictions on foreign direct investment (FDI) in this sector?

See Questions 3 and 6.

 
19. Summarise landmark or recent cases that have defined the law and practice in this sector.

The authors are not aware of any recent case law dealing with this matter.

 

Plant variety rights (PVR)

20. Has your jurisdiction ratified the International Convention for the Protection of New Varieties of Plants 1961 (UPOV Convention) and its revisions in 1972, 1978 and 1991?

Brazil adopted the UPOV Convention on 23 May 1999, through the revision in 1978. Brazil did not ratify the 1991 revision, although the Brazilian Plant Variety Law has incorporated elements from the 1991 revision, including the essentially derived variety and the possibility to include any kind of vegetal species.

 
21. Briefly describe the registration process for PVR in your jurisdiction.

The PVR registration procedure briefly consists of the presentation of a signed request before the RNC. This must include (among other information and documents) the botanical specifications of the plant variety, its name, genetic, evidence of distinctiveness, uniformity and stability, and statements indicating:

  • That there is a live sample available for analysis (and an indication of its location, in case the competent authority considers it necessary).

  • Whether the plant variety is commercialised in Brazil or abroad.

  • If there is any existing registration or request for PVR abroad.

Formal aspects of the documents are verified on receipt. If accepted, the request of registration is published and a temporary certificate of registration is issued. After the publication, third parties can file petitions to challenge the registration request and the applicant is informed accordingly. The registry can also raise office actions requesting additional information and documents if it considers necessary. If the applicant does not comply or inappropriately complies with office actions, the request is cancelled. If the registry rejects the request, an appeal can be filed. After the final analysis, the final certificate or registration is issued and the titleholder must pay, starting from the following year, an annual fee to keep the registration valid.

After registration, a plant variety can also be nullified ex officio by the registry or on a third party challenging, through a nullity request:

  • Loss of homogeneity and stability.

  • Lack of payment of annual fees.

  • Lack of appointment of a Brazilian attorney to titleholders residing abroad.

  • Non-presentation of live sample.

  • Negative impacts to the environment or human health caused by the plant variety.

 
22. Briefly describe the laws and procedures of your jurisdiction covering the protection of PVR in terms of:
  • Requirements for protection.

  • Extent of the protection.

  • Restrictions on the rights of the PVR holder.

  • Farmer's privilege.

Requirements for protection

To be registered, a plant variety must be new or essentially derived from any vegetal species. Exceptions to this requirement are possible, but depend on a sequence of cumulative factors and result in a shortened registration period. Formally, a plant variety name must:

  • Be different from any prior variety.

  • Not be composed exclusively by numbers.

  • Not lead to misunderstanding of the main features or origin.

Extent of the protection

A plant variety is protected for 15 years, starting from the issuance of the temporary certificate of protection. The protection term for vines, fruit trees, forest trees, ornamental trees and their corresponding rootstocks is 18 years. After the protection term, the plant variety falls into the public domain and no other rights can prevent its free use.

Restrictions on the rights of the PVR holder

The titleholder of a plant variety is entitled to restrict third parties without authorisation from proceeding with any commercial production, offer for sale or commercialisation of any materials that are the object of its plant variety.

However, the following acts will not lead to infringement of PVR:

  • Planting or reserving seeds for self use in its own establishment or a third party establishment under its possession.

  • Use or sale as food or as raw material the product obtained from its plantation (except for reproductive purposes).

  • Use of the plant variety as a variation source in genetic development or for scientific research.

  • Small farmers can, without authorisation from the titleholder, multiply seeds for donation or exchange, exclusively to other rural producers in the scope of financing programmes or support programmes for small farmers performed by public entities or NGOs authorised by public authorities.

Different restrictions of PVR are provided for sugarcane exploiters. The exploiters must request the authorisation of the PVR titleholder whenever they decide to multiply vegetal materials, even if for self-use.

Farmer's privilege

A small farmer can, without authorisation from the plant variety titleholder, multiply seeds for donation or exchange, exclusively to other rural producers in the scope of financing programmes or support programmes for small farmers performed by public entities or NGOs authorised by public authorities.

Under the Plant Variety Law, a small farmer is someone that cumulatively:

  • Explores a parcel of land as owner, settler, leaseholder or partner.

  • Holds up to two permanent employees (being admitted to count with additional and exceptional third party resources when necessary due to the seasonal nature of agricultural activity)

  • Does not hold an area larger than four fiscal modules (in accordance with the applicable laws of the municipality where the land is located)

  • Has a minimum of 80% of its annual gross income arising from agricultural or livestock activities.

  • Resides in the property or nearby rural or urban agglomerations.

 
23. Which legal actions are available to owners of PVR in the event of PVR infringements?

Owners of PVR can seek compensation for damages in case of infringement before Brazilian civil courts.

In addition, the Plant Variety Law establishes that a person who sells, offers for sale, reproduces, imports, exports, as well as packages or stores for such purposes, or assigns, at any title, plant variety protected materials without the authorisation of its owner must pay a fine of an amount equivalent to 20% of the commercial value of the apprehended material. In case of a repeated infringement, the fine is increased to 40%.

 
24. Summarise landmark or recent cases that have defined the law and practice in this sector.

According to a recent leading case decided by the Brazilian Superior Court of Justice, small, medium-sized and large Brazilian soybean farmers can reserve transgenic soybean variety products for replanting in their fields and can also sell the production as food or raw materials, without any payment of royalties, technology fee or indemnification. The case law was established in a collective type of lawsuit, meaning that it can be enforced and must be followed by everyone.

 

Genetically modified (GM) crops

25. Has your jurisdiction ratified the Cartagena Protocol on Biosafety 2002? What is the domestic policy with respect to GM crops?

Brazil ratified the Cartagena Protocol on Biosafety 2002 on 11 September 2003, which became enforceable in Brazil on 22 February 2004.

The Brazilian Biosafety policy is part of the PBD (see Question 2) which provides that the development of biotechnology, both applied to human health and the environment, must be made in strict compliance with ethical and biosafety standards, as well as respecting the rights of the indigenous and local communities, social inclusion, and the sharing of benefits requirements.

With regards to agricultural development, PBD aims to encourage the development of new strategic agricultural products to enhance competitiveness and food safety, by means of products differentiation and introduction of innovations enabling the opening of new markets.

The transgenic safety assessments follow international standards defined by the World Health Organization (WHO) and by the Food and Agriculture Organisation of the United Nations (FAO), institutions that already support GM food, in addition to many others, such as the Pontifical Academy of Sciences.

The Cartagena Protocol (Protocol) was approved in Brazil on November 21 2003 and became effective on 22 February 2005. The main regulation in the area is the Brazilian Biosafety Law.

 
26. Describe the domestic laws regulating genetic engineering. Which authority(ies) is(are) responsible for approving GM crops. Set out the permit requirements and prohibitions as well as sanctions in the event of infringement.

The CNBS (see Question 2) is a superior advisory body of the federal government. The CNBS is responsible for creating and implementing the National Policy on Biosafety, by:

  • Establishing the principles and guidelines for the administrative action of the bodies and federal entities competent over the subject.

  • Analysing, on the request of CTNBio (regarding the aspects of convenience) socioeconomic opportunity and national interest, and the requests of release for commercial use of GM crops and their derivatives

  • Issuing the last and final decision on procedures relating to activities involving the commercial use of GM crops.

CNBS is composed of the:

  • State Minister of the Civil Office (who chairs the CNBS).

  • Minister of Justice.

  • Minister of Science and Technology.

  • MAPA.

  • Minister of Health.

  • Minister of the Environment.

  • Minister of Development, Industry and Foreign Trade.

  • Minister of Foreign Affairs.

  • Minister of Defence and the Special Secretary for Aquaculture and Fisheries.

As part of the Ministry of Science and Technology, CTNBio provides technical support and assistance to the federal government on the formulation, review and implementation of the National Policy on Biosafety relating to GM crops and their derivatives. It is also responsible for establishing the safety technical rules and technical opinions regarding the authorisation of activities involving research and the commercial use of GM crops and its derivatives, based on the evaluation of the phytosanitary risks, the human health and the environment. In addition, CTNBio is responsible for following up the development and the technical and scientific progress in the areas of biosafety, biotechnology, and bioethics, aiming at increasing protection of the health of human beings, animals, as well as plants and the environment.

CTNBio's other responsibilities include:

  • Establishing the rules for research activities and projects relating to GM crops and their derivatives.

  • Risk evaluation analysis relating to activities and projects involving GM crops and their derivatives.

  • Authorising, registering, and following up the research activities with GM crops and their derivatives.

  • Certifying the development of activities with GM crops and their derivatives in laboratories, institutions and companies, as well as submitting copies of the processes to MAPA, the Ministry of Health, the Ministry of Environment, and the Special Secretary for Aquaculture and Fisheries.

  • Defining the biosafety level to be applied to GM crops and their uses, and the respective procedures and safety measures concerning GM crops use.

  • Classifying GM crops according to the relevant risk category, among others.

In addition to the above, the inspection and registry entities of the Ministry of Health, the Ministry of the Environment, MAPA and the Ministry of Defence and the Special Secretary for Aquaculture and Fisheries are responsible, in its respective area of expertise, for the issuance of the import authorisation for GMO and its derivates for commercial use. For example, the Office of the Superintendent of Agriculture Defence must issue the import authorisation for GM vegetables. However, the entities must observe the technical decisions of CTNBio, and CNBS's deliberations.

Any and all activities involving GM crops and their derivatives, including scientific research, technological development and industrial production are restricted to legal entities, such as companies, universities, and research centres, and must be previously approved by CTNBio. In addition, all institutions engaged in the activities must create an Internal Commission of Biosafety (CIBio) and designate a major responsible technician for each specific project.

CIBio must:

  • Keep the works and other members of the group informed on the questions related to safety and health, as well as on the procedures to be adopted in case of accidents.

  • Establish the preventive programmes and inspections necessary for the regular functioning of the installations under its responsibility within the biosafety standards defined by CTNBio.

  • Submit to CTNBio the documents for analysis, registration and authorisation of the competent body.

  • Keep a record of individual monitoring of each activity or project involving GM Crops and its derivatives.

  • Notify CTNBio, of the bodies responsible for registry and surveillance, and to the labour entities of the results of the risks evaluations that the exposed persons are subject to, as well as of any accident or incident that may cause the spread of biological agent.

  • Investigate the occurrence of accident and diseases possibly relating to GM Crops and its derivatives and notify its conclusions and actions to CTNBio.

The procedure for the release of a commercial GM Crop is very complex, and must observe a number of steps provided for in the legislation.

A GM Crop is approved by CTNBio if it obtains 14 favourable votes, among the 27 members appointed to review the procedure. The technical decision must:

  • Summarise the technical grounds.

  • Explain the safety measures and restrictions for the use of the GM Crop and its derivative.

  • Consider the particularities of the different regions of the country, with a view to guiding the registration and inspection bodies.

Within 30 days of its publication on the Official Gazette of the CTNBio's decision, any inspection body of the Ministry of Health, Ministry of Environment, and/or MAPA can file an appeal against the decision. The CNBS must then issue the final decision.

All activities involving GM Crops must strictly comply with the applicable Brazilian law and the rules. Non-compliance with the law and rules may give cause to administrative sanctions. Penalties provided for under the applicable regulation include:

  • Warnings.

  • Fines.

  • Seizure of GMOs and derivatives.

  • Suspension of the sale of GMOs and derivatives.

  • Suspension of activities.

  • Business partial or total shutdown.

  • Suspension/cancellation of the registration, licence or permit.

  • Loss or suspension of credit lines.

  • Intervention in the establishment.

  • Prohibition from contracting with the government for a period of up to five years.

 
27. Which safety evaluations are legally required before GM crop commercial market entry? How are GM crops regulated?

The GM crop risk classification and biosafety security levels to be applied in activities and projects involving GM crops and its derivatives, such as growing, production, manipulation, storage, research, technological development, education, quality control and disposal are defined in Normative Resolution No.2, enacted by CTNBio on 27 November 2006 (Resolution 2/2006).

 
28. Describe the GM crop test plot regulations and requirements.

GM crop test plot conditions are regulated by the Normative Resolution No.2/2006 .

Under the Normative Resolution No.2/2006 activities and projects involving construction, production, growth, manipulation, storage, research, technological development, teaching, quality control and wastage of GM Crops, in conditions that do not allow their escape or discharge into the environment can be approved and authorised by CTNBio.

The biosafety level to be applied and its respective requirements depend on the GM Crop risk class, which is based on the GM Crop's potential adverse effects on human and animal health, plants and the environment. The higher the risks involved, the higher the level of security.

 
29. Describe pre-market approval requirements (and approval timelines) to grow, produce and sell GM food or feed. Provide details on the competent approval authorities.

Entities engaged in activities and projects involving GM crops and their derivatives must adopt the necessary measures to inform CTNBio, the health, environmental, and agricultural authorities, in addition to society and employees, on the risks posed by the activity/project and the procedures to be followed in case of accidents.

Accidents occurring during the activities and projects must be investigated and reported to CTNBio. Besides that, CTNBio and the health, agricultural and environmental authorities must be immediately notified about accidents which may cause the dissemination of GM Crops.

The commercial release of a GM crop must be preceded by a CTNBio approval as well as a written authorisation stating the conditions for the approval. The approved GM crops are submitted to toxicological, allergenic, nutritional and environmental testing, which are submitted to the CTNBio's group connected to the Ministry of Science, Technology and Innovation (MCTI).

 
30. Set out the domestic product genetically modified organism (GMO) content labelling obligations (or the absence of them) and sanctions in the event of non-compliance or inaccurate content labelling.

Decree 4.680 enacted on 24 April 2003 (Decree 4.680) provide the rules for the labelling of foods containing or being produced with GM crops. Labelling is mandatory for packaged food containing or being produced with GM crops over the limit of 1% of the product, which must be highlighted in the main panel along with a specific printed symbol (Decree 4.680). In addition to the above, the packages of food and ingredients produced from animals fed with feed containing GM crops must indicate that the animal was fed with GM crops.

Infractions to the labelling requirements may be considered as infractions under the Code of Consumer Defence (see Question 38).

 
31. Summarise landmark or recent cases that have defined the law and practice in this sector.

The authors are not aware of any recent case law dealing with this matter.

 

Importing animals and gene patents

32. Summarise the import/export control measures for animals and genetic resources.

Brazil complies with IOE standards, including the Terrestrial Animal Health Code and the Manual of Diagnostic Tests and Vaccines for Terrestrial Animals and the country's sanitary system is consistent with these standards.

Domestic legislation internalises international rules, further details procedures and provides some adjustments aiming to adapt it to domestic specificities related to animal health defence. Minor differences between international standards and domestic practices can occur due to bilateral protocols of product exchange, where other countries eventually demand higher protection standards, which are complied with by Brazil in order to assure market access in these countries.

For further information on the import and export measures that are applicable to operations with animals and genetic resources, see Question 15.

 
33. Does the law of your jurisdiction allow for patentability of livestock genes on the grounds of isolating and purifying them?

The mere isolated and purified gene cannot become a patent in Brazil. Under Law 9,279, of 14 May 1996 (Brazilian Industrial Property Law), the whole or part of living beings are not subject to patent protection, except transgenic microorganisms that meet the three requirements for patentability (novelty, inventive step and industrial application) and that are not mere discoveries. Under the Brazilian Industrial Property Law, transgenic microorganisms are those organisms, (except the whole or part of plants or animals) that express, through direct human intervention in their genetic composition, a characteristic normally not attainable by the species under natural conditions.

In addition, the Brazilian Industrial Property Law expressly provides that the whole or part of natural living beings and biological material found in nature or also isolated there from, including the genome or germplasm of any natural living being and their natural biological processes are not regarded as inventions or utility models. However, the process of isolating may be patentable, if resulting from the creative act of a human being and if it meets the requirements of patentability. The same applies to biotechnological processes for the obtaining of living beings.

 
34. Which legal instruments are available to protect animal breeding know-how and a resulting animal nucleus?

The way to protect certain animal breeding know-how depends on the nature of the actual know-how. In addition to the need to observe the three requirements for patentability if the know-how consists of mere discoveries, scientific theories or purely abstract concepts, the protection as patent is not permitted under Brazilian law. Nevertheless, know-how may be also treated as a trade secret and its protection would depend on procedures taken by the titleholder to keep the knowledge secret. In Brazil, unauthorised disclosure of trade secrets is a crime and may also represent an act of unfair competition.

The protection of the animal nucleus arising out of certain animal breeding know-how also depends on its nature. An animal nucleus could be protected if it could be featured as a transgenic microorganism in accordance with the Brazilian Industrial Property Law.

 
35. Are there legal or practical restrictions on the introduction of new breeds/species, the breeding of certain animal species or certain breeding practices?

According to Brazilian rules, the importation of new breeds or species to Brazil require the issuance of an authorisation by the Federal Environmental Protection Agency (IBAMA), that will analyse the potential risks associated with the impacts to the environment by the introduction of the new breed or species into the environment.

Certain states and municipalities in Brazil also have legislation regulating the introduction of new breeds and species that may cause impact to the environment and that may represent restriction of the activity.

Regarding the sanitary control of the import of animals, and new breeding, the competent governmental body to perform the regulation is MAPA. Under Decree No. 24,548, of 3 July 1934, the importation of animals requires:

  • The presentation of a sanitary certificate from the country of origin, executed by an official veterinarian.

  • The presentation of official documents regarding pests and other diseases.

MAPA is also competent for issuing the authorisation, and to register and inspect the entities that are responsible for the Genealogical Registry Service (SRG) which allows the control of the genetic history of a determined species under Decree 8,236, of 5 May 2014.

Concerning the genetic material, MAPA has an internal Department for the Inspection of Animal Genetic Material (DMG) that is responsible for the registration and inspection of establishments that produce, collect, import, export, process and sell genetic material, as well as the registration of animal semen donors. It scans and monitors the central collection and processing of semen and embryos in the country, contributing to the genetic progress of the species.

The import of animal genetic material must be preceded by an authorisation from the Animal Health Service, which is issued by MAPA. The importer must apply for the authorisation before the Federal Superintendence of MAPA (SFA) in the state of the destination of the product to be imported. As part of the process, SFA must inform the importer of all sanitary requirements to be met and the possible sites of entry of the genetic material in the Brazilian territory. In most states the authorisation is issued by the Animal Health Service (SSA, SIFISA or SISA) of the SFA. In states that do not have a specific animal health service, the authorisation is issued by the Department of Animal Health (DSA), located in Brasilia. Only importers duly registered before MAPA are authorised to commercialise such genetic material. The procedures are provided in the Normative Ruling No. 01/2004.

Regular agribusiness activities (crops/livestock) are subject to environmental licensing, however breeding practices are not evaluated during the licensing process from the environmental impact point of view.

The introduction of GMOs species into the environment (crops) is subject to environmental licensing by the governmental environmental protection agency that will evaluate the potential impact of the activity from a social and environmental point of view. CTNBio (as part of the Ministry of Science and Technology) provides technical support and assistance to the federal government on the formulation, review and implementation of the National Policy on Biosafety relating to GM crops and their derivatives. It is also responsible for establishing the technical safety rules and technical opinions regarding the authorisation for activities involving research and commercial use of GM crops and their derivatives, based on the evaluation of the phytosanitary risks, the human health, and the environment.

 
36. Summarise landmark or recent cases that have defined the law and practice in this sector.

The authors are not aware of any recent case law dealing with this matter.

 

Agricultural safety and product liability

Standards

37. Summarise the system of food safety standard setting, the main regulator(s) and regulations. If industry input on the standards is possible, indicate how this is conducted.

The main regulators on food safety in Brazil are MAPA and the Ministry of Health (MS) through its National Agency for Sanitary Surveillance (ANVISA).

Besides MAPA and ANVISA, food safety is also controlled by other ministries and agencies, including the:

  • Ministry of Environment, through IBAMA.

  • Ministry of Development, Industry and Commerce, through the National Institute of Meteorology, Standardisation and Industrial Quality (INMETRO).

  • Ministry of Science and Technology, through CNTBio and the Ministry of Justice, through its Department of Consumer Protection.

MAPA is responsible for enacting and enforcing the regulations concerning the production, import, export and marketing of animal origin products, fresh fruit, vegetables, alcoholic beverages, juices, grains, seeds, animal feed, and pet food. MAPA's role also comprises the classification and inspection of imported agricultural products in Brazil.

ANVISA is responsible for enacting and enforcing the regulations regarding processed food products. Its duties include assessing food standards, safety, and contaminants.

As a member of WTO, Brazil applies the Codex Alimentarius of UN/FAO.

Both ANVISA and MAPA perform public consultations before enacting new regulations on food safety in Brazil. Through the public consultations society and the industry have the opportunity to analyse and provide their opinion regarding new proposals. The opinions are then reviewed by the agency and considered in the final text of the new regulations.

Given the relevance of this instrument, ANVISA has conducted several public consultations in recent years (and has issued over 1,200 consultations since its creation), favouring the development of normative acts in a democratic and transparent manner for the whole society.

The basic sanitary food standards are set out in Decree-Law 986 of 21 October 1969 (Decree 986/69), which provides that all food, food additives and food packages must be registered with ANVISA prior to commercialisation. The exceptions to the rules are raw foods, food raw-materials, certain specific additives and food products for use in the processing of industrialised foods, which, although they must comply with the standards provided by the law, are not subject to registration.

Decree 986/69 also establishes the general rules on the labelling of foods and products by specifying certain mandatory wording on the label and stating general principles applied to label information. The labels of packaged foods and beverages must also contain mandatory nutrition facts as established by the law.

For each type of food sold in the country there is a Standard for Identification and Quality (PIQ), defining the:

  • Designation, definition and composition, comprising a description of the food and the requirements to establish quality criteria.

  • Manufacturing hygiene and food handling.

  • Use of intentional additives.

  • Indication of weight and measure of the product.

  • Labelling and presentation of the product.

  • Methods of sampling, testing and analysis of the food.

In addition, ANVISA requires the proof of safety of new food and ingredients, food with functional or health property claims, and bioactive substances. The requirement aims to protect people's health and reduce the risks associated with the consumption of such products.

 

Liability

38. Set out the legal requirements to establish the liability of producers and suppliers for defective or contaminated food ingredients that cause damage, in relation to:
  • Tort.

  • Product liability.

Brazilian Law No. 8,078/90, the Consumer Defence Code (Código de Defesa do Consumidor), is the main source of liability for both food producers and suppliers.

The law provides that all companies involved in the supply chain (producers, suppliers, distributors, sellers, (including importers)) are jointly and severally responsible for any damages that the consumer may suffer. It is also important to highlight that the liability has an objective nature, which means that it does not depend on fault/malpractice of the producer/supplier, meaning that the liability is strictly set, regardless of negligence or knowledge of the producer/supplier. In the procedural field, producers/suppliers will carry the burden of proof.

 
39. Which defences are available to the producer and/or supplier to avoid liability? For instance, is market-entry prior government approval a legal defence against product liability and under which conditions?

The Brazilian Consumer Defence Code treats producers/suppliers as jointly, severally and strictly (regardless of negligence or knowledge) liable before consumers, also carrying the burden of proof in lawsuits. The defences available for producers/suppliers provided under the law are:

  • Proving the product was not released in the market.

  • The non-existence of the defect alleged by the consumer (this may be supported by market-entry approvals).

  • Exclusive fault of the consumer or a third party.

  • Proving that, if the defect exists, it has no causal link with the damages suffered by the consumer.

 
40. Which types of damage are generally compensated by civil courts in food safety liability cases? For instance loss of value, reparation costs, loss of revenue, and personal injury. Are punitive damages available?

Under Brazilian law, the party is entitled to obtain indemnification for actual damages and lost profits. The concepts include reparation costs, pain and suffering and loss of revenue. However, Brazilian law does not include punitive damages, since the indemnification to be paid must correspond to the extent of the damage.

 
41. Summarise landmark or recent cases that have defined the law and practice in this sector.

There are two recent and significant cases in this sector in Brazil.

In September of 2011, a contaminated batch of Pepsico's chocolate milk drink for children named 'Toddynho' reached the market in the State of Rio Grande do Sul. There were reports of 40 consumers from 15 different cities that suffered mouth burns, nausea and similar symptoms. On 30 September 2011, the local Health Surveillance prohibited sales of Toddynho in the state. The sales were authorised 12 days later, on 11 October 2011, after the investigations carried out showed that the contamination came from cleaning materials and reached only one batch of the product, which was subsequently banned. In July 2012, Pepsico reached a settlement with the State Prosecution Office in Rio Grande do Sul and agreed to pay a fine of BRL420,000 to indemnify collective moral damages arising from the case. The company now faces individual lawsuits filed by the consumers who suffered damages.

In March 2013, a contaminated batch of Unilever's 'Ades' (apple juice with soy) reached the market in the states of São Paulo, Rio de Janeiro and Paraná. On 14 March 2013, Unilever issued a recall communication stating that a batch of the product had been mixed with acid cleaning materials (similar to the Pepsico's Toddynho case) but that all other batches were normal. However, on 18 March 2013, ANVISA (the National Health Surveillance Authority) prohibited the sales of any Ades products in the whole national territory based on suspicion of lack of compliance with the regulations for the facilities responsible for producing the Ades products. On 22 March 2013, ANVISA finished its report, concluding 96 bottles of the product contained caustic soda instead of juice, which was considered human fault. On 8 April 2013, the contaminated batch was banned and the commercialisation of all other Ades products was authorised.

There were reports of 14 people that consumed the contaminated product. The company faces administrative investigations before the Department of Protection and Defence of the Consumer (DPDC), a body of the Ministry of Justice, and before ANVISA. The company is also subject to individual lawsuits to be filed by consumers who suffered damages from the contact with the product. No sanctions have yet been announced.

 

Online resources

Ministry of Agriculture, Cattle Breeding and Food Supply

W www.agricultura.gov.br

Description. The website is maintained by the Ministry of Agriculture, Cattle Breeding and Food Supply and provides official information. However, its content may not be up-to-date.

Brazilian National Surveillance Agency

W http://portal.anvisa.gov.br/wps/portal/anvisa/home ( www.practicallaw.com/6-603-7527)

The website is maintained by the Ministry of Health, and provides official information. However, its content may not be up-to-date.

National Technical Commission for Biosecurity (CTNBio)

W www.ctnbio.gov.br

The website is maintained by the Ministry of Science and Technology and provides official information. However, its content may not be up-to-date.

Legislation Portal

W www4.planalto.gov.br/legislacao

The website is maintained by the federal government and provides official information. Its content is up-to-date.

The Brazilian Government does not maintain any official websites where English-language translations can be obtained.


Summary: agricultural law in Brazil

Agricultural policy

Household farming

Industrial farming

Foreign investment

Encouraged/neutral/restricted?

Encouraged

Encouraged

Neutral

Acquisition of a domestic agricultural company

Transaction review

National security review

Competition review

Government approvals?

INCRA and specific ministry approval whenever directly or indirectly acquiring rights to rural real estate property

Defence Counsel approval whenever directly or indirectly acquiring rights to real estate property located in boderline areas

Applies without exception

Foreign acquisition of agricultural land

Allowed/not allowed

Transferable

Auction/tender required

Agricultural land ownership?

Restricted

Restricted

No

Agricultural land usage rights (maximum term)?

Restricted (no maximum term, except for usufruct (30 years)).

Restricted

No

Mortgage/pledge of agricultural land?

Allowed

N/A

N/A

Agri/green parks

Agri investment

Tax

Land fees

Foreign investment incentives?

No

No

No

Foreign investment in crop business

Generally permitted

Restricted

Prohibited

Import of foreign plant varieties?

No

MAPA import licence/importer registered at RENASEM/variety registered at RNC

No

R&D/test plots?

No

MAPA authorisation (once companies are registered with NRSS/ variety registered at RNC).

No

Production of crop seed?

No

MAPA authorisation (once companies are registered with NRSS/ variety registered at RNC).

No

Commercial crop production?

No

MAPA authorisation (once companies are registered with NRSS/ variety registered at RNC).

No

Distribution of crop seeds?

No

MAPA authorisation (once companies are registered with NRSS/ variety registered at RNC).

No

IP protection

Available

Certain varieties/species

Not protected

Plant variety right?

Available.

N/A

N/A

Patent on plant genetic sequence?

Available for transgenic microorganisms.

N/A

N/A

Patent on livestock genes?

Available for transgenic microorganisms.

N/A

N/A

Exemption from breeder rights to a protected plant variety

R&D for scientific purpose

Prior consent breeder

Royalty payment obligation

Third parties breeding rights?

Allowed.

Authorisation by the PVR titleholder is necessary as a general rule

To be agreed between the user and the titleholder of the PVR

Farmer's privilege

Re-use

Share/exchange

Sell

Farmer rights to harvest protected plant varieties?

Allowed for small farmers (except sugarcane)

Allowed for small farmers (except sugarcane)

Not allowed

Genetics

Generally permitted

Restricted

Prohibited

Import of GM seeds?

No

CTNBio approval and the inspection and registry entities of the Ministry of Health, the Ministry of the Environment, MAPA, and the Ministry of Defence and the Special Secretary for Aquaculture and Fisheries, as the case may be.

No

Import of GM crops?

No

CTNBio approval and the inspection and registry entities of the Ministry of Health, the Ministry of the Environment, MAPA, and the Ministry of Defence and the Special Secretary for Aquaculture and Fisheries, as the case may be.

No

Testing of GM seeds?

No

CTNBio approval

No

Local production of GM seeds

No

CTNBio approval

No

Local production of GM crops?

No

CTNBio approval

No

Import of animal genetic material?

No

MAPA approval

No

Import of new animal breeds?

No

IBAMA approval/MAPA approval

No

Food product liability

Strict liability

Negligence

Market-entry approval is a legal defence?

Producer?

Strict Liability under Consumer Defence Code

N/A

No

Importer?

Strict Liability under Consumer Defence Code

N/A

No

Distributor?

Strict Liability under Consumer Defence Code

N/A

No

 

Contributor profiles

Alexei Santana Bonamin, Partner

TozziniFreire Advogados

T +55 11 5086 5179
F +55 11 5086 5555
E abonamin@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer

Areas of practice. Banking and finance; capital markets; corporate finance; investment funds; project finance; private equity and venture capital; agribusiness.

Non-professional qualifications. LL.M.Banking and Finance, London School of Economics and Political Science, England, 2002; Law School of Pontifícia Universidade Católica de São Paulo, 1999.

Recent transactions

  • Assistance in public offering of Agribusiness Receivables Certificates (CRA) originated from:
    • Nufarm Indústria Química e Farmacêutica to the amount of R$71,000,000 (2014).
    • Vale do Tijuco Açúcar e Álcool S.A. to the amount of R$99,000,000 (2014).
    • Peninsula International S.A. to the amount of R$70,539,659.09 (2014).
    • Coteminas S.A. to the amount of R$270,000,000 (2014).

Languages. English, Portuguese

Professional associations/memberships

  • Publications Officer of the International Bar Association (IBA) Capital Markets Forum.
  • Professor of Investment Funds in the Master's Programme in Law (GVlaw) at Fundação Getulio Vargas.
  • Professor of Capital Markets at ANBIMA - Brazilian Financial and Capital Markets Association.

Publications

  • Co-author of the publication Estrutura Legal dos fundos de Private Equity e Venture Capital no Brasil (Legal Structure of Private Equity and Venture Capital funds in Brazil), from Associação Brasileira de Private Equity & Venture Capital (ABVCAP), February 2014.
  • Co-author of Brazil chapter from the publication Getting the Deal Through Banking Regulation (London: Global Competition Review, 2014).
  • Co-author of Investment Funds - Banking & Financial Services, European Lawyer, Thomson Reuters, 2013.
  • Co-author of Investing Across Borders, International Finance Corporation, 2010.
  • New Self-Regulation Code on Public Offers in Brazil chapter from the International Company and Commercial Law Review, Sweet & Maxwell, 2006.
  • Co-author of Public-Private Partnerships in Brazil. Editora Observador Legal, 2005.
  • E-Banking in Brazil, from the International Internet Law Review, n. 12, 2001.

Andreia de Andrade Gomes, Partner

TozziniFreire Advogados

T +55 21 3535-2116
F +55 21 3535-2121
E angomes@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer

Areas of practice. Intellectual property.

Recent transactions

  • Assistance to ABS Global in preparing and filing trade mark applications and managing trade mark portfolios.
  • Assistance to Petronas in preparing and filing trade mark applications and managing trade mark portfolios in Brazil and other countries in South America.
  • Assistance to Codexis in preparing and filing patent applications and managing patent portfolios.
  • Assistance to United Business Media in intellectual property issues, including negotiating and drafting licence agreements, trade mark prosecution, and management of a trade mark portfolio.
  • Assistance to Tredegar Film Product Corporation in negotiating and drafting patent licence agreements, patent prosecution, and management of patent portfolio.

Languages. English, Portuguese

Professional associations/memberships

  • Member of the International Trademark Association (INTA).
  • Chairperson of the Intellectual Property Committee of the American Chamber of Commerce in Rio de Janeiro.
  • Member of Brazilian Association for Intellectual Property (ABPI).

Publications

  • Nordic Light Magazine: The use of mediation to overcome patent and trademark backlog, 2014.

  • IAM Magazine: Generics and biogenerics in Brazil, 2008.

  • Managing Intellectual Property Magazine: Madrid Protocol: An opportunity for Brazil, 2005.

Darcy Teixeira Junior, Partner

TozziniFreire Advogados

T +55 11 5086-5153
F +55 11 5086-5555
E dteixeira@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer.

Areas of practice. Agribusiness; bioenergy; corporate law and foreign investment; M&A; private equity and venture capital.

Recent transactions

  • Assisting the Equipav Group in the sale of shares of the group's ethanol plant to Shree Renuka Sugars Ltd.
  • Assisting Infinity Bio-Energy in over 35 sugar and ethanol sector transactions.
  • Assisting Agroindustrial Santa Juliana S/A in the sale of Agroindustrial Santa Juliana a Bunge Alimentos S/A.
  • Acting for Energias Renováveis do Brasil S/A (ERB) in the sale of a minority interest to BNDESPar e FIP Caixa Ambiental through capital investment.
  • Acting for BS&C Empreendimentos e Participações S/A in the sale of 40% of the company to private equity fund One Equity Partners (JPMorgan Chase & Co.).

Languages. English, Portuguese

Professional associations/memberships. Visiting Professor of Corporate Restructuring at the Tax Management MBA programme of the Foundation Institute of Accounting and Financial Research (FIPECAFI).

Elysangela de Oliveira Rabelo, Partner

TozziniFreire Advogados

T +55 11 5086-5323
F +55 11 5086-5555
E erabelo@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer.

Areas of practice. Life sciences and healthcare; corporate law and foreign investment; M&A; private equity and venture capital

Non-professional qualifications. Specialised Biotechnology degree (Food, Environment, and Medicine), Faculdades Oswaldo Cruz, 2010.

Recent transactions

  • Assistance in the sale of Chemtura's agrochemicals business to Platform Specialty Products Corporation ("Platform"), a global specialty chemicals company, for approximately US$1 billion, consisting of US$950 million in cash and two million shares of Platform's common stock.
  • Assistance in the sale of Jasmine to Nutrition et Santé, a subsidiary of Otsuka Group. Jasmine will keep the current brand and has plans to launch a gluten-free line, and organic and sugar free products.
  • Acting for Agroceres Nutrição Animal Ltda. in acquiring Multimix Nutrição Animal.

Languages. English, Portuguese

Professional associations/memberships

  • Member of the Sanitary Law Committee at the Brazilian Bar Association, São Paulo Section (OAB-SP).
  • Member of the Young Lawyers Council of the International Bar Association - Latin American Regional Forum (IBA - LARF).

Luiz Renato Okumura, Partner

TozziniFreire Advogados

T +55 11 5086-5174
F +55 11 5086-5555
E lokumura@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer.

Areas of practice. Agribusiness; bioenergy; corporate law and foreign investment; M&A; private equity and venture capital.

Non-professional qualifications. Specialised Business Management degree, Business School São Paulo, 2007

Recent transactions

  • Assistance to the shareholders of Equipav Açúcar e Álcool in the sale of 50% of the capital of this company to Shree Renuka Sugars Ltd. (amount of the operation: BRL1.4 billion).
  • Assistance to Sipcam UPL Brasil S/A in the sale of 50% of the company to Sipcam SpA.
  • Assistance to Infinity Bio Energy in the acquisition of several sugar cane mills in Brazil.

Languages. English, Portuguese

Vera Kanas, Partner

TozziniFreire Advogados

T +55 11 5086-5314
F +55 11 5086-5555
E vkanas@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer.

Areas of practice. International Trade

Non-professional qualifications. PhD in International Law, Universidade de São Paulo (USP), 2004; Masters in International Economic Law, Université de Paris-I Panthéon-Sorbonne, France, 2002; Law School of the Universidade de São Paulo (USP), 1998; Business Management, Business School São Paulo, 2007.

Recent transactions

  • Representing Sumitomo Rubber Industries in the anti-dumping investigation on imports of trucks and bus tires from Japan, South Africa, Russia, Korea, Chinese Taipei and Thailand.
  • Assistance to Lanxess Elastômeros do Brasil SA in requesting the initiation of an anti-dumping investigation on imports of synthetic rubber from the European Union.
  • Assistance to Greiner Bio-One Ltda in requesting the initiation of an anti-dumping investigation on imports of blood collection tubes from China, Germany, UK and the US.
  • Assistance to BMW in matters related to the Brazilian automotive regime, trade and customs, tariff classification of goods and trade compliance and the best suited logistic structure to be adopted in Brazil.

Languages. English, French, Spanish, Portuguese

Professional associations/memberships

  • Member of the Commission of Customs Law of the Brazilian Bar Association, São Paulo Chapter (OAB/SP).
  • Former director of the International Trade Committee of the Brazilian Institute of Studies on Competition, Consumer and International Trade (IBRAC).
  • Consultant to the Ministry of Foreign Affairs for matters relating to WTO dispute settlement and the environment.
  • Member of the official Brazilian delegation in the Conference of the Parties on Climate Change, COP-6 (The Hague, 2000) and COP-10 (Buenos Aires, 2004).

Publications

  • Trade and Environment and Compliance in the Disputes involving Brazil at WTO chapters from the book Solução de Controvérsias: O Brasil e o Contencioso na OMC (Dispute Resolution: Brazil and Litigations in the WTO) (São Paulo: Saraiva, 2008, ed. I and II).
  • Co-author of the book Business Guide to Trade Remedies in Brazil, publication by the International Trade Centre (UNCTAD/WTO), Geneva, 2005.
  • Proteção dos Investimentos no NAFTA (Protection of Investments in the NAFTA), chapter from the book Regulamentação Internacional dos Investimentos: algumas lições para o Brasil (International Regulation of Investments: a few lessons for Brazil) (São Paulo: Aduaneiras, 2007).
  • Meio Ambiente e Negociações Internacionais (Environment and International Deals) chapter from the book O Brasil e os Grandes Temas do Comércio Internacional (Brazil and the Great Themes of International Law) (São Paulo: Lex Editora, 2005).
  • A Proteção Ambiental no NAFTA (Environmental Protection in the NAFTA) chapter from the book O Sistema de Comércio Internacional e o Novo Milênio (The International Trade System and the New Millennium), organised by Alberto do Amaral Júnior, 2002.

Vladimir Miranda Abreu, Partner

TozziniFreire Advogados

T +55 11 5086-5219
F +55 11 5086-5555
E vabreu@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer.

Areas of practice. Agribusiness; climate change and carbon market; real estate; infrastructure; timberland investment.

Recent transactions

  • Assisting Ontario Teachers Pension Plan in the sale of 23,000 hectacres of timberland in the states of Paraná and Santa Catarina, Brazil.
  • Assisting Summit Farms in negotiating and setting up a joint venture with a Brazilian partner for the construction and operation of an ethanol plant in the state of Mato Grosso, Brazil.
  • Assisting TIAA-CREF in the acquisition of one of the most high-end shopping malls in the city of São Paulo, Brazil, Shopping JK Iguatemi.
  • Legal advice in the preparation of the sale of three companies that held timberland investments in the states of Paraná and Mato Grosso, assistance in the bidding process co-ordinated with several potential purchasers by financial advisor Brookfield Financial Services, negotiation of the sale and closing of the transaction with the chosen bidder, Remasa Reflorestadora S.A.

Languages. Portuguese, English, Spanish

Publications.

  • Real Estate and Property, Doing Business in Brazil, São Paulo: Britcham Brazil Publications, 2012.
  • Indirect Investment, Doing Business in Brazil, São Paulo: Britcham Brazil Publications, 2005.
  • Several articles published in World Law Group (WLG), Industrial GHG Solutions Magazine, Energy Hedge, Brasil Econômico, Capital Aberto and Gazeta Mercantil.

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