Country audit Brazil

Country audit
Brazil
May 2015
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03
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04
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05
Company information
Receita Federal
São Paulo
Rio de Janeiro
Minas Gerais
Paraná
Rio Grande do Sul
06
07
07
07
News
Ownership
Defamation and censorship
Violence against journalists
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07 Litigation
07 Bankruptcy procedures
07 Judicial transparency
08
08
09
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Regulators
Anti-corruption bodies
Anti-monopoly
Serious fraud
Securities regulation
Cover image: Gustavo Gomes CC-BY-NC
Image below: Aureliano Nóbrega CC-BY-NC
Company information
Company registration in Brazil operates through a
federalised system and its corporate registers are, similarly,
run on a state-by-state basis. Each of the 26 states has a
registry (Junta Comercial) where all companies in the state
are registered.
The methods in which companies can be researched, the
cost of a report, and the hurdles required to register as a
user of the system varies from state to state. Basic company
details can be obtained from the Receita Federal by any
user without registration, but can only be searched using
a company’s taxpayer registration number (CNPJ). More
detailed reports typically require provision and verification
of several personal details, usually including a Brazilian ID
number from the Natural Persons Register (Cadastro de
Pessoas Físicas/CPF).
Often, reports can only be ordered if the investigator
already knows details about the company such as the CNPJ
or the identification number assigned by the Board of Trade
(the NIRE).
São Paulo
Junta Comercial
(JUCESP)
Capital São Paulo
Shareholder names temporarily
unavailable at time of writing, but can
be obtained in person at the registry.
Basic search can be conducted without
registration. Registration to order
reports requires provision of full name,
CPF, date of birth, mother’s maiden
name, full address, telephone number,
email and voter number.
Federal level
Receita Federal
Report
Site search
Cost/time
Free/instant
Search by
CNPJ only
Registered
status
!
Basic company
details
!
Director
names
"
Shareholder
names
"
Registered
capital
"
Historical
names
"
Sitesearch
Simplifiedreport
Fullreport
Cost/time
Free/instant
Free/instant
Free/instant
Search by
Name or NIRE
Registered
status
!
!
!
Basic company
details
!
!
!
Director
names
"
!
!
Shareholder
names
"
"
"
Registered
capital
!
!
!
Historical
names
"
"
!
GDP US$721,036m
Population 44,065,000
Registered companies
4,649,516 (27.5%)
Country Audit / Brazil
03
Service
Sitesearch
Simplifiedreport
Original
documents
Cost
Free/instant
R$99.00
(US$37.30)
/2-3 days
R$149.00
(US$56.13) per
document/2-3
days
Search by
Company name, NIRE or CNPJ
Registered
status
!
!
!
Registration to search or order
reports requires provision of full name,
CPF, email, address and telephone
number. The simplified report doesn’t
list all shareholders, but reveals
whether directors also hold shares
in the company.
Basic company
details
"
!
!
Director
names
"
!
!
Shareholder
names
"
"
!
GDP US$504,221m
Registered
capital
"
!
!
Historical
names
"
!
!
Sitesearch
Simplifiedreport
Original
documents
Cost
Free
R$10.00
(US$3.77)
R$39.00
(US$14.20)
Search by
Full or partial company name and either NIRE or CNPJ
Registered
status
!
!
!
Basic company
details
"
!
!
Director
names
"
!
!
Shareholder
names
"
"
"
Registered
capital
"
!
!
Historical
names
"
"
!
Rio de Janeiro
Junta Comercial
(JUCERJ)
Capital Rio de Janerio
Population 16,385,000
Registered companies
1,466,572 (8.7%)
Minas Gerais
Junta Comercial
(JUCEMG)
Capital Belo Horizonte
Registration to search or order reports
requires provision of full name, CPF,
email, address and telephone.
GDP US$403,551m
Population 20,736,000
Registered
companies
1,737,518 (10.3%)
Country Audit / Brazil
04
Paraná
Junta Comercial
(JUCEPAR)
Site search
Company report
Cost/time
Not available
Free/1 day
Time
n/a
1 day
Search by
n/a
Full name, NIRE and CNPJ of the
company and CPF of one of the
associates
Registered
status
n/a
!
Basic company
details
n/a
!
Director
names
n/a
!
Shareholder
names
n/a
!
Registered
capital
n/a
!
Historical
names
n/a
!
Site search
Basic report
Company
report
Cost/time
Free/instant
Free/instant
R$20.00
(US$7.06)/2-3 days
Search by
Company name or NIRE number
Registered
status
!
!
!
Basic company
details
"
!
!
Director
names
"
"
!
Shareholder
names
"
"
"
Registered
capital
"
!
!
Historical
names
"
"
!
Capital Curitiba
To order a report, users must
provide their full name, email,
telephone and address
GDP US$255,927m
Population 11,084,000
Registered
companies
1,157,956 (6.8%)
Rio Grande do Sul
Junta Comercial
(JUCERGS)
Capital Porto Alegre
Registration to order reports requires
provision of full name, CPF, email,
address and telephone number
GDP US$277,658m
Population 11,352,000
Registered
companies
1,296,58 (7.7%)
Country Audit / Brazil
05
News
Top news titles
Despite the country’s large population, newspaper
consumption per-head is not particularly high: newspaper
subscriptions are expensive relative to the minimum wage,
and most consumers prefer TV, radio or internet for
real-time news. The tabloid Super Notícia surpassed
Folha de São Paulo as the most widely-read paper in 2008.
Owner
The country is ranked 111th out of 180 in the World Press
Freedom Index. The ability of reporters to critically engage
with their subjects is limited by daunting judicial costs in
potential defamation cases and the fear of physical attacks.
The situation is worse for journalists outside urban areas
or bloggers who lack public attention and the backing
of one of the major media corporations.
News title
Home state
Grupo SADA (Medioli family)
Grupo Folha (Frias family)
Grupo Globo (Marinho family)
O Estado de São Paulo (Mesquita family)
Grupo RBS (Sirotsky family)
Jaime Câmara (Jaime Câmara)
Empresa Jornalística Caldas Júnior (Caldas Júnior)
Editora O Dia (Freitas family)
50,000 readers
Online access
to content
8
Diário Gaúcho
Goiás
9
Correio do Povo
Rio Grande do Sul
Free access
Free access
7
Daqui
Rio Grande do Sul
Print only
10
Meia Hora
Rio de Janeiro
Free access
1
Super Notícia
Minas Gerais
ValorEconômico
Leading business title
Free access
5 Free articles per
month (CPF to
register)
6
Zero Hora
Rio Grande do Sul
30 Free articles per month
(CPF to register)
2
FolhadeSãoPaulo
Rio de Janerio
10 Free articles per month
(CPF to register)
5
OGlobo
Rio de Janeiro
10 Free articles per month
(CPF to register)
3
Extra
Rio de Janerio
5 Free articles per month
(CPF to register)
Country Audit / Brazil
4
OEstadodeSãoPaulo
São Paulo
5 Free articles per month
(CPF to register)
06
Media ownership
Brazil’s media environment is generally considered open,
however the ownership is highly concentrated and the
majority of news conglomerates are family-owned, limiting
media pluralism (see infographic). Over 250 politicians
are shareholders, holders of senior posts or directors in
media corporations. The majority of these are mayors and
representatives on a sub-state level. This yields the potential
for conflicts of interests and is likely to have an influence
on the editorial line of these outlets.
Defamation and censorship
The Brazilian constitution includes broad guarantees for
the freedom of expression. However, the widespread use
of civil defamation complaints to censor publications
reporting alleged corruption or other misconduct can be a
significant hindrance to coverage of these issues. Aggrieved
subjects use privacy articles and defamation laws to obtain
injunctions which can result in significant losses for the
media outlets.
Violence against journalists
Intimidation and violence against journalists is a persisting
concern in Brazil. It is the 11th deadliest country for
journalists to work in (Committee to Protect Journalists,
2013). Reporters covering criminal cases or misconduct
by local authorities are especially vulnerable to attacks.
Physical safety for journalists is also significantly worse
in provincial areas where law enforcement is weaker or
perpetrators among the local or military police are often
not prosecuted.
Litigation
The Brazilian legal system is based on Civil Law tradition
formed of legislative normative acts and characterised
by the rigid language contained in the Brazilian Federal
Constitution. The states have limited powers to adopt their
own constitutions and laws within the principles of the
Federal Constitution. Similarly, municipalities enjoy restricted
legislative autonomy, needing to conform to both state and
federal guidelines. The judiciary is organised into only federal
and state branches, there are no municipal judicial systems.
The judiciary consists of several levels with the Federal
Supreme Court (STF) at the apex and the state-level courts
overseeing cases outside the federal judicial jurisdiction.
The STF, as the guardian of the constitution, also maintains
ultimate authority on issues of constitutionality as well as
exclusive jurisdiction over extradition requests.
Country Audit / Brazil
Bankruptcy procedures
In Brazil, there are two distinct legal statutes that rule
bankruptcy (falência) and insolvency (insolvência civil), the
Brazilian Civil Procedure Code, which deals with the civil
insolvency and the new Bankruptcy Law 11,101, passed in
2005, which governs commercial insolvency. Civil insolvency
primarily defines the rights of creditors to seize assets to
resolve debts but does not afford individuals with that same
level of protections as commercial entities. However, the new
bankruptcy law, similar to the US Chapter 11 model, provides
a more effective means for managing corporate liquidations
and reorganisations, and is an important upgrade to the
previous versions. The law introduces three procedures
governing commercial bankruptcy in Brazil:
1ExtrajudicialReorganisation(EJR) - debtor company
presents a reorganisation plan which has obtained threefifths approval from the creditors and been ratified by a
judge
2JudicialReorganisation(JR) - debtor company requests
court protection for a period of 180 days, within which
they must submit a reorganisation plan to be approved by
creditors and the court
2 Bankruptcy Liquidation - judge appoints a trustee to
manage the liquidation of a company’s assets to pay
creditors according to an order of priority determined
by the bankruptcy law
These rules apply only to publicly traded companies. In
cases involving fully or partially state-owned companies or
financial institutions, insolvency procedures are managed
by regulatory agencies including the Brazilian Securities
Commission, Central Bank and the National Monetary
Council. Basic records are freely available online but more
detailed proceedings require a Brazilian identification
number.
Judicial transparency
Brazil, a founding member of the Open Government
Partnership (OGP), has a relatively good record on
transparency over the past decade with almost all Brazilian
legal and legislative information readily available on
the internet for free. However, litigation information is
distributed among several thousand sites across multiple
government institutions. While one can easily search for
civil, criminal and administrative litigations records, there
is no uniformity of detail provided by each of the courts
beyond names and process data. However, searching this
labyrinth of sources is now easier following the release of
LexML, Brazil’s first legislative and legal information portal,
which opened June 2009 and combined more than 1.5
million documents into a single aggregated database. Any
Brazilian person can ask in person to the Courts to read full
case files, but this rule is not always consistently followed
by all judiciary servers. Additionally, litigation involving
divorces, child custody and similar subjects are kept under
secrecy and while they appear in most search results, there
are few or no details.
07
Regulators
The Brazilian government is following a multi-agency
approach in order to tackle corruption and fraud. Under
president Lula’s rule, the Office of the Controller General
and the Prevention of Corruption and Strategic Information
Secretariat were created. Rousseff’s government
continued to strengthen the legal framework by adopting
the Information Access Law and Anti-Money Laundering
Law that gave powerful tools to both the public and public
prosecution. The most recent addition to this catalogue
is the Anti-Graft Law, which provisions fines for up to
20% of a company’s gross annual revenue or £15m when
charged guilty. Despite the new institutional setup and
comprehensive federal approach to tackle these problems,
Brazil’s score on the Corruption Perceptions Index is
stagnating at 43, ranking it 69 out of the 175 countries
observed. The recent corruption case involving
state-controlled Petrobras has once again illustrated
the wide spread of corruption, clientelism and its
entanglement with Brazil’s central political and economic
elite. Rousseff promised a thorough investigation and
effective prosecution for this case as part of her second
term’s agenda (even though this may fall back on her as
she partially chaired the company in the period in question).
Anti-corruption bodies
Image: Maxwell Mariano CC-BY-NC
Available information
Officeofthe
Comptroller General
Controladoria-Geral
da União
This anti-corruption agency publishes reports on
investigative actions management assessments
and evaluations of government programs.
Transparency portal
Portal Transparencia
This website allows the tracing of public funds and
includes a registry of ineligible and suspended companies.
Public Prosecutor’s
Office
Ministério Público
Federal
The Public Prosecutor’s Office puts out
information on lawsuits and investigations started
by this independent government branch.
FederalPolice
Department
Departamento de
Polícia Federal
The Federal Police Department collects evidence for
the judiciary and publicises news about their operations,
including those concerning abuse of public resources,
bribery and fraud.
FederalCourt
of Accounts
of Brazil
Tribunal de
Contas de União
The court website hosts full-text judgments as well as
process histories, lists of individuals disqualified from
public service and entities who are banned from applying
for public tenders.
Country Audit / Brazil
08
Anti-monopoly
Available information
Administrative Council
forEconomicDefence
Conselho Administrativo
de Defesa Econômica
(CADE)
The regulator publishes precautionary and preventative
measures imposed by CADE. Further information is
available on trials concerning monopolies and mergers.
Secretariat for
EconomicMonitoring
Secretaria de
Acompanhamento
Econômico (Seae)
Seae provides information on administrative processes
regarding tariff reductions, trade promotions or public
interest review. Also links to documents that
specify the value of premiums granted.
Secretariat of
EconomicLaw
Secretaria de
Direito Econômico
(SDE)
Major investigations into M&As or violations of the
economic order are featured on the Secretariat’s
website alongside opinions and further analysis.
Serious fraud
Available information
Internal Revenue Service
Receita Federal do Brasil
The tax administration provides a database of taxpayers
that however can only be searched by Brazilian nationals
or those in possession of a tax number (CPF).
CouncilforFinancial
Activities Control
Conselho de Controle de
Atividades Financeíras
The council is Brazil’s Financial Intelligence Unit.
Financial service providers that are required to submit
information on their transactions to the council can also
consult an internal database including Brazilian PEP data.
Securities regulator
SecuritiesandExchange
Commission of Brazil
Country Audit / Brazil
Available information
Comissão de Valores
Mobiliários
The regulating authority for securities and
publicly-held companies provides information on regulated
entities including documents for public companies,
lists of suspended entities, financial sanctions
and records of active and cancelled investment funds.
09