July 26, 2019


1. Federal government authorizes a new option for FGTS withdrawal

The government has published a Provisional Measure that lays out another option for withdrawing the funds set aside in the FGTS (Guarantee Fund for Length-of-service). The so-called “Birthday Withdrawal” will be allowed during the taxpayer’s birth month. Moreover, the government authorized a one-time withdrawal in 2019 with a maximum amount of R$ 500.00 (USD$ 132.00). The FGTS is a type of compulsory savings account, where employers must pay 8% of an employee’s salary towards the fund in their name. The funds are made available to every employee who is fired without justification. Last week, media reports stated that the government was looking into the possibility of allowing occasional withdrawals limited to 35% of all funds available, but the announcement was not substantiated. According to government experts, the idea behind the “Birthday Withdrawal” is to give people more freedom, seeing as they can now make new withdrawals every year. As he announced this new measure, Economy Minister Paulo Guedes denied this is a remedial move to resume economic growth.

“Communication problems”: read this week’s analysis of Brazil’s political landscape on the Brasília Report. 

Valor Econômico: Nova regra do FGTS vai prever sete faixas para saque anual
G1: FGTS: governo anuncia regras para saque de contas ativas e inativas

2. Federal Police arrests hackers charged with hacking into government officials’ phones

Brazil’s Federal Police (PF) has arrested four hackers that are accused of having hacked into the cellphones of over a thousand people, including President Jair Bolsonaro, Justice Minister Sérgio Moro and other Supreme Court Justices. The Federal Judge who authorized the arrests through a warrant granted this Thursday also gave the Federal Police access to the accusers’ bank accounts, since a police report suggests there is evidence of suspicious money transactions. In addition to the arrests, police agents apprehended cellphones, computers and R$ 100,000 (USD$ 26,525.00) in cash. The hackers took advantage of the gaps found in mobile telephone networks to hack into the Telegram app on government officials’ phones. The investigation now seeks to determine whether the crime was politically-motivated.

Valor Econômico: Juiz cita ‘operações suspeitas’ ao quebrar sigilo de supostos hackers
G1: Veja como hackers, segundo a PF, aproveitaram falha para acessar celulares de autoridades

3. STF orders Petrobras to provide fuel to Iranian ships docked in Brazil

The president of Brazil’s Federal Supreme Court (STF), Justice Dias Toffoli, has ordered Petrobras to provide fuel to two Iranian ships that have been docked for approximately 50 days at Paranaguá Port (located in the state of Paraná) in Southern Brazil. The state-owned company had refused to sell fuel to the two ships, on the grounds that they are under a commercial embargo from the United States. Petrobras also argued that selling fuel to the Iranians would essentially self-impose U.S. sanctions. The Iranian ships unloaded a shipment of urea and were expected to return home with more than 100,000 tons of corn – a cargo with an estimated value of more than R$ 100 million (USD$ 26 million). As he reviewed the case, Justice Dias Toffoli considered the fact that Iran is the biggest buyer worldwide of this Brazilian commodity. Furthermore, he argued that the person susceptible to any U.S. sanctions would be the Brazilian company hired to take the shipment to the Middle East, and not Petrobras.

Folha de S.Paulo: Toffoli decide que Petrobras deve fornecer combustível a navios iranianos no Paraná
G1: Toffoli rejeita recurso da Petrobras e manda estatal vender combustível a navios iranianos

4. Government credit lines for businesses fall by 39% in 2019

The approval of new credit lines for businesses by the Brazilian National Development Bank has dropped by 39% in the first semester of 2019, in comparison with the same period last year. The BNDES is a federal state-owned company with ties to the Ministry of Economic Affairs and is responsible for granting long-term lines of credit to businesses across a variety of industries. Consultations from entrepreneurs interested in new bank financing options dropped by 49% compared to the same period in 2018. The curtailing of credit lines and consultations is directly related to the stagnation of the Brazilian economy and the current political landscape of the Bolsonaro administration, as the President himself is a staunch opposer of “using [the BNDES] for political purposes”, which according to him, occurred mostly during the Lula and Dilma administrations.

G1: Consultas sobre novos financiamentos do BNDES desabam 49% no 1º semestre
Valor Econômico: Empresas menores receberam R$ 11,5 bilhões do BNDES no 1º semestre

5. Ministry of Education launches private financing program

New data published by the Ministry of Justice and Public Safety shows that asylum requests filed by Venezuelan citizens has shot up by 245%, going from 17,685 requests in 2017 to 61,681 requests in 2018. Brazil currently houses the fifth largest population of Venezuelan refugees in the world. According to the report, Venezuelans are responsible for 75% of all asylum requests filed in Brazil. In second place, are Haitian refugees, followed by Cuban refugees (third place). Chinese round off the top four. The United Nations reports that Venezuelans currently make up the largest population of displaced individuals worldwide.

G1: Pedidos de refúgio de venezuelanos ao Brasil crescem 245% em um ano
O Globo: Brasil aceita 224 pedidos de refúgio de venezuelanos em 2019, ante 5 no ano passado

Brasilia Report

Click here for the Brasilia Report, a weekly analysis prepared by JeffreyGroup Senior Advisor in Brasilia, Gustavo Krieger.