A. PRICE CONTROL
20.101 For several years, Brazil resorted to a variety of measures to control the economy and to curb its high inflation. The Federal Administration measures to encourage the Brazilian economic growth and development, and to reorganize the public sector, included a currency and economy reform under the so-called Plano Real.
20.102 As from July 1, 1994, all prices and monetary obligations were converted into the new Brazilian legal tender, the Real (R$).
20.103 All obligations converted into or denominated in Real can be adjusted for inflation according to the variation in an index that reflects the weighted variation in the cost of inputs utilized, provided that such adjustment is made under the law on a yearly basis. The parties to a contract may freely agree on adjustment indexes, provided that any such adjustment is made on a yearly basis.
20.104 Transactions carried out on the financial, securities, insurance, forward and futures markets may be indexed according to the variation in the Reference Rate (TR).
20.105 The Ministry of Finance (specifically, the Economic Protection Office—SDE) is the government entity that has powers and authority to file actions and procedures under Law 8884/94. In this sense, the Ministry of Finance is in charge of (i) setting out the procedures for disclosure of information on production, distribution and consumption of goods and services, as well as for disclosure of special, ongoing or other data in possession of government or private entities; and (ii) reviewing the inventories, documents and other written instruments related to individuals or companies engaging in the above activities.
B. CONTROL OF INTEREST RATES
20.106 There are two separate controls on interest rates in Brazil. First there is the control of individuals and companies other than financial institutions; and there is also a control applicable to financial institutions.
20.107 Effective January 11, 2003, the Civil Code governs interest payments under Brazilian civil law. If the parties do not stipulate the default interest accruing in case of non-fulfillment of obligations under their agreement or legal relation, this kind of interest will apply at the rate adopted by the National Treasury for nonpayment of its taxes.