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Business round-up

The Brazil Business and Politics Round-up June 4th 2018

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Politics

  • Government to aim at exporters to lower cost of diesel In order to lower the cost of diesel – an initiative that will cost the federal government US$ 2.6 billion – the Temer administration has announced that it will raise taxes on exporters and certain sectors of the industry: namely soft drinks and chemical.
  • Supreme Court unanimously convicts first congressman in Operation Lava Jato Justices belonging to the second panel of Brazil’s Supreme Court sentenced Nelson Meurer (PP-Paraná) to more than 13 years in prison for corruption and money laundering following Operation Car Wash and its investigations.
  • Courts maintain Lula’s benefits as former President Judge André Nabarrete Neto, of the Federal Regional Court of the 3rd region, overturned the injunction which suspended the right of the former President to security guards and drivers paid by the Federal Government.

Business

  • Pedro Parente resigns as president of Petrobras Parente has been under mounting criticism for his insistence on maintaining a pricing policy for fuel that was implemented under his management, which has led to successive increases and culminated in the truckers’ strike.
  • Unemployment rate reaches 12.9% affecting 13.4 million people Non-working population – people aged 14 or older who sought employment without success – grew 5.7% compared to the previous quarter (12.7 million).

The Brazil Business and Politics Round-up May 21st 2018

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Politics

  • One in three presidential candidates drops out of the race six months before the poll Eversince 1985, when democracy in Brazil was restored, an average of one in three of the main presidential candidates drop out of the race six months before the poll day
  • Brazilian prosecution office indicts JBS’ executives and ignores agreement The Federal Prosecution Office indicted JBS’ executives and informers Joesley Batista and Francisco de Assis on charges of active corruption, money laundering, violation of functional confidentiality and obstruction of investigations
  • São Paulo police kill more men, blacks and youth Data from an unpublished research shows there are more men, blacks and young people killed as a result of police interventions than the number of murder victims in the State of São Paulo

Business

  • Brazil’s Central Bank maintains interest rate at 6.5% The decision was unexpected, as surprised financial market analysts were estimating a new cut of 0.25%; On another note, the cycle of interest rate cuts, which started in October 2016 when the rate was as high as 14.25%, has ended
  • Operation against illegal mining launched by Federal Agencies The Brazilian Federal Prosecution Office (MPF) and other federal government have started an operation against mining and companies in the Tapajós river area, in Pará, aiming to attack an illegal chain of gold mining in the Amazon

The Brazil Business and Politics Round-up May 14th 2018

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Politics

  • CIA Document exposes former President from the Brazilian military regime as executions supporter The CIA document was posted on social media by journalist Matias Spektor, which claimed the piece was “the most disturbing confidential document” that he had ever read in 20 years of research
  • Brazil’s Justice proposes extention of privileged jurisdiction restriction Justice Dias Toffoli, a member of Brazil’s Supreme Court, has drafted a proposal to extend the restriction of privileged jurisdiction to all the authorities of the Executive, Legislative and Judiciary branches at the federal, state and local levels
  • Witness accuses city councilor in the Murder of Marielle Franco; Politician Denies Connection “My relationship with Marielle was very good; I don’t understand why this factoid against me was created,” said Marcello Siciliano; Marielle Franco (PSOL) was murdered on March 14

Business

  • Brazilian Airline Companies affected by soaring oil prices The price of the commodity is causing major concern for airline companies, once they suffer from the consequences of high prices for the fuel, raising their operating costs
  • Viracopos airport seeks for bankruptcy protection If the request for Bankruptcy protection filed on Monday (the 7th) is granted, partners could get relief from their payment obligations for concession granting fees already due for 2017 and those that come due at the end of the month

The Brazil Business and Politics Round-up May 7th 2018

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Politics

  • Partial Immunity for Congressmen and Senators narrowed by Brazil’s Supreme Court The court will only try members of congress if they are accused of committing a crime during their terms and if the crime is connected to their activities as representatives, making the proccess
  • Presidente Michel Temer cancelled his Speeches on May 1 due to chance of booing There are 13.7 million people unemployed  in the country as of now
  • Brazil’s Next President To Face Narrower GPD Spending Margin Due to the country’s spending cap, whoever is elected president will have to face the lowest spending margin in terms of GDP since 1997

Business

  • Brazilian Steel Makers Accept Quotas Imposed by The US An ultimatum by Donald Trump’s administration made Brazilian steel mills accept steel export quotas to the United States; The measure will effectively mean a reduction of 20% in Brazilian sales to the US
  • Excessive increase in Açai Berry production may harm it’s harvesting The harvesting and cultivation of açai berry generates about US$ 141,7 million per year to the Amazon, but the producers might be shooting themselves in the foot when excessively increasing the production.

The Brazil Business and Politics Round-up May 2nd 2018

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Politics

  • Jailed in Brazil’s Lava Jato Operation Have Assets Blocked and Cannot Pay for Compensation
    The compensation for damage is a type of indemnity for the crime committed in which the resources embezzled are returned; The payment of compensation for damage has made the concession of reduction of prison sentences to those jailed in the Operation come to a standstill.
  • President Michel Temer Cancels Trip to Asia as Investigations Advance His decision coincides with the request made by the Federal Police to continue with investigations against him over the decree that benefitted a port company
  • Former Lula and Dilma Minister Reaches Plea Bargain Agreement with Investigators Antonio Palocci, the right hand man to presidents Luiz Inácio Lula da Silva (2003-2010) and Dilma Rousseff (2011-2016) in terms of their economic and political agendas, has been in pre-trial detention since September of 2016, had tried to reach an agreement previously with investigators, but hadn’t succeeded

Business

  • Vale Profits Fall 36% in ‘Very Complex’ Q1 Brazil’s Vale, the world’s largest iron ore producer, posted a 36% drop in net income in a “very complex” first quarter of the year; Results released on Wednesday show the company reported US$ 1.59bn in net income, down from US$2.49bn a year ago
  • Unemployment Hampers Advance of Labor Reform Breakthrough The agreement between an employer and a fired employee, one of the breakthroughs introduced by labor reform last year, has hardly been used due to high levels of unemployment

The Brazil Business and Politics Round-up April 23th 2018

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Politics

  • JBS’ Batista Claims He Paid Monthly Payoff of US$ 14 thousand to Aécio Neves The Brazilian businessman said the payments were requested directly by the senator at a meeting in Rio, in order to “cover his monthly expenses”.
  • Ex-Presidents of São Paulo Metro Company to Face Charges after Court Order The civil proceedings on the grounds of misconduct of office include the periods when the state was managed by PSDB politicians José Serra, Alberto Goldman and Geraldo Alckmin.
  • Dispute Over Satellite Puts the Spotlight on Brazil’s Broadband Promises The main promise of the Brazilian Federal Government related to the plan Internet for All, published at the end of 2017, is a Telebras satellite which cost US$ 800 million and has not been used since June 2017, when it went into orbit.

Business

  • Petrobras President Agrees to Replace Abilio Diniz as Chairman of BRF’s Board Pedro Parente accepted to substitute businessman Abilio Diniz as the head of the board of the biggest processed food company in Brazil.
  • Brazilians More Optimistic about Own Financial Situations According to a poll, the improvement in terms of expectations that Brazilians have regarding their own financial situations, however, did not translate into a more optimistic take on the country’s economic growth.

The Brazil Business and Politics Round-up April 16th 2018

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Politics

  • Arrest Weakens Lula and Sets Marina Silva Close to Bolsonaro A nation-wide survey carried out last week shows that Lula is still leading the poles with 31% in the most favorable scenario among the nine possible candidates
  • Senator Aécio Neves May Become a Defendant in New Trial The defeated candidate in the last presidential elections was accused of passive corruption and obstruction of justice in June 2017, in an investigation related to JBS’ plea bargain; Aécio was caught on tape asking Joesley Batista for US$ 587,000.
  • Cash Was Used to Pay for Work Done for Temer’s Daughter, Says Supplier Architect Maria Rita Fratezi, wife of President Michel Temer personal friend, paid expenses related to the remodeling of a home belonging to one of the President’s daughters in cash, according to one of the project’s suppliers.

Business

  • Marfrig Acquires Part of National Beef, Becoming World’s 2nd Largest Meat Company The acquisition of National Beef will be financed through private bank Rabobank; The Brazilian National Development Bank helped Marfrig and other Brazilian food processing companies expand
  • Despite Economic Recovery, Brazilians’ Income Declined in 2017 The fall was driven by salaries, still a reflex of the labor market crisis; The figures show that Brazil was coming from a very bad situation and it continued very bad,” says FGV economist Fernando de Holanda Barbosa Filho

The Brazil Business and Politics Round-up April 9th 2018

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Politics

  • Former President Lula arrested. While the politician Lawyer said that the order Is Arbitrary, Judge Sérgio Moro has ordered the arrest of Lula after the Brazilian Supreme Federal Court rejected the habeas corpus request filed by his lawyers.
  • The Federal Supreme Court Denied Lula Habeas Corpus in a 6×5 vote. The case that resulted in his condemnation involves the triplex apartment in Guarujá (SP) has now exhausted it’s compliance procedures and formalities at the 4th Regional Federal Tribunal (TRF-4).
  • Brazilian Army Commander said he repudiates impunity on the eve of the Lula Ruling. The opinion was shared on a social media platform. General Eduardo Villas Boas stated that the army always remains vigilant when it comes to its institutional duties, raising eyebrows when it comes to democracy.

Business

  • Brazil could lose up to R$ 1.1 Billion in exports because of new U.S. Steel Tariff. If applied, the U.S.’s new tariff on imported steel would affect at least 13% of the steel exported by Brazil. The measure announced by President Trump would also lead to a decline of 1.2% in the activity level in the Brazilian sector and would affect the production of semi-finished steel.
  • State of Pará Demands US$ 75 million Settlement from Norwegian Company The governor of the state of Pará filed a civil environmental lawsuit demanding that Hydro Alunorte pay the state R$ 250 million in damages after inadequately disposing of untreated waters in the city of Barcarena, 100 kilometers away from state capital Belém.

The Brazil Business and Politics Round-up April 2nd 2018

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Politics

  • 2017 was a record for the apprehension of contraband goods and merchandise in Brazil: The Federal Revenue Service seized US$ 693 million in unregistered merchandise; This is the largest amount since 2010 and represents an increase of nearly 10% over 2016
  • Brazil’s former president ended his caravan campaign in the south of the country with an event in Curitiba attended by thousands of people – which also had moments of tension
  • Supreme Court Justice Authorizes Maluf to Serve Sentence in House Arrest Former mayor of São Paulo has been in the jail of Papuda, in Brasília, since December 2017; In his decision, Justice Toffoli said that Maluf’s defense presented documents that prove that the congressman “is having severe problems related to his health in prison”

Business

  • Construction Firm Odebrecht Signs Public Contract for First Time since Operation Lava Jato Began The firm won a bid to modernize a unit of the Santa Cruz thermoelectric plant in Rio de Janeiro, which belongs to federal state-owned company Furnas, a subsidiary of Eletrobras; The Furnas contract is worth approximately US$ 180 million
  • Informal Sector Employment Becomes Obstacle for Brazil’s GDP in 2018 Last year, all 1.8 million jobs created belonged to the informal sector; The average income of workers without work permits, sometimes referred to as workers who are “on their own”, is half the income of formal sector worker.

The Brazil Business and Politics Round-up March 26th 2018

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Politics

  • Federal Intervention in Rio de Janeiro Approved by 76%; Majority Sees No Change The decree ordering the intervention was signed by President Michel Temer on February 16; Since then, the Brazilian Army has been responsible for fighting violence in the state.
  • Michel Temer Prepares Electoral Package with Announcements and Inaugurations The package includes increases in the Bolsa Família welfare program, the inaugurations of housing for the underprivileged and airport terminals as well as a visit to a hospital already operational.
  • Most Rio de Janeiro Residents Received Fake News about Marielle Franco, but Did Not Believe It On Thursday, March 22, Rio de Janeiro courts ordered Google to take down 16 Youtube videos which contained offensive messages against Marielle, or it would have to pay fines of R$ 1,000 per day.

Business

  • President Temer Mentions Suspension of Steel Tariff without US Official Statement The American government had announced previously that the 25% tariffs on steel and 10% on aluminum would come into force on Friday, March 23, and the only countries exempted would be Mexico and Canada.
  • Brazil’s Department of Federal Revenue Approves Land Border Duty Free Shops This means that stores subjected to a special taxation regime – similar to the ones that exist in airports and ports – will be able to operate along Brazil’s borders, selling tax-free items to international travelers.
  • Lack of Government Policies Affects the Development of Tourism on National Level At least that was the main conclusion that participants of the Tourism and the Internationalization of Brazil Conference arrived at. The event took place on Thursday (the 15th) at the Pinacoteca in the state of São Paulo and was sponsored by Embratur and supported by CVC.
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