Brazilian Securities and Exchange Commission understanding in cases involving conflict of interest

The conflict of interest in corporate deliberations is a controversial issue. In times of car wash operationOperação lava-jato) and plea bargain arrangements, where members of management and shareholders are often involved in investigations, the issue takes on even greater proportions. In light of first paragraph of article 115 of Brazilian Corpora LawLaw No. 6,404/1976), the shareholder may not vote in deliberations of a shareholders´ meeting that may benefit him in a particular way or in which he has conflicting interest with the company.
Based on precedents of the Brazilian Securities and Exchange Commission”CVM”), the interpretation of this legal provision by the authority was directed at preventing the vote before the meetingformal conflict, a priori). Article 115 of the Corporate Law would lose its meaning if the conflict of interest could only be ascertained after deliberationmaterial conflict, a posteriori), since the purpose of the law is to avoid the shareholder to benefit himself in detriment of the common interest to the others.
This view was supported essentially by the argument that the prohibition of voting allows the decision-making power to be shifted to those who do not have a conflict of interest, thus preserving the social interest.
However, in a recent case judged by the CVMProcess SEI No. 19957.007563 / 2017-12), where the minority shareholder sought to prevent the controlling shareholderswho also held positions as directors of the company ) to vote in the resolution regarding the filing of a claim against the managers and controlling shareholderswho were involved in the unlawful acts confessed in awarding agreements) for damages caused to the Company, the CVM board concluded that it remains for the shareholders to evaluate if they are in a situation of conflict of interest with respect to the deliberations in question, and, if necessary, abstain from exercising their right to vote at the meeting.
Thus, “conflict of interest” remains a controversial topic, and CVM has expressed different opinions on the subject.
Candido Martins Advogados is following the developments on this subject and is available for any clarification

Brave New World – Aldous Huxley

Brave New World is novel written by Aldous Huxley in 1931. This literature classic takes place in London in the year 2540 and anticipates fictional developments in reproductive technology, hypnopedia, psychological manipulation, among others, all combined to create the foundations of a new society.

Notice of Non-Occurrence (Clearance Statement) of money laundering or terrorist financing to regulatory agencies

Law No. 9,613 of 1998Law on Prevention and Combating Money Laundering) made it compulsory for individuals or legal entities that engage on a permanent or temporary basis in any of the activities listed in article 9 of such law to submit a Notice of Non-Occurrence (Clearance Statement) of money laundering or terrorist financing transactions to the Financial Activities Control CouncilCOAF) or to the regulatory or supervisory body of its activity, under penalty of civil or administrative liability.
The Notice must be submitted, within the terms and conditions established by the regulatory body of each segment, as shown in the table below.
The deadline to submit the Notification is until January 31, 2018 and noncompliance may result in sanctions ranging from fines to suspension of authorization for the exercise of activity or operation.
Candido Martins Advogados is available to assist you with any clarifications.

  Regulatory   Sector   Timeframe   Term   Where to Submit
BCB Financial institutions and other institutions authorized to operate by the Central Bank of Brazil 01/01/2017 to 31/12/2017 Up to 10 working days after the end of the calendar year SISCOAF
CFC Professionals and Accounting Organizations, in the performance of their duties 01/01/2017 to 31/12/2017 Up to 31/01/2018 Portal CFC
COAF  Commercializationfactoring), securitizationnot regulated by the CVM) 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
COAF  Trade of jewelry, precious stones and metals 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
COAF  Advisory, consultancy, auditing, counseling or assistance services, except accountants, economists and real estate brokersnot subject to regulation of a regulatory body) 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
COFECI  Individuals and legal entities engaged in real estate development activities or the purchase and sale of real estate, whether permanent or incidental, principally or ancillary 01/01/2017 to 31/12/2017 Up to 31/01/2018 COFECI
COFECON Individuals and legal entities providing economic and financial services 01/01/2017 to 31/12/2017 Up to 31/01/2018 Regional Economic Council of the jurisdiction of the professional or legal entity
CVM Persons who have, on a permanent or occasional basis, a principal or accessory activity, cumulatively or not, custody, issuance, distribution, settlement, negotiation, brokerage, consulting or administration of securities or independent auditing in the securities market 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
CVM Entities managing organized markets 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
CVM  Other persons subject to CVM regulation 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
DREI  Boards of Trade 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
IPHAN Individuals or legal entities that commercialize Antiques and/or Works of Art of any Nature. 01/01/2017 to 31/12/2017 Up to 31/01/2018  National Register of Art and Antiques Dealers – CNART, IPHAN
PREVIC  Private entities of complementary pension 01/01/2017 to 31/12/2017 Up to 31/01/2018 PREVIC
SEAE Lotteries 01/01/2017 to 31/12/2017 Up to 31/01/2018 SISCOAF
SUSEP Insurance and capitalization companies, local and admitted reinsurers, open supplementary pension entities Monthly Until the 20th of the following month SUSEP


Tax Havens: Federal Revenue Office amends list of countries with favored taxation regime and privileged tax regimes

The Federal Revenue OfficeReceita Federal do Brasil – “RFB”) issued the Normative Instruction No. 1,773 / 2017, published on December 21, 2017, which amended Normative Instruction No. 1,037 / 2010 to implement changes in the list of countries with favored taxation regime and privileged tax regimes.
Among the changes, we point out that Cyprus, Costa Rica and Madeira Island are no longer considered as tax havens. However, the Costa Rican Free Zones Regimes and the Madeira International Business Center have come to be regarded as privileged tax regimes.
In addition, Singapore has become a privileged tax system for some sectors of the economy.
Candido Martins Advogados is available for any clarification on the subject.

PERT – submit information to PGFN

The Brazilian General Attorney’s OfficeProcuradoria Geral da Fazenda Nacional – “PGFN”) issued the Ordinance No. 1,207/2017, published on December 29, 2017, regulating the procedure for the utilization of tax losses and other tax credits for the payment of debts under the tax amnesty program named Special Tax Regularization ProgramPrograma Especial de Regularização Tributária – “PERT“).
Taxpayers who joined PERT to pay enrolled debts in a total amount equal to or less than BRL$ 15 million must inform PGFN the amount of credit to be used under PERT, through the eCAC Portal until 01.31.2018.
It addition, it will be necessary to present corporate documents or the documents of the legally qualified attorney, as the case may be, and a statement regarding the existence and availability of the tax credits used to offset tax debts under PERT. Such documents must be presented in the service units of PGFN or RFB, during the period between February 01, 2018 and February, 28.2018.
Candido Martins Advogados is available for any clarification on the subject.


At the end of 2017, CONFAZ approved the ICMS Agreement No. 190/2017, establishing the procedures to be followed by the States and the Federal District for the remission of the tax debts arising from Tax War and the possibility of reestablishment and extension of tax benefits in accordance with the Supplementary Law No. 160/2017.
The ICMS Agreement clarified the obligation of each Brazilian State to:

(i)    publish:
         (a) until March 29, 2018, normative acts in force until August 08, 2017;
         (b) until September 30, 2018, normative acts not in force on August 08, 2017;
(ii)    register and submit the supporting documentation before CONFAZ:
         a) until June 29, 2017, for acts in force at the time of registration and submitting;
         b) until December 28, 2018, for acts not in force at the registration and submitting.

If the States and the Federal District do not meet the above deadlines in relation to one or more normative acts, the respective tax benefit should be revoked until December 28, 2018 by the State that originally granted it.
In practice, each State and the Federal District must observe the procedures established in Supplementary Law No. 160/2017.and in the ICMS Agreement No. 190/2017 for the maintenance and validation of tax benefits granted unilaterally.
 As a result, ICMS tax debts arising from Tax War will be remitted and amnestied, provided that taxpayers comply with the legal requirements to ensure the remittance of debts.
Up to December 28, 2018, the States and the Federal District may reestablish, maintain and extend their tax benefits. An entity of the Federation may extend the same benefit to other taxpayers under the same conditions.
Any State may also adhere the benefit of another entity of the Federation.
The paths for the end of the discussions regarding the tax benefits granted until August 08, 2017 is given. Apparently, this is only a solution for the past. But how will it be from now on?
Candido Martins is available for any clarification needed.