Ordinance approves requirements for executing a Commitment Term after sanction to suspend operations

On April 15, 2024, , was published SDA/MAPA Ordinance No. 1,091, of April 11, 2024 was published by the Secretariat of Agricultural Defense within the Ministry of Agriculture and Livestock (“MAPA”).

The new regulation approves the requirements for executing a term of commitment involving administrative proceedings that resulted in  sanctions to suspend operations,  whose enforcement was suspended by the Secretariat of Agricultural Defense.

The main provisions of the new ordinance include:

• Eligibility to apply for the term of commitment: Animal product companies registered with the Animal Products Inspection Department that have been fined for violating Decree No. 9,013, of March 29, 2017, are eligible to enter into the term of commitment.
• Applications for the term of commitment: Interested parties must request the execution of the term of commitment within 10 days from the official announcement regarding resumption of the penalty enforcement phase, and must comply with the obligation to pay a commitment fine, which is calculated according to the amounts provided for in Annex III. Timely applications will effectively suspend the enforcement of the sanction in administrative proceedings whose processing was resumed after this ordinance entered into force.
• Commitment fine: The obligation referred to in the main section will replace the enforcement of the suspension of activities originally provided for in the citation and must not be confused with any pecuniary fines imposed on the company during the citation trial. In addition to the commitment fine, at the discretion of the Secretariat of Agricultural Defense, compliance with obligations involving the donation of personal property to the Federal Government, with or without burdens, can be imposed, in compliance with the procedure provided for in Decree No. 9,764, of April 11, 2019. The commitment fine must be paid through the Federal Tax Collection Form (Guia de Recolhimento da União), generated by the Animal Products Inspection Department.
• Obligations under the term of commitment: The term of commitment provides for the parties’ obligations, the deadline for compliance, and the sanctions applicable in the event of non-compliance. The obligations under the term of commitment encompass:

1. 1. remedying irregularities identified in the citation;
   2. implementing measures to prevent further violations; and
   3. repairing any additional pending issues identified in each specific case.

• Amendment and termination of the term of commitment: The current commitment term can be amended either at MAPA’s or the interested party’s initiative, upon a prior analysis and approval by the competent authority. The term of commitment can be terminated if there is non-compliance or at the request of the interested party. Termination of the term of commitment entails enforcement of the suspension of activities originally imposed in the citation, but will not entail the return of the amount collected as commitment fine, nor of any assets donated.
• Final provisions: The Animal Products Inspection Department must update the administrative sanction and register compliance with it in the electronic systems that manage the citation records, upon full compliance with the term of commitment. The effects of this ordinance apply to final and unappealable cases until the publication of Law No. 14,515, of December 29, 2022.

SDA/MAPA Ordinance No. 1,091 entered into force on the date of its publication.

Demarest’s Life Sciences team will continue to monitor the developments of this topic and remains available to provide clarification.