The long story about the acquisition of Brazil’s rural land by foreign companies or their subsidiaries moves on to a new chapter this week with Minister Marco Aurélio’s Supreme Court ruling suspending the effects of the decision from the Comptroller-General of Justice of the State of São Paulo that allowed such kind of acquisition.
To understand more about the controversy: the Law No. 5,709/71 restricted the acquisition of rural land by foreign companies without distinguishing them with Brazilian companies controlled by foreigners or companies with majorly foreign capital. However, since Brazil’s federal Constitution in 1988, these restrictions were not being applied by land registers. Such acquisitions were suspended by the Brazilian government, since 2010, supported by the Brazilian Federal Attorney General’s opinion that the former law is still in force.
The State of São Paulo Comptroller-General of Justice’s ruling, suspended this week, considered the former AGU’s opinion unconstitutional.
This subject will have more ramifications; while Minister Marco Aurélio’s decision was a preliminary assessment and the Supreme Court will further exam the lawsuit, a legislative proposal establishing new rules to this subject and admitting the regularization of properties acquired after the 1988 Constitution is currently going through the National Congress. The current president Michel Temer already anticipated his support to this law.
By: International Task-Force Team – Zilveti Advogados