Brazil: New Regulation Modifies Procedures in Federal Environmental Sanctioning Administrative Process

On April 14, 2021, Normative Instruction No. 1/2021 was issued jointly by the Ministry of the Environment, the Federal Environmental Agency (IBAMA) and the Federal Conservation Unit Agency (ICMBio), revoking Normative Instruction No. 2/2020 and modifying procedures in the federal environmental sanctioning administrative process. Although many of these procedures have been maintained, some changes introduced by the new regulation should be noted.

First, the new regulation dissolves the so-called Preliminary Analysis Team (EAP) and the Settlement Hearing Team (ECAC), which were part of the IBAMA’s and ICMBio’s Environmental Conciliation Center (NUCAM). Now the preliminary analysis of infraction notices, which had been conducted by the EAP before settlement hearings, will be carried out by the NUCAM itself, orally, at the beginning of the hearing.

Another change related to NUCAM's duties concerns the responsibility to conduct hearings. This had been based on the value of fines. Previously, fines equal to or greater than BRL 500,000 would mean a settlement hearing conducted by the NUCAM of the federal district. For fines below that amount, the NUCAMs of each state would be in charge of the hearings. With the new rule, settlement hearings will always be the responsibility of the NUCAM administrative unit that issued the infraction notice.

Also regarding settlement hearings, the new normative instruction establishes that transgressors must expressly indicate that they agree to participate in the settlement hearing, which should preferably occur electronically. If there is no such express indication, the settlement hearing is deemed waived and the deadline for submitting an administrative defense will begin.

Lastly, it should be noted that, according to the new regulation, after issuing the infraction notice, the inspection agent must forward the relevant documentation to their superior officer, who will be responsible for initiating the sanctioning process. If he or she deems necessary, the officer may request additional clarification from the inspection agent and, depending on the sufficiency of such clarification, the officer shall decide whether there are grounds to continue the sanctioning process. Likewise, the officer has authority to assess the applicability of precautionary measures eventually imposed by the inspection agent, such as embargos or seizure of goods.

For more information related to this Legal Update, please contact our Environment team.