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  • STJ Authorizes Seizure of Airline Miles and Loyalty Points

    STJ Authorizes Seizure of Airline Miles and Loyalty Points

    The Third Panel of the Superior Court of Justice (STJ, Brazil’s highest appellate court for non-constitutional matters) unanimously ruled that airline miles and points accumulated in loyalty programs can be seized to pay debts. Seizure is the judicial attachment of a debtor’s assets to guarantee debt settlement. The decision was issued in the judgment of Special Appeal (REsp) 2,198,485, under the reporting of Justice Nancy Andrighi.

    Miles as Digital Assets

    The panel found that loyalty program points, when carrying measurable economic value, are classified as digital assets. Consequently, they become part of the debtor’s estate and can be used to satisfy financial obligations.

    The STJ’s legal basis relies on Article 789 of the Brazilian Code of Civil Procedure (CPC), which establishes that debtors answer with all their present and future assets to fulfill their obligations. The reporting justice highlighted that debt enforcement law must adapt and keep pace with new ways of acquiring, storing, and investing wealth.

    The Impact of Non-Transferability Clauses

    A central point of the judgment was the analysis of the programs’ internal terms, which frequently classify miles as personal and non-transferable. The STJ ruled that a non-transferability clause, on its own, does not automatically make the points immune from judicial seizure.

    However, enforcing the seizure requires caution and a case-by-case analysis to avoid imposing an undue burden on the loyalty program operator, which has no connection to the debt being enforced. Practical solutions identified by the court to enable this measure include:

    • The repurchase of points by the issuing company itself, provided there is commercial interest.
    • The freezing of the balance without transfer to third parties, preventing its use by the debtor and acting as a coercive measure.

    Additionally, the STJ determined that once points are frozen, their expiration period must be suspended for the duration of the seizure. This requirement aims to prevent the assets from expiring while proceedings are underway, ensuring the effectiveness of the judicial restriction.

    Practical Requirements for the Creditor

    Despite establishing favorable precedent for seizure, the STJ set procedural boundaries for such requests. In the specific case examined, the court denied a generic request by the creditor, which sought to search for points without naming specific companies or programs.

    The decision establishes that the creditor is responsible for expressly indicating the loyalty programs in which it seeks to locate assets. Only with this specific identification can the court notify the providers, evaluate their terms, and determine the feasibility of the seizure. The absence of this specification prevents the court from assessing the transferability of the points, which cannot be presumed across all programs in the market.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • Brazil’s Supreme Court Reaches 5 Votes for Real Estate ITBI Tax Immunity

    Brazil’s Supreme Court Reaches 5 Votes for Real Estate ITBI Tax Immunity

    The STF (Brazil’s Supreme Federal Court) is analyzing the application of tax immunity for ITBI (Municipal Real Estate Transfer Tax) for real estate companies. According to recent court records, the tribunal has already gathered five votes in favor of granting this tax immunity when real estate is contributed to corporate capital.

    What is at stake

    ITBI is a municipal tax levied on property transfers. Capital contribution occurs when shareholders transfer assets, such as real estate, to form a company’s equity during its incorporation or expansion.

    The debate at the STF focuses specifically on real estate companies. The central assessment is whether these entities are entitled to tax immunity when receiving properties from their partners to form corporate capital. With five votes already cast in favor of immunity, the court indicates a potential precedent regarding the tax burden involved in structuring these businesses.

    Impact on the real estate sector

    The progress of this trial is a relevant development for investors, executives, and business founders in the real estate market. The final decision by the STF will establish a precedent regarding the tax costs involved in structuring and contributing property assets to companies.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • Decisions on Exclusivity Clauses and Chinese Investment

    Decisions on Exclusivity Clauses and Chinese Investment

    The flow of Foreign Direct Investment (FDI) into Brazil is frequently influenced by the regulatory environment and guarantees of fair competition. Currently, the delivery app sector illustrates this dynamic, with foreign chains conditioning their expansion in the country on institutional definitions regarding market practices.

    The Antitrust Landscape and Exclusivity Clauses

    The Administrative Council for Economic Defense (Cade, Brazil’s antitrust authority) and the São Paulo State Court of Justice (TJ-SP) are currently assessing the legality of exclusivity clauses in food delivery contracts. The core discussion involves contractual provisions that prevent restaurants from operating with specific competing platforms.

    Recently, Cade’s Tribunal denied a request for preventive measures seeking the immediate suspension of these clauses in contracts of one industry player. Following the decision, existing contracts remain valid while the authority deepens its investigation into the Brazilian delivery market structure. The inquiry remains ongoing for a detailed analysis of competitive practices.

    In parallel, the matter is subject to a civil lawsuit before the TJ-SP. The trial, initiated in August, shows initial divergences: while the reporting judge voted to deem the clauses illegal, the session was suspended due to a request for more time to review the case (pedido de vista) by another appellate judge, pending a final collective ruling.

    Impact on Chinese Investment in Brazil

    The lack of definition regarding exclusivity rules directly affects the attraction of foreign capital, especially from China. Industry representatives indicate that between eight and nine major Chinese restaurant brands are considering entering the Brazilian market, but are awaiting greater clarity regarding the business environment. This movement follows the recent entry of niche Asian chains, such as ice cream and tea franchises, which started operations in São Paulo.

    For international investors, high market concentration in few platforms may represent a commercial hurdle. The perspective is that mature markets operate with multiple major platforms and impose restrictions on exclusivity, preventing establishments from being confined to a single sales channel and ensuring alternatives for consumers and logistics partners.

    Practical Outlook

    The outcome of these disputes at Cade and the TJ-SP will serve as a benchmark for legal certainty and digital competition regulation in Brazil. For foreign companies structuring their entry into the country, monitoring these rulings is crucial for business modeling and operational risk assessment.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STJ Upholds Inclusion of Port Handling Fees in ICMS Tax Base on Imports

    The Superior Court of Justice (STJ, Brazil’s highest appellate court for non-constitutional federal matters) issued a decision ruling that port handling expenses (capatazia) must remain in the calculation base for ICMS, the state value-added tax levied on import operations.

    What are port handling expenses (capatazia)?

    In the context of foreign trade, capatazia refers to the physical movement and handling of cargo. These expenses routinely occur at ports or customs terminals when goods arrive in the country for customs clearance.

    The impact of the STJ decision

    The tax dispute centered on defining the exact components of the calculation base for the Tax on the Circulation of Goods and Services (ICMS) upon import. Following the interpretation established by the STJ, the amounts spent by companies on handling cargo at terminals form part of the total base on which the tax is calculated.

    In practice, the ruling directly influences cost structures for businesses importing goods into Brazil, as including these terminal handling charges in the tax base increases the final tax amount remitted to state authorities.

    Key takeaways for foreign trade

    For companies, executives, and foreign investors operating import activities in Brazil, the court’s decision reinforces the importance of aligning financial forecasts. Foreign trade planning must account for the fact that cargo handling costs at ports and customs terminals are subject to ICMS taxation.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STJ Validates Contract Payments Using Cryptocurrencies

    The Third Panel of the Superior Court of Justice (STJ — Brazil’s highest appellate court for non-constitutional federal law) issued a significant ruling for the Brazilian business environment, validating the use of cryptocurrencies to settle contractual obligations between private parties. In ruling on Special Appeal (REsp) 2,235,558, the court established that mere price fluctuation of a digital asset does not justify invalidating a legal transaction.

    The Case and the Courts’ Position

    The legal dispute originated in a lawsuit seeking contract termination and the nullity of contractual clauses. The case involved the transfer of the cryptocurrency Token I9COIN as partial payment for the acquisition of real estate and a vehicle. The seller claimed that the cryptoasset had been fraudulently overvalued and was linked to a financial pyramid scheme, requesting that the obligation be converted into legal tender currency.

    On appeal, the Santa Catarina State Court of Justice (TJSC) dismissed the fraud claim. The state appellate court highlighted the seller’s lack of caution in failing to assess the transaction’s risks beforehand. The TJSC ordered the rescission of the real estate contract solely because only partial payment occurred, but upheld the validity of the vehicle contract and the agreed use of the cryptoasset as payment.

    Upon reviewing the appeal, the reporting justice at the STJ, Justice Nancy Andrighi, upheld the Santa Catarina court’s understanding, dismissing the seller’s claim and reinforcing the validity of transactions involving digital assets.

    Grounding in the Legal Framework for Cryptoassets

    The STJ decision is grounded in current legislation, specifically Federal Law No. 14,478/2022, known as Brazil’s Legal Framework for Cryptoassets. The reporting justice highlighted that the law recognizes the regularity of virtual assets, defining them as digital representations of value that can be used for payments or investments.

    It is important to emphasize the distinction drawn by the court between cryptocurrencies and legal tender. According to the ruling:

    • Lack of legal tender status: Unlike the Brazilian Real (BRL), cryptocurrencies do not have forced circulation status in Brazil. Therefore, their acceptance in contracts is strictly optional.
    • Nature of the obligation: When parties agree to use cryptocurrencies, the obligation does not constitute a debt in money under Article 315 of the Brazilian Civil Code, but rather the transfer of a digital asset.

    The justice emphasized that, because no legal prohibition exists, transactions involving cryptocurrencies are valid under the Brazilian legal system, which not only recognizes them but also provides legal protection.

    Volatility and Risk Assumption

    A core element of the ruling is the allocation of risk in contracts involving digital assets. Using cryptocurrencies constitutes a high-risk investment for both parties — both buyer and seller.

    The high volatility of these assets, which can lead to significant variations in purchasing power, must be weighed by the parties when executing the agreement. The STJ determined that both parties bear the risk of appreciation or depreciation of the asset’s value when converted into Brazilian Reais. Consequently, market fluctuation does not serve as a legal basis to invalidate the agreed transfer.

    Practical Considerations for Businesses

    The STJ Third Panel ruling brings greater legal certainty to private transactions utilizing new financial technologies. For founders, investors, and executives structuring commercial operations, this precedent reinforces that using cryptoassets as payment is legitimate, provided there is mutual agreement between the parties. However, judicial validation comes with a reminder of the need for prior due diligence and a clear understanding that price fluctuation risks are fully assumed by the contracting parties.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STJ Suspends Lawsuits on Short-Term Rentals

    The Second Section of the Superior Court of Justice (STJ, Brazil’s highest appellate court for non-constitutional matters) has ordered a nationwide suspension of all individual and collective lawsuits challenging rules on short-term property rentals in residential condominiums. The measure directly impacts operations mediated by digital hosting platforms.

    The Core Legal Dispute

    The main debate before the Court aims to establish a clear standard for condominium bylaws. The central question is whether a standard clause establishing a building’s “residential purpose” is sufficient to prohibit short-term rentals of individual units, or whether the condominium bylaws must expressly forbid the practice.

    To settle the matter, the STJ admitted Special Appeals (REsp) 2,272,537 and 2,272,536, with Justice Raul Araújo as rapporteur, under the repetitive appeals system (a mechanism for resolving widespread identical legal questions). The dispute was registered as Topic 1,443.

    The repetitive appeals system, governed by Articles 1,036 et seq. of the Brazilian Code of Civil Procedure (CPC), allows the court to select representative cases with identical issues for sampling. Under Article 927, III, of the CPC, the legal holding established in this judgment will be binding on lower-court judges and appellate courts. According to the STJ, the Precedent, Case Law, and Class Action Management Commission (Cogepac) had already identified 50 single-judge and panel decisions on the subject within the Court, underscoring the need for harmonization.

    STJ Precedents on the Topic

    The issue is not new to the Court. The reporting Justice highlighted that panels specialized in private law have previously addressed the scenario. In a prior ruling (REsp 2,121,055), the Second Section—which comprises the Third and Fourth Panels—consolidated the view that an express prohibition in the condominium bylaws is not required to prevent the practice.

    On that occasion, the panel ruled that the mere provision of an exclusively residential purpose for the units makes rentals via digital platforms incompatible with the condominium’s intended use. For short- or ultra-short-term rentals to be permitted in such cases, the STJ established that an assembly resolution approved by a qualified quorum of two-thirds of unit owners is required.

    Practical Impact and Legal Certainty

    The nationwide stay of proceedings prevents local courts from issuing conflicting rulings on the same topic while the STJ finalizes its ruling. According to Justice Raul Araújo, establishing a binding precedent ensures legal certainty and consistency in resolving similar disputes, while streamlining the judicial system.

    Until Topic 1,443 is decided and the binding precedent is established, investors, property owners, and condominium boards must await the superior court’s final ruling, which will set the definitive rules for the commercial use of residential units through short-term rentals.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • China Prepares New Transnational Anti-Corruption Law

    China Prepares New Transnational Anti-Corruption Law

    China recently presented the draft of its Transnational Anti-Corruption Law. The document sets guidelines to prevent and punish corrupt practices that cross the country’s borders, aiming to protect national sovereignty and deepen international cooperation. The initiative reflects a move toward alignment with global governance practices, with direct impacts on foreign companies and investment funds operating in the Chinese market.

    The scope of transnational corruption

    Article 3 of the draft law broadly defines conduct that constitutes transnational corruption. The legislation encompasses both Chinese citizens and companies (including their branches and subsidiaries) that offer bribes to foreign authorities or international organization officials, as well as foreign individuals and organizations that bribe Chinese public officials and related parties.

    Beyond direct bribery, the text classifies embezzlement, abuse of power, and misappropriation of funds carried out by Chinese entities abroad as transnational corruption. The cross-border transfer of illicit assets and the flight of investigated individuals to other countries are also expressly categorized, demonstrating the government’s intent to monitor capital flows across multiple fronts.

    Control mechanisms and corporate governance

    The coordination of anti-corruption efforts will be led by the National Supervisory Commission, working in conjunction with ministries such as Foreign Affairs, Public Security, Justice, Commerce, and Finance. Articles 7 through 10 of the bill highlight the importance of establishing corporate compliance management systems. Authorities will act to identify risks, issue warnings, and monitor sectors that are more vulnerable to illicit practices.

    The legislation also mandates that financial regulatory bodies intensify anti-money laundering supervision. Article 13 establishes that financial institutions must reinforce the monitoring of cross-border funds, tracking suspicious transactions and reporting evidence of corruption to competent authorities.

    Monitoring of public officials and whistleblowing channels

    The draft introduces strict rules for Chinese public servants. Articles 11 and 12 mandate oversight of public officials who obtain foreign citizenship or permanent residency abroad, while also requiring the disclosure of deposits and investments held outside the country. To strengthen the detection of irregularities, Article 17 guarantees the right of any organization or individual to report transnational corruption acts, ensuring confidentiality and providing rewards for verified information.

    International cooperation and countermeasures

    The draft dedicates a chapter to international judicial cooperation. Articles 21 through 25 detail mechanisms for asset repatriation, extradition, joint investigations, and evidence sharing. Article 22 lists the types of judicial assistance that may be requested from foreign jurisdictions, such as financial account tracking, search and seizure, and freezing of assets.

    A notable provision is Article 6, which establishes China’s right to adopt countermeasures. If a foreign state uses anti-corruption as a pretext to improperly apply its laws extraterritorially—imposing restrictive or discriminatory measures against Chinese companies and citizens—the Chinese government may trigger blocking and retaliation mechanisms under its Anti-Foreign Sanctions Law.

    Practical impact on international business

    The legislative process of this new law points to a stricter regulatory environment for companies operating internationally. Organizations receiving Chinese investment or maintaining operations in China will need to align their integrity programs with the new requirements. Structuring robust governance policies and rigorously monitoring financial transactions become essential elements to ensure safe operations that comply with global standards.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • Artificial Intelligence and Fiduciary Duties in Companies

    Artificial Intelligence and Fiduciary Duties in Companies

    Artificial intelligence in business decisions

    The adoption of artificial intelligence (AI) in the corporate environment has transformed how organizations operate. When this technology directly influences business decisions, new risks emerge that require careful attention from corporate leadership.

    New risks, same principles

    Despite the technological innovation inherent in artificial intelligence, the framework for assessing its use in a corporate context remains grounded in traditional concepts. The application of AI falls directly within the realm of fiduciary duties.

    This means that adopting these tools does not relieve managers of their established responsibilities. The principles governing corporate conduct remain the same, requiring directors’ oversight to extend to the technological processes and tools that support strategic choices.

    Oversight and governance

    For corporate officers and directors, the current landscape reinforces the need for active oversight. Supporting decisions through artificial intelligence systems must be paired with control mechanisms that ensure compliance with fiduciary duties, guaranteeing that new technological risks are managed diligently.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STJ Sets 15% Withholding Tax Rate on Film Licensing

    STJ Sets 15% Withholding Tax Rate on Film Licensing

    The Superior Court of Justice (STJ, Brazil’s highest appellate court for non-constitutional matters) issued a decision with direct impact on Brazil’s audiovisual and entertainment sector. The court fixed the Withholding Income Tax (IRRF) rate applicable to film licensing transactions.

    Taxation on Remittances Abroad

    Under the STJ’s ruling, the applicable rate is 15%. This percentage applies specifically to funds remitted abroad as payment for licensing cinematographic works intended for exhibition in Brazilian movie theaters.

    Relevance for the Audiovisual Industry

    The definition of this rate establishes tax treatment for media and entertainment companies operating in Brazil that do business with international producers or distributors.

    Licensing foreign content is essential for theatrical exhibition in the country. Confirming the 15% rate on remittances abroad provides clear guidance for structuring cross-border transactions in the audiovisual sector.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STF upholds monthly limit on tax credit offsetting

    STF upholds monthly limit on tax credit offsetting

    The STF (Brazil’s Supreme Federal Court) has upheld the rule establishing a monthly limit on tax credit offsetting. The decision has direct relevance for the financial planning of companies and foreign investors operating in Brazil, as it affects the dynamics of settling tax liabilities.

    What is tax credit offsetting?

    Tax offsetting is a mechanism that allows companies to use amounts owed to them by tax authorities (credits) to settle taxes they are required to pay (debts). Rather than disbursing cash to pay taxes while waiting to receive tax credits, a company reconciles these accounts. This practice is an important tool for corporate cash flow management.

    The STF’s validation of the monthly limit

    Imposing a monthly limit restricts the portion of credit that can be utilized for offsetting within a single month. Under this rule, high-volume credits cannot be deducted entirely at once and must be spread out over time.

    When analyzing the matter, the STF confirmed the validity of this limitation. The high court upheld the application of the monthly cap, establishing that the restriction imposed on tax credit offsetting is legitimate from a constitutional standpoint.

    Impacts on corporate planning

    With the STF’s confirmation, companies holding large volumes of tax credits must adjust their financial projections. The inability to perform full immediate offsetting requires companies to reorganize cash flow to cover ongoing tax liabilities while the credit balance is gradually utilized within the permitted monthly limit.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.