<\/p>\n
MURRAY ADVOGADOS<\/strong><\/p>\n NEWSLETTER<\/strong><\/p>\n AUGUST 2025<\/strong><\/p>\n <\/p>\n 08\/01\/2025<\/p>\n <\/p>\n REDIRECTING EXPORTS IS SLOW AND DIFFICULT, EXPERTS SAY<\/u><\/strong><\/p>\n Looking to other Asian markets beyond China could offer opportunities for some sectors<\/em><\/strong><\/p>\n <\/p>\n Opening new markets to redirect Brazilian products affected by the 50% U.S. tariff is a slow and challenging process that won\u2019t bear fruit in the short term, warn international trade experts. Some sectors may eventually find opportunities in Asian countries outside of China, currently the largest buyer of Brazilian goods.<\/p>\n <\/p>\n The process of opening new markets can take months or even years, experts explain. Bureaucratic hurdles, including sanitary licenses and regulatory approvals, must be overcome, and companies still need time to establish business contracts in these new destinations. This is all unfolding amid global turbulence, with the U.S. tariffs affecting several countries at once and spurring everyone to seek alternative markets.<\/p>\n <\/p>\n Estimates on how much of Brazil\u2019s export portfolio is subject to the new tariff vary. According to the Ministry of Development, Industry, Trade and Services (Mdic), the measure could affect 35.9% of Brazil\u2019s exports to the U.S. In 2024, those exports totaled $40.3 billion, meaning around $14.5 billion are at risk due to the tariff imposed by President Donald Trump\u2019s administration.<\/p>\n <\/p>\n Welber Barral, former foreign trade secretary and partner at BMJ Consultoria, divides the affected products into three groups. The first includes food commodities like coffee and meat. Due to their characteristics, these have a better chance of being redirected to other global markets or even within the U.S. itself\u2014but at the cost of lower prices, as the tariff effectively reduces American and global demand while supply remains unchanged.<\/p>\n <\/p>\n The second group includes industrial products, particularly machinery. For these, the natural destination is Latin America, especially South America.<\/p>\n <\/p>\n \u201cChina, Indonesia, and India are large markets, but they don\u2019t have the same purchasing power as the U.S. Also, they\u2019re more likely to buy commodities, since Brazil can\u2019t compete in industrial products in those markets\u2014except for niche items,\u201d says Mr. Barral.<\/p>\n <\/p>\n The third group consists of Brazilian subsidiaries of American companies. Their outlook is the worst, in Mr. Barral\u2019s view. \u201cMost likely, parent companies will seek factories in countries with lower tariffs to produce. Any investment plans in Brazil are now in limbo because companies no longer know to what extent they\u2019ll be able to export to their own headquarters.\u201d<\/p>\n <\/p>\n Global demand conditions and supply in other regions also affect the search for new buyers, notes Jos\u00e9 Alfredo Gra\u00e7a Lima, vice president of the board at the Brazilian Center for International Relations (Cebri).<\/p>\n <\/p>\n Coffee, for example, is largely exported to the U.S., but demand elsewhere in the world is already saturated, he says. \u201cIf we can\u2019t find a market to replace the U.S., prices will be affected,\u201d he warns.<\/p>\n <\/p>\n Lia Valls, head of economic analysis at UERJ and associate researcher at FGV Ibre, emphasizes that entering new markets requires meeting specific quality standards, which can be a lengthy process.<\/p>\n <\/p>\n \u201cThese adaptations are not impossible, but they won\u2019t happen right away and won\u2019t be feasible for every product,\u201d she says. \u201cEach market has its own quality certifications\u2014Europe, for example, has very strict rules depending on the product.\u201d<\/p>\n <\/p>\n Machines and shoes face particular challenges, says Ms. Valls. \u201cSome machines are custom-built for individual companies, and shoes are made to specific sizes. These products will require more significant adjustments to be suitable for new markets.\u201d<\/p>\n <\/p>\n Given the situation, expanding the list of exemptions to the U.S. tariff may be the best-case scenario, says Jos\u00e9 Augusto de Castro, CEO of the Brazilian Foreign Trade Association (AEB). \u201cPersonally, I think that list will expand. For some products, it simply doesn\u2019t make sense to be excluded,\u201d he says, citing coffee as an example\u2014since it isn\u2019t produced in the U.S.<\/p>\n <\/p>\n In the short term, betting on countries that already buy from Brazil may be the safest move, says Mirella Hirakawa, head of research at Buysidebrazil. \u201cThe question is whether there will be demand to absorb this surplus.\u201d<\/p>\n <\/p>\n In the case of beef, 10.3% of Brazilian exports in the first half of 2025 were destined for the U.S. Some of that volume could be redirected to China, which accounted for 51.6% of Brazil\u2019s beef exports.<\/p>\n <\/p>\n Other products could follow the same path, says Ms. Hirakawa, including coffee\u2014the European Union buys around 33.8% of Brazil\u2019s coffee exports, compared to 16% by the U.S.\u2014and ethanol. In that case, China and South Korea each import more than double what the U.S. buys (11.8%).<\/p>\n <\/p>\n Carlos Frederico Coelho, researcher at the BRICS Policy Center and professor of international trade at PUC-Rio\u2019s Institute of International Relations, believes Brazil can look to other Asian countries beyond China.<\/p>\n <\/p>\n \u201cIt\u2019s hard not to consider Asia. The continent may be the next frontier for protein exports. The challenge is, how much more can Brazil sell, given that we already export to the region? It will mean going beyond China,\u201d he says.<\/p>\n <\/p>\n In the case of coffee, global demand could help redirect exports over the medium to long term, Mr. Coelho explains. \u201cThe Brazilian coffee that won\u2019t go to the U.S. will be replaced there by other suppliers. That opens up space elsewhere for Brazilian exports.\u201d<\/p>\n <\/p>\n Brazilian footwear, which was also hit by the 50% U.S. export surcharge, can\u2019t easily be redirected to new markets due to its highly customized production, says Haroldo Ferreira, CEO of the Brazilian Footwear Industry Association (Abical\u00e7ados).<\/p>\n <\/p>\n \u201cI can\u2019t take that shoe and ship it to Chile or Europe, for example. It was developed for a specific importer,\u201d he explains.<\/p>\n <\/p>\n According to Mr. Ferreira, 22% of Brazilian footwear exports go to the U.S. \u201cLast year, we exported $216 million\u201410.3 million pairs. In the first half of 2025, we exported 5.8 million pairs, up 13.5%. In other markets, growth was 8.8% over the same period.\u201d<\/p>\n <\/p>\n For the textile sector, redirection is also costly due to the need for international infrastructure, such as distribution centers, sales networks, and local contacts, says Fernando Valente Pimentel, executive director of the Brazilian Textile and Apparel Industry Association (Abit).<\/p>\n <\/p>\n \u201cIt\u2019s not a matter of just switching markets. You can\u2019t find new destinations right away,\u201d he says. \u201cThe viable option is the local market, which has its own specific demand.\u201d<\/p>\n <\/p>\n Mr. Pimentel says the U.S. is one of the top three destinations for the industry\u2019s exports. \u201cWe expected to sell around R$500 million this year, half of which had already been fulfilled in the first half,\u201d he notes. \u201cBut with the new tariff, almost everything is jeopardized.\u201d<\/p>\n <\/p>\n In the search for new alternatives, Mr. Pimentel says the conclusion of the EU-Mercosur agreement is currently the sector\u2019s top priority. \u201cThe deal could open new space for trade, investment, acquisitions, and operational and technological partnerships,\u201d he says.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/01\/2025<\/p>\n <\/p>\n BRAZILIAN INDUSTRIES CALCULATE LOSSES, SEEK NEW MARKETS<\/u><\/strong><\/p>\n Affected sectors still believe exceptions list may be expanded, but see tariff hike in effect for months<\/em><\/strong><\/p>\n <\/p>\n Industries affected by the 50% tariff imposed on Brazilian exports to the U.S. estimate billions in losses and are already seeking new markets for their products, believing that the surcharge will make business with the northern country unfeasible. Affected sectors still believe that the list of exceptions may be expanded, but the perception is that the tariff hike will be in effect for months, starting August 6th.<\/p>\n <\/p>\n In the aluminum industry, the impact could reach R$1.15 billion by the end of the year, according to estimates from the Brazilian Aluminum Association (Abal). This figure represents direct losses already suffered and projected losses after the 50% tariffs enter into effect. According to Abal, although the surcharge is not cumulative with the tariffs already in effect since June, around one-third of Brazilian exports to the American market are already at risk.<\/p>\n <\/p>\n \u201cIn 2024, the United States was the third-largest export destination, behind Canada and Norway, accounting for 14.2% of foreign sales, or $773 million. It is estimated that about a third of this total is currently subject to the 50% tariffs, which will make access to the American market unfeasible for several products,\u201d Abal says.<\/p>\n <\/p>\n The effects of rising tariffs are already being felt. In the first half of the year, Brazilian exports subject to Section 232 plummeted 28% compared with the first half of 2024, resulting in $ 46 million in losses. This reduction reflects previous tariff hikes of 10% and 25%, now aggravated by the new 50% tariff.<\/p>\n <\/p>\n Although alumina, a raw material for primary aluminum production, has been excluded from the list of tariffed products, Abal warns of a systemic risk to the supply chain. In 2024, Brazil exported 1.3 million tons of alumina to the U.S., a volume essential to produce 90% of American primary aluminum. Brazil also supplies Canada with alumina for 64% of the country\u2019s aluminum production, which supplies a share of U.S. industrial demand. \u201cThe disruption of regional complementarity could affect supply, redirect trade flows, and compromise the predictability of operations in the three countries.\u201d<\/p>\n <\/p>\n After being exempted from the 50% tariffs, the Brazilian pig iron industry faces the challenge of resuming suspended shipments and the production halted by trade uncertainty. In 2024, Brazil produced 3.8 million tons of pig iron, and 85% of the sector\u2019s exports were shipped to the U.S. The inclusion of pig iron in the exemption list was considered crucial to avoid layoffs and widespread shutdowns.<\/p>\n <\/p>\n According to Fausto Varela, president of Sindifer, the association of independent mills in the state of Minas Gerais, the challenge is to overcome logistical and operational obstacles that have piled up in recent weeks. \u201cWe halted cargo shipment for three ships that were scheduled to depart in August, and now we are talking with buyers to resume operations,\u201d Mr. Varela told Valor.<\/p>\n <\/p>\n The state of Paran\u00e1\u2019s forestry industry is seeking government support to reduce losses. Apre Florestas, an association of 47 Paran\u00e1 companies, intends to request subsidized financing and advance tax credits. \u201cFrom now on, we will establish new strategies,\u201d said F\u00e1bio Brun, president of the association.<\/p>\n <\/p>\n Apre Florestas will ask the Paran\u00e1 government that access to credit be provided through the Regional Development Bank (BRDE) for payroll payments; advance tax credits for timber exporters; and flexible payment terms, which are part of a Paran\u00e1 program aimed at supporting businesses. Apre Florestas also wants to join other business associations to monitor the federal government\u2019s negotiations but believes that the new tariff will be in place for the next six months.<\/p>\n <\/p>\n Forestry companies are planning initiatives such as expanding their markets for the products that will no longer be exported to the U.S.<\/p>\n <\/p>\n According to the 2024 Apre Sector Report, wood pulp, which was included in the exception list, accounts for 8.64% of the state\u2019s forest-based products sold to the U.S. The other main forest-based products, like wooden frames, wooden doors, pine plywood, and pine sawn timber, among others, have not been exempted from new 50% tariff.<\/p>\n <\/p>\n Apre Florestas is still estimating the financial impact of the tariff hike on the Paran\u00e1 forestry industry. In the first half of the year, exports to the United States generated $ 331 million, in line with the same period last year.<\/p>\n <\/p>\n The Brazilian Food Industry Association (ABIA) also considered the exemption list \u201climited,\u201d a measure that undermines the predictability of trade between U.S. and Brazil. While orange juice\u2014which totaled nearly $750 million in exports in the first half of 2025\u2014was exempt from the additional tariff, other heavily exported products, such as meat, coffee, and vegetable oils, were not.<\/p>\n <\/p>\n ABIA released a statement saying the decision \u201cjeopardize the predictability of bilateral trade and creates distortions in value chains.\u201d<\/p>\n <\/p>\n According to ABIA\u2019s estimates, based on exports to the U.S., which totaled $2.83 billion in the first half of the year, a hypothetical 10% decline in export volume would result in losses of up to $570 million annually in foreign revenues. ABIA stated that it \u201cadvocates cooperative and balanced solutions.\u201d<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/08\/2025<\/p>\n <\/p>\n BRAZIL WEIGHS COMPANY-BY-COMPANY RELIEF PLAN TO COUNTER U.S. TARIFFS<\/u><\/strong><\/p>\n Government analyzes export data to fine-tune measures while exploring talks on big tech regulation, critical minerals, and data center policy<\/em><\/strong><\/p>\n <\/p>\n With a contingency plan already on President Lula\u2019s desk, Brazil\u2019s economic team is now assessing the situation of each exporter individually to fine-tune measures aimed at offsetting the impact of the 50% tariff announced by the United States on Brazilian goods. The plan is expected to be presented by Tuesday.<\/p>\n <\/p>\n In a parallel effort, Vice President and Minister of Development, Industry, Trade and Services (MDIC) Geraldo Alckmin has hinted at possible avenues for bilateral talks, including regulation of big tech companies, access to critical minerals, and data center policy.<\/p>\n <\/p>\n Valor has learned that he details of the plan were still being defined on Thursday (7), with calculations underway to assess the fiscal impact. There was no decision yet on the amount of credit to be offered or whether the Reintegra program\u2014which grants tax credits to exporters\u2014would be expanded to cover affected companies.<\/p>\n <\/p>\n The review is delayed as the government examines each exporter individually to decide which support measures to implement. The MDIC prepared a detailed report on the tariff\u2019s impact by company, which was under review at the Finance Ministry.<\/p>\n <\/p>\n For now, expanding Reintegra remains under consideration. The program currently grants 0.1% credit for medium and large companies and 3% for small and micro enterprises. Industry representatives are lobbying to set the rate at 3% for all exporters. The issue was raised during a meeting between Mr. Alckmin and Haroldo Ferreira, president of the Brazilian Footwear Industry Association (ABICAL\u00c7ADOS), who stressed the program\u2019s \u201cimportance for companies selling to the U.S. market.\u201d<\/p>\n <\/p>\n Another businessperson said that Reintegra was well on the way to being included in the initial measures. However, there was uncertainty about the criteria for choosing the companies that would benefit.<\/p>\n <\/p>\n Another measure under discussion is easing drawback rules, which suspend taxes on imported components used in products bound for export. Officials are weighing longer deadlines for companies to fulfill their export commitments.<\/p>\n <\/p>\n Mr. Alckmin noted that the need for support varies even within sectors. In fisheries, for example, tilapia is sold domestically, while tuna is exported\u2014making the latter more vulnerable to the new tariffs. Measures will therefore target firms with greater export exposure to the U.S.<\/p>\n <\/p>\n The vice president said the government is acting on two fronts: implementing a contingency plan to protect jobs and production, and negotiating to exclude as many products as possible from the tariff list. Currently, about 38% of Brazilian exports to the U.S. are subject to the 50% duty.<\/p>\n <\/p>\n Mr. Alckmin also met with U.S. charg\u00e9 d\u2019affaires Gabriel Escobar, reiterating Brazil\u2019s opposition to the tariff hike and offering dialogue on non-tariff issues such as big tech regulation, critical minerals, and data centers. He argued that the measure would harm the U.S. by raising consumer prices, disrupting supply chains, and creating legal uncertainty. Mr. Escobar also visited Congress on Thursday.<\/p>\n <\/p>\n Private-sector engagement is part of the strategy. On Wednesday, Mr. Alckmin met with Abr\u00e3o Neto, head of the American Chamber of Commerce for Brazil (Amcham Brasil), which will work with the Brazilian Trade and Investment Promotion Agency (ApexBrasil) to intensify outreach in Washington.<\/p>\n <\/p>\n Measures under consideration include credit lines, government purchases of food for school lunch and prison programs, job support initiatives, and a possible Reintegra expansion. Behind the scenes, officials are careful to avoid measures that would worsen public finances, particularly the primary balance\u2014revenues minus expenditures excluding interest payments\u2014which is the key fiscal target.<\/p>\n <\/p>\n While credit provision is seen as less risky, high subsidies are a concern. The goal is to prevent any perception that the crisis is a pretext for higher spending in a pre-election year. Measures with budgetary impact could bypass the fiscal target but might increase gross public debt.<\/p>\n <\/p>\n Officials are also mindful that U.S. President Donald Trump could impose further trade restrictions and want to preserve the option to respond if that happens.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n <\/p>\n 08\/08\/2025<\/p>\n <\/p>\n EXPORTS TO ARGENTINA HELP BRAZIL SUSTAIN CAR MANUFACTURING PACE<\/u><\/strong><\/p>\n Vehicle exports to Argentina rose 156.5% in one year; industry revises forecast<\/em><\/strong><\/p>\n \u00a0<\/strong><\/p>\n Brazilian automakers are bracing for a slowdown in domestic market growth. Thanks to rising exports to Argentina, however, they will be able to keep production levels steady.<\/p>\n <\/p>\n Driven by stronger demand from its southern neighbor, the share of exports in Brazil\u2019s auto industry has risen from 14% to 25% over the past year.<\/p>\n <\/p>\n Noticing signs of a rebound in Argentina\u2014Brazil\u2019s top export destination for vehicles\u2014automakers had been preparing since January to ramp up shipments. At the time, the National Association of Vehicle Manufacturers (ANFAVEA) projected a 7.8% increase in exports in 2025.<\/p>\n <\/p>\n However, the recent performance exceeded expectations, said the ANFAVEA president, Igor Calvet. On Thursday (7), the industry association revised its forecast sharply upward, now projecting a 38.4% increase in vehicle exports this year.<\/p>\n <\/p>\n In a year, vehicle sales from Brazil to Argentina surged 156.5% to 183,900 units. Argentina\u2019s share of total exports rose from 35% to nearly 59%. Although sales to other neighboring markets such as Colombia and Chile also increased, Argentine demand was the key driver behind what ANFAVEA is calling a \u201csurprising surge.\u201d<\/p>\n <\/p>\n From January through July, Brazil exported 312,100 vehicles, a 52.7% increase compared to 2024. Export revenue reached $8.33 billion, up 43.9% year-over-year.<\/p>\n <\/p>\n According to Mr. Calvet, foreign demand has been the main reason automakers have expanded hiring in recent weeks. In just one month, 400 new positions were created. Total employment in the sector now stands at 109,100, up 4.4% over the past 12 months.<\/p>\n <\/p>\n Stronger prospects for exports are helping the industry offset weaker domestic demand and maintain the production targets announced at the start of the year.<\/p>\n <\/p>\n ANFAVEA lowered its forecast for domestic market growth in 2025 from 6.3% to 5%, or 2.765 million vehicles. However, it kept its projected increase in production at 8.4%, totaling 2.749 million units.<\/p>\n <\/p>\n Not even the federal government\u2019s Sustainable Car incentive program will be enough to reverse the trend. The program eliminated the Industrialized Products Tax (IPI) on a list of basic car models, leading to a 16.7% spike in sales of those vehicles in its first month.<\/p>\n <\/p>\n The industry association points to high interest rates as one of the main factors behind weakening demand, especially for trucks. ANFAVEA holds a pessimistic outlook for the heavy-duty transport segment.<\/p>\n <\/p>\n Since the beginning of the year, demand for trucks has fallen 4.1%, and the situation may deteriorate further in the coming months. The trade group revised its 2025 forecast for domestic truck sales from a 0.2% increase to an 8.3% drop. \u201cInstability hurts us, and high interest rates kill us,\u201d Mr. Calvet said.<\/p>\n <\/p>\n But it\u2019s not just the basic interest rate\u2014which is now at its highest level since 2006\u2014that threatens to slow production lines. According to Mr. Calvet, the U.S. government\u2019s new import tariffs, in effect since Wednesday (6), will also impact the truck market. He noted that nearly all of Brazil\u2019s exports to the U.S. rely on trucking to reach the ports.<\/p>\n <\/p>\n The tariff hike announced by President Donald Trump is also expected to hurt exports of components such as engines. In that case, the import tax jumped from 2.5% to 27.5%. Based on ANFAVEA\u2019s estimates, this could cost the industry $268 million if current shipment volumes continue, which the leader doubts will happen.<\/p>\n <\/p>\n While presenting the industry\u2019s results, Mr. Calvet again criticized the growing volume of Chinese vehicle imports. Chinese car sales in Brazil are now approaching those from Argentina.<\/p>\n <\/p>\n From January to July, 87,800 Chinese vehicles were sold in Brazil\u2014up 41.2% from the same period in 2024. Vehicles imported from Argentina totaled 121,400, an 11% increase year-over-year.<\/p>\n <\/p>\n \u201cImports from Argentina are positive because we also export there, but we sell nothing to China,\u201d he pointed out.<\/p>\n <\/p>\n At the same time, Mr. Calvet praised a recent decision by Brazil\u2019s Foreign Trade Chamber (CAMEX), which limited the import tax exemption period for semi-knocked-down (SKD) vehicles to six months. BYD, which is preparing to launch local production, had requested a longer exemption of one year. The CAMEX also imposed quotas on SKD imports, which will apply to all brands, including ANFAVEA members.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com\/<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n 08\/08\/2025<\/p>\n <\/p>\n CENTRAL BANK DROPS BLOCKCHAIN FOR NEXT PHASE OF DREX<\/u><\/strong><\/p>\n Brazil\u2019s digital currency to debut by 2026 in reduced form without tokenization, surprising some in the market and raising questions<\/em><\/strong><\/p>\n <\/p>\n In its next phase, Brazil\u2019s Central Bank (BC) will drop plans to develop a complex distributed ledger technology (DLT) system for digital assets in the financial sector. Instead, the Drex project will focus on a more modest goal: creating a lien reconciliation solution that will pave the way for credit operations backed by a variety of collateral types\u2014targeted for rollout in 2026.<\/p>\n <\/p>\n The shift, seen as a major change in direction, will postpone the use of decentralized networks similar to those in cryptocurrencies\u2014features that would have enabled programmable money, peer-to-peer lending, and other disintermediated financial transactions as originally envisioned.<\/p>\n <\/p>\n The change in focus was first disclosed by BC Auditor Clarissa Souza during a panel at Blockchain Rio. Fabio Araujo, the BC\u2019s Drex coordinator, later confirmed the move in an interview with Valor.<\/p>\n <\/p>\n Mr. Araujo said the project will now be split into two timelines: one to deliver a service to the public in the short term without a decentralized network, and another to mature that technology over time. He explained that lien reconciliation will ensure an asset registered at a brokerage can be used as loan collateral, with all the different systems involved communicating with one another.<\/p>\n <\/p>\n Originally, this was to be done using Hyperledger Besu, the DLT platform the BC chose in 2023 as Drex\u2019s infrastructure. Besu is a permissioned protocol compatible with Ethereum smart contracts. The idea has now been shelved because developing all the needed solutions on that network proved unfeasible in the short term.<\/p>\n <\/p>\n One of the biggest hurdles has been implementing a privacy solution for Drex within Hyperledger that preserves programmability and composability. Three tools were tested in the project\u2019s first phase, with none fully satisfying the BC. Three more options emerged in the second phase.<\/p>\n <\/p>\n Mr. Araujo said current privacy solutions are strong but require significant additional work, development, and adaptation before they can serve as the foundation for a decentralized financial system. \u201cWe found good privacy solutions, but apparently it\u2019s not enough. We need to put this to the test,\u201d he said.<\/p>\n <\/p>\n Marcos Sarres, CEO of GoLedger\u2014part of the Hyperledger Foundation\u2014said there is no indication Hyperledger Besu will continue to be used when DLT returns to Drex\u2019s roadmap. Mr. Sarres acknowledged that Besu was not ideal for the project due to its limitations.<\/p>\n <\/p>\n \u201cThere are technologies already designed with privacy and scalability in mind\u2014you don\u2019t have to build them from scratch,\u201d he said, citing Hyperledger Fabric as an example. Fabric recently upgraded to handle up to 200 million transactions per second, from 20 million previously. Brazil\u2019s Federal Revenue Service already uses Hyperledger Fabric in its b-Cadastros database-sharing program.<\/p>\n <\/p>\n The BC has yet to say what technology will power lien reconciliation for secured lending. Even members of the private-sector consortia currently testing Drex said they were surprised by the decision.<\/p>\n <\/p>\n Marcos Viriato, CEO of Parfin\u2014developer of one of Drex\u2019s privacy solutions\u2014suggested that asset transfers in the third phase could be processed through Brazil\u2019s Pix instant payment system. \u201cIt\u2019s like they\u2019ve said before\u2014they want integration with Pix,\u201d he said.<\/p>\n <\/p>\n At the end of July, the 16 private-sector consortia involved in Drex submitted reports on their tests of 13 tokenization use cases. The BC will release a comprehensive report on the second phase by October. It is unclear when the third phase\u2014focused on collateralized lending\u2014will begin, though it is expected later this year.<\/p>\n <\/p>\n The tested use cases were far broader than what will now be delivered, including tokenized property sales. According to Araujo, DLT-dependent solutions will be discussed and developed in later phases, after lien reconciliation is in place.<\/p>\n <\/p>\n The future involvement of the 16 current consortia is uncertain. Beyond technical challenges, Drex has also become a political flashpoint. The debate intensified when U.S. President Donald Trump backed legislation to bar the Federal Reserve from creating a central bank digital currency (CBDC), prompting Brazilian politicians to criticize Drex.<\/p>\n <\/p>\n Companies in the Drex pilot expressed surprise at the sharp shift but said it would not derail tokenization efforts in Brazil. Jo\u00e3o Canhada, founder of crypto exchange Foxbit, said the tokenization market was already advancing independently of Drex. \u201cYes, there would have been more opportunities if Drex had been rolled out as previously discussed. But today\u2019s tokenization market is not anchored to what Drex will deliver in the future,\u201d he said.<\/p>\n <\/p>\n Andr\u00e9 Portilho, head of digital assets at BTG Pactual\u2014also part of the pilot\u2014called the BC\u2019s phased approach \u201cpragmatic and correct\u201d as it keeps the project and long-term vision intact while matching implementation to technology maturity.<\/p>\n <\/p>\n Jo\u00e3o Arag\u00e3o, technology and financial services innovation specialist at Inter bank, said the bank tokenized soybean trades and implemented interoperability features in Drex\u2019s second phase. He stressed that the experience was not lost with the change in direction. \u201cWe\u2019re all moving toward [future] virtual asset service provider licenses and have other projects we want to roll out. We will continue working on tokenization,\u201d he said.<\/p>\n <\/p>\n In a statement, the Brazilian Federation of Banks (Febraban) expressed confidence that the BC is developing Drex with the caution needed to meet efficiency, security, and stability requirements. \u201cWe remain firmly in the group supporting the creation of the Drex platform and are working within the ongoing Technical Cooperation Agreement,\u201d it said.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com\/<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n 08\/11\/2025<\/p>\n <\/p>\n CONGRESS MOVES TO CURB SUPREME COURT AFTER LOWER HOUSE UNREST<\/u><\/strong><\/p>\n Lawmakers revive stalled proposals to expand protections for parliamentarians, citing political momentum and U.S. sanctions on justices<\/em><\/strong><\/p>\n \u00a0<\/em><\/strong><\/p>\n Lawmakers who took part in the meeting that brokered the deal to end the occupation of the Lower House floor last Wednesday (6) believe the current political climate is more favorable for challenging the Supreme Court. That was one of the key factors considered by leaders of the center-right bloc in giving the green light to a set of bills that would bolster parliamentary immunity.<\/p>\n <\/p>\n Cited as a chief broker of the deal that dismantled the pro-Bolsonaro uprising, former Speaker Arthur Lira was involved in similar initiatives when he previously led the Lower House. The first proposals emerged in the wake of the 2021 arrest of former congressman Daniel Silveira.<\/p>\n <\/p>\n One bill, introduced by pro-Bolsonaro lawmaker Soraya Santos, would have required that any lawmaker arrested be brought to the Lower House along with the arrest records. Both the records and the detainee would be held in custody by the Constitution and Justice Committee until the full House decided on the arrest. The proposal failed to advance and was shelved.<\/p>\n <\/p>\n Around the same time, then-congresswoman Celina Le\u00e3o, now the vice governor of the Federal District (Bras\u00edlia), introduced a bill to prevent the same judge from overseeing both an investigation and the resulting criminal trial. \u201cThis seeks to give such proceedings the accusatory nature required by our Constitution, ensuring that the impartiality of the judge is not mere fiction,\u201d she argued. That proposal also failed to advance.<\/p>\n <\/p>\n In October of last year, under Mr. Lira\u2019s leadership, the House attempted to revive what became known as the \u201canti-Supreme Court package,\u201d which included two constitutional amendments. One would have allowed Congress to suspend Supreme Court rulings; the other would have limited the ability of justices to issue injunctions acting alone.<\/p>\n <\/p>\n Both proposals cleared the Constitution and Justice Committee but stalled thereafter. At the time, Justice Gilmar Mendes called the initiatives \u201ca disgrace.\u201d Tensions between the branches of government had already been mounting, particularly amid demands for greater transparency in the execution of parliamentary budget allocations.<\/p>\n <\/p>\n A lawmaker who attended the meeting that sealed the deal to vacate the House floor said the prevailing view was that the political environment had left the Supreme Court more vulnerable, creating a new opening to push measures that would shield legislators.<\/p>\n <\/p>\n The U.S. government\u2019s sanctions on the court\u2014including the revocation of visas for eight justices and the application of the Magnitsky Act to Justice Alexandre de Moraes\u2014are also seen as a sign of weakness. Added to that are criticisms from various sectors of society over what some view as Justice Moraes\u2019s excesses in handling the investigation against former president Jair Bolsonaro.<\/p>\n <\/p>\n \u201cWe have the word of five leaders, representing 261 lawmakers, that the House, united, will consider a proposal to restore the moral standing of the Brazilian parliament,\u201d one participant said.<\/p>\n <\/p>\n The immediate goal is to swiftly approve a constitutional amendment changing the rules on parliamentary immunity. The current draft, which could benefit dozens of lawmakers under Supreme Court investigation for irregularities in budget allocations, is expected to be amended on the floor, potentially ensuring that such cases are transferred not to lower courts but to the Federal Regional Courts, one level above.<\/p>\n <\/p>\n Weakened by the uprising, Speaker Hugo Motta reiterated the widespread dissatisfaction among lawmakers with the Supreme Court, a sign he will back a renewed push for protective measures.<\/p>\n <\/p>\n \u201cSome invasions of prerogatives, interference of the judiciary in the legislature\u2026 Sometimes anti-Supreme and anti-judiciary measures gain reciprocal support because of this discontent,\u201d Mr. Motta told the news website Metr\u00f3poles. \u201cBut it is also the duty of all those who set the agenda to focus on what is important to strengthen our prerogatives,\u201d he added. Messrs. Motta and Lira declined to comment when contacted.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n 08\/14\/2025<\/p>\n <\/p>\n SLOW-MOVING CONGRESS STALLS REFORM DECREE FOR POWER SECTOR<\/u><\/strong><\/p>\n Delays installing committee to review decree could trigger expiration of electricity subsidies for low-income consumers<\/em><\/strong><\/p>\n <\/p>\n The slow pace in Congress to set up the joint committee that will analyze Provisional Measure (MP) 1,300\/2025 \u2014 the government\u2019s proposal for reforming the electricity sector \u2014 has begun to cause concern within the Ministry of Mines and Energy, Valor has learned. The ministry\u2019s main worry is the new model for the Social Tariff, which grants free electricity to low-income households.<\/p>\n <\/p>\n Dubbed \u201cLuz do Povo\u201d (Light for the People), the new scheme offers free consumption of up to 80 kilowatt-hours (kWh) per month for beneficiaries. It has been in effect since July 5. The ministry believes the new rules are guaranteed for at least one tariff cycle \u2014 about a year. After that, one possibility would be to issue another MP next year to maintain the model.<\/p>\n <\/p>\n At the National Electric Energy Agency (Aneel), however, the view is different. According to Valor\u2019s sources, technical staff believe that if Congress fails to approve the MP, the new system would cease to exist immediately, as there would be no legal basis for the revised Social Tariff.<\/p>\n <\/p>\n Lawyer Felipe Furcolin, a partner at Furcolin Mitidieri Advogados, says the continuation of the free allowance after the MP expires depends on how the relevant article of the Constitution governing MPs is interpreted. He notes that measures like the Social Tariff changes do not involve \u201cestablished legal relationships\u201d in the strict sense, which distinguishes them from cases recognized by previous Supreme Court rulings.<\/p>\n <\/p>\n \u201cAlthough actions have been taken, such as Aneel\u2019s dispatch, the approval of the budget for the CDE [Energy Development Account], and even ordinary tariff reviews for certain distributors, these do not present the same level of individualization and bilateral obligations seen, for example, in an MP involving signed adhesion contracts and guarantee deposits,\u201d Mr. Furcolin explained.<\/p>\n <\/p>\n Similarly, lawyer Henrique Reis, a partner at Demarest, argues that while the subsidy is legitimate and socially justified, maintaining it after the MP\u2019s lapse without conversion into law could face legal challenges.<\/p>\n <\/p>\n \u201cIn principle, I understand that the discount from the MP would no longer apply. Just as the discount was applied immediately to the tariff in effect during Aneel\u2019s approved cycle, the loss of effect of the provision that created the subsidy would have to be incorporated immediately into the current cycle,\u201d he said.<\/p>\n <\/p>\n The congressional committee\u2019s installation had been scheduled for Tuesday (12), but the meeting was canceled for the second week in a row.<\/p>\n <\/p>\n The government\u2019s congressional leader, Senator Randolfe Rodrigues (Workers\u2019 Party, PT, of Amap\u00e1), indicated that the decision to postpone came from Senator Eduardo Braga (Brazilian Democratic Movement, MDB, Amazonas), who was appointed by Senate President Davi Alcolumbre (Brazil Union of Amap\u00e1) to preside over the committee. Asked by Valor about concerns over deadlines, Mr. Braga said the government had not yet approached him about the matter.<\/p>\n <\/p>\n Senate Infrastructure Committee Chair Marcos Rog\u00e9rio (Liberal Party, PL, of Roraima) said he sees no government effort to advance MPs in Congress. \u201cThe government should be the one in a hurry and get these committees working,\u201d he said. \u201cIf there is no more careful and swift action, it will end up expiring.\u201d<\/p>\n <\/p>\n In a statement, the Brazilian Association of Electricity Distributors (Abradee) said it hopes deliberations begin as soon as possible, as the measures are both essential and urgent. \u201cAbradee stresses that it is crucial for the MP to advance in its entirety, not just in the part concerning the social tariff. Without full review, the risk of further electricity bill increases is real.\u201d<\/p>\n <\/p>\n Aneel said in a note that it is monitoring the debate and awaiting the MP\u2019s approval, and will assess the situation when called upon.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n <\/p>\n 08\/20\/2025<\/p>\n <\/p>\n BRAZIL DRAFTS BIG TECH BILLS ON CONTENT REMOVAL, CHILD PROTECTION<\/u><\/strong><\/p>\n Proposals require court orders for defamation takedowns, curb online fraud, and strengthen data protection authority<\/em><\/strong><\/p>\n <\/p>\n The President Lula administration is preparing to submit to Congress, in the coming days, two bills aimed at regulating large technology companies. One will focus on competition, the other on online content.<\/p>\n <\/p>\n According to government sources, the competition bill establishes annual revenue as a key criterion for defining which companies will be subject to the new rules. Firms with yearly revenues of around R$5 billion in Brazil and between R$40 billion and R$60 billion globally could fall within the scope of regulation.<\/p>\n <\/p>\n Other qualitative factors will also be considered, such as data access and processing capacity, strategic importance for developing other businesses, and digital integration with adjacent markets. The government estimates that between five and ten companies operating in Brazil would meet these criteria.<\/p>\n <\/p>\n By setting this \u201ccutoff,\u201d the Lula administration intends to focus regulation on the largest platforms, while providing a \u201csafe harbor\u201d for smaller firms. The aim, sources say, is to address digital monopolies in order to strengthen competition and level the playing field. The logic is to adopt preventive measures rather than corrective ones.<\/p>\n <\/p>\n New powers for antitrust regulator<\/p>\n <\/p>\n The competition bill would also grant new powers to Brazil\u2019s antitrust watchdog, CADE, including the ability to curb the formation of oligopolies in the digital sector. To that end, it would create a new Digital Markets Superintendency within CADE to handle cases.<\/p>\n <\/p>\n This body would be empowered to identify platforms and design customized measures for each. It would not, however, decide cases independently: all decisions would be submitted to CADE\u2019s tribunal. According to officials, this reflects a concern with procedure and transparency. \u201cThe bill doesn\u2019t bring a recipe, but rather a menu to guide CADE\u2019s work,\u201d said one source.<\/p>\n <\/p>\n The government argues that regulation is needed to prevent tech companies from imposing exclusivity agreements or engaging in cross-market practices that could distort competition.<\/p>\n <\/p>\n Social media and content rules<\/p>\n <\/p>\n Alongside the competition bill, the government will submit another proposal focused on content regulation for digital platforms, particularly social media, with the goal of enhancing safety in the online environment. The scope would include services that intermediate products, services, and content.<\/p>\n <\/p>\n According to officials, the principle is to address conduct that is already illegal offline, without creating a new digital penal code. The bill would impose administrative obligations on companies to tackle fraud and scams\u2014described as an \u201cepidemic\u201d\u2014and to improve protections for children and adolescents.<\/p>\n <\/p>\n Because it involves content regulation, the proposal has drawn criticism from some civil society groups who warn of possible censorship. To defuse such concerns, the bill specifies that crimes against honor\u2014such as defamation\u2014could only be removed from platforms by court order. \u201cIf content could be removed merely by notification, it would trigger a war of notifications,\u201d said one government source.<\/p>\n <\/p>\n Exceptions are made for more serious crimes, such as terrorism and offenses against children and adolescents, which would allow immediate removal. Finally, the government plans to strengthen the National Data Protection Authority (ANPD), which would oversee platform compliance with these obligations.<\/p>\n <\/p>\n Source: Valor International<\/p>\n <\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n 08\/20\/2025<\/p>\n <\/p>\n LOCAL ASSETS FALL AS BRAZIL-U.S. TENSIONS ESCALATE<\/u><\/strong><\/p>\n Ibovespa drops 2%, dollar nears R$5.50, and long-term rates rise sharply after Supreme Court ruling; poll rumor also weighs on prices<\/em><\/strong><\/p>\n <\/p>\n Brazilian markets reacted strongly to a fresh escalation in diplomatic tensions with the United States. Heightened risk perception fueled a sharp increase in future interest rates and sent the dollar close to R$5.50, while the Ibovespa took a hit from steep losses in bank stocks. The sell-off intensified after Washington toughened its rhetoric in response to a ruling by Federal Supreme Court (STF) Justice Flavio Dino, who determined that foreign laws have no immediate effect in Brazil, raising concerns about the potential impact of the Magnitsky Act on the domestic financial sector.<\/p>\n <\/p>\n Risk aversion deepened in the afternoon as traders also began factoring in the political landscape. Rumors about new popularity polls for President Luiz In\u00e1cio Lula da Silva rattled markets further, particularly in currency and interest rate trading.<\/p>\n <\/p>\n In just two sessions, the real erased all of its recent gains, with the dollar closing up 1.19% at R$5.4993, the highest level since August 5. In the rates market, intermediate maturities priced in significant risk premiums, with the January 2029 DI climbing from 13.235% to 13.48%, its highest since July 31.<\/p>\n <\/p>\n The Ibovespa, which had avoided Monday\u2019s risk-off mood, ended Tuesday down 2.10% at 134,432 points, dragged by heavy losses in bank shares.<\/p>\n <\/p>\n Real interest rates, measured by NTN-Bs (inflation-linked government bonds), also moved higher. Yields rose more than 10 basis points across nearly all maturities, reflecting both market stress and a hefty R$1.3 million supply of NTN-Bs offered by the National Treasury on Tuesday.<\/p>\n <\/p>\n According to SulAm\u00e9rica Investimentos CIO Lu\u00eds Garcia, the market had remained relatively calm when tensions were limited to trade frictions or sanctions against specific officials. \u201cBut the Supreme Court\u2019s signal could prompt a counter-response from Washington and lead to a much more troubling scenario,\u201d he said.<\/p>\n <\/p>\n Mr. Garcia warned that the greatest risk would be U.S. sanctions affecting Brazil\u2019s access to the Swift payment system, which connects financial institutions worldwide. Such a move, he said, could disrupt foreign capital inflows, push the dollar back toward R$6, and fuel inflation expectations, potentially jeopardizing the Central Bank\u2019s rate-cutting cycle.<\/p>\n <\/p>\n The worst-case scenario, he added, would involve measures affecting not just new flows but also existing investments in Brazil.<\/p>\n <\/p>\n For now, SulAm\u00e9rica is taking tactical positions in local markets rather than holding assets for long. If tensions ease, Mr. Garcia sees room for the real to strengthen further and for future rates to fall, supported by Brazil\u2019s monetary easing cycle.<\/p>\n <\/p>\n Still, he noted that long-term rates have remained stubbornly high, even during periods of market optimism. \u201cThe exchange rate is the most popular risk gauge, but it doesn\u2019t reflect fiscal concerns as strongly as the long end of the curve,\u201d he said.<\/p>\n <\/p>\n Adding to the day\u2019s volatility, traders circulated rumors that an upcoming poll would show improving electoral prospects for the government, prompting investors to demand higher risk premiums.<\/p>\n <\/p>\n A foreign fund manager, who requested anonymity, said risks are far from benign, especially since U.S. sanctions are politically driven and likely to escalate tensions. \u201cUnder these circumstances, markets can quickly turn very volatile, with rumors surfacing and undermining investor confidence even when denied,\u201d the manager said.<\/p>\n <\/p>\n On the political front, he argued that polls should not yet carry such weight, given the time remaining before elections and uncertainty over candidates. \u201cBut something has broken in the positive momentum, and that will have a lasting effect on investor confidence,\u201d he said. \u201cI\u2019ll be more cautious going forward, especially in FX, and this reinforces my view that the DI curve should steepen\u2014with weaker growth requiring lower short rates, while shaken confidence drives outflows at the long end.\u201d<\/p>\n <\/p>\n But not all share this skeptical outlook for the real. Nelson Rocha Augusto, chief economist and president of BRP, projects the dollar closer to R$5.40 by year-end, despite short-term swings. \u201cI see four factors supporting this view: the interest rate spread will remain wide; U.S. exceptionalism will erode; as inflation falls and rates come down, foreigners will have better visibility for calculations and direct investment should increase; and tensions with Washington are likely to ease after the trial of former president Jair Bolsonaro,\u201d he said.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/21\/2025<\/p>\n <\/p>\n SUPREME COURT JUSTICES MEET WITH BANK REPRESENTATIVES<\/u><\/strong><\/p>\n Banks still unclear on full impact of Justice Dino\u2019s ruling putting check on effects of Magnitsky sanctions<\/em><\/strong><\/p>\n \u00a0<\/em><\/strong><\/p>\n Justices of Brazil\u2019s Federal Supreme Court (STF) have resumed meetings with representatives of financial institutions following a ruling issued Monday (18) by Justice Fl\u00e1vio Dino against the immediate enforcement in Brazil of foreign laws, court rulings, administrative acts, and executive orders.<\/p>\n <\/p>\n Justice Cristiano Zanin met Tuesday (19) at 6:30 p.m. with Rodrigo Maia, former speaker of the Chamber of Deputies and now president of the National Confederation of Financial Institutions (formerly CNF, now FIN). The two had already met earlier this month after Mr. Zanin was appointed rapporteur in a case seeking to prevent the STF from allowing the blocking of Justice Alexandre de Moraes\u2019s bank accounts. Since Monday, other justices have also met with bank representatives.<\/p>\n <\/p>\n According to reporting by Valor, banks remain uncertain about the full scope of Dino\u2019s decision. On one hand, they fear sanctions from the United States; on the other, fines from the Supreme Court should they fail to comply with the Brazilian order.<\/p>\n <\/p>\n The ruling has fueled uncertainty in the sector. On Tuesday (19), the day after Mr. Dino\u2019s move, banks lost more than R$38 billion in market value amid concerns that the justice\u2019s reaction could trigger stricter enforcement of the law by the Donald Trump administration. Shares partly recovered yesterday.<\/p>\n <\/p>\n Bankers head to Bras\u00edlia<\/p>\n <\/p>\n Through industry associations, financial institutions have been lobbying in Bras\u00edlia to defuse tensions as relations between Brazil and the U.S. escalate.<\/p>\n <\/p>\n Mr. Zanin is handling a case filed by Federal Deputy Lindbergh Farias (Workers\u2019 Party, PT, Rio de Janeiro), leader of the PT in the lower house, requesting that the STF prevent Brazilian banks from blocking Mr. Moraes\u2019s accounts. The justice was sanctioned in July under the Magnitsky Act.<\/p>\n <\/p>\n On August 1, Mr. Zanin referred the matter to the Office of the Prosecutor General (PGR) and is awaiting its opinion. He has signaled that he intends to hear all parties involved, including banks, before issuing any ruling.<\/p>\n <\/p>\n Earlier this month, Justices Gilmar Mendes and Moraes also held meetings with bank representatives, with the consensus at the time being that no accounts would be blocked. Should moves in that direction occur, however, the STF could step in to stop the enforcement of the Magnitsky Act in Brazil\u2014as Mr. Dino effectively did on Monday (18). His ruling, though, came in a case unrelated to U.S. sanctions, instead involving lawsuits filed by Brazilian municipalities in the United Kingdom over environmental disasters.<\/p>\n <\/p>\n Dino pushes back with irony<\/p>\n <\/p>\n Justice Dino on Wednesday (20) mocked the financial market\u2019s reaction to his ruling against the immediate enforcement in Brazil of foreign laws, rulings, and administrative acts. \u201cI issued a decision yesterday [Tuesday] and the day before [Monday]. The one they say crashed the markets. I didn\u2019t know I was so powerful: R$42 billion in financial speculation. Fortunately, age teaches you not to be impressed by small things. Obviously one thing has nothing to do with the other.\u201d<\/p>\n <\/p>\n \u201cWe should not be swayed by foam. This was a ruling for a specific case. The first technical challenge is understanding. A decision on acts by the U.S. has nothing to do with a drop in the stock market,\u201d he added.<\/p>\n <\/p>\n \u201cIt was a decision among so many obvious points of the principle of territoriality. Nothing heterodox, just a repetition of concepts that are established worldwide,\u201d Mr. Dino continued. \u201cThere are Brazilian companies with extensive operations in the U.S. Imagine if Brazil\u2019s Superior Labor Court issued a ruling saying labor relations there must follow Brazilian law. I don\u2019t think it would be very well received.\u201d<\/p>\n <\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/21\/2025<\/p>\n <\/p>\n <\/p>\n ANTITRUST BODY SECURES MAJORITY TO APPROVE BRF-MARFRIG MERGER<\/u><\/strong><\/p>\n CADE\u2019s tribunal leans toward unconditional approval despite SALIC dispute<\/em><\/strong><\/p>\n <\/p>\n Brazil\u2019s Administrative Council for Economic Defense (CADE) has reached a majority in favor of approving the merger between giant meatpackers BRF and Marfrig without restrictions, even though the final vote has been postponed after Counselor Carlos Jacques requested more time to review the case.<\/p>\n <\/p>\n So far, four counselors have voted to approve the deal, diverging from the position of the case\u2019s rapporteur, Counselor Gustavo Augusto, who also favored approval but proposed restrictions on the Saudi Agricultural and Livestock Investment Company (SALIC). Through its subsidiary Salic International Investment Company (SIIC), the Saudi fund holds shares in the merged company and could potentially exercise political rights. The majority, however, opted not to rule on this point.<\/p>\n <\/p>\n The issue was brought forward by Minerva, a competitor in the beef market, which argued that SALIC\u2019s shareholding structure could give the fund undue influence over direct competitors in the fresh beef segment. Minerva, in which SALIC also holds a stake, warned of possible competitive distortions.<\/p>\n <\/p>\n Minerva\u2019s attorney, former CADE counselor Luiz Hoffmann, stressed during Wednesday\u2019s oral arguments that \u201cSALIC will indeed have an active presence in the post-merger scenario.\u201d He also raised concerns about the combined purchasing power of BRF and Marfrig and the strengthened brand portfolio, since the two companies together control 37 brands.<\/p>\n <\/p>\n Mr. Hoffmann argued that the deal should have been filed as an incorporation rather than a simple acquisition, which would affect how Marfrig\u2019s control over the new entity is assessed. The case had initially been approved by the CADE\u2019s General Superintendence but was escalated to the tribunal following Minerva\u2019s appeal.<\/p>\n <\/p>\n Representing BRF and Marfrig, attorney Victor Rufino countered that SALIC\u2019s permanence in the new company is not guaranteed, since the Saudi fund has a defined exit period. Should SALIC remain a shareholder, he said, its position would be duly reported to the CADE.<\/p>\n <\/p>\n Mr. Rufino dismissed Minerva\u2019s claims as being driven more by \u201ca private vendetta against Marfrig\u201d than by legitimate competition concerns, pointing to ongoing disputes between the companies, including a breach-of-contract lawsuit and an arbitration proceeding.<\/p>\n <\/p>\n In his vote, Rapporteur Gustavo Augusto emphasized that the merger represents a complex corporate restructuring rather than a mere acquisition of equity. \u201cThis cannot be characterized as a simple purchase of shares by a controlling shareholder. It involves a far-reaching corporate reorganization that reshapes the competitive landscape,\u201d he said.<\/p>\n <\/p>\n Mr. Augusto argued that concerns over the combined portfolio of BRF and Marfrig were overstated, noting that competitors such as JBS and Minerva remain capable of challenging the merged company\u2019s market power. However, he acknowledged lingering uncertainty over SALIC\u2019s potential influence, stating that the fund\u2019s notification on its role does not rule out the exercise of political rights.<\/p>\n <\/p>\n Counselor Victor Fernandes opposed Mr. Augusto\u2019s approach, voting to approve the merger without addressing SALIC\u2019s participation. His position was supported by counselors Diogo Thomson, Camila Cabral Pires Alves, and Jos\u00e9 Levi, forming the current majority in favor of unconditional approval.<\/p>\n <\/p>\n BRF and Marfrig declined to comment on the matter.<\/p>\n <\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n 08\/22\/2025<\/p>\n <\/p>\n BRAZILIAN APPETITE FOR STOCKS FALLS AMID TENSION WITH U.S.<\/u><\/strong><\/p>\n XP survey with investment advisors from its platform shows sentiment toward equities has deteriorated<\/em><\/strong><\/p>\n <\/p>\n The share of investors intending to add Brazilian stocks to their portfolios dropped from 34% in July to 21% in August, according to an XP platform survey conducted with investment advisors. The research shows that tension with the United States is increasing risk perception among Brazilian investors.<\/p>\n <\/p>\n Conversely, the slice of investors looking to reduce stock allocation rose from 7% to 16% during this period. Meanwhile, the percentage of people who do not intend to change their investments increased from 59% to 64% over the same timeframe.<\/p>\n <\/p>\n Investor sentiment toward the stock market has deteriorated. The share of investors who gave a score of 7 or higher to the equity market fell from 65% last month to 54% this month. The average response was 6.2 in August, below the 6.8 from the previous month. On average, investors expect the Ibovespa to remain at the current level of 135,000 points by the end of this year, down from 142,000 points in the previous survey.<\/p>\n <\/p>\n Concern about fiscal policy decreased from 47% to 41%, but remains the biggest risk to the stock market. Meanwhile, concern about unstable politics grew from 22% to 28%. Concern about geopolitical risks increased from 4% to 12%.<\/p>\n <\/p>\n Many advisors indicated that changes in the commercial relationship between Brazil and the U.S. led to a more defensive positioning by investors: 49% reported an increase in Brazilian fixed-income investments, 29% in dollar-denominated investments, and 11% in defensive Brazilian stocks. However, 38% of advisors stated there were no significant changes in portfolios.<\/p>\n <\/p>\n Fixed income continues as the most preferred asset class. The percentage of investors interested in fixed-income investments rose from 73% to 77%. In contrast, interest in stocks fell from 36% to 31%, while interest in international investments climbed from 42% to 48%. Multi-market (or hedge) funds and equity funds remain the investments with the lowest interest, at just 9% and 6%, respectively.<\/p>\n <\/p>\n Long-term focus is key<\/p>\n <\/p>\n Most specialists recommend increasing allocation to Brazilian stocks at this time only if the investor is focused on long-term gains and can withstand the volatility that tends to occur in the short term. They say the stock market is cheap and will rise, but the problem is that it\u2019s uncertain when this rally will happen.<\/p>\n <\/p>\n Despite caution with equity investments, several specialists advise adding higher yielding fixed-income investments to portfolios, such as prefixed bonds and inflation-linked securities, already anticipating the beginning of interest rate cuts next year. The expectation is that the benchmark interest rate, the Selic, will remain at 15% until the end of 2025, but fall to 12.50% by the end of 2026.<\/p>\n <\/p>\n Prefixed bonds and inflation-linked securities carry higher risk than securities that track the CDI or Selic because their rates fluctuate more and may eventually cause losses if redeemed before maturity. However, they may provide higher returns if interest rates decline, especially for investors who wait until maturity to withdraw their money.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n ____________________________________________<\/strong><\/p>\n 08\/26\/2025<\/p>\n <\/p>\n BRAZIL\u2019S MID-MONTH INFLATION GAUGE SHOWS FIRST MONTHLY DROP IN A YEAR<\/u><\/strong><\/p>\n Consumer prices fall 0.14% in August; 12-month rate eases to 4.95%<\/em><\/strong><\/p>\n <\/p>\n Brazil\u2019s IPCA-15 consumer price index fell 0.14% in August, reversing July\u2019s 0.33% increase, the Brazilian Institute of Geography and Statistics (IBGE) reported Tuesday (26). It was the first monthly decline since July 2023, when the index slipped 0.07%. In August 2024, the gauge had risen 0.19%.<\/p>\n <\/p>\n The IPCA-15 is a preview of the broader IPCA inflation index. It reflects the spending patterns of households earning between one and 40 minimum wages across nine metropolitan areas, plus Bras\u00edlia and Goi\u00e2nia. The main difference from the full IPCA is the data collection period and geographic coverage.<\/p>\n <\/p>\n The result came in slightly above market expectations. A Valor Data survey of 22 consultancies and financial institutions projected a 0.22% drop, with forecasts ranging from a 0.28% decrease to a 0.09% gain.<\/p>\n <\/p>\n Over 12 months, inflation slowed to 4.95% from 5.3% in July. The rate had stayed above 5% for five straight months, starting in March, when it reached 5.26%. Analysts had expected 4.88%, with estimates ranging from 4.80% to 5.26%.<\/p>\n <\/p>\n The Central Bank\u2019s target for 2025 is 3%, with a tolerance band of 1.5 percentage points in either direction.<\/p>\n <\/p>\n Among the nine spending categories that make up the IPCA-15, household goods and clothing shifted back to positive territory, moving from -0.02% to 0.03% and from -0.10% to 0.17%, respectively. Health and personal care rose more sharply, from 0.25% to 0.64%, while personal expenses jumped from 0.25% to 1.09% and education from 0% to 0.78%.<\/p>\n <\/p>\n Food and beverages fell more steeply, from -0.06% to -0.53%, while housing moved from a 0.98% gain to a 1.13% drop. Transportation and communication also turned negative, falling 0.47% and 0.17%, respectively.<\/p>\n <\/p>\n Diffusion index<\/p>\n <\/p>\n Price increases were more widespread in August. The diffusion index\u2014which measures the share of items registering price gains\u2014rose to 57.2% from 51.2% in July, according to Valor Data. Excluding food, often one of the most volatile components, the index jumped to 64.9% from 51.2%.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/26\/2025<\/p>\n <\/p>\n FEDERAL PROBE SOUGHT FOR BANCO DO BRASIL RUMORS<\/u><\/strong><\/p>\n Attorney General\u2019s Office asks Federal Police to investigate fake news spread by Bolsonarists that could \u201ctrigger true bank run\u201d<\/em><\/strong><\/p>\n <\/p>\n The Attorney General\u2019s Office (AGU) has asked the Federal Police to open an investigation into the spread of fake news targeting the National Financial System. The request came after Banco do Brasil (BB) appealed to the AGU to take action against attacks on the institution by Bolsonaro supporters.<\/p>\n <\/p>\n In its filing, the AGU cited posts with the potential to \u201cfoment a true bank run for the withdrawal of funds\u201d and damage Brazil\u2019s economy. The request was sent to the Federal Police last Friday (22) and disclosed on Monday (25). Spreading false information against a financial institution is considered a crime.<\/p>\n <\/p>\n \u201cSince August 19, 2025, several social media accounts have been circulating fake news involving agents of the national financial system, especially Banco do Brasil, in reaction to the bank\u2019s institutional stance regarding sanctions imposed by the U.S. Treasury Department through OFAC [Office of Foreign Assets Control], under the so-called Magnitsky Act,\u201d said the AGU\u2019s National Office for the Defense of Democracy (PNDD), which authored the request.<\/p>\n <\/p>\n In a letter sent Friday, Banco do Brasil pointed to posts by federal lawmaker Gustavo Gayer (Liberal Party, PL, Goi\u00e1s) and lawyer Jeffrey Chiquini, who defends Filipe Martins, a former aide to ex-president Jair Bolsonaro (PL). Both urged clients to withdraw their money from banks. The bank also cited a post by Federal Deputy Eduardo Bolsonaro (PL of S\u00e3o Paulo), currently on leave, claiming BB was headed for bankruptcy.<\/p>\n <\/p>\n According to the bank\u2019s letter, Bolsonaro supporters have been misusing a section of BB\u2019s own statement to claim it would not enforce Magnitsky sanctions in Brazil, citing the part in which the bank said it would act \u201cin compliance with Brazilian law.\u201d<\/p>\n <\/p>\n The AGU said the circulation of messages encouraging depositors to pull their money out was intended to pressure financial agents and generate \u201cchaos\u201d in the National Financial System. \u201cThere is a coordinated campaign of mass postings seeking to terrorize society with the imminent prospect of a system-wide collapse,\u201d the filing read.<\/p>\n <\/p>\n The PNDD asked for an investigation into the material facts and their authorship, \u201cwhich may also overlap with criminal probes already under way under the jurisdiction of the Supreme Court.\u201d<\/p>\n <\/p>\n In the formal complaint, the AGU specifically mentioned only Mr. Chiquini\u2019s posts. In a statement, the lawyer denied authorship of the post cited and said his remarks concerned stock investments amid growing \u201clegal uncertainty,\u201d which, he argued, makes the market unpredictable. He said his comments merely anticipated a market movement. \u201cMy remarks are far from constituting a criminal offense; they are simply an observation of the reality of U.S. law, which has been widely discussed by jurists worldwide. Just read the Magnitsky Act to understand the obvious,\u201d he said.<\/p>\n <\/p>\n In response to the bank\u2019s letter, Mr. Gayer\u2019s office said the lawmaker\u2019s comments did not mention any financial institution directly. \u201cGayer commented on the consequences of Justice Moraes\u2019 statements, which themselves could lead to a collapse in Brazilian banks,\u201d his staff said. Eduardo Bolsonaro did not respond before publication.<\/p>\n <\/p>\n Justice Alexandre de Moraes was sanctioned under the Magnitsky Act in July. Earlier this month, Supreme Court Justice Fl\u00e1vio Dino ruled that foreign laws, administrative acts, and executive or judicial orders should not be automatically applied in Brazil. Shortly after, Moraes warned in an interview that Brazilian banks could face punishment if they enforced U.S. sanctions against Brazilian assets.<\/p>\n <\/p>\n Banco do Brasil, which manages payroll for Supreme Court staff, canceled at least one U.S.-branded credit card held by Mr. Moraes, Valor revealed last week.<\/p>\n <\/p>\n The sharper decline in some blue chips \u2014 including Banco do Brasil \u2014 weighed on the Ibovespa on Monday. BB shares closed down 2.20%, while the benchmark stock index finished flat, edging up 0.04% to 138,025 points.<\/p>\n <\/p>\n Market participants attributed part of BB\u2019s negative performance to the news that the bank had filed its complaint with the AGU, alleging Bolsonarists were trying to sow \u201cchaos\u201d in the system. \u201cWhat Eduardo [Bolsonaro] has been saying doesn\u2019t help BB, but picking a fight with Bolsonarists isn\u2019t good either,\u201d one trader said, requesting anonymity.<\/p>\n <\/p>\n The sell-off comes at a sensitive time for BB shares, which are already under pressure from second-quarter results and uncertainty about how banks will implement Magnitsky sanctions.<\/p>\n <\/p>\n Igor Barenboim, chief economist at Reach Capital, said banks understand the risks of failing to comply with Magnitsky sanctions. He added that there has been a surge in legal consultations to assess the scope of the measure. \u201cLarge banks are managed very professionally. As difficult as this situation is, they will find a solution that doesn\u2019t harm their business,\u201d he said. \u201cWe see only a remote risk of this going wrong, and we believe shareholder value will remain protected,\u201d he added, noting his firm was holding positions in the banking sector.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/26\/2025<\/p>\n \u00a0<\/strong><\/p>\n CANADA RESUMES TRADE TALKS WITH MERCOSUR AMID U.S. TARIFF HIKE<\/u><\/strong><\/p>\n Brazil plans trade mission to Toronto in September as negotiations restart<\/em><\/strong><\/p>\n <\/p>\n Brazilian Foreign Minister Mauro Vieira and Canada\u2019s Minister of International Trade Maninder Sidhu announced on Monday (25) the resumption of negotiations for a possible free trade agreement between Canada and Mercosur, the South American bloc currently chaired by Brazil. As Valor had reported, Canada is one of Brazil\u2019s top bets to diversify its export markets in response to the tariff hikes imposed by U.S. President Donald Trump.<\/p>\n <\/p>\n As part of this effort, Mr. Vieira confirmed a Brazilian business mission is scheduled for Toronto from September 10 to 12 to strengthen commercial ties. A face-to-face meeting between lead negotiators from both sides is also planned for October in Brazil to advance the talks.<\/p>\n <\/p>\n According to Brazil\u2019s Foreign Ministry, Mr. Sidhu will remain in the country until Wednesday (27), with a visit to S\u00e3o Paulo\u2019s industry federation FIESP on Tuesday. In a joint statement with Mr. Vieira, the Canadian minister said he had also met with Vice President and Minister of Development, Industry and Trade Geraldo Alckmin, and with Energy and Mines Minister Alexandre Silveira.<\/p>\n <\/p>\n Mr. Vieira said the reopening of talks followed discussions held in June between President Lula and Canadian Prime Minister Mark Carney on the sidelines of the G7 summit in Alberta.<\/p>\n <\/p>\n He emphasized that both Brazil and Canada are concerned about \u201cthe rise of trade restrictions\u201d and measures that \u201cdistort legitimate trade flows without technical justification\u201d while weakening the principles that should guide such relations. He stressed that the two countries share the goal of strengthening the rules-based multilateral trading system, with the World Trade Organization (WTO) playing a central role.<\/p>\n <\/p>\n Mr. Sidhu noted that at a time when rules-based trade \u201cis under threat,\u201d Canada is seeking partners with a \u201clike-minded\u201d approach to preserve this framework.<\/p>\n <\/p>\n The U.S. has slapped Brazil with a 50% tariff, with limited exceptions, while Canada faces a general 35% tariff on its exports, also with several exemptions. Canada is pursuing its own bilateral trade deal with Washington.<\/p>\n <\/p>\n Trade ties<\/p>\n <\/p>\n Mr. Vieira highlighted that economic relations between Brazil and Canada are already significant. In 2024, Canada ranked as Brazil\u2019s ninth-largest export market and moved up to seventh place in the first seven months of 2025.<\/p>\n <\/p>\n Bilateral trade between the two countries reached $9.1 billion in 2024, with Brazilian exports to Canada totaling $6.3 billion, up nearly 10% from the previous year. Canada is also the 11th-largest foreign investor in Brazil, with direct investments amounting to $28 billion.<\/p>\n <\/p>\n Diversifying partnerships<\/p>\n <\/p>\n Beyond Canada, Brazil is pursuing negotiations with the United Arab Emirates and engaging in dialogue with India and Vietnam. Vietnam, in particular, has been identified by President Lula as a potential partner for a Mercosur free trade agreement.<\/p>\n <\/p>\n To advance these efforts, the Foreign Ministry is preparing two presidential trips for October. Mr. Lula will attend the Association of Southeast Asian Nations (ASEAN) summit in Malaysia, and is also expected to make a state visit to Indonesia, a country of over 280 million people with significant consumer market potential.<\/p>\n <\/p>\n Source: Valor International<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/27\/2025<\/p>\n <\/p>\n CHIEF OF STAFF WARNS AGAINST DROPPING HIGH-INCOME TAXATION FROM REFORM<\/u><\/strong><\/p>\n Rui Costa says removal of compensatory measures could impact funding for schools and hospitals<\/em><\/strong><\/p>\n <\/p>\n The president\u2019s Chief of Staff, Rui Costa, warned on Wednesday (27) that removing compensatory measures from the government\u2019s income tax reform proposal could undermine public services such as schools and hospitals. Speaking about congressional negotiations, he argued that sometimes \u201cirrational strategies to damage the federal administration prevail.\u201d<\/p>\n <\/p>\n Mr. Costa\u2019s remarks refer to behind-the-scenes maneuvering by opposition lawmakers to strip out provisions that would help offset revenue losses from expanding the income tax exemption to those earning up to R$5,000 per month. The government\u2019s bill includes a 10% tax on high-income earners. Without that provision, new measures would be needed to cover the fiscal cost of the expanded exemption.<\/p>\n <\/p>\n While Mr. Costa said it would be difficult for Congress to reject the overall project, he admitted compensatory measures could be removed. \u201cThat would create difficulties in keeping schools and hospitals running, because any government in the world needs resources to provide public services,\u201d he said during a live interview on the program Bom Dia, Ministro.<\/p>\n <\/p>\n The Lula administration is pushing for a vote on the reform this week, fearing that former president Jair Bolsonaro\u2019s trial at the Supreme Court\u2014scheduled to begin September 2\u2014could heighten political tensions and delay the agenda.<\/p>\n <\/p>\n As reported by Valor, lawmakers see the release and payment of congressional earmarks as key to smoothing approval in the lower house, though resistance remains. A faction of Brazil Union, for example, is lobbying to strike the 10% high-income tax. Meanwhile, Mr. Bolsonaro\u2019s Liberal Party (PL) is pressing for the exemption threshold to be raised further, to R$10,000.<\/p>\n <\/p>\n Mr. Costa also addressed President Luiz In\u00e1cio Lula da Silva\u2019s recent appeal for ministerial loyalty, delivered Tuesday (26) during a cabinet meeting at the Planalto Palace. Mr. Lula told ministers they may attend partisan events but must consistently defend the government, especially in opposition forums.<\/p>\n <\/p>\n Defending Mr. Lula\u2019s stance, Mr. Costa argued that members of the governing bloc need discipline: \u201cOtherwise you hold ministries, but end up voting against the government,\u201d he said. \u201cIf you\u2019re in the government, you must defend not Lula personally, but the administration.\u201d<\/p>\n <\/p>\n According to Mr. Costa, ministers should respond directly to criticism. \u201cIf a person doesn\u2019t defend their own work, it becomes hard for the public to understand,\u201d he said.<\/p>\n <\/p>\n Sources told Valor that Mr. Lula avoided singling out ministers or parties during Tuesday\u2019s meeting, but he cited a recent example: the federation event formalizing ties between Brazil Union and the Progressives Party (PP). During the event, PP leader Ciro Nogueira criticized the government, yet, Mr. Lula complained, \u201cnot one minister raised a hand to defend\u201d the administration.<\/p>\n <\/p>\n The episode highlights mounting friction between the government and its coalition partners. Together, Brazil Union and the PP control four ministries but have increasingly clashed with the president.<\/p>\n <\/p>\n Adding to the tension, Mr. Lula also mentioned Brazil Union president Antonio Rueda, reportedly saying he disliked Mr. Rueda and that the feeling was mutual. The remarks followed weeks of unease after Mr. Rueda publicly criticized the government\u2019s handling of tariff negotiations with the United States.<\/p>\n <\/p>\n Source: Valor international<\/p>\n https:\/\/valorinternational.globo.com<\/a><\/p>\n <\/p>\n ____________________________________________<\/strong><\/p>\n 08\/28\/2025<\/p>\n <\/p>\n BRAZIL TO FAST-TRACK TAX REFUNDS FOR COMPANIES HIT BY U.S. TARIFFS<\/u><\/strong><\/p>\n Fiscal relief measures are part of broader aid package for exporters<\/em><\/strong><\/p>\n \u00a0<\/strong><\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Companies affected by the 50% tariff hike imposed by the United States on Brazilian products will be given priority in the processing of tax credit refunds and reimbursements. These credits are used to offset federal taxes and contributions owed by companies. In addition, these businesses will benefit from extended deadlines to pay federal taxes and installments related to federal debt settlements.<\/p>\n <\/p>\n The tax relief measures were outlined in an ordinance issued by Finance Minister Fernando Haddad and form part of the \u201cBrazil Sovereign\u201d plan, a government program launched last week with credit lines and other measures to support exporters impacted by the U.S. sanctions introduced by President Donald Trump.<\/p>\n <\/p>\n The regulation states that priority will be granted to requests already submitted through the electronic system known as Per\/Dcomp (Electronic Request Program for Refund, Reimbursement or Compensation and Declaration of Compensation), as well as to new claims submitted within six months of the regulation\u2019s publication, which occurred last Friday (22). This deadline may be extended for another six months by the Federal Revenue, Brazil\u2019s tax agency, and the measure applies only to taxes under its jurisdiction.<\/p>\n <\/p>\n Eligible companies include private-sector exporters of goods that generated at least 5% of their total revenue between July 2024 and June 2025 from products subject to the additional U.S. tariffs. Sole proprietors (MEIs) and rural producers with a corporate taxpayer registration (CNPJ) may also qualify.<\/p>\n <\/p>\n The Ministry of Development, Industry, Trade and Services (MDIC) will soon publish a table listing the affected products by Mercosur Common Nomenclature (NCM), which companies will need to consult to verify whether they meet the 5% revenue threshold.<\/p>\n <\/p>\n The same regulation also extends deadlines for the payment of federal taxes and for installments related to debt settlements made with the Attorney General of the National Treasury (PGFN) or the Federal Revenue. Taxes originally due in August may now be paid by the last business day of October, and those due in September by the last business day of November. These extensions apply exclusively to companies impacted by the tariff increase.<\/p>\n <\/p>\n The Finance Ministry said the deferral will have no fiscal impact in 2025, since the payments will still be made within the same fiscal year. It is designed as temporary relief during the first two months the tariffs are in effect. The ministry also said the tax credit refund prioritization will not affect fiscal balance. \u201cThere was no change in the rules for approving refunds,\u201d it said in a note to Valor.<\/p>\n <\/p>\n Tiago Sbardelotto, an economist at XP Investimentos, confirmed the measure should not impact public accounts, since it only changes the order in which refunds are processed. \u201cThe main effect is likely to be timing, more concentrated use of credits early on, and less later in the year,\u201d he said.<\/p>\n <\/p>\n He noted that the prioritization works in tandem with an increase in the refund percentage under Reintegra, a federal program that reimburses exporters for taxes paid in order to boost competitiveness abroad.<\/p>\n <\/p>\n \u201cIn other words, the government is making a larger volume of tax credits available [by raising Reintegra rates] and at the same time speeding up access to those credits. While not limited to this specific type of credit, these will likely be the most relevant right now,\u201d he explained.<\/p>\n <\/p>\n Cutting in line<\/p>\n <\/p>\n Tax attorneys interviewed by Valor raised concerns about how this \u201ccutting in line\u201d will work and whether companies that are not eligible could be harmed. They argued that this should not happen. The Finance Ministry rejected the idea that other companies would be disadvantaged.<\/p>\n <\/p>\n \u201cThe prioritization is legitimate to give businesses some relief, but it\u2019s a regulatory measure that essentially ignores the chronological order of requests,\u201d said Priscila Faricelli, a partner at law firm Demarest. She acknowledged that the government is facing a large backlog of credit refund requests, but warned that skipping the line could lead companies not covered by the measure to take legal action if they feel harmed by the break in chronological order.<\/p>\n <\/p>\n Ms. Faricelli pointed out that Brazil\u2019s Supreme Federal Court (STF) recently ruled that the chronological order must prevail in cases involving the reimbursement of credits from the government to private-sector parties. That ruling involved court-recognized credits, which must be paid through court-ordered payments known as precat\u00f3rios, rather than through administrative requests. \u201cThe courts have consistently upheld the chronological order for precat\u00f3rios,\u201d she said.<\/p>\n <\/p>\n The Finance Ministry said that companies not affected by the U.S. tariffs will not be harmed by the prioritization. \u201cGranting a refund to one company does not mean denying it to another,\u201d the ministry said in a statement. \u201cWe will continue to review all cases to ensure that all valid refunds are granted.\u201d<\/p>\n <\/p>\n Source: Valor International<\/p>\n