Home 29. Brazilian Code of Aeronautics

 

29. BRAZILIAN CODE OF AERONAUTICS

Di Ciero e Mello Franco Advogados

29.1 The liberalization of the brazilian air transportation market and the several proposals for amendment of the Law nr. 7.565 of December 19th, 1986

Paulo Ricardo Stipsky

The rules that are applicable to the concession (when it refers to regular air transport) or authorization (in the case of non-regular air transport or specialized services) for the exploration of public air transport services in Brazil are currently provided in the Brazilian Code of Aeronautics (Law nr. 7.565, of December 19th, 1986), which limits the granting of exploration rights to Brazilian companies, with the requirement that the company shall be managed exclusively by Brazilian citizens and that at least 80% of the voting capital is owned by Brazilian citizens (foreign shareholding limit, with the previous approval of the Aviation Authority), as provided for by law.

In addition, in the same line of reasoning, the current Brazilian Code of Aeronautics regulates domestic transportation, thus considering all transportation with departure and destination points, as well as intermediary stops, within Brazilian territory, which is a modality of air transportation which is currently also reserved to Brazilian companies, according to article 216 of Law nr. 7.565/1986.

Due to the current rules, and also according to the example of the liberalization standard and suppression of barriers to the foreign capital ownership interests internationally adopted and with the justification that the protectionist character of the Brazilian legislation with regard to the Brazilian air carriers is no longer justifiable due to the demand in the sector (a sector that is regarded as fundamental for the development of tourism and the national economy), the amendment of Law nr. 7.565/1986 was proposed by means of several projects being carried out at the Brazilian Senate and at the Brazilian House of Representatives, with the purposes of amending the rules which are currently in force under the Brazilian Code of Aeronautics (Law nr.7.565/1986).

About this issue, the Senate Bill (PLS) nr. 259/2006 can be mentioned (that aims at revoking the articles 181, 182 and 216; and the amendment of the wording of article 218, all of them from the Brazilian Code of Aeronautics), according to which the Brazilian airline transport liberalization must be deemed as essential for the integration of the Brazilian territory and the development of the Brazilian economy, thus enabling the strengthening of trade and diplomatic relations with other countries from the continent. Notwithstanding, the Bill also establishes that the issue is extremely important in consumer relations, allowing the rendering of better services with lower prices, due to the intended restructuring of the competition system in the sector.

The referred Senate Bill (PLS) nr. 259/2006 is under consideration along with the Senate Bill (PLS) nr. 184/2004 (which is intended to amend the article 181 of the Brazilian Code of Aeronautics in order to limit foreign ownership interest to 49% of the voting capital) and with the Senate Bill (PLS) nr. 258/2006 (that intends to amend articles 181, 182 and 212 of the Brazilian Code of Aeronautics in order to authorize the rendering of services of domestic airline transport between international lines stop points), and currently waits legal analysis.

Therefore, one can see that the proposal inserted in the scope of the several projects sent for consideration of the Senate or the House of Representatives, tries the liberalization of the Brazilian air transportation market, thus permitting the revoking (in some cases) or flexibilization (in other cases) of the current restriction according to the Brazilian Code of Aeronautics, of the granting of the right to explore air transport services only to legal entities of Brazilian nationality. In addition, another inserted objective is the revoking or flexibilization of the requirements, depending on the specific proposition, that at least 80% of the voting capital shall be owned by Brazilian citizens.

Besides, Bill nr. 1.682/2007 is under consideration by the House of Representatives, which also aims at amending the Brazilian Code of Aeronautics so that the granting for the exploration of air transport service to the Brazilian legal entities is enabled by the amendment of article 181 of that rule, regardless of the nationality of the capital stock. Additionally, this Bill nr. 1.682/2007 also intends amend the aeronautics legislation to provide a new wording to article 216 of Law nr. 7.565, of December 19th, 1986, so that domestic air transport services may be rendered by companies which are incorporated under the Brazilian laws, according to the guidelines already set forth originally by the Bill which is under consideration by the House of Representatives.

Also with regard to Bill nr. 1.682/2007 of the House of Representatives, the proposal is currently under consideration with Bill nr. 1.760/2007, Bill nr. 2.001/2007, Bill nr. 2.219/2007 and with Bill nr. 3.177/2008; and others, reason why it is waiting for final processing according to the law.

29.2 The international conventions about air transportation and the Brazilian law: an overview on the passengers' rights in Brazil

Valéria Curi de Aguiar e Silva Starling

In Brazil, the Warsaw Convention that regulated the international air transportation, as amended by Additional Protocols nrs. 1, 2 and 4, was effective until September 27th, 2006, period in which Decree nr. 5.910 became effective.

It is worth informing that, although the Montreal Convention became effective internationally on November 4th, 2003 and the fact that Brazil had ratified the referred Convention, in fact, it had to become an internal rule in order to be followed, and this was the reason why the Brazilian National Congress had to approve it, and made effective by means of Legislative Decree, made effective by means of Legislative Decree nr. 59 (of April 18th, 2006), in addition to the President of the Republic's approval, made effective by means of Decree nr. 5.910
September 27th, 2006).

Another important issue is that both the Federal Constitution (in its 5th articleº, 2nd and 178th paragraphs) as well as the Civil Code (article 732), authorize and legitimate the use of international legislation to solve cases relative to international air transportation.

Concomitantly with the international legislation, the local legislation is also effective and has been broadly applied to solve the international air transportation cases. And this legislation, notably the Consumer Protection Code, has been used as the passenger has been compared to the figure of the consumer as the final recipient of the rendered transport services. On the other hand, the local legislation, like the referred Consumer Protection Code, is preferred by the Brazilian judges, due to the possibility of indemnity without the need to apply any limit.

It should be highlighted that, on a routine basis, there are decisions that only apply the international rules and others that only apply the Common Law and some of them that mix provisions of the domestic and international law, under the argument that where the Common Law does not determine anything, then the specific international law must be applied. The Brazilian Legal System has total freedom to apply the internal or international legislation in the cases relative to the international air transportation.

However, the understanding of the Brazilian judges, in most cases, has been reported as follows:

 until 1990 (when the Consumer Protection Code came into force, Law nr. 8.078, of September 11th, 1990) the international rules had been applied (Warsaw Convention) for most cases;
 after September 11th, 1990 until the current days, some judges began to apply the Consumer Protection Code to the damage of to the Warsaw Convention, with the understanding that the further law revokes the previous one. It should also be noted that there are also decisions which only apply to the international legislation and there are others that concomitantly apply the domestic and international law.

And, despite part of the legal decisions about issues relative to the passengers' international transport have the tendency to apply the domestic rules(Consumer Protection Code), we consider that with the incorporation of the Montreal Convention into the domestic Law, it is possible that the provisions contained in the international rule (Montreal Convention) are applied again, and not only due to the fact that it is a new law (that would revoke the previous laws on the same issue, despite being clear that the Montreal Convention did not revoke the Consumer Protection Code, as the latter is more generic and comprehensive that the first one), as well as due to the fact it envisions more assumptions (such as delays in flights), with higher penalty limits as well.

A pioneering sentence in regards to this matter was proffered by the Illustrious Law Judge Dimitrios Zarvos Varellis, from the 11th Civil Court Section of the Judicial District of São Paulo - SP (said sentence having been published in the "Diário da Justiça" on June 5, 2008), in the judgment of an Indemnity Proceeding following an ordinary rite, which, during the analysis of the request for indemnity for material damages and for pain and suffering caused by the irretrievable misplacement of luggage, applied all the terms of the Montreal Convention, acknowledging their effect on the Brazilian Territory ever since the enactment of Decree 5.910/06.

29.3 Disabled passengers - applicable law in Brazil

Valéria Curi de Aguiar e Silva Starling

Although the airline companies and airports are duly compliant with the international rules with regard to boarding conditions for disabled passengers who need special assistance, ANAC - The Brazilian Civil Aviation Agency, approved Resolution nr. 9, on June 5th, 2007, which brings other requirements for said compliance of airline companies and airports, aiming at the protection of disabled passengers.

The requirements are of such magnitude that the airline companies would have to change the services rendered to disabled passengers, and even making some changes in their aircrafts, and said requirements are nonexistent in the international aeronautics legislation.

In addition to the changes in the aircrafts and facilities in airports, the airline company (regardless of the class of the passenger's airline ticket) must provide assistance to all disabled passengers, escorting their entrance and exit on aircrafts.

On the other hand, it is important to remember that there is an excess of constitutional rules about the protection to disabled people, and that is the reason why Resolution n. 9 of ANAC can hardly be regarded as unconstitutional.

Preserving the dignity of the human being (1st article., III) is a fundamental principle of the Brazilian State, and it provides the disabled people a large number of rights and guarantees (3rd art., IV; 5th article, caput; 7th article, XXXI; 37th article, VIII; 205th article; 208th article, III), as well as also art. 227, 2nd paragraph of the Constitution: "the law will make provisions about the rules on construction of locations and buildings for public use and the manufacturing of collective transport vehicles in order to guarantee adequate access to disabled people", and art. 244: "the law will make provisions about the adaptation of locations, of current public use buildings and collective transport vehicles in order to guarantee adequate access to disabled people, as provided in article 227, 2nd paragraph".

It should also be highlighted that the Constitution in its 3rd art., IV and Resolution nr. 9 of ANAC in its 6th article state that any type of discrimination is prohibited, and if the sale of airline tickets is denied without justification, this may incur indemnity proceeding by the disabled person and a penalty incurred by ANAC.

Therefore, until Resolution nr.9 of ANAC is reviewed, the airline companies have responsibilities and obligations to disabled passengers which go beyond air transportation.

29.4 Reimbursement of airline tickets for passengers who are arrested due to drug trafficking

Valéria Curi de Aguiar e Silva Starling

The airline companies have been receiving during the last years official letters issued by legal authorities in connection with Lawsuits in which the passenger is arrested in the act of carrying drugs, ordering the penalty of losing the airline ticket in favor of country by means of deposit of the amounts related to the airline ticket reimbursement seized from the passenger.

Despite the fact that those orders were legally grounded under Law nr. 6.368/1976, as revoked by Law nr. 11.343/2006 (which states similar provisions in this issue relative to the previous one), the Lower Court Judges' opinion, which is almost always hasty and without the fulfillment of the legal requirements for the sentence, has been repeatedly revoked in the Courts.

The Courts' opinion is, therefore, of high relevance to the airline companies, and due to this we will explain each one of the reasons by which the greater portion of those ordinances must be inquired in the Courts by the airline companies.

First of all, it should be highlighted that the airline companies are good-faith third parties and any and all of their rights must be highlighted, according to the legal direction set forth in article 91 of the Civil Code. One should clarify that it is not only the Criminal Code that is concerned with the rights of the third parties of good faith. Likewise, the other Brazilian Codes also provide the same legal direction as well as the doctrine, court decisions and the Federal Constitution itself.

On the other hand, the referred penalty of loss of an airline ticket, based on Law nr 11.343/2006, is totally mistaken as, under provided in its Article 62, 2nd and 3rd paragraphs, the penalty of loss can be applied when money or issued checks as payment orders are seized, resting sure that the airline tickets apprehended constitute neither cash nor checks.

It should not be mentioned that the penalty of loss of airline ticket would be authorized by Law nr. 11.343/2006, as, according to provision in article 91, clause II, paragraph a, of the Criminal Code, the penalty of loss can only be applied to the instruments of crime "provided they constitute in items whose manufacturing, sale, use, holding or possession constitute an illicit fact", which does not correspond to the case of an airline ticket possession.

Said decisions added to all that was explained, data venia, violate the Federal Constitution, notably the 5th Article, clauses I, II, XXXIX, XLV, LIV and LVII, which guarantee to any person fundamental rights such as to property and to the due legal suit.

On the other hand, one needs to take into consideration that the international air transportation is regulated by International Treaties to which Brazil has adhered - by the Montreal Convention, by the Brazilian Code of Aeronautics (Art. 203), by the IATA (International Air Transportation Association), by D.A.C. (Civil Aviation Department), by ANAC (Brazilian Civil Aviation Agency) and the Administrative Rules of the Ministry of Aeronautics approved by provision of Art. 87, Sole Paragraph, Clause II, of the Federal Constitution and Art.194 of the Brazilian Code of Aeronautics.

On November 13th, 2000, the Command of the Aeronautics approved of the Administrative Rule nr. 676 where the Transport General Conditions were regulated which, among other issues, in its Chapter II, of the Transport of People, that states the issue of the airline ticket reimbursement, and therefore, article 10 can be transcribed as applicable to the case study: "Art. 10. No reimbursement will be due by the carrier, if, by the passenger's initiative, the trip is interrupted in the airport of the flight stop."

Therefore, the presumed right concerning reimbursement of the flight sections which are not used in the airline tickets, in fact does not exist, as the transport was interrupted by its guilt as they were carrying narcotic substances. The airline companies have nothing to do with that.

The beneficiary of the confiscation may not intend to receive more rights than the one that the criminal person, holder of the airline ticket, had; after all, the airline ticket only proves the existence, in a certain moment, of the transport agreement and does not constitute a negotiable deed.

On the other hand, 7th article of the referred General Transport Conditions is clear when it provisions: "7th Art. The passenger that does not use the airline ticket will be entitled to, within the respective validity term, the reimbursement of the amount that was effectively paid and with monetary correction incurred, according to the following procedures: ... "2nd Paragraph- The reimbursement of the airline ticket that was acquired with a promotional tariff shall obey to the possible restrictions which are contained in its application".

In other words, according to the referred provision, the reimbursement of the airline ticket would only be applicable if the ticket were not promotional, or, if it were, if it had no restrictions. What happens is that in most cases, the airline tickets seized are bought by means of the use of promotional tariffs.

In general, the amount paid for a round-trip ticket seized is lower than the amount of a one-way ticket, or a return ticket, between the chosen destinies. This occurs because, it is cheaper for the company, under the operational viewpoint, to issue a round-trip ticket between two destinations, than issuing a one-way ticket, or a return ticket, and this creates some restrictions for the issued ticket.

It should be noted that the difference in cost between the issuance of a round-trip ticket and a one-way ticket or a return ticket is so big that a ticket to a certain section is more expensive than the double price of a round-trip ticket.

It should be highlighted that if the Defendant himself who was arrested because he was carrying drugs, asked for the reimbursement of a seized airline ticket, said request would be denied by the airline companies, due to the aforementioned ticket restrictions.

And, if all the reasons shown are not sufficient to demonstrate the liquidity and the certainty of the right of the airline companies, what is only admitted to discuss, it should be reinforced that said ordinances determining the reimbursement of airline tickets are illegal, as they do not obey the provisions of the specific law.

In fact, article 62, 2nd and 3rd paragraphs of Law nr. 11.343/2006, makes the following provisions:

"Art. 62. The vehicles, ships, aircrafts and any other means of transport, machinery, utensils, instruments and objects of any kind, used for the practice of crimes as defined in this Law, after its regular seizure, will be under custody of the legal police authority, except weapons, that will be collected, according to specific legislation.
2nd Paragraph- The seizure being made, as referred in the caput of this article, and if has incurred money or issued checks as payment orders, the judiciary police authority that presides the inquest must immediately request the competent court the summoning of the Public Prosecution Service.
3rd Paragraph - And duly summoned, the Public Prosecution Service must request the court, in the form of a provisional remedy, the conversion of the amounts seized in Brazilian currency, and as is the case, the clearing of checks which were issued after the inquest instruction, with certified copies of the respective deeds and the deposit of the respective amounts in a judicial account, and attaching the receipt to the records."

It should be restated that the seized airline tickets constitute neither money nor bearer's checks, and that is the reason why the reimbursement ordinance is clearly illegal.

When the orders for reimbursement of the tickets are issued, they usually create own procedure without legal provision, as it is clear that the airline tickets do not constitute money or checks, and the Lower Court Judges have granted orders for said measure, regardless of this fact.

The principle of legality is stated in the Federal Constitution, more precisely in Clause II, 5th article, which imposes that "no one will be obliged to do something or not do it, except due to the law".

Therefore, said order does not only violate the principle of legality applied to the private one but also violates the principle of strict legality, according to which the Powers of the Union, of the States, of the Federal District and of the Municipality must only do what the law expressly determines.
Due to those reasons, we understand that the airline companies should not bow to the decisions that determine the reimbursement of tickets related to the aforementioned cases, struggling against those determinations in Court and safeguarding their constitutional and infra-constitutional rights.

29.5 Electronic commerce and the sale of airlne tickets - brief comments

Adriano Mota Cassol

Introduction

Internet, is knowingly an international network of interconnected computers, which enabled, in a speed that was never seen in the past, a significant democratization of knowledge, allowing access to a large number of people around the world, in addition to much revolutionizing the social and entrepreneurial relations. Communication, from this moment on, became simpler, faster and more efficient with clear and successful effects in the commercial field that and, by substituting the conventional means, originated the so-called electronic commerce (also referred to e-commerce).

The commercial operations that were previously performed with the physical presence of the parties, with the use of a big amount of papers and many times requiring dislocations which were sometimes very expensive, began to be performed by means of the transmission of codes(binary ones) and images, by simply clicking, saving time and money and at the same time expanding the profits and possibilities.

With the intent to reinforce this idea, a recent survey made by Ibope/NetRatings shows an increase of about 200% (two hundred percent) of home users between the year 2000 and April, 2007, which represents a volume of 15,9 million users. Also, according to this survey, the Brazilian users would be among those that spend longer periods of time surfing on the internet and this surely represents a substantial consumption market of goods and services in the world web. And also taking into consideration that just a few airline companies, which have not yet implemented a system for the sale of airline tickets on the Internet, as the air transportation sector is highly computerized and uses state-of-the-art information technology.

As the specialists comment, internet, and, in its turn, the quick evolution of electronic commerce, present characteristics which show to be legally relevant and well explain the review of paradigms so far being in force. In this regard, one could mention, among several other ones, and with no intent of limitation: the liberalization of the network and the possibility of access by any person; how it is easy to go beyond the international boundaries; the lack of centralization and construction of "rules" to start from the free performance of the actors involved and of the habit; it allows communication between several persons in any location, in "real time"; and maybe one of the most significant ones is the big decrease of operating costs.

The liberalization and the global Internet interactivity along with low costs of transactions as a result of an even faster technology improvement produce an impact in a broad category of social and legal issues which still remain unsolved and due to this they challenge the concepts of time, space, state borders, location, privacy, assets, among others.

The exchange of goods and information by using electronic means as a new form to perform businesses (public or private ones), thus imposing the change of the physical means by which said transactions had so far been performed, made said reality be called as the "deconstruction of the contract" verified by means of the depersonalization, dematerialization, deterritorialization and a temporality of the businesses undertaken in the virtual means.

Therefore, there are several legislative, doctrinal and jurisprudence challenges to be faced in an attempt to redesign and adapt the contracts to the new technologies which have been occurring. It should be noted that, regardless of the quick advance of custom and usage habits in the electronic trade, a few are the laws to regulate the legal relations incurring from it, and it should be highlighted that in Brazil there is no specific regulation about the theme, except a Bill (PL nr. 1.589, 1999) still being carried out and with no estimate about its approval.

The notion of the electronic contract

According to the specialized doctrine about the theme, the electronic contract is characterized as such by the means employed for its execution for its fulfillment or execution encompassing those phases, whether totally or partially.

In other words, despite all contract validity requirements such as the ones provided in the legislation can be thoroughly applicable, the distinctive note of the electronic contract would be the means employed for its formation, conclusion and execution, in addition to the circumstance of the absence of the physical presence of the parties.

This notion would imply, first of all, in verifying the impact level of the electronic means used in the business relation as well as the legal effects incurring from them as it is executed and concluded in a total form the parties elaborate and send their declarations of will by means of the data digital or electronic interchange. Being only partial a party can, for example, send an e-mail or fill out a certain field on one site and after some time receive a document in writing to be signed. The hypotheses are so many.

Still in this regard, the execution of the contract in full can be made by electronic means, as it is the case of bank transactions and the acquisition of programs and software where only a download would be necessary and its consideration would occur by digital means as well. Or even the fulfillment can be only partial with the remittance of goods by postal service or deliveries or the remittance of a digital asset and the payment made by clearing the client's check.

As far as we are concerned, the air transportation contract, although it can be perfectly executed and concluded by electronic means with the payment and issuance of an e-ticket (an electronic airline ticket usually sent to the electronic address provided by the passenger), its execution could surely never occur by other means but the conventional one, as the rendering of the service made by the carrier through other means is impossible.

Specifically with regard to the electronic means, one should highlight that in some legal systems this notion can be extended or not to other forms which are similar to the internet, taking into consideration the absence of the physical presence of the parties, such as for example, the telephone contact, by means of cable TV, telemarketing and telematics, being this a legislative policy option.

Therefore, once one can notice that the digital means is used for the performance, fulfillment or execution of agreements, what we have before us is an electronic contract, and depending on the legislative option to be implemented, some hypotheses may or may not be excluded, although they present the aforementioned characteristics, such as for example, the labor contracts, which involve exclusive rights among other situations which are envisioned by the doctrine.

Also with regard to the electronic contract characteristics, much has been discussed about the moment of contracting, taking into consideration that the Brazilian legislation distinguishes the contract between absent and present ones to identify the moment of its conclusion. This is because in many situations, although one can not state correctly that there is a physical presence contracting, the formation and conclusion of the relation is prompt and only performed by means of programmed machines for the transfer of declarations of will with certain autonomy, without having a significant time interval.

However, one can notice that there is a lot of discussion in terms of doctrine to qualify the electronic contract either as being between absent persons or at a distance. However, within the current framework, it should not be correct to set general rules for the qualification of the electronic contract, due to the absence of typification for a certain modality. Anyway, and understanding the electronic contract as being between absent people or at a distance, the issue is posed in order to verify in which moment the acceptance and relation occurs with regard to the offer, taking into consideration the declaration and issuance theories.

In this moment one sees a complex issue as, due to the current Brazilian Civil Code, in its article 434, the contract between absent ones improves by the time of the issuance of the declaration of will in its sense of acceptance. On the other hand, the Consumer Protection Code does not specifically provision about the mode of contracting between absent ones, but it regulates contracting at a distance, where the simple acceptance of the supply binds the offeror, according to articles 30, 34, 35 and 48, thus granting strength that is much higher than the theory of declaration and trust of what one could suppose in a first moment. Therefore, the effects and consequences will be distinct for each case.

Although, as it was said, the present discussion about the moment of contracting has no consensus as there is not yet, at least in Brazil, the typification of this contract mode, but only the existence of a Bill whose approval is improbable, on the other hand, one notes that a good part of the doctrine deems the electronic contract as a type of remote contract so that the simple transmission of the offer binds the offeror.

The Contract preparation and execution - the offer and acceptance

In order to form the contract, the doctrine highlights several moments of the pre-contract phase that in the case of electronic contracting encompass the supply practices by means of sites, e-mails, spams, remittance of links and other virtual manifestations which demonstrate the offeror's or supplier's willingness to do business.

And in this scenario, the offer involves a unilateral declaration of will of a receptive character, which must be complete, hold the binding intent and be directed to the right person. In the absence of this last element, as is the case of mass contracting, being the declaration directed to the public in general or to a group of undetermined people, it means this would constitute in a public invitation to the offer or contracting, in these cases, the adhesion contracts being included, where the contractual clauses are unilaterally preset and elaborated by the offeror, in a uniform manner, where the buyer would simply accept them without being able to discuss it when the agreement is settled.

However, the contract will only be executed by means of the user's acceptance in this case, the eventual passenger, who will adhere to the previously set conditions and clauses.

Then, and due to the understanding of a good portion of the doctrine by the characterization of the electronic contract as being at a distance, is that the circulation of the offer, which contains the elements for such, will bind the proponent by means of the simple acceptance of the user, according to the theory of declaration, as aforementioned (arts. 30, 34, 35 and 48 of the CDC).

This was the conclusion reached at the V Brazilian Congress of Consumers' Rights held in 2000 in Belo Horizonte:

"In the moment when the sufficiently precise offer was disclosed in the world web referred to as Internet, the supplier is then bound to it; the retraction of the civil law is not applicable; the supplier's acknowledgment about the consumer's adhesion to his proposal is necessary or even the consumer's declaration that he has accepted the offer as it is the supplier's will unilateral declaration, from which perfect obligation arises, ipso facto, liable"

"The sufficiently precise offer disclosed by the supplier, on the Internet, implies, as a rule, the adhesion contract concluded with the consumer's virtual adhesion, as the contractual content was pre-elaborated in an abstract, generic, strict and uniform manner."

Also, with regard to the content of the offer made available through electronic means, Bill nr. 1589/99 in its 4th article states which information the offeror must render clearly, taking into consideration that one of the scopes of the referred project is the protection of the user's trust:

"4th Art. - The offer of electronic contracting must contain clear and precise information about:
a) name of the offeror and the number of his registry at the Ministry of Finance general files and also as it is a service that is subject to a regulated profession regime, the registry number in the fiscal or regulatory agency is required;
b) Physical address of the location;
c) Identification and the physical address of the server;
d) The means by which it is possible to contact the offeror, including his electronic address;
e) Filing of the electronic contract, by the offeror;
f) Instructions for the filing of the electronic contract, by the agreed person, as well as to its recovery if needed; and
g) The security systems employed in the transaction."

Therefore, the website, provided it contains sufficient information to characterize an offer, demonstrating the business will of the person who keeps it and at the same time enabling a receptive declaration of the user, said fact will bind the offeror.

However, the acceptance must occur in a specific manner due to the characteristics of the electronic contract, as it does not happen by means of conventional means, such as for example, the signing on a sheet of paper, but in a virtual environment. Still in this regard, the user must have the opportunity to know the whole content of the general contract clauses very clearly so that the contract can be validated.

As the user must accept the contract clauses elaborated by the offeror, the issuance by him of an express declaration of will in the cases of instantaneous hypotheses (on line), said manifestation of will be expressed by means of material acts that most times involves the clicking on a certain area of the page of the offeror's site. This type of celebration and conclusion of a contract which was decided to be referred to as point and click agreements or click- wrap agreements, consists of obliging the user to read and declare awareness about the content of the contract and only after that he may go to another page and conclude the purchase of a certain product or service.

This virtual "declaration", however, must be converted in an electronic document with the possibility to store it for the purposes of conclusion proof of the contract, and so the offeror will protect himself from risks if the validity of the contracting is contested in the future. At the same time, the contract conditions can also be stored or made perennial (for example allowing its printing or remittance to an electronic address provided by the user by the time of his identification) both by the offeror and by the user.

In this regard, after the contract is executed, the doctrine highlights that the offeror must send the agreed party a confirmation of the contract with the terms and conditions of the business performed, and this being the sense of 7th article of Bill nr. 1589/99 by means of which one intends to regulate the electronic commerce:

"7th Article - The offeror's electronic systems must transmit an automatic reply, transcribing the message previously sent by the recipient and confirming its receipt."

In the specific case of the sale of airline tickets on the internet, said requirements are already observed, as after the reservation and purchase of the tickets, generally the systems used by the airline companies already issue automatically what one calls e-ticket, allowing its printing or even its remittance to the electronic address that the passenger had to provide as an obligation at the time of the ticket was purchased. And as the ticket itself is the proof of the transport agreement, as provided in the specific legislation of the matter, including mentioning possible restrictions, this does not present more serious problems in this respect.
In addition, the passenger's air transportation contract general conditions are not the only ones disciplined by means of normative acts issued by the Regulating Agency of the sector (refer to the content of Administrative Rule DAC 676/GC-5 of 13.11.2000), but the content of the persons' transport agreement is also regulated by articles 730 to 742 of the Brazilian Civil Code.

Another issue that may present some inconvenience, mainly in the hypotheses of instantaneous electronic contracts and whose execution occurs immediately (for example: the acquisition of digital goods), is the right to surrender. As foreseen in article 49 of the Consumer's Defense Code, a good portion of the doctrine is understood as applicable by analogy of the contracting by electronic means as it is contracting at a distance and so, after the conclusion of the contract or the delivery of the goods acquired, the user would have time to reflect during seven days to be able to surrender.

In the specific cases of air transportation contracts, despite being performed by means of the internet, the issue, except mistakenly interpreted, would not present more serious difficulties, as both in the General Transport Conditions (Administrative Rule DAC 676/GC-5 of 13.11.2000) and in article 740 of the Brazilian Civil Code, and its paragraphs, the right of a passenger to terminate the transport agreement is already disciplined, with the consequent reimbursement of the paid amounts. Therefore, even if the Consumer Defense Code rules can be applicable to the electronic contracts, in this specific issue, one would just need the conjugations of said rules to solve the concrete case.

The additional duties of the offeror

If the contracts performed by the conventional means originate to the parties a series of additional duties of conduct, inserted in the comprehensive concept of objective good faith, it is right to state that in the contracts executed by virtual means the same also occurs and with more vigor to the offeror, as the feeling that surrounds the virtual contracting is distrust.

When the user decides to hire by electronic means, one has to create to him the trust that the complex internet system, which the offeror uses, will work, fulfilling its duty and that his economic interests and privacy will continue to be protected.

Therefore, one should create for those who use the Internet to set their business platforms, specific duties to inform transparency, safety and confirmation which, in addition converge to the materialization of the good faith general duty and the tutelage of trust and of the legitimate expectations created in the counterpart; in case, the users and to the transport agreementair transportation agreements, the passenger will surely acquire his airline ticket on the airline company site.

As the offeror has a control on the electronic means that is not compared to what the agreed party has, as the system is created and administered by that one, then the offeror should not only provide the buyer of the good or service the most complete awareness of the contract content (the general conditions and specific clauses) and of the execution procedures, as well as its execution, and also clarifications about the technological means used, instructions of how to validly accept the offer and payment performance, in addition to information regarding the product and service to be acquired.

Concerning this, there are several provisions (4th art., IV, 6th, III, 8th) of the Consumer Protection Code that materialize this duty. In addition, the concern with the duty of information is a constant issue both in the compared law and in the Brazilian law.

When buying airline tickets on the internet, in addition to the general transport conditions and the applicable airfare, the passenger must be informed by the airline company about the eventual restrictions that the ticket may present, such as: impossibility for endorsement, airline ticket rescheduling, reimbursement hypotheses. In the same way, orientation should be given concerning the transport execution and the passengers' rights and duties. Only this way the duty to inform will be fully accomplished.

In addition to the mere duty of informing, the offeror should, when making available on its site or in electronic message, or any other form of offer transmission, also pay attention to the fact that the language used should be as clear as possible so as to allow an exact comprehension of the clauses to which there will be adhesion, also including, obviously, the attention with regard to the language.

Parallel to the duty of information, one can still find the confirmation duty in the electronic commerce, as due to the dematerialization of the contract means, one should use effective means for the contract proof and mainly to proof the user's consent to the contractual terms and clauses. To do so, the offeror must send to the agreed party's electronic address the confirmation of the contract conclusion with due notification of receipt, also allowing the filing of the contract in order to make it perennial.

Although the airline ticket is regarded as the contract itself for air transportation services, and this also applies to the e-ticket, the airline company must make it available for the passenger records the applicable airfare specific rules, and any possible restrictions, in order to ensure a better protection for the company in the event of possible claims.

With regard to the safety duty, generally speaking, the offeror must ensure that the contracting occurs in an environment that is technically safe, reliable, caring for the integrity of the information exchange with the agreed party, mainly with regard to personal data and those furnished for the performance of the on line payment. Although the virtual means still presents serious risks, what justifies the generated distrust, mainly by jurisprudence, it is understood that the burden of the responsibility for the integrity and safety of the information collected from the user during the execution of the electronic contract is the offeror's responsibility.

And for this reason, the legislator provisioned something specific about this in the wording of a Bill about electronic commerce:

"5th Article. - The offeror can only ask from the recipient information of a private nature, which is necessary for the materialization of the offered business, and he shall keep them confidential, except if their disclosure or granting is previously and expressly authorized by the respective holder.
1st Paragraph - The authorization mentioned in this caput of this article will be highlighted and may not be linked to the acceptance of the business.
2nd Paragraph - The offeror, who asks for, discloses or grants information thus violating the provision in this article will be liable for losses and damages."

Therefore, if the compliance with objective good faith and the protection of trust are the basis of juridical traffic, the base of all legal bindings and for this reason represent principles of great relevance in the contractual relations, the fulfillment to at least the rights herein mentioned and named by the doctrine must always be checked in the electronic commerce in order to reach its best development.

Electronic Commerce Regulations

As previously shown, at least in Brazil and maybe in several other countries, specific regulations about electronic commerce have not been developed yet, except some Bills in this regard, as well as guidance about this issue according to the European Community Guidelines.
Notwithstanding a Provisory Bill (MP 2.200-2) that only rules the electronic signature, there is not effectively any other law that disciplines the electronic contracts, but only Bill nr.1.589 of 1999, whose procedure is paralyzed at the Brazilian National Congress and with no perspective for its approval.

However, the doctrine and jurisprudence have been using analogy to solve concrete cases posed for analysis, by using the Consumer Protection Code, when a consumption relation is characterized, that, in addition, the simple contracting by electronic means would have the intent to destroy. One can surely state that this understanding is solved and there is no relevant position against it. Additionally, one is informed that the answers offered to the postulated issues have been satisfactory.

One should highlight that Bill nr. 1.589 of 1999 in its 13th article, caput, makes express reference to the Consumer's Protection Code as the applicable legislation to the legal relations originating from the electronic commerce, when characterized so, obviously:

"13th Art. - The consumer's defense and protection rules are applied to the electronic commerce."

On the other hand, one can say that neither the consumer protection law offers all the answers to the several situations originating from technological innovations on the internet environment and to the adopted business practices.

However, one should also consider that in some types of contracts, even if being entered into by means of electronic means, their fundamental characteristics still remain in such a way that one can not fully ignore the specific rules that regulate them as is the case of the passengers' air transportation contract, although the Montreal Convention provisions, mainly the transporter's commitment regime and the contract content, as well as articles 730 to 742 of the Brazilian Civil Code and other normative acts issued by the airline sector Regulatory Agency, ANAC - Brazilian Civil Aviation Agency.

Although one can not totally disregard the application of the rules as provided in the Consumer Protection Code, it is certain, however, that due to the special character of the rules which are contained in the Montreal Convention and of the articles relative to the transport of people stated in the Civil Code, one must provide a privileged application of their rules (art. 732 of the Civil Code) in certain situations. However, this has not been the understanding from the doctrine and especially from the jurisprudence emerged from the High Supreme Court. However, the best answer, as we see it, would be in the joint application of both laws, with the exception of the normative conflict hypothesis.

Default and Liability for damages

Although there is not any specific ruling about the mode of contracting by means of electronic or virtual means, as previously mentioned, the solutions to the hypotheses of default of the obligations undertaken by the offeror due to the contract binding does not present more difficult issues.

Despite being entered into by electronic means, the contract still keeps the same consequences in cases of default if compared to the contracts entered into in a conventional manner, and so the composition of losses and damages originating from possible default, whether by the offeror or by the agreed party, will occur in common law or by the specified rules of each contract type, in addition to the already existing civil liability rules.

Therefore, for the exclusive case of non-fulfillment of the service imposed to the offeror and a consumption relation being characterized, it is rested clear that the solution to be adopted should observe the rules of the Consumer Protection Code, specially those that discipline the liability of the services or product provider, according to the terms provided in articles 12 and 14. As a subsidiary character, the provision in the Civil Code should also be noted which states about the non-fulfillment of obligations. (arts. 389 to 420) and civil liability (arts. 927 to 954) and those applicable to several kinds of contracts (arts. 421 to 853).

In case of transport agreementair transportation agreements, we believe that the judge, being aware of the consumer defense regulations, when applicable, should privilege the specific rules about the air carrier's liability (Brazilian Code of Aeronautics and Montreal Convention and other normative acts issued by the Aviation Authority).

One issue of concern, however, is that one relative to the safety of information and data which are exchanged during the contracting, as previously mentioned, particularly the user's interception of personal data as well as financial ones, by the time of payment due to the acquisition of a product or service by means of a credit card or debit authorizations in a current account of which he is the holder.

As one could see, and despite the absence of specific regulation about those transactions, the doctrine and jurisprudence generally speaking have considered that the offeror is responsible for the integrity of filing, processing and authenticity of information exchanged with users. Therefore, as third parties' may intercept data, the offeror must adopt measures to ensure the integrity and protection of the system used by him, thus preventing violations.

Conclusion

According to the explanation and analysis about the issues which involve electronic commerce, some observations may be formulated, despite not being definite ones, taking into consideration the constant innovation of practices and technologies used, which will end up influencing in the understanding of the phenomenon.

a) The contracts entered into through electronic means can be divided into: contracts negotiated via internet; concluded via internet and entered into via internet. In the category in which the transport agreementair transportation agreements are inserted, one can assure that this type of contract is only entered into and concluded in the virtual means, as it execution can only occur in the "real world".
b) Although the content of the electronic contracts are not far from those entered into by the conventional means, and one should mention that the content of airtransport service agreement is fully regulated both by the Civil Code and the Montreal Convention and other normative acts issued by the Aviation Authority, the major problem one can notice stands with regard to the mode and moment of acceptance by the user, as well as the proof of binding, as it is contracting at a distance, despite this classification may not be sufficient.
c) Although no specific regulation exists with regard to this contract modality, however, it is certain that the legislative gap does not represent an obstacle to the application of the rules of the Consumer Protection Code and the specific laws of each contract type, taking into consideration the object of the contracting, and so when one deals with airline transport agreement, one can not verify any hindrance for the application of the specific rules that govern it, despite being entered into on the internet. However, this does not hinder the postulation of a reform of the already existing legislation in the sense that it may encompass the situations originating from e-commerce.
d) Despite a specific regime for electronic contracts is non-existing, the services or products provider, who uses virtual means as a platform for the performance of his businesses, must be attentive to the additional duties, mainly those regarding the duty to inform and safety (which in addition consubstantiate the good faith duty), and taking into consideration that the tutelage of trust and of the legitimate expectations of the counterpart is the key to the sounder development of the electronic commerce.
e) Finally, in cases of default or damage remediation originating from the contract entered into by electronic means, the consequences do not reveal to be distinct from those provisioned by the already existing legislation and so the solutions to those, have been, so far, satisfactory.

29.6 Comissions for travel agencies

Paula Ruiz de Miranda Bastos

Since 2000 a huge legal battle has been occurred in every Brazilian State as the Travel Agencies affiliated to IATA are not willing to accept the decrease of commission percentage paid in consideration for the sale of airline tickets.

The decrease that occurred in Brazil followed a world trend in the sector, which reduced the commissions of international tickets from 9% to 6% and for domestic tickets, from 10% to 7%.

Following the communication provided to travel agencies about the decrease of the percentage that would from that moment on be used, the Travel Agencies Associations and Unions filed suits with the purpose of keeping the percentage of 10% and 9%, firstly by means of injunctions, claiming, in the suit, the declaration of nullity of the so-called clause that would decrease the percentage, stating a presumable illegality of the decrease, with claims which go from violation of the contracts entered into along the years and the outdated principle of "pacta sunt servanda", under which no party shall be permitted to amend previously set contract clauses.

They have also stated that due to the illegal measure of the airline companies, the travel agencies in Brazil would suffer a big negative impact in their finances and in the long run, the sector itself.

At first, the thesis supported by the Associations was received by the some Courts which granted injunction relieves obliging the airline companies to suspend this decrease measure, and keeping the previously paid commission percentage to the travel agencies (9%). There was also the Minas Gerais State Court decision that determined that the controversial amount, which corresponds to 3% of the amount of the airline ticket, would be deposited in Court until the suit was concluded.

However, along the time, the suits followed their natural course and in the judgment of the merit even in lower courts, the opinion that the relations set between the travel agencies and the airline companies are mostly tacit, have never been formalized and under this condition there are no documents which have set clauses that would be protected by the inalterability aimed by the Associations.

The Courts' decisions with the awareness that they are eminently mercantile commission contracts, at that time regulated by the Commercial Code (until January 2002) and after said date by the Civil Code itself, mentioned the absence of a formal and unalterable agreement and in this scenario, according to the characteristics of the commercial contract type - mercantile commission, the unilateral amendments were authorized without the agreement from the other contracting party, as this remuneration is basically grounded on the market conditions.

On the other hand, the allegations that the agencies have the sale of tickets as a unique source of revenues was not considered and that a bankruptcy of the sector would be inevitable, mainly taking into consideration the market analysis where, although the decrease had been performed several years ago, there was no news about an disproportional dismantling in the sector.

Said position has been accepted by most of the Brazilian State Courts and certainly the issue has already reached the Highest Court in the country - STJ (High Court of Justice) which, in a decision that is unique in this discussion, established the legality and legitimacy of the decrease operated by the air carriers, by means of a judgment that was amended as follows:

"COMISSION - MERCANTILE - SALE OF AIRLINE TICKETS - COMMISSION VALUE - AMENDMENT - POSSIBILITY.
- In the indefinite time period commercial commission contract, the constituent can change the amount to be paid to the commissioner on unilateral basis."
(STJ - 3rd Panel of Judges - Reporter Associate Judge Humberto Gomes de Barros - Resp 762773/GO, judged on 04/17/2007).

The decision rendered by the High Court of Justice in April, 2007 was basically grounded in the assertion that, as it is a commission contract for sales performed on an ongoing basis and for an undetermined period of time, the obligation, by a legal decision, for a company to pay commission as previously set can not be kept, if this is not economically interesting to the company and, resting sure, on the other hand, that the travel agency accepts or does not accept to work for the amount of the commission which is being offered.

According to the outlined understanding, the Judiciary can not intervene in private businesses to oblige one of the parties to pay another one, in future contracts, for a price that does not consider fair or economically feasible. Therefore, the contract is improved at every sale of an airline ticket, occasion on which the travel agency agrees to receive that commission; otherwise, it is not obliged to sell any of the company's airline tickets, which will pay a percentage that is not commercially interesting.

Due to the clear and definite understanding that was outlined by the STJ, it is certain that the decision will act as a domino effect in other suits, which are still pending judgment at the Regional Courts, taking all of them to an unsuccessful result.

One should highlight that the issue reached the realms of the Secretariat of Economic Law - Economic Defense and Protection Department, under the suspect of formation, by airline companies, of a cartel and there an opinion was rendered that distances said characterization laying down the "non-existence of violation to the economic order".

And due to this, ABAV and other entities linked to the travel agencies have been studying a way so that the commission relative to the sale of tickets shall be paid by the passengers and not by the airline companies and this would stop the discussion about the theme, including the several legal proceedings which are distributed all over Brazil. The commission relation would then be between the agency and the passenger and so the percentage set would be negotiation issues between the parties, thus stimulating the competition among travel agencies. No other alternative is given to the network of travel agencies in the country.

29.7 Non-levy of ICMS tax - value-added tax on sales and services on the import of an aircraft by means of a leasing transaction (leasing)

Vanessa Ferraz Coutinho/
Simone Franco Di Ciero

In 2007, The Federal Supreme Court Plenary analyzed the issue of the constitutionality of ICMS levy on the entry of imported goods from overseas by means of leasing transactions. By a unanimous decision, the STF Ministries determined that the import of aircrafts, as well as parts of the aircraft, do not characterize a factor that would generate Value-Added Tax on Sales and Services (ICMS), provided the transaction is performed by means of a leasing contract.

The referred subject was again discussed at the Federal Supreme Court after the filing by the State of Rio de Janeiro of an Extraordinary Appeal nr. 553.663-7, filed in June, 2007. In the referred Appeal, the State Attorney's General Office argues that the decision pronounced by the Plenary could not be applied to imports made after the enactment of EC nr. 33/2001. Said pronouncement emerged from the observation by the referred office that the decision pronounced by the Plenary of RE nr. 461.968 specifically referred to goods which had been imported prior to 2001.

Therefore, in February 2008, the Second Panel of Judges of Federal Supreme Court concluded that the tax non-levy persists even if the import has been performed under the support of the Constitutional Amendment nr. 33/2001. In order to better understand the issue, one needs to perform an analysis of both the initially pronounced decision by the Court Plenary and the recently pronounced decisions by the Second Panel of Judges.

The Reporter of the court decision that was pronounced in 2007 and that changed the Supreme Court's opinion about the matter, affirmed in his vote that the fact the goods circulate physically for the effect of ICMS levy is indifferent, once the fact that generates the tax demands that the circulation involves transfer of the property of the goods. Thus, as in the leasing transaction, there is no transmission of possession until the termination of the contract, and the hypothesis of the circulation of goods for the purpose of tax collection must not thought of. The court decision pronounced by the Full Court was amended as hereunder set:

"Extraordinary Appeal. ICMS. Non-levy. Entry of imported goods from abroad. Art. 155, II of CB. Leasing of aircrafts and/or their parts or equipment.
1. The import of aircrafts and/or their parts or equipment performed in a leasing mode does not admit further transfer to the lessee possession.
2. The circulation of goods is presupposition of ICMS levy. The tax - as stated in art. 155, II of the Brazilian Constitution - is about "transactions related to the circulation of goods and about communication and interstate and inter-municipal rendering of services, even if the transactions and services originate in a foreign country."
3. There is no transaction relative to the circulation of goods that is subject to the ICMS levy in a commercial leasing transaction which is contracted by the large size aeronautic industry in order to make the use, by the airline companies, of aircrafts constructed by it as something feasible"
(RE nr. 461.968-7, Full Court of the Federal Supreme Court, Reporter. Associate Judge Eros Grau, DJ of 08.24.2007)

Although the opinion by the Federal Supreme Court being recent, the High Court of Justice has for long been recognizing the non-levy of taxes on the imports performed by means of leasing contracts. According to the decision issued by this Court, the circulation of goods could only be characterized after the transfer of the property of the goods.

The discussion about the tax levy or non-levy was the result of the wording attributed by EC nr. 33, of 12.11.2001, to Clause IX of 2nd paragraph, art. 155 of the Constitution of the Federative Republic of Brazil of 1988, which provisions:

"Art. 155. The States and the Federal District are responsible for imposing taxes on:
I - (...)
II - transactions related to the circulation of goods and to communication and interstate and inter-municipal rendering of services, even if the transactions and services are originated abroad;
III - (...)
§ 1º (...)
§ 2º The tax provided in clause II shall provide the following:
(...)
IX - it will also be levied on:
a) the entry of assets or goods imported from abroad by a natural person or a legal entity, even if it is not a habitual taxpayer, no matter what its purpose is, as well as on the services rendered abroad, and the State is responsible for the tax where the domicile or location of the recipient of the goods, assets or services is located;"

After the judgment of the Extraordinary Appeal nr. 461.968, in which STF (the Federal Supreme Court) decided that the ICMS is not levied on in aircraft leasing transactions, the State of Rio de Janeiro Attorney interposed new appeals to the Supreme Court, with the argument that the understanding adopted would not apply to the imports made after the enactment of the Constitutional Amendment nr. 33/2001.

Once the State argument was analyzed, the STF Ministries (Federal Supreme Court) concluded that the non- levy of ICMS on the referred case originates from the fact that this import is materialized by means of a leasing contract, where there is no further transfer of possession. This way, according to Associate Judge Cezar Peluso, who is the Reporter of the Interlocutory Appeal in the Extraordinary Appeal nr. 553.663-7, the ICMS is not due over the import of aircrafts and their parts, regardless of the import date of the goods. Therefore, the decision amendment is structured as follows:

"Extraordinary Appeal. Inadmissibility. Commercial Leasing Contract. Leasing. Non-existence of purchase option. Aircraft Import. ICMS non-levy. Decision maintained. Interlocutory Appeal not granted. No ICMS is levied on imports, from abroad, of aircrafts, equipment and parts which are performed by means of a leasing contract when there is no circulation of the goods, characterized by the transfer of the possession, even if it under the protection of EC nr. 33/2001."
(Ag. Reg. in RE nr. 553.663-7, 2nd Panel of Judges of the Federal Supreme Court, Reporter Associate Judge Cezar Peluso, DJ of 02.29.2008)

The Associate Judge Eros Grau firmly stated that the tax is not levied simply on the entry of the imported assets or goods but on this entry, provided it is concerned with the transactions related to the circulation of those same assets or goods.

In other words, Clause IX, line a, of 2nd article of art. 155 of the Constitution of the Federative Republic of Brazil of 1988 did not institute a tax on the entry of the assets or goods imported from abroad by a natural person or a legal entity. What it simply does is to establish that, provided it is concerned with the operation relative to its circulation, the entry of the imported assets or goods from abroad by a natural person or a legal entity will incur ICMS levy.

Therefore, what determines the non-levy of the tax on aircraft, parts and equipment imports is the legal nature of the leasing contract, in the hypotheses in which there is no option of the purchase of the assets.

One should highlight, however, that the Federal Supreme Court did not change its position relative to the ICMS levy on the entry of assets intended for consumption or for the fixed asset, in the hypotheses in which there is the lessee's option to buy the good, as decided by the time of the RE nr. 206.069 judgment, published on the DJ, of 09.13.2005.

29.8 IOF - zero tax rate for remittances: international airline companies

Luisa Medina/
Simone Franco Di Ciero

As of 12.31.2007, CPMF ceased to exist in the Brazilian Legal System, as the Senate partially rejected the proposal of the constitutional amendment nr. 89/2007, which again would extend the validity of the referred tax.

With the 40-billion real tax collection loss, the government announced some decreases and measures in the beginning of this year, among which, changes in the IOF legislation.

On January 3, 2008, Decree nr. 6.339/2008 was published and it amended the provisions of Decree nr. 6.306/2007, which regulates the Taxes on Credit Transactions, Exchange and Insurance or relative to Bonds or Securities - IOF.

One of the amended provisions is Article 15, which involves the IOF taxes in exchange transactions.

In its initial wording, art. 15, 1st paragraph, Clause IV, it provisioned the percentage of ‘0' to the other exchange operations other than the ones provided in the previous clauses. In other words, the exchange transactions performed by the airline companies to remit funds originated from the local revenues checked in Brazil to their headquarters, were subject to ‘0' percentage due to the referred provision.

However, with the new wording attributed to Decree nr. 6.306/2007, the previously mentioned clause was amended and the other exchange transactions, which were not specified in the referred paragraph, were subject to IOF levy at the percentage of 0.38%, which included remittances made by international airline companies.

However, due to the occurred error, the problem was solved, by means of Decree nr. 6.391, of March 12th, 2008, which amended the wording of Decree nr. 6.306/2007, to add article 15, among others, clause XIV, which exactly provisions ‘0' percentage to exchange transactions performed by international airline companies which are domiciled abroad, for remittances of funds originated from their local revenues.

That was not the first time that international airline companies faced situations like the one mentioned, of non- compliance with the several international agreements to avoid double taxation that support their transactions, of which Brazil is signatory.

It should be remembered that for several years the Brazilian Internal Revenue Service unduly demanded from those companies social contributions such as Finsocial, PIS, and later on COFINS, and this misunderstanding was corrected later, both with domestic laws providing exemption or remission of debts that had already been incurred prior to exemption.

Therefore, the international companies that run their businesses in Brazil must pay attention to the changes in the Brazilian legislation to prevent that agreements made to avoid double taxation may be disregarded by the Brazilin tax authorities.

29.9 Federal Audit Court (TCU) analyzes the regularity of concession contracts of air transport services

Vanessa Ferraz Coutinho/
Luisa Medina -

The Plenary of the Federal Audit Court (TCU) has recently analyzed the issue of the regularity of the concession contracts of the passengers' regular air transport services. The theme was forwarded to TCU after analysis of Senate Consulting about the performance of extinct Civil Aviation Department (DAC) as an economic regulator of the prices of airline tickets. During the technical argumentation presented by DAC, the issue about the absence of public bidding in the airline concessions was raised, said fact being regarded as illegal once the air transport service according to the Aeronautic Brazilian Code is a public service.

Despite being complex, this theme which was analyzed by the TCU Plenary finds as the main issue the fact that the Brazilian Code of Aeronautics (Law nr. 7.565/86) defines the air transport service as a public service and establishes a concession regime for the rendering of those services by the private initiative. On the occasion the referred law was edited, our Federal Constitution had not be published, which expressly determines the need to perform a public bidding whenever the rendering of public services occurs by means of the concession regime.

Aiming at regulating the issue provided in the Federal Constitution, a rule known in the legal scenario as the Law of Biddings (Law nr. 8.666/93) was edited, which did not omit when determining that the concession of airlines should observe a specific bidding procedure, as stated in the Brazilian Code of Aeronautics.

Although the issue has been duly regulated, the Brazilian Code of Aeronautics was never amended to become adequate to the constitutional provisions, and this triggered the TCU statement concerning the irregularity of transport agreementair transportation agreements.

On the other hand, the issue of ANAC being unable to deny the request made by an airline company to operate new lines or change the operating lines was analyzed under the argument of lack of demand conditions for the additional offer of flights in the sections that were being analyzed. According to the report presented by TCU, the aforementioned statement has groundings in the wording of art. 48, 1st paragraph of Law nr. 11.182/2005, which guarantees companies of domestic air transport services the exploration of any air line, by means previous registry at ANAC, exclusively observing the operating capacity of each Airport and the regulatory rule of adequate service.

About the issue, the Federal Audit Court ordered the Brazilian Civil Aviation Agency (ANAC) not to consider aspects relative to the possible excess of supply of flights when it analyzes new requests related to Transport Schedule - Hotran (the document in charge of the formalization of the concessions to explore regular Brazilian and international airlines of passengers and/or cargo and the postal service network by the transport companies).

After examining all issues brought for deliberation, the Federal Audit Court recognized that the lack of bidding to grant new concessions is a solely legal issue, as under the economic and operating point of view, the deregulation and elimination of barriers to the entrance of new competitors in the market is bringing good results to civil aviation.

29.10 Hazard pay: aircrew members

Gabriella Gaida

Introduction

Nowadays it is very common to see suits filed by aircrew members in Brazil claiming for the hazard pay due to the fact that they are working inside the aircraft when it is being fueled. Due to this fact, a legal discussion is revealed and about which the Legal System has to ponder and come to a conclusion.

The Concept of Dangerous Work

The request for payment due to dangerous work made in the aircrew members' labor suits is based on the fact that the employee is working while the aircraft is being fueled.

In order to receive the hazard pay, the employee must be in contact, while working, with flammable substances or explosives in acute risk conditions, as provided in caput of article 193, of the Consolidation of Labor Laws(CLT):

Article 193
"Dangerous activities or operations are those ones provided in the regulations approved by the Labor Ministry, those ones, which by their nature or working methods, imply in the permanent contact with flammable substances or explosives in acute risk conditions".

Based on the legal concept of dangerous activities or operations, one can extract two necessary requirements for the granting of the benefit of the additional salary, which must occur simultaneously:

1º) permanent contact with flammable substances or explosives;

2º) and acute risk conditions.

Therefore, for a worker to have the right to receive hazard pay he must work in permanent contact with flammable substances or explosives and the conditions of this contact must be taken as acute risk conditions.

The aircrew members, when performing their duties inside the aircraft, have no contact with flammable substances or explosives and no permanent contact either, as provisioned by the Law.

In addition, the crew members do not participate in fueling operations, whether directly or indirectly; said activity is solely performed by duly authorized personnel.

Aircraft fueling operation

The fueling of aircrafts in the airports of the world, and not differently in Brazil, is made in a totally safe manner under strict inspection by the airport authorities, by the airline companies and also by the companies that provide the fuel and not putting any person at risk, whether this person is inside or outside the aircraft.

One should mention that vapor exhaust is impossible and neither fuel, as the fueling occurs by means of a quick coupling and closed system in which the fuel is not exposed to the atmosphere.

The fuel transfer begins when a safety device is actuated, which automatically locks if the operator has an unexpected health problem and as a consequence, he may drop the device.

The aircraft fueling operation only occurs when the engines are off and, therefore, there is no risk to anyone who is around and neither for the crew and passengers who are inside the aircraft.

In addition, the fueling area is marked by cones at a safety distance of about 7 (seven) meters respecting the provision of NR 15, and the access of any person who is not authorized to participate in the operation is not allowed.

Jurisprudence

Jurisprudence has already taken the decision in order to clarify the expression "permanent contact" and it is certain that the employee's exposure so that he may receive the additional pay, must be continuous and inherent to the performed activity:

"HAZARD PAY. The permanent contract provided in article 193 of CLT has no specific legal definition for dangerous activities. But in the activities related to biological agents, which characterize unhealthy work, Annex 14 of NR-15, defines it as follows: A permanent contract is work resulting from ongoing and obligatory rendering of services, originated from a requirement stated in the labor contract, with permanent exposure to dangerous agents. This is authentic interpretation of the referred expression, originated from legal delegation for the administrative authority to issue hygiene and safety rules. Therefore, it would be controversial to understand that the permanent contact with explosives and flammable substances, in acute risk conditions, would have a diverse definition, extension and nature from the legal concept, even if intended for distinct activities, and if it were not this way, at least by analogy (8th article of CLT), the same concept is relevant". (TRT - 4th Reg. 1st T, Proceeding 8003/86, judg. 14/05/87; Reporter Judge Ermes Pedrasani, in Repertório da Jurisprudência Trabalhista, by João de Lima Teixeira Filho, Vol. 6, Rio de Janeiro, Freitas Bastos, 1989, pg. 136/137 (our bolded emphasis).

By means of Abstract 364, the High Labor Court crystallized the understanding that the hazard pay is only due when contact is permanent and continuous:

Abstract 364 TST - Res. 129/2005 - DJ 20.04.2005 - Conversion of Jurisprudence Orientations nrs. 5, 258 and 280 of SDI-1
I - The employee entitled to the hazard pay is the one that is permanently exposed or in an intermittent way is subject to the risky conditions. And only undue when the contact occurs in an eventful manner, the casual thus considered, or being habitual, it occurs during a very short period of time. (ex-OJs nr. 05 - Inserted on 03.14.1994 and nr. 280 - DJ 11.08.2003)
(our bolded emphasis)

Another important issue is the lack of acute risky conditions, which is a pre-requisite provisioned by article 193 of CLT, so that the dangerous situation may be characterized.

The Superior Labor Court has decided not to grant the hazard pay to the aircrew members, by sheltering the appeal of a review of a Brazilian airline company which demonstrated the existing legal divergence and necessary for the appeal processing and alleged that the aircraft fueling is not dangerous as it is performed worldwide and by any airline company not only with the crew inside but also with passengers, thus judging the plaintiff's request as unfounded (RR-1281/2003-029-04-00.9).

One should be clarified that the above mentioned Superior Labor Court decision is neither the first nor the only one that directs towards the denial of hazard pay to those employees who do not have their work activities directly linked to fueling.

Conclusion

Hence, it is wise to conclude that even if the matter is not solved by the TST - Superior Labor Court, the aircrew members are not exposed to danger because of fueling and, therefore, are not entitled to hazard pay. And, although there is no consolidated orientation about the theme, in relation to the current decision of TST - Superior Labor Court, one believes that the theme must be forwarded for the exclusion of the right of hazard pay in the specific case.

29.11 The characterization of economic group for labor purposes and the partnerships formed between airline companies

Gabriella Gaida/
Simone Franco Di Ciero

Due to several reasons, mainly of economic order, more and more the airline companies have been searching for partnership models to perform globally, thus keeping the necessary competition in the sector.

However, it is important to note that according to the Labor Justice in Brazil two or more companies are deemed to be part of the same economic group not only when a company runs, controls or manages the other.

It is legal understanding that even without any formal legal relation of coordination and/or subordination among companies, the companies that will be regarded as being part of the same economic group are those which have a closely related business purpose.

In this regard, we can highlight several judgments by labor courts by means of which one can highlight that the characterization of the economic group for the purpose of liability of a certain company for the payment of amounts that may be due and payable to a claimant worker does not presuppose the necessary existence of a parent company, and for such purpose what is sufficient is the checking of a joint performance of both companies in the transactions made, in the use of the logistics of one company by another, even if in the specific case there is no formal legal relation of coordination ad subordination.

The characterization of the figure of the economic group and the joint responsibility - this is how each company that belongs to the group will reply if it is legally summoned-, has as an objective to safeguard the employee's right to receive their labor credit and to prevent frauds, which were common in the past.

This way, it is necessary to be aware of such fact in the formation of partnerships as they may be deemed legally liable for the labor debts of other company, even if there is no legal formal relation of coordination and/or subordination but when if it is proved that the companies act jointly.

 

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