New Act of Introduction to Brazilian Law Norms should modify rule enforcement for public institutions

The implications and consequences of the new rule for public agents, particularly for the Brazilian Internal Revenue Service, was discussed at an event held by the Nucleus for Fiscal Studies (NEF) of FGV’s Sao Paulo Law School (Direito SP) on August 29.
法学
04 九月 2018
New Act of Introduction to Brazilian Law Norms should modify rule enforcement for public institutions

Law No. 13.655, known as the Introduction Act to Brazilian Law Rules (LINDB), drafted by legal experts Floriano de Azevedo Marques Peixoto and Carlos Ari Sundfeld, which complemented the Introduction Act to the Civil Code of 1942, introduced principles of interpretation in case of conflict between public law rules. The original rule was restricted to private law rules and conflicts with rules from other countries.

The implications and consequences of the new rule for public agents, particularly for the Brazilian Internal Revenue Service, was discussed at an event held by the Nucleus for Fiscal Studies (NEF) of FGV’s Sao Paulo Law School (Direito SP) on August 29.

“The great profusion of tax rules in Brazilian law harms all agents, especially taxpayers, who are required to interpret and enforce the legislation, to subsequently submit to the tax authorities, in the system that we know as self-assessment. The introduction of the LINDB is an effort to include principles that can guide the actions of public officials”, said Eurico de Santi, NEF Coordinator.

Carlos Ari Sundfeld, a professor of Administrative Law from Direito SP and one of the drafters of the law, which came into force in April this year, explains that the LINDB has no punitive aspect and no relationship with private law, but finds it curious that it has been invoked as a way of resolving conflicts on contracts “more for a symbolic force than for the principle of analogy”.

The professor also notes that public servants show little understanding of the law itself, tending to take ownership of the rules for their own agendas or to reject it, in a natural protective move.

In regard to the enforcement of tax rules, Sundfeld explains that Ministry of Finance authorities discussed and proposed changes that led to an amendment to article 30, which provides that “public authorities should act to improve legal certainty in the enforcement of the rules, including through regulations, administrative precedents and responses to queries”.

For Sundfeld, the introduction of this rule aims to ease a common technique, which is to allow the retroactive interpretation of rules and regulations. “The regulatory agencies announce new rules and notify old actions based on new interpretations, which causes a Judicial race.

“It is a technique often preferred to regulations and that worries public agents, because this custom introduces, through legal practice, a disorganization of the law, promoted by the State and that results in high economic costs”, he said.

André Corrêa, a professor of Private Law from Direito SP, made a historical retrospective to justify the creation of the law in 1942. According to the professor, the creation of the CLT (Consolidation of Labor Laws) in 1940, provoked a resistance of the courts to enforcing the rules to an area of Justice, and on the recitals of the Law of Introduction to Civil Code (former name of the LINDB) there was a need to establish a minimum of control to the Judiciary.

Finally, for Tércio Sampaio Ferraz, Jr., a retired professor from University of Sao Paulo (USP), the movement that justifies the creation of the LINDB has been pursued by several European countries, who have adopted the tradition of Roman law (characterized by the use of codes and fixed rules), increasingly affected by the workings of the so-called Common Law (system of rules adopted by England and the United States, based not on codes or laws, but on case law).

“One of the phenomena that we see is breaking the hierarchical perception in decision making. And it is not just in Brazil. At the international level, a German scholar raised 125 institutions that do not comply with any decision. And it is starting to spread. Hierarchy is losing its function. And it is essential to explain the workings of our law”.

For Ferraz, the big challenge is that the pyramidal representation of the law is overcome by paradigms that operate in networks or even in rhizomes (representing systems into themselves).  “The proposal of the LINDB tries to respond to this new paradigm and work with the internal logic of the institutions”. 

The subject was also addressed in an FGV Chat with Carlos Ari Sundfeld, analyzing aspects of the law.

Check out the complete interview, in Portuguese: