After nearly two years of waiting, the Environmental Ministry published, on May 6, 2014, Regulation No. 2 (Regulation), formally implementing the Rural Environmental Registry (RER). Now, all rural properties must be enrolled in the RER System (RERSYS) by May 2015. This deadline may be extended for an additional year.

In summary, the Regulation addresses the RER operation in detail, establishing provisions in connection with data integration between the RER and State registries, special simplified schemes for certain types of properties and several other procedures, including data analysis and the identification of liabilities and pending issues. The registration of a rural property in the RER is national, unique, permanent and comprises a sequential number code, the federation unit acronym and the municipality identification number.

It is worth noting that the Regulation filled an important gap in the Brazilian forest legislation, by expressly defining what is a “rural property”. Pursuant to the Regulation, rural property is the rustic estate with continuous area, regardless of its location, which is intended for, or may be intended for, farming, livestock breeding, vegetal exploitation, forest exploration and agribusiness. Therefore, owners or occupiers of rural properties who possess more than one real estate in a continuous area shall register the rural property in the RER as a whole – eliminating the interpretation that RER inscription would be required for each piece of real estate (title deed).

Other important piece of legislation published this week is Federal Decree no. 8,235 (Decree), which sets forth general supplementary rules in connection with the Environmental Regularization Programs (ERPs). ERPs can only be used for regularizing permanent preservation areas, legal forest reserves and restricted use areas, which may be conducted through restoration, regeneration or offsetting measures – the latter applicable to legal forest reserves only. In line with 2012 new forest laws, owners or occupiers of rural properties with pending environmental regularization can only apply to ERPs after RER enrollment.

The decree also filled regulatory gaps, particularly one related to legal forest reserve offsetting. Pursuant to the Forest Code, offsetting legal forest reserves outside the original State can only be authorized if the area used for offsetting is located within “priority areas identified by the Union or by the States”. However, there was no legal definition concerning such areas. The Decree provides that priority areas are (i) those defined by the Ministry of the Environment; (ii) public domain conservation units pending regularization; (iii) areas harboring migratory species or endangered species, as defined in official lists published by environmental agencies; and (iv) areas identified by the States and the Federal District.

Lastly, the Decree establishes that an additional regulation shall be issued within a year, to govern the conversion program for fines imposed due to unauthorized deforestation in areas where the suppression of vegetation was not forbidden before July 22, 2008.

Certainly, these new rules are a significant development, not only for rural property regularization control, but also for the effectiveness of the Brazilian Forest Code, as the operation of several of its instruments (like the ERPs and the Environmental Reserve Quotas) relied on the RER implementation.

For more information about this Legal Update, please contact Luiz Gustavo Bezerra, Gedham Medeiros Gomes or Solange S. A. Cunha.