Effects of COVID-19 on the Brazilian Entertainment and Tourism Sector

On April 8, 2020, Provisional Measure No. 948 (MP 948/2020) was published, which provides for the cancellation of services, reservations and events in the tourism and culture sectors due to the COVID-19 outbreak in Brazil.

The measure provides that, in the case of service cancellations, there is no obligation to refund the amounts paid by the consumer if the service providers ensure:

i) The rescheduling of cancelled services, reservations and events;

ii) Credits for use or discount in the purchase of other services, reservations and events, available at the companies; or

iii) Another agreement to be settled with the consumer.

Consumers have up to 90 days, counted from the publication, to request the alternatives highlighted above without any additional cost. In the event of the impossibility of complying with the chosen option, the amount paid must be monetarily restated by the IPCA-A and refunded within 12 months, counted from the date of closure of the state of emergency recognized by Legislative Decree No. 6 of 2020.

Regarding the artists and other professionals already hired, there is no obligation to immediately reimburse the values of the services or fees, as long as the event is rescheduled within 12 months after the end of the state of emergency. If the events are not held, the amounts must be returned, also restated by the IPCA-A.

The current outbreak characterizes the theory of unforeseeable circumstances or force majeure, and, consequently, the cancellations encompassed by the Provisional Measure do not give rise to pain and suffering, fines or other penalties.

MP 948/2020 is in effect, and Congress has up to 120 days to approve it.

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And for any legal questions related to this pandemic, please contact the authors of this article or Mayer Brown’s COVID-19 Core Response Team at FW-SIG-COVID-19-Core-Response-Team@mayerbrown.com.