Brazilian Government takes steps towards market liberalization

On February 5th, the Brazilian government signed Decree No. 10.229 and thereby took another step towards facilitating economic activity in Brazil. The decree sets out new possibilities to develop, execute, operate or commercialize a product or service in disagreement with outdated national technical standards. Specifically, where Brazilian national standards are outdated and applicable international standards (ISO, IEC, CAC, ITU, OIML) exist, economic activities in Brazil, including the marketing of products, will now be possible if they are aligned with these applicable international standards.

Decree 10.229 continues the transition towards the implementation of market liberalization initiated by Decree No. 10.178 on risk-based procedures for product licensing, which was approved in December 2019. Decree No. 10.178 establishes the categorization of economic activities in three risk classes. For each risk class, separate (but mostly strongly eased) licensing procedures apply for the marketing of products and services in that risk class. For instance, the marketing of products classified as “low/middle-risk activities” in the Brazilian market will be possible without any previous approval from public authorities.

For high risk activities, the decree defines a maximum period for approval by public authorities (first 120, then 90, in the end 60 days). Currently, Brazilian authorities are working on methodologies for the risk classification within their sectors. The Decree will come fully into force on 1 June 2020.

Both Decrees were created in the framework of implementing the reforms ruled by the Economic Freedom Act (law No. 13.874), approved by Brazilian President Jair Bolsonaro on September 20, 2019. The Act aims to reduce bureaucracy in economic activities and to facilitate the opening and operation of companies in terms of investments and trade, thereby improving the Brazilian overall regulatory environment of doing business. The government expects the law to facilitate and give more legal certainty to businesses, with an increase of approximately 7% of national GDP in ten years.