Government measures in key jurisdictions 5th edition - Flipbook - Page 16
Brazil
Contributor: MattosFilho
Loans and
financial
support
Has the
government put
in place any new
bank funding
schemes?
Employment
What financial
support is
the government
providing to
businesses and
to individuals on
employment
issues?
Alessandro Amadeu da Fonseca| afonseca@mattosfilho.com.br | +55 11 3147 7826
Rodrigo Ferreira Figueiredo | rodrigof@mattosfilho.com.br | +44 207280 0161
Since the beginning of the outbreak, the government has been taking some important
measures to mitigate the effects of the current scenario. The federal government, through
Brazilian government-owned banks, has been providing funds to support mostly small and
medium-sized companies with respect to employees’ payroll and working capital during the
period of crisis. The federal government has also been encouraging the Brazilian
government owned/development banks (such as BNDES, BNB, CEF and Banco do Brasil) to
postpone the payment of principal and interest of existing loans for periods of up to six
months. The financial conditions may vary from bank to bank.
Brazilian federal agencies have also issued temporary regulation suspending certain
obligations in order to foster loans and issuances in the financial and capital markets (e.g.,
suspending the obligation of filing and registering certain corporate acts with the Boards of
Trade, lifting restrictions for companies to issue the same type of security within four
months from its last issuance). The federal government had also suspended the payment of
certain taxes applicable to certain financial transactions that were contracted until
December 31st 2020.
Currently, there is no financial support from Federal Government to businesses and
individuals on employment issues. Las year, however, the government issued a Provisional
Measure No. 936, later turned into Law No. 14,020, which provided an allowance called
“emergency benefit” to employees who (i) had their employment agreements suspended,
and/or (ii) reduced to part-time with a corresponding salary decrease, by means of collective
or individual agreements, according to certain requirements set forth therein. Although the
financial aid is not currently in place, there are discussions to extend the state of calamity for
another six months and, possibly, such benefits as well.
Moreover, at the Federal level, there are pending bills in Congress extending the payment of
emergency aids, similar to the previously granted so-called “corona voucher”, to
microentrepreneurs, autonomous, informal workers and the unemployed , which have been
in the centre of intensive budgeting debate.
At the local level, Brazilian States are envisioning their own emergency aid programs for local
workers. For example, the governor of São Paulo has recently announced a program
proposal that is going to be presented to local Legislators. The State Legislative of Rio de
Janeiro is also processing its own initiative.
Law No. 4,458/2020 was issued on December 24, 2020 (“Law”), amending significant
provisions of the Brazilian Judicial Reorganization and Bankruptcy Law currently in force
(Law 11,101/2005) “Brazilian Bankruptcy Law”, Brazilian Federal Law 10,522/2002 (which
Has the
government made provides for the Registry of Defaulted Credits – CADIN), and Law No. 8,929 of August 22,
1994 (which instituted the Rural Product Bond – CPR in Brazil).
any changes
to insolvency
The Law is in effect since January 23, 2021, but some provisions, vetoed by the President,
legislation?
shall remain ineffective and unenforceable until further analysis by the Brazilian Congress,
Insolvency
which should take place until March 4, 2021 – otherwise, it will be suspended. The
Congress will decide to either maintain or overrule the vetoes, and if overruled these
provisions will also become part of the Brazilian Bankruptcy Law definitively. The vetoed
sections are related to issues such as the protection of acquirers of assets from debtors in
judicial reorganization, unenforceability of the judicial reorganization law to credits and
guarantees arising from CPRs, tax effects arising from the sale of assets and/or
renegotiation of debts, as well as the suspension of labour enforcement proceedings.
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Government measures in key jurisdictions
