Provisional Measure 881 - establishment of the Statement of Economic Freedom Rights

The Provisional Measure 881/2019 (MP 881/2019) was published in the Extra Edition of the Official Gazette, of Apr-30-2019 establishing the Statement of Economic Freedom Rights and establishes standards of protection for free initiative and free exercise of economic activity, reinforcing the role of the State as a normative and regulatory agent.

Applicability

The text came into force at its publication (certain provisions are dependent on a regulation to be effective) and its guidelines will have effect in the applicability and interpretation of civil, business, administrative, economic, urban and labor law and in the public order on the performance of professions, commercial associations, production and consumption and protection of the environment. However, its rules and principles do not apply to tax law and financial law.

Principles

MP 881/2019 is guided by the following principles:

Presumption of freedom in the performance of economic activities;

Presumption in good faith of the individual;

Minimal and exceptional subsidiary intervention of the State, on the performance of economic activities.

Economic freedom rights

The text of MP 881/2019 highlights the rights of every person, legal or natural, that are considered essential for the economic development and growth of the country:

Develop economic low-risk activity with no need for public acts deliberation of economic activity;

Produce, employ and generate income, with the freedom to develop economic activity assured;

Not having its freedom to establish the price of products and services restricted as a consequence of changes in offer and demand in the unregulated market;

Receive isonomic treatment of public administration agencies and entities regarding the practice of acts of liberation of economic activity;

To enjoy a presumption of good faith in the acts practiced in the in the performance of economic activity, for which the doubts of interpretation of civil, business, economic and urban law will be solved in order to preserve the autonomy of their will;

To develop, execute, operate or market new product and service modalities when infralegal standards become outdated due to internationally consolidated technological development;

Implement, test and offer, free or not, a new product or service for a private and restricted group of larger and capable persons, who will rely exclusively on own private property or consensual third parties, with no application or public act of liberation of economic activity;

Ensure that corporate legal transactions will be subject to free stipulation of the contracting parties, so as to apply all rules of business law only in a subsidiary manner to the contractor, in which case no public policy rule on this matter will be used to benefit the party that has agreed against it, except to protect rights protected by the public administration or third parties outside the contract;

Ensure that in the application for public acts to release the economic activity, under the provisions of MP 881/19, when all the elements necessary for the investigation of the process are presented, the individual will immediately receive express deadline that will determine the most suitable deadline for the analysis of his request and after the deadline set, in case of silence by the competent authority, will lead to implicit approval for all purposes, except in cases expressly prohibited by law; and

To file any document by means of microfilm or by digital means, according to technique and requirements established in the rule, in which caseit will be equivalent to printed document for all legal effects and for the proving of any act of public law.

One of the MP highlights is the permission for individuals or legal entities to develop businesses considered low risk (defined by the federative entity or by a committee under to Ministry of Economy), regardless of any public act of release by the public administration. In addition, it is determined that even more complex initiatives are automatically released if the deadline given by the public administration for analysis is exceeded.

Guarantees of free initiative

MP 81/2019 also indicates that the public administration must work to avoid abuse of regulatory power, respecting compliance with what is provided by law.

Regulatory impact analysis

Proposals for editing and amending normative acts of general interest of economic agents or users of the provided services would be preceded by a regulatory impact analysis, which will contain information and data on the possible effects of the normative act to verify the reasonableness of its economic impact.

Amendments to other legal texts

In addition to the aforementioned, the MP 881/2019 promotes changes in some legal standards. We highlight the following:

The extinction of the Brazilian Sovereign Fund (FSB), a special fund of accounting and financial nature, linked to the Ministry of Economy, created in 2008 (Law 11,887) with the purpose of promoting investments in assets in Brazil and overseas, composing public savings, reducing the effects of economic cycles and promoting projects of strategic interest to the country located abroad.

It amends provisions of the Civil Code (Law 10406/2002) that deal with the abuse of legal personality (when there is a misuse of purpose or property confusion), freedom of contract (prevailing the principle of minimum state intervention), more favorable interpretation of contracts for the joining, establishing objective parameters for interpretation of requirements for revision or resolution of contracts between companies, social patrimony that can be entitled for debts of the individual limited liability company, investment funds, among others.

It amends Law 6,404/1976, which deals with stock companies, allowing the Brazilian Securities and Exchange Commission (CVM) to exempts requirements to facilitate the entry of small and medium-sized entrepreneurs into the capital market.

Amends Law 10101/2005, which regulates judicial and extrajudicial reorganization and bankruptcy of businessmen and companies, in order to determine that the extension of the effects of bankruptcy is only allowed when there are requirements for disregarding the legal entity.

In the Law 10.522/2002, it inserts a new provision that establishes, for administrative and tax matters, the issuance of precedents of the federal tax administration, whose content shall link decisions made by the administration's bodies. In addition, it exempts the Attorney General's Office of the National Treasury (PGFN) from the need to appeal, in several situations, in relation to judicial or administrative actions (which is currently mandatory) and authorizes the withdrawal of appeals already filed.