Federal Decree Regulates Donation of Assets and Services to the Federal Public Administration

On Thursday, April 11, 2019, the Brazilian Federal Executive Branch issued Decree No. 9.764/19 ("Decree"), which sets forth regulation for the donation of movable assets and services by individuals or private legal entities to the federal public administration. The Decree will enter into force on August 12, 2019.

The Decree authorizes agencies and entities of the federal public administration to receive donations of movable assets and services compatible with public interest, even in relation to studies, consultancies and technologies not available in the market or undergoing testing that are meant to provide solutions and innovations to the government—and society as a whole—and also improve public management.

However, accepting service donations that could compromise, or put at risk, the management and outcome of activities concerning federal administration entities is strictly forbidden. In addition, the Decree prohibits donations that (a) are made by individuals or legal entities declared disreputable; are suspended or prevented from contracting with the public administration; or who have been convicted of administrative improbity, crimes against the public administration (only applicable to individuals) or are in violation of Law No. 12.846/2013 ("Brazilian Clean Company Act"—only applicable to legal entities); (b) may create a conflict of interest; or (c) may subject the beneficiary agency or entity to expenses, charges or liabilities that render the donation uneconomical.

Donations can be made voluntarily through the federal Executive branch website or by public call, as per the needs of the agency or entity of the federal public administration interested in the donation.

The Decree establishes the execution of donations though a term of donation or declaration signed by the donor, depending on the value of the donated asset or service.

Finally, the Decree also prohibits the use of assets and services for advertising purposes, without prejudice to merely informative disclosure.

It is worth clarifying that the Decree refers exclusively to the possibility of making donations to agencies and entities of the federal public administration, therefore it (a) does not cover electoral contributions, whose performance by legal entities remains prohibited as per the current case law of the Brazilian Federal Supreme Court; and (b) does not apply to state and municipal public administrations.