Government warns of AI-driven disinformation as national security risk

Deepfake videos and synthetic content targeting elections and public figures prompt calls for urgent regulation ahead of 2026 polls

 

 

 

 

06/09/2025

The growing use of artificial intelligence to create highly realistic fake content has raised alarm bells within the Brazilian government, especially as the country approaches the 2026 general elections. Officials are particularly concerned with the manipulation of real data to produce convincing fake videos—spread widely on social media—that can mislead the public or facilitate digital scams. Authorities now frame the issue as not just an electoral or regulatory matter but one of public safety and national defense.

Three weeks ago, Valor reported on a case in Argentina where an AI-generated “deepfake” video may have influenced the results of Buenos Aires’ city council elections on May 18. The video, widely circulated the night before the vote, appeared to show former President Mauricio Macri endorsing Javier Milei’s party, even though Mr. Macri was in fact a political rival. The video used AI to reproduce Mr. Macri’s appearance and voice with striking accuracy.

The capital is a traditional stronghold of Argentina’s right wing. But when results came in, Mr. Milei’s party led with 30% of the vote, followed closely by the left-leaning Peronists with 27%. Mr. Macri’s party finished third, with just 16%—a surprising defeat in its own stronghold.

In Brazil, concerns have intensified after similar cases surfaced involving President Lula and Finance Minister Fernando Haddad. In one instance, a fake video circulated showing Mr. Lula supposedly announcing that the government would grant Bolsa Família cash-transfer benefits to women caring for reborn dolls—lifelike dolls that resemble newborns. The video used AI-driven lip-syncing to manipulate a real interview in which Mr. Lula was actually talking about soccer.

In another case, a fake video showed Mr. Haddad saying the government would tax pregnant women and pet dogs. The manipulated footage was based on a real speech where he had discussed taxing online betting platforms. These videos gain traction precisely because they combine authentic content with manipulated audio or visual elements, lending them false credibility.

Attorney General Jorge Messias, who leads the government’s effort to hold digital platforms accountable, told Valor that neither Brazil nor other countries are prepared for the chaos caused by AI, which he described as a “dystopian and unregulated technology.” He noted that while electoral technology has evolved, such as the now-regulated mass messaging systems used illegally in 2018, the role of AI in elections will be far more prominent in 2026.

In the meantime, AI is also being used in digital scams, many of which target vulnerable groups such as children, teenagers, and the elderly. A notable example was the so-called “Pix crisis,” when a false rumor spread that the government would tax the country’s instant payment system. Scammers took advantage by falsely charging fees for money transfers.

According to Mr. Messias, the lack of regulation has turned the debate over AI and digital platforms into an issue of public safety. “Street crime has moved onto the platforms,” he said. “These are the digital pickpockets.”

While the Supreme Court is currently reviewing platform liability, the issue is also being addressed in Congress. The Attorney General’s Office (AGU), in partnership with the President’s Chief of Staff and the Presidential Communication Secretariat (SECOM), is drafting new legislation to be submitted for President Lula’s approval before reaching Congress.

In the absence of stronger legislation, the AGU, through its National Office for the Defense of Democracy (PNDD), has been working to remove or flag false and criminal content on social media platforms. In December, the office secured the removal of 12 fake videos about Mr. Lula’s health from YouTube. At the time, the president was recovering from brain surgery following a fall, but some videos falsely claimed he had died. YouTube removed seven of the 12 flagged videos within 24 hours via an out-of-court process.

YouTube, which sees around 20 million videos uploaded daily, stated that it uses AI to identify potentially harmful or manipulated content, which is then reviewed by humans. Users can also report misleading videos, which may be removed or labeled as disinformation. The company emphasized that the use of AI alone does not necessarily constitute a policy violation and that each case is reviewed individually under its guidelines and user rights.

Between January 2023 and May 2025, the PNDD submitted 39 out-of-court takedown requests. Of those, 23 were fully granted, two partially accepted, six rejected, and eight remain pending. In court, five requests were granted, two were rejected, and five await a ruling.

Over time, the PNDD has found that applying a “disinformation” label is often more effective than removing content entirely. Labeling allows users to access the content while being explicitly warned about its misleading nature—a solution the platforms may find less invasive.

Meta, which owns Facebook and Instagram, did not comment when contacted.

*By Andrea Jubé — Brasília

Source: Valor International

https://valorinternational.globo.com/

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Foot-and-mouth outbreaks in neighboring countries keep Brazil on alert

Industry leaders say resurgence of the disease in the country is “only a matter of time”

 

 

06/09/2025

Brazil is transitioning from a vaccination-driven approach to one that depends on constant vigilance, according to CNA

Brazil’s recent upgrade in sanitary status opens new opportunities for cattle and pig farmers as well as meatpackers, but it also raises the stakes for surveillance and enforcement in rural areas. The main challenge is to keep the disease out of the herds and avoid having to resume vaccination.

Still, many players in the livestock chain believe the return of the virus is inevitable. The question is when it will happen—and whether Brazil will be ready to respond to such a sanitary emergency. Unlike poultry and pig farming, which are largely carried out in controlled environments, Brazil’s extensive cattle ranching in open pastures makes containment much harder.

Outbreaks in neighboring countries like Uruguay serve as warnings. Uruguay saw cases of foot-and-mouth disease (FMD) even after receiving certified FMD-free status without vaccination and continues to immunize its herds. In Germany, the disease reappeared after more than 40 years, though vaccination was not made mandatory.

“The question isn’t if FMD will return to Brazil, but when—and how we’ll respond,” said Emílio Salani, vice president of the National Union of the Animal Health Products Industry (SINDAN), who was involved for decades in negotiations for the gradual phaseout of vaccination. “If we hesitate and need to restart vaccination, timelines will be extended, and the entire chain will suffer major losses.”

Among neighboring countries, Venezuela is the main concern. It lacks official FMD status and offers little transparency about its situation. Bolivia, however, received FMD-free certification without vaccination from the World Organization for Animal Health (WOAH) last week. Argentina and Paraguay have not reported recent cases but continue to vaccinate.

Currently, studies show the virus is not circulating in Brazil, Mr. Salani said. But risks remain due to the movement of infected animals across dry borders, as well as smuggling and cattle theft. Infected goods or individuals arriving at ports and airports also pose a threat.

Mr. Salani said the ideal solution would be to create a “protective ring” on the Venezuelan border, including donations of vaccines and financial resources. “The dry borders are our Achilles’ heel. One sick animal is enough [to jeopardize our status],” he warned.

“The challenge is much greater because cattle roam and move through open environments,” said João Paulo Franco, livestock production coordinator at the Brazilian Confederation of Agriculture and Livestock (CNA). He noted that Brazil is transitioning from a vaccination-driven approach to one that depends on constant vigilance. He emphasized that this “active surveillance” will rely heavily on farmers to spot symptoms and quickly alert the authorities.

Mr. Franco said the key to maintaining FMD-free status will be individual traceability of cattle and buffalo. A federal government plan launched at the end of 2024 aims to identify all livestock within seven years.

Lack of personnel

The need to uphold high safety standards also involves increasing personnel and investment, said the National Union of Federal Agricultural Tax Auditors (ANFFA Sindical). The organization said the new scenario will require greater attention from the state and called for adequate infrastructure to support the “new and rigorous surveillance and sanitary control measures” that will be needed.

“This progress comes at a critical moment, when production could be at risk if Brazil moves forward with privatizing inspections—a measure that weakens food safety and undermines international trust in our inspection system,” said Janus Pablo Macedo, president of ANFFA Sindical.

The Agriculture Ministry recently hired 200 new auditors approved in the 2024 public exam and 240 animal and plant health technicians. The union is pressing for additional hires from the waiting list, citing a shortage of professionals and increasing demand from the agribusiness sector.

Roberto Perosa, president of the Brazilian Meat Exporters Association (ABIEC), said a proposal to allow companies to conduct carcass inspections before and after slaughter—under the supervision of federal auditors—could benefit the sector. The idea, which is still under discussion at the Agriculture Ministry, has drawn criticism from the union.

Mr. Perosa also supports having agribusinesses contribute to the fund used to pay overtime for public inspectors in this area.

The journalist traveled at the invitation of ABIEC.

*By Rafael Walendorff — Paris

Source: Valor International

https://valorinternational.globo.com

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Government hammers out deal to offset IOF increase

Agreement negotiated by Finance minister includes tax hike on bets, ending breaks for LCI and LCA

 

 

06/09/2025 

After a five-hour meeting, Finance Minister Fernando Haddad and congressional leaders agreed on a package of measures designed to offset the revenue loss from partially scaling back a decree that raised the Financial Transactions Tax (IOF). The proposals include higher taxes on sports betting and the elimination of the income tax exemption for LCI and LCA fixed-income securities. Broader structural measures, such as cuts to tax benefits not enshrined in the Constitution and administrative reform, were also discussed.

The more immediate proposals will be implemented via a provisional measure (MP), which takes effect immediately but must still be approved by Congress. In the case of ending the income tax exemption for LCI and LCA, the change would take effect in 2026 due to Brazil’s fiscal annuality rule.

The new MP would allow the government to reissue the IOF decree with lower tax rates. These changes still require approval from President Luiz Inácio Lula da Silva, who is due to return from France on Monday evening (9).

The revised plan is expected to reduce the fiscal impact of the IOF decree by one-third. According to the Finance Ministry, this shortfall will be offset by the MP. In its current form, the decree was projected to generate R$19.1 billion in 2025 and R$38.2 billion in 2026.

The government presented the new proposals after intense backlash from lawmakers, who threatened to overturn the original decree. Chamber of Deputies Speaker Hugo Motta said the alternative measures are less harmful than the original tax hike.

“The MP provides the government with financial compensation, but it’s much less damaging than the continuation of the original IOF decree. Plus, we’ve opened the door for a broader and more meaningful debate on tax exemptions,” Mr. Motta said.

One key element of the MP is raising the tax rate on Gross Gaming Revenue (GGR) from 12% to 18%, aligning with the government’s original proposal to regulate the betting sector. GGR refers to the total amount wagered, minus the payouts to players.

Another measure targets incentives for LCI and LCA investments. According to Mr. Haddad, these instruments—currently exempt from income tax—will now be taxed at 5%. “These securities will no longer be tax-free but will still enjoy significant incentives. We’re narrowing the gap between 0% and 17.5% down to 5%,” he explained.

The MP will also standardize the Social Contribution on Net Profit (CSLL) paid by financial institutions. The preferential 9% rate for fintechs will be eliminated, leaving the standard rates of 15% and 20%.

Under the revised IOF decree, one significant change involves the tax on reverse factoring—a form of early payment to suppliers by banks. This measure had drawn strong criticism from the financial and retail sectors.

“The most affected part of the IOF will be on risco sacado. The fixed component of this tax will be removed, and the daily rate will be recalibrated to better align with the existing credit system,” Mr. Haddad said. The original decree set a fixed IOF rate of 0.95% for reverse factoring, along with a daily rate of 0.0082%. The fixed rate will be eliminated, and the daily rate adjusted.

As for Brazil’s broader system of tax expenditures, Mr. Haddad said the plan is to reduce them by at least 10%, although the exact figure has yet to be finalized. According to reporting by Valor Econômico, essential items such as the basic food basket, Simples Nacional regime, and the Manaus Free Trade Zone will be spared.

“We agreed here on cutting tax expenditures by at least 10%. Everything will be subject to deliberation by Congress. The Executive’s initiative is based on input from both congressional presidents and leaders who participated in the meeting,” Mr. Haddad stated.

Mr. Motta emphasized that the specifics of how tax incentives will be trimmed remain under discussion. “In the coming days, we will primarily target exemptions found in infra-constitutional legislation. There’s a suggestion to cut by 10%, but we might implement this gradually. The final structure is still up for debate,” the Chamber speaker said, adding that political feasibility will be a key consideration.

* By Jéssica Sant’Ana and Andrea Jubé — Brasília

Source: Valor International

https://valorinternational.globo.com/

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Disapproval of Lula 3 at highest level, at 57%, Genial/Quaest poll shows

President’s popularity remains negative; perception of economy shows improvement

 

06/04/2025 1

Disapproval of President Lula’s government reached 57% in May, the highest level since the start of his third term, according to a Genial/Quaest poll released on Wednesday (4). In the previous survey conducted in March, the disapproval rate was 56%. Approval now stands at 40%, down from 41% in the last poll, which had already marked the worst result since official records began.

The changes are within the margin of error of two percentage points. Since January, disapproval has risen by 8 points, while approval has dropped by 7 points. The latest edition of the bimonthly survey interviewed 2,004 respondents between Thursday (29) and Sunday (1).

Negative evaluations of President Lula’s government also increased slightly, reaching a historical peak of 43%, up from 41% in March. Positive evaluations fell from 27% to 26%. Those rating the administration as “regular” dropped from 29% to 28%. The percentage of Brazilians who believe the country is heading in the wrong direction rose to 61%, up from 56% in March and 50% in January. Meanwhile, 32% believe Brazil is on the right track, compared to 36% and 39% in the two previous rounds.

For the first time, disapproval of President Lula’s government surpassed approval among Catholics, at 53% to 49%. In March, approval and disapproval were tied at 49%. Catholics had previously shown more support than Evangelicals, a group historically more critical of the president. In the latest survey, disapproval among evangelicals stood at 66% (down from 67%), while approval was 30% (up from 29%).

The survey also indicates worsening figures in Mr. Lula’s traditional support voting bloc. His government is disapproved of by 54% of women, 47% of those with only basic education, and 49% of those earning up to two times the minimum wage—all segments showing an upward trend within the margin of error.

Regionally, President Lula’s approval outweighs disapproval only in the Northeast, where 54% support the government and 44% oppose it. In the more populous Southeast region, disapproval stands at a record 64%, while it reaches 62% in the South and 55% in the Central-West.

Improved economic perception

Despite confirming Mr. Lula’s popularity crisis, the survey shows an improvement in economic perceptions. The percentage of respondents who believe Brazil’s economy has worsened fell to 48%, down 8 points from 56% in March. Meanwhile, 18% say the economy has improved (up from 16%), and 30% believe it has stayed the same (up from 26%).

There was also some improvement in approval ratings among those familiar with recent government initiatives. For the proposal to exempt income tax for those earning up to R$5,000 per month, 56% had heard of it, and 45% approved. Regarding the new gas voucher program (Vale-Gás), 59% were aware of it, and 49% approved.

In a report released alongside the poll, political scientist and Quaest CEO Felipe Nunes described the scenario as a paradox, attributing the contradiction to the “widespread impact of negative news.” He noted that cases such as the social security fraud scandal at the National Institute of Social Security (INSS) have diluted positive impacts in other areas.

According to the survey, 56% believe the current Lula administration is worse than his first two terms. In comparison with former President Jair Bolsonaro’s administration, 44% believe Lula’s current term is worse, while 45% think the government is performing below expectations.

Social security scandal and IOF tax increase

Some 82% of respondents said they were aware of the INSS fraud scandal. Among them, 31% blamed Lula’s government, 14% cited the INSS itself, and 8% pointed to Bolsonaro’s administration—the same percentage as those blaming the organizations that forged retirees’ signatures. Another 26% said they did not know or did not respond.

Half of the respondents (50%) support opening an Investigative Parliamentary Committee (CPI) to investigate the INSS scandal, while 43% believe a Federal Police investigation is sufficient and that the opposition is only seeking to undermine the government.

Regarding the recovery of embezzled funds, 52% said the government should focus solely on reclaiming assets frozen from the implicated organizations, while 41% said the money should be returned even if public funds are needed.

Regarding changes to the Tax on Financial Transactions (IOF), fewer respondents were aware of the issue (39%) than those unaware (58%). Of those who knew, 41% approved of the government’s decision to reverse the IOF hike on investment funds, while 36% disapproved.

However, regarding the maintenance of the IOF increase on dollar purchases by individuals and remittances abroad, 50% said the government was wrong, and 28% said it was right.

Violence and corruption among top concerns

Violence remains the top concern for Brazilians, cited by 30% of respondents. It is followed by social issues (22%) and the economy (19%).

The fourth spot saw a shift compared to March: health, previously ranked fourth with 12%, was displaced by corruption, now cited by 13% (up from 10%). Health dropped to fifth place with 10%. Education ranked sixth at 6%.

*By Joelmir Tavares, Valor — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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BlackRock sees fiscal issues, elections holding more sway over exchange rate

Head of research and emergin-market bond manager Pablo Goldberg believes Brazil could benefit from U.S. capital outflows

 

 

06/04/2025

The interest rate shock announced by Brazil’s Central Bank at the end of last year, which pushed the Selic to 14.75%, helped the real recover against the dollar throughout this year. However, anchoring the Brazilian currency can’t rely solely on high interest rates, especially since rates will eventually be cut. That points to the need for greater focus on local risk factors, according to Pablo Goldberg, head of research and fixed income manager for emerging markets at BlackRock.

“What’s more important is entering a process where you reduce the embedded risk in assets, which will allow you to lower the real’s carry without driving investors away from the country,” Mr. Goldberg said in an interview with Valor. “What’s really high right now is not just the interest rate differential, but the risk that these high rates need to compensate for [in order to keep the currency anchored].”

When analyzing the impact of interest rate differentials on the domestic exchange rate, Mr. Goldberg explains that the real’s anchoring through high rates is a gradual, day-to-day process—while a single piece of news that worsens the perception of risk can sharply devalue the currency in just one session.

“There’s a well-known saying: currency appreciation goes up like a staircase, step by step, but depreciation goes down like an elevator, all at once. Carry alone gives the currency a purpose, but high interest rates don’t justify themselves.”

“We usually think in terms of ‘carry to risk’—the interest rate differential adjusted for risk. The higher the risk, the higher the carry. Today, the real offers good carry for the associated risks,” says the BlackRock manager, who maintains a constructive view on the Brazilian currency in the short term.

Due to the real’s characteristics, Mr. Goldberg sees no obstacles to its continued appreciation in the near future. “Besides the carry, valuation is favorable [for the real]. The Brazilian exchange rate is not overvalued, so fiscal matters, elections, and the monetary policy cycle will determine Brazil’s weight in global portfolios,” he explains.

Regarding the electoral cycle, Mr. Goldberg says that with fiscal issues in focus, any candidate who, during the campaign, signals an intent to ease the country’s debt trajectory will automatically become the market favorite. “I won’t name names, but I think those who provide the market with confidence that this particular area of policy will be well managed will do well.”

On Brazil’s monetary policy cycle, Mr. Goldberg aligns with market consensus and sees little room for further rate hikes, with the remaining question being when the Central Bank will begin cutting the Selic. “The current level of restriction [from the rate] is significant. But the economy still hasn’t responded as one might expect at this level of restriction. Perhaps that’s due to fiscal factors,” he says.

“Although inflation expectations are falling, they’re still significantly above the Central Bank’s target, so I don’t expect a sharp monetary easing any time soon—unless the economy slows very quickly, which also seems unlikely,” he adds. Mr. Goldberg believes the first rate cuts could come at the end of this year or possibly only in 2026.

Not knowing exactly when the Central Bank will cut rates doesn’t mean investors should stay away from the interest rate market, Mr. Goldberg argues. “It’s not just about when rate cuts will begin, but about the market pricing in the DI [interbank deposit] curve,” he says. “Those building positions now are betting rates won’t go higher, and they’re collecting yield for that. It’s more about earning carry than capital appreciation for now.”

BlackRock does not detail its allocations, but Mr. Goldberg says he favors Brazilian positions in sovereign bonds, corporate bonds, and the currency itself. He believes Brazil—like other emerging markets—could benefit from global investors diversifying away from U.S. assets due to a number of factors.

“I’m not saying global assets are now more attractive than U.S. assets, but compared to before, there’s been a small decline in the ratio between non-U.S. and U.S. assets,” he notes.

Mr. Goldberg attributes this shift to uncertainties around Donald Trump’s trade policies and their potential effects on the U.S. economy (whether through inflation or a slowdown); the challenging position the Federal Reserve may find itself in as a result; the growing belief that artificial intelligence and tech are not exclusive to the U.S.; and America’s own fiscal situation, which could prompt global investors to seek safe-haven alternatives to U.S. Treasury bonds.

“All of this opens up opportunities in other markets and geographies, meaning a global weakening of the U.S. dollar,” concludes Mr. Goldberg.

*By Arthur Cagliari — São Paulo

Source: Valor International

https://valorinternational.globo.com/

 

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Embraer invests in India to expand in Asia

Brazilian manufacturer opens subsidiary and office in the country; considers setting up final assembly line

 

 

 

 

06/04/2025 

Embraer has stepped up its bet on the Asian market with the launch of a new subsidiary and office in India, where the Brazilian company currently has a modest presence. CEO Francisco Gomes Neto told Valor that the country offers significant business opportunities, particularly in the defense and commercial aviation sectors.

On Tuesday (3), an Embraer team visited the Brazilian Embassy in New Delhi to present its growth plans for the region. Earlier this year, the company established a subsidiary in India to support its business expansion and recently announced the opening of a new office.

India is not the only Asian country on Embraer’s radar. China, the world’s second-largest aviation market, has also been a key target. “We have 4,000 aircraft worldwide, and only 49 are here [in India]. We are heavily focused on the KC-390 [the defense aircraft being evaluated by the Indian government], and discussions are advancing. However, we also want to sell executive and commercial jets,” Mr. Gomes Neto said.

Of Embraer’s fleet in India, only 10 aircraft are in the commercial division, operated by Star Air. Mr. Gomes Neto noted that India’s regional aviation market relies heavily on turboprop aircraft, an area where Embraer sees a competitive edge. “There has been substantial investment in roads and railways, which reduces the competitiveness of smaller aircraft. We believe our planes can fill those gaps,” he said.

According to Embraer’s estimates, India will require approximately 500 aircraft over the next 20 years, with around 300 of those expected to be delivered within the next decade. A significant portion of orders is likely to focus on replacing turboprops, as there are currently about 100 operating in the country.

India’s vast geography contrasts with the limited range of turboprops, typically around 500 km. Embraer’s jets, besides being faster, can fly approximately 6,000 km, enabling direct connections between distant cities. Part of Embraer’s strategy to strengthen its position in India involved setting up a subsidiary, a process completed in March. This week, the company also announced a new office.

João Bosco da Costa Júnior, vice president of Embraer’s defense and security business, recalled that three years ago the company had no employees in India. All operations were managed from Singapore, about a five-hour flight from New Delhi. “Since we started our growth strategy here, we’ve hired people and now have 10 positions,” he said. The company’s goal is not only to build a sales team but also to hire engineers and technicians locally.

The subsidiary also supports Embraer’s effort to sell the KC-390 to the Indian Air Force. The Brazilian manufacturer is competing against industry giants such as the Lockheed C-130 Hercules and the A400M Atlas.

India plans to order between 40 and 80 aircraft, with a decision expected by 2026. One of the requirements is that 50% of the aircraft content must be produced locally, which helped drive Embraer’s decision to establish a presence in the country. Depending on the size of the order, the company is also considering setting up a final assembly line in India.

“The defense market in India is extremely significant. The Asia-Pacific region has seen considerable growth and now has an aging military fleet that will need to be replaced,” Mr. Costa Júnior pointed out. Embraer estimates the region will account for about 23% of global military aircraft demand in the coming years.

Embraer’s interest in the region extends beyond India. As previously reported by Valor, the company is eyeing opportunities in China, especially amid the current geopolitical turbulence. American manufacturer Boeing has been directly impacted by the trade tensions fueled by U.S. President Donald Trump, with the Chinese government even halting deliveries of Boeing planes.

China’s Comac offers aircraft with 80 to over 160 seats, while Embraer’s models range from 110 to 146 seats. The company already operates a fleet of around 90 aircraft in China, mainly ERJ-145s and E190s. To boost its prospects in the Chinese market, Embraer has hired Patrick Peng, formerly of Airbus and GE, to help drive business development.

The Brazilian manufacturer closed the first quarter with its highest revenue since 2016, totaling R$6.4 billion, a 44% year-over-year increase. Net income reached R$434 million, up 204.1%. Embraer’s order backlog now stands at $26.4 billion, the largest in its history.

However, the company also faces challenges. Chief among them is the Chapter 11 bankruptcy filing by Azul, currently its largest customer for the E2 model. “We have several aircraft scheduled for delivery, either directly to Azul or through lessors. We are monitoring the situation closely. What we hear is that Azul’s fleet strategy is to replace E1 jets with E2s, and that plan remains in place,” Mr. Gomes Neto said. According to him, the involvement of American Airlines and United in Azul’s restructuring process is a positive sign.

Another concern involves U.S. tariffs. Recently, Embraer delivered a commercial aircraft to an American customer under the new tariff structure. However, due to the U.S.-made content in the aircraft, the tax rate was significantly lower than the standard 10%. Despite the higher tariff, no orders have been canceled.

(The reporter’s travel costs were covered by IATA.)

*By Cristian Favaro — New Delhi

Source: Valor International

https://valorinternational.globo.com/

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Blockchain could have prevented INSS fraud, experts say

Features like records immutability, traceability, and programmability could block unauthorized deductions from pension benefits

 

 

 

 

06/03/2025 

Blockchain technology could have prevented a multi-billion fraud that hit Brazil’s National Institute of Social Security (INSS), according to technology specialists consulted by Valor. Key features of blockchain—such as immutability of records, traceability, and programmability—would help stop unauthorized deductions from social security benefits.

Edilson Osório, founder of the blockchain authentication company OriginalMy, notes that blockchain alone wouldn’t resolve all problems. However, the fraud could have been entirely avoided by combining blockchain networks with digital identity systems.

The main advantage is that all information recorded on a blockchain is immutable. In other words, it cannot be edited or altered once entered. According to Mr. Osório, tying the authorization of payroll deductions to a signature that validates a retiree’s digital identity would ensure verified consent and offer irrefutable proof of when that consent was given.

The Brazilian government already uses blockchain to register the National Identity Card (CIN), which includes a digital version integrated with the gov.br platform. Since 2023, the “b-Cadastros” solution—a shared blockchain registry developed by the Federal Revenue Service in partnership with Serpro—has been used to issue the CIN. The document aims to centralize the CPF (individual taxpayer number) as the sole reference for accessing public services like SUS (public healthcare), INSS, Bolsa Família, and voter registration. Public Management Minister Esther Dweck has stated that the CIN seeks to eliminate fragmented civil records.

However, the INSS systems affected by the fraud do not yet use such technology. Caroline Nunes, founder of InspireIP—a blockchain-based intellectual property registry platform—says that Brazil’s social security systems suffer from fragmented data across different databases developed in various generations of IT infrastructure. “The INSS systems are connected via APIs or other types of interfaces. We’re dealing with information transfers between systems and agencies,” she explains.

All information registered on a blockchain is immutable: it cannot be edited or altered.

Murilo Cortina, head of new business at QR Asset, argues that the current system is vulnerable to unauthorized changes, deletions, or data entries by individuals with privileged access. “Blockchain technology, which underpins the entire crypto ecosystem, proposes a new architecture for storing and verifying data. Each record is validated by multiple independent parties—called nodes—that share an identical copy of the full history. This eliminates the risk of unilateral manipulation and ensures that everyone sees the same version of events,” he says.

According to Ms. Nunes, it would be possible to migrate all systems to an interoperable blockchain shared among government agencies, such as the Drex platform currently under development by Brazil’s Central Bank. Drex is a “tokenized” infrastructure for the financial system. “Drex could significantly advance blockchain identity. You could register the ID on the network just like a physical identity card, but on the blockchain,” she suggests.

A critical challenge would be adapting the system’s usability for retirees, many of whom are not comfortable using digital platforms. Mr. Osório proposes linking a digital identity app to a physical card, which could be used to sign authorizations. “A person would go to an INSS office, insert the card, and enter a PIN. Then, the office could proceed on their behalf,” he explains.

When asked for comment, the INSS said it monitors blockchain developments but has no active studies regarding its implementation. “While the INSS monitors the evolution of technologies such as blockchain and recognizes their potential for enhancing security and transparency, we inform that there are currently no ongoing studies for its specific adoption in payroll-deductible or association-linked discounts,” the institute said in a statement.

*By Ricardo Bonfim — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Gol parent says merger still on track despite Azul restructuring

Abra Group CEO Adrian Neuhauser says both airlines are cleaning up their capital structures, paving way for possible merger

 

 

 

 

06/03/2025 

Adrian Neuhauser, CEO of Abra Group—the holding company that controls Gol and Avianca—said the group remains interested in airline consolidation in Brazil. According to Mr. Neuhauser, Azul’s recent decision to file for Chapter 11 bankruptcy protection in the U.S. does not alter Abra’s plans to pursue a potential merger between the two Brazilian carriers.

“We made public a memorandum of understanding [MOU] outlining a potential tie-up between Gol and Azul, and we also submitted that MOU for regulatory approval,” Mr. Neuhauser said during a panel at an event hosted by the International Air Transport Association (IATA) in New Delhi. He emphasized that the group still sees a clear opportunity for consolidation.

Mr. Neuhauser noted that both carriers have similar financial structures and are now working to clean up their balance sheets. “Gol is expected to exit Chapter 11 this week,” he said. “We’re happy to see Azul making progress in its restructuring, and we hope that opens the door to consolidation, which is something we intend to pursue.”

During the panel, Mr. Neuhauser was asked whether Latin America’s airline industry might see further restructurings. The region has been marked by several high-profile bankruptcy cases in recent years, including Avianca, Latam, Gol, Aeroméxico, and now Azul.

Mr. Neuhauser responded that such restructurings were a natural outcome in Latin America, where airlines received far less government support compared to their peers in the U.S. and Europe—where public funds helped sustain operations during crises.

“That’s why we saw them all go through restructuring one after another. But we don’t expect more large carriers in the region to go through this. That cycle is behind us,” he said.

After prolonged but unsuccessful attempts to restructure its debt through direct negotiations with creditors last year, Azul announced on May 28 that it had filed for Chapter 11. Through the process, the airline aims to restructure roughly R$35 billion in debt with creditors and investors.

However, Azul entered bankruptcy proceedings with a secured debtor-in-possession (DIP) financing package worth $1.6 billion. It also secured about $950 million in exit financing commitments from bondholders and strategic partners, including American Airlines and United.

With these guarantees and advanced negotiations, Azul has indicated that it expects a swift process.

During its first hearing at the New York bankruptcy court overseeing its case, Azul informed Judge Sean H. Lane that it anticipates a confirmation hearing for its Chapter 11 exit plan to be held on December 28. If approved, the company expects to emerge from bankruptcy within 90 days—by March 2026.

The confirmation hearing is one of the final stages in the Chapter 11 process, during which the court must approve the airline’s restructuring plan.

*IATA covered the reporter’s travel expenses.

*By Cristian Favaro, Valor — New Delhi

Source: Valor International

https://valorinternational.globo.com/

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GNA opens Brazil’s largest thermal power plant at Porto do Açu

With R$7bn in investments, GNA II boosts gas-fired capacity and strengthens energy security

 

 

06/02/2025 

Gás Natural Açu (GNA), a joint venture between Siemens Energy Sip Brasil and bp, has launched operations at its second power plant in Porto do Açu, in northern Rio de Janeiro state. The project, which received R$7 billion in investments, is now the largest thermal power plant in operation in Brazil.

The new facility, GNA II, has an installed capacity of 1,673 megawatts and was recently approved for operation by Brazil’s electricity regulator, ANEEL. Capable of supplying energy to roughly 8 million homes, the plant positions GNA as the operator of the largest natural gas-fired power complex in Latin America.

GNA II complements the company’s first plant, GNA I, which has been running since 2021 with a capacity of 1,338 MW. Together, the two units represent 17% of Brazil’s thermal generation capacity and play a crucial role during dry seasons when hydroelectric output declines.

The goal was to establish a gas hub at Porto do Açu, GNA CEO Emmanuel Delfosse told Valor. “These plants are like insurance for the power system as they come online when they’re most needed.”

The plants are connected to a private liquefied natural gas (LNG) regasification terminal with a daily capacity of 21 million cubic meters. This allows GNA to import LNG and convert it back to gas for power generation. Combined, the thermal units consume about 12 million cubic meters per day, roughly equivalent to the energy consumption of the entire state of São Paulo, according to Mr. Delfosse.

With GNA II operating under a 40% inflexibility clause, the system is contractually required to use the plant at least 40% of the time during Brazil’s dry season, from July to November.

The facility runs on natural gas and was contracted through Brazil’s energy auctions. It operates in a combined-cycle configuration, improving efficiency and lowering emissions. However, it lacks “fast ramp” capability, meaning it must be brought online several days in advance—a limitation in terms of operational flexibility.

GNA II is part of the federal government’s revamped Growth Acceleration Program (PAC), which targets key infrastructure investments. The total investment in the GNA power complex stands at R$12 billion. “It was a major technical and logistical challenge, especially during the pandemic,” Mr. Delfosse said. “Doing business in Brazil is complex. The scale of this industrial venture alone—R$12 billion—is remarkable.”

The project also has room for significant expansion, with 3.4 GW of additional capacity already authorized from an environmental standpoint. Any future development, however, will depend on demand in upcoming energy auctions.

GNA’s shareholders played critical roles beyond capital contributions. Siemens Energy supplied three gas turbines and one steam turbine, while bp handled the gas supply. Chinese state-owned company SPIC joined the venture during a period of heavy Chinese investment in Brazil’s power industry. Prumo Logística, which manages Porto do Açu’s infrastructure, is also a stakeholder in GNA I.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Trump tariffs stall wood pulp price recovery

Prices in top buyer China may have fallen as much as 20% since the mid-April peak

 

06/02/2025

The heightened uncertainty triggered by U.S. President Donald Trump’s new tariffs has led to a slowdown in pulp demand, particularly in the United States and China. The measures also brought a halt to the upward price cycle that had been building since the start of the year.

According to the Foex index from Fastmarkets, the net price of bleached hardwood kraft pulp (BHKP) in China dropped by $77.9 over the past month, with the most recent weekly quote at $517.47 per tonne. Market sources report some resales taking place below $500 per tonne—though those levels have yet to be reflected in official indexes.

If confirmed, these prices would represent a decline of more than 20% from the April peak, amounting to a drop of approximately $120 per tonne.

Suzano—the world’s largest producer of BHKP—had been implementing monthly increases of $20 for Asian markets since the beginning of the year, capitalizing on stronger-than-expected momentum.

According to the company, price adjustments in January, February, and March were implemented successfully. However, instability caused by the new tariffs derailed April negotiations, which failed to move forward. In other words, beyond halting the price rally, the uncertainty-driven downturn effectively wiped out Suzano’s gains from the first quarter.

During a conference call, Leonardo Grimaldi, Suzano’s executive vice president for pulp sales and logistics, said the current price level is “unsustainable” and expressed hope for a normalization of market negotiations in May.

Fastmarkets’ outlook calls for weaker prices in the months ahead, with a possible recovery by year-end. “If global demand for pulp—particularly in China—continues to grow, that could support a price rebound later this year,” said Rafael Barisauskas, Latin America economist at the consultancy.

While the tariffs aren’t the sole cause of the downturn, they have certainly added another layer of complexity.

Since last year, the supply-demand dynamics in the pulp market have been shifting. Some Chinese producers have resumed operations, and new capacity has come online—such as Suzano’s Cerrado Project. The new facility began the year running at full capacity, producing 2.55 million tonnes annually, ahead of the Brazilian company’s own projections.

“Uncertainty about demand in Asia and the U.S. has led buyers to adopt ‘just-in-time’ purchasing strategies, avoiding inventory buildup throughout the supply chain, which has restrained pulp consumption,” Mr. Barisauskas explained.

Data from the Pulp and Paper Products Council (PPPC) for April, cited in a BTG Pactual report, reflect this trend. According to the council, inventory days rose to 44 (47 days for hardwood pulp and 41 for softwood), and the system operating rate stood at 80%, which the bank classified as “underutilized.”

Despite the volatile environment, total pulp shipments rose 2% year-over-year in April, driven by a 15% increase in exports to China. In Latin America, the figure dropped 9%.

After reporting first-quarter results, Suzano CEO Beto Abreu stated that the company had not yet seen changes in demand but remained cautious about market dynamics in the coming months.

In mid-May, during a conversation with reporters, Marcos Assumpção—Suzano’s executive vice president of finance and investor relations—was asked whether the company planned to reduce production to help balance supply and demand.

According to Mr. Assumpção, Suzano has identified operations with higher production costs but does not intend to cut output. “What we’ve said is that we will sell everything we produce,” he affirmed.

One concern for the industry is whether Chinese pulp originally intended for the U.S. might be redirected to other markets. “China will likely face some difficulty exporting short-fiber pulp to the U.S. The big question is whether Chinese buyers will absorb the volume or send it elsewhere,” said Klabin CEO Cristiano Teixeira during a conference call. The company’s outlook for demand in this segment over the coming months is negative.

In the case of softwood pulp (pine), Mr. Teixeira sees a more favorable dynamic, as most of China’s imports in this category come from the U.S. “Any global softwood pulp producer becomes a potential supplier to Chinese buyers, and Brazil could benefit,” he added.

Despite the recent impact, it’s too early to determine whether these shifts signal lasting changes for the industry, said Ambassador José Carlos da Fonseca, president of the Brazilian Paper Packaging Association (Empapel) and international relations director at the Brazilian Tree Industry (Ibá).

Earlier this month, the U.S. and China agreed to lower reciprocal tariffs from 125% to 10% for 90 days while negotiations continue. “Right now, we’re at the peak of this cycle, but the world won’t be the same—even if this passes,” Mr. Fonseca said.

*By Helena Benfica — São Paulo

Source Valor International

https://valorinternational.globo.com/

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