Brazil

The promise of reducing accidents and revolutionizing sectors such as automakers and insurance companies faces an urgent challenge: creating clear rules to allow testing and safe circulation of autonomous vehicles on the streets. Thinking about autonomous vehicles may seem futuristic, but it is also a reflection on the present. In Europe, different countries have already regulated the development and introduction of the technology in traffic, such as Germany, the first country in the world to do so in 2021, and the United Kingdom, very recently. In the United States, a pioneer country for autonomous vehicles (“AV”), commercial AV based mobility service provider like Uber and Waymo are already on the market and in the US-States Texas and California local state regulation are already in place. Comparing the existing legal framework for AV vehicles globally for instance the liability for car crashes is regulated inconsistent. Further, research showed that the regulatory framework for AVs follows two different regulatory approaches: the pro-business approach, leaving the providers freedom and the regulatory approach which tries to eliminate the security risk of the AVs. In Brazil, the first car to travel on urban roads for more than 70 km was IARA in 2017, a technology developed by the Federal University of Espírito Santo. Today, it is applied in port operations and logistics through the Espírito Santo-based startup Lume Robotics, involving different companies in the sector and state entities. However, the regulatory scenario does not keep up with the speed of Brazilian innovation. Although Bill 1317/2023 is currently proceeding in the National Congress, although its current text has much to gain from the maturity of international experiences. Given the expectation that it will enhance traffic safety, grant mobility also for elderly or handicapped people, secure extra time to driver for emails or reading as well as have repercussions on several sectors of the economy, such as in-car entertainment providers and insurance companies, if the impact of autonomous driving is as significant as expected, it is essential to have clear rules that ensure precisely this purpose. It must be avoided that over regulation hinders the development of AV businesses by determining only allowed and prohibited safety limits. Further, inconsistent rules regarding the driver’s liability for car crashes caused or not by a malfunction of the driving system will discourage customers to rely on their driving system or pay extra for the auto pilot/driving assistant. This is because the promise that technology will increase traffic safety by reducing the human error factor, significantly lowering accident rates, has as a counterpart the relevant risk of system’s decision or failures that cause lethal or non-lethal accidents. Also, it cannot be ignored that traffic is an essentially human environment, filled with unpredictable and uncontrollable factors, such as a pedestrian crossing outside the crosswalk or countless other examples. In other words, the current moment in Brazil is not only important, but indeed essential and it represents an opportunity to allow autonomous driving to be truly safe in the Brazilian experience. So, what can we learn from international experiences? Changing traffic rules is a sensitive endeavor, with various implications and challenges related to social and institutional acceptance. From the perspective of international experience, we observe the conservative German approach and the British model, which already establishes preliminary liability for insurers. Within the scope of this brief reflection, we turn to the legal developments taking place in the United States. Despite the contrast between California and Texas laws, both states are concerned with identifying the human presence in the safe operation of autonomous driving. While California requires a human operator who, to some extent, monitors the circulating vehicles remotely or onboard, Texas law lacks clarity regarding continuous monitoring. However, it imposes duties on the manufacturer and the owner to keep the autonomous driving system (SAE levels 4 and 5[1]) operating in accordance with traffic laws. Despite their differences, both regulations aim to ensure safety and damage reduction measures, especially for the manufacturer. In other words, starting from the freedom-responsibility binomial as a premise, it is up to the manufacturer to do everything within their reach to ensure that autonomous driving is as safe as possible for passengers and the entire community. In other words, acting freely, because it is allowed or not prohibited by law, imposes duties and precautions whose noncompliance may lead to significant legal consequences. Just imagine an accident, caused or not by a malfunction in the system, resulting in serious injuries or even the death of one of the parties involved. Note that the same example may be applicable, for instance, to a hypothetical test on a highway and to a not-so-distant future of app-based passenger transport. Texas regulation generically imposes the duty of safety, requiring autonomous driving to comply with traffic laws and be licensed by regulatory agencies. California law, for example, requires that, during the testing phases, companies have a human operator who, in real time, monitors the operation of each of the vehicles. This remote operator, according to the text, must be able to take control of the vehicle remotely and place it in a minimum risk condition and be trained to “safely execute the duties,” including how to react to dangerous situations and potential accidents. Although imperfect, the experiences of California and Texas can serve as guidance, especially due to the importance of imposing, at the regulatory level, guidelines on safety duties and organizing the bureaucracy related to licenses and specific authorizations from regulatory agencies. In Brazil, the legal gap presents, on one side, the challenge of technological development under the risks of a lack of legal and regulatory support, and on the other side, the opportunity to discuss and propose the adaptation of this development to the Brazilian legal system. Companies already operating or planning to operate in Brazil face a complex scenario, in which the notion of safety and care must be suited to these circumstances. We have the chance now that we don’t just adapt a foreign legal regimes but discuss the different regulatory approaches and develop a tailored legal framework which suits best to the Brazil country. Rodrigo Sardenberg Senior Associate Compliance, Business Investigations and White-Collar Crime FAS Advogados in cooperation with CMS Martin Wodraschke Head of CMS Automotive & Mobility IFG CEE German Practice – CMS Law Firm [1] Society of Automotive Engineers – SAE is the international entity that, together with the International Organization for Standardization – ISO, develops technical standards for the development and circulation of autonomous vehicle technology. The automation levels listed by these entities range from 0 to 5. Level 3 defines conditional automated driving, while levels 4 and 5 differ between high and full driving automation, meaning that the driver's/passenger's level of attention is an important distinguishing factor.

The corporate and mergers and acquisitions team at Finocchio & Ustra Advogados advised Gran Capital Partners — a Brazilian private equity firm that partners with entrepreneurs by combining capital and management support to scale high-potential businesses — on a strategic investment transaction in STK Comércio de Alimentos S.A. (Aurok), a chain of high-quality meat boutiques with stores in Campinas and Indaiatuba and a vertically integrated operation with its own high-technology processing facility. This is the firm’s third recent investment, following Sterna Café and La Guapa. The transaction reinforces the ongoing professionalization of the specialized protein retail and gourmet grocery segments, with positive impacts on quality standardization, the shopping experience, and the expansion of the product portfolio for consumers. As a result, Aurok will be able to accelerate its growth and implement its expansion, with gains in operational efficiency and enhanced professionalization, thereby contributing to the consolidation of the segment in São Paulo. The transaction was led by partner Andrea Tincani, with the participation of Camila de Godoy Ferreira, Júlia Cristina Arruda Savioli, Carolina Zogaeb, and Enrico Abrahão Oliveira, all from Finocchio & Ustra Advogados.

Brazil creates special tax unit to combat money laundering, targeting fuel distributors and fintechs. Brazil has announced the creation of a specialized unit within the Federal Revenue Service (Receita Federal) to intensify efforts against financial crime[1]. The move followed the “Spare” and “Carbono Oculto” operations, which uncovered billions of reais in illicit transactions. These operations revealed how sectors such as fuel distribution and fintechs were used as platforms to channel or disguise suspicious financial flows, highlighting the growing complexity of organized crime schemes. A New Investigative Role for Receita Federal Traditionally, the Receita Federal acted primarily as a tax authority, identifying irregularities in payments and auditing fiscal integrity. With the establishment of this new unit, the agency steps into a broader role, working side by side with police and prosecutors in detecting, analyzing, and disrupting money laundering operations. This represents a structural change in Brazil’s enforcement landscape, aligning with international trends that emphasize “following the money” to combat organized crime. Anti-Money Laundering Challenges and Sector Exposure The findings of the recent operations make clear that certain industries are more vulnerable to infiltration by illicit networks. Fuel distribution, with its high-volume and cash-intensive operations, and fintechs, with their agility and technological models, are particularly exposed. For businesses in these sectors, the announcement should be read as a signal of intensified monitoring and heightened expectations regarding anti-money laundering controls and transaction monitoring systems. The new framework also signals broader international implications. Many of the sectors under scrutiny operate through import and export chains or rely on cross-border financial systems. As Brazil intensifies cooperation with foreign tax and enforcement authorities, companies abroad connected to Brazilian operations may face greater scrutiny and information sharing between jurisdictions. Concerns Over Fiscal Confidentiality At the same time, the new role of Receita Federal raises important concerns. Companies and their shareholders rely on the constitutional guarantee of fiscal secrecy, which protects sensitive financial data from undue exposure. The growing involvement of the tax authority in criminal investigations creates the risk that legitimate business information could be subject to excessive scrutiny or even misused. It is essential to emphasize that combating money laundering cannot justify unrestricted access to confidential data. The effectiveness of enforcement must not come at the cost of transforming financial intelligence into a fishing expedition that compromises corporate privacy and undermines due process. Looking Ahead The creation of this unit is a turning point in Brazil’s strategy against financial crime. For companies, especially in sectors already flagged by recent operations, the challenge is twofold: to strengthen criminal anti-money laundering frameworks while also safeguarding their rights against investigative overreach. Success in this environment will require balance—robust transparency and control mechanisms, paired with vigilance to ensure that the fight against illicit activity does not erode the legal protections of legitimate businesses.   Bruno Henrique dos Santos Henrique Zigart Pereira Guilherme Cremonesi   [1] https://www.cnnbrasil.com.br/economia/macroeconomia/fazenda-cria-delegacia-na-receita-para-combater-crime-organizado/#goog_rewarded. Access on 10/03/2025.

Does my Legal Reserve and Permanent Preservation Area make me eligible to issue carbon credits? This is one of the most recurring questions among Brazilian rural landowners considering the recent enactment of Federal Law No. 15,042/2024, which establishes the Brazilian Emissions Trading System. The question is legitimate: if Legal Reserve (RL) and Permanent Preservation Areas (APP) are protected by legal obligation under the Forest Code, Federal Law No. 12,651/2012, would it be possible to generate carbon credits by keeping these areas conserved? The answer, considering the new legislation, is yes, but the principle of additionality prevents carbon generation projects from being eligible for this purpose. Before delving into the analysis of whether or not it is possible to issue carbon credits in these areas, it is necessary to explain what the institute of legal reserve and permanent preservation area is in the Forest Code. Legal reserve is understood as the area located within the rural property intended for the sustainable use of natural resources, conservation of biodiversity, and fulfillment of the socio-environmental function (art. 3, III, and art. 12, Law No. 12,651/2012). The permanent preservation area, in turn, corresponds to the protected space, whether or not covered by native vegetation, whose function is to preserve water resources, soil stability, biodiversity, and ensure the well-being of human populations (art. 3, II, Law No. 12,651/2012). Federal Law No. 15,042/2024, article 43, paragraphs 17 and 46, which establishes the regulated market, expressly recognizes the suitability of these areas to generate carbon credits, provided they meet the technical and regulatory requirements for measurement, verification, and registration. However, the debate arises regarding the criterion of additionality, traditionally required in carbon markets, which questions whether conservation already required by law can be considered an “additional” mitigation. It is important to understand the legal concepts established in the Forest Code to understand the relationship of this rule with the regulated carbon market law. Thus, for Legal Reserve, Federal Law No. 12,651/2012 defines, in its art. 3, item III and 12, the area located within a rural property or possession that must be maintained with native vegetation, with the purpose of ensuring the sustainable use of natural resources, the conservation of ecological processes and biodiversity. The extent of the mandatory Legal Reserve varies according to the geographical location of the property: 80% for forest areas in the Legal Amazon, 35% for cerrado within the Legal Amazon, and 20% for other regions. Art. 3, item II, of the aforementioned law, in turn, defines permanent protection area as a protected area, whether or not covered by native vegetation, with the environmental function of preserving water resources, landscape, geological stability, and biodiversity, facilitating the gene flow of fauna and flora, protecting the soil, and ensuring the well-being of human populations, such as the marginal strips of any natural watercourse, slopes with a gradient greater than 45 degrees, restingas, mangroves, hilltops, edges of plateaus or tablelands, and veredas. And then comes the question: what is additionality? I preserve 20% of my area with vegetation cover, in this scenario of climate change does it have no value? Does being in environmental compliance not generate economic benefits for me? In common sense, these questions are pertinent, since the media constantly mentions that Brazilian agribusiness will benefit from the carbon credit market and that rural areas will be eligible to generate carbon credits. However, in practice, the monetization of the conservation of these areas within rural properties does not occur, either because there is no additionality or because it is too small to gain scale and guarantee the cost of the projects. The concept of additionality, although not expressly provided for in Brazilian environmental legislation, was developed internationally and is a criterion used to verify whether the environmental benefits, notably the reduction of greenhouse gas emissions, are actually due to the implementation of the project, and are therefore additional to the reference scenario. From a systematic reading of Federal Law No. 15,042/2024, which establishes the Brazilian Greenhouse Gas Emissions Trading System (SBCE), and the Forest Code (Federal Law No. 12,651/2012), the compatibility between the legality of the protection of these areas and the principle of additionality is analyzed, as well as the effects of Brazilian legislation in relation to the environmental integrity standards of carbon markets. The article “Is the requirement of additionality for carbon projects unfair?”, published by LACLIMA, critically discusses this point, arguing that landowners who have historically kept the forest standing are disincentivized, while agents who deforested and now restore obtain greater access to the market. After the enactment of Federal Law No. 15,042/2024, the possibility of issuing carbon credits from the conservation of native vegetation protected by law was established. In theory, additionality ceases to be an absolute criterion and becomes weighed according to the Brazilian regulatory and socio-environmental reality. However, considering that the rule is recent and the carbon credit market does not apply this logic to carbon credit projects, there is a high probability that rural landowners will have difficulty monetizing the preservation and conservation of existing forests on their rural properties that result from compliance with the Forest Code. By recognizing the suitability of permanent preservation areas and legal reserves to generate carbon credits, the Brazilian legal system gives economic value to the maintenance of ecosystems and promotes a fairer and more effective model of sustainable development. Luciana Camponez Pereira Moralles Partner, Specialist in Environmental, Sustainability, and Regulatory Law.