Source: OAB website (Federal Council)

Brasília, 11/08/2008 - The search for solutions and alternatives to combat the growing worsening of illicit competition, manifested through piracy practices, smuggling, violation of intellectual property rights, tax evasion to finance unfair prices, in addition to violations of sanitary, environmental norms and consumer rights. This is the great challenge of the Special Committee to Combat the Illegal Market of the Federal Council of the Bar Association of Brazil, recently installed in a ceremony conducted by the national president of the entity, Cezar Britto, marking the end of Lawyer Day.

According to the President of the Commission installed by Britto, the Treasury Director of the OAB Federal Council, Ophir Cavalcante Junior, “the estimate is that only in 2007 did the Treasury fail to collect approximately R $ 230 billion due to evasion, avoidance tax, informality and other misconduct ”.

Speaking at the inauguration ceremony, Ophir maintained that current practices in the illegal market are serious and affect the entire population - consumers, workers, businessmen, lawyers and the treasury. In this sense, it proclaimed the participation of the OAB in the defense of legality and lawful market practices as fundamental to the entity's representativeness and political performance, “even considering its legitimacy to represent the interests of workers, consumers, industry and of commerce ”. He added that the action of the Special Commission to Combat the Illegal Market will also seek to promote the engagement of authorities from the Executive, Legislative and Judiciary branches, as well as organizations and other entities representing this segment in combating illegal and harmful operations and practices.

With Ophir Cavalcante Junior in the presidency, the following were also sworn in to the Special Commission to Fight the Illegal Market: Antonio Francisco Lima de Rezende (vice-president); the federal councilor for Rio de Janeiro Nelio Machado (secretary), and the members Alexandre Santos de Aragão, Ana Tereza Palhares Basílio, Guido Silveira Filho, Igor Mauler Santiago, Rinaldo Zangirolami and Túlio Freitas do Egito Coelho.

The following is the full statement of the President of the Special Committee to Combat the Illegal Market during the inauguration ceremony:

“Hon. Mr President,

In early 2005, it was proposed to the then President of the Federal Council to create a Temporary Commission to Combat the Illegal Market, in view, in brief summary, of the need for the OAB to act in the search for solutions and alternatives to combat the growing aggravation illicit competition, manifested through piracy practices, smuggling, violation of intellectual property rights, tax evasion to finance unfair prices, violations of health and environmental standards and consumer rights.

In view of the relevance of the subject and the institutional role of the Brazilian Bar Association in ensuring the legal order and constitutional values ​​(art. 44, I, of Law No. 8.906 / 94), the creation of the Commission was approved, having some relevant activities have been carried out, among which we highlight the awareness of the Judiciary in relation to tax evasion practices through a Seminar held in May 2005 where the “Legal and Economic Aspects of Tax Evasion” were discussed, until the end of the term of office of that Federal Council, as determined by paragraph 2 of art. 1 of Resolution No. 06/2000. The term of such Temporary Committee, ended, under the terms of the regulations, at the end of the management that created it.

Following the evolution of the theme and verifying that illicit competition practices have worsened, with serious losses for the Public Treasury, for the national community and, also, for the practice of law, which is strengthened in a healthy and competitive market environment , guided by the rules and principles of the legal system, not by means of activities outside its margin, I proposed and the Board of Directors of the Federal Council agreed to recreate that Committee to contribute to the discussion of this topic.

In fact, it is estimated that in 2007 alone, the Treasury failed to collect around 230 billion reais due to tax evasion, tax avoidance, informality and other misconduct. Data collected by McKinsey Consulting and its Global Research Institute, McKinsey Global Institute reveals that Brazil could grow up to 7% per year simply by reducing levels of informality over a decade.

The World Bank has also recently spoken out on the topic of informality and tax evasion in Brazil, asserting that these practices are, in fact, pitfalls for Brazil's growth and for the consumer himself who thinks he will benefit from cheaper products. This is because, on the one hand, they reduce investments applied in the formal market and harm competition, and, on the other hand, they do not imply benefits for the consumer, because, although the prices of products sold in the illegal market are, in theory, lower , its quality is also.

In a survey carried out by that institution (World Bank's Investment Climate Survey in Brazil), it is concluded that (i) tax evasion in Brazil is not limited to small and medium-sized companies, but is also practiced by large companies, in greater or lesser degree; (ii) the culture of tax evasion in Brazil has consequences for the development of the Brazilian capital market, since tax evaders choose not to trade their shares on the stock exchange, as this would subject them to regular external audits; and (iii) illegal companies are less productive than legal ones, one because they are not subject to regulation, they are not forced to observe a minimum degree of quality in the preparation of their products, and two because they cannot seek financing from the legal market , with a view to investing in technology and quality.

It should be noted that the consumer's own health is put at risk with the use of products from the illegal market. They are sunscreens and fake sunglasses that do not protect from sunlight, condoms and cigarettes without the control of the Health Surveillance, toys intended for children dyed with toxic paints. Another encumbrance concerns the consumer protection system and liability for damages arising from consumer relations. There is no way to apply them when the supplier of a certain product is unknown and its trader has no fixed headquarters or any registration with the authorities.

This quick presentation of the problem already allows us to glimpse that the negative consequences of the practices of evasion, counterfeiting, smuggling, among others, are serious and affect the entire population - consumers, workers, businessmen, lawyers and the Treasury. As a class entity with strong representativeness and political performance, the participation of the Brazilian Bar Association in the defense of legality and lawful market practices is fundamental, considering, even, its legitimacy to represent the interests of workers, consumers, industry and commerce, as well as promoting the engagement of authorities from the Executive, Legislative and Judiciary branches, organizations and other entities representing these segments.

The objective of the Commission, Mr. President, will be to study and propose alternatives and solutions to the exposed problem, through initiatives aimed at articulating the state apparatus, seeking the correct and just application of the law, carrying out logical and strategic analysis of the rules that govern the matter and dedicating themselves to the study and development of these theses.

With this in mind, the Commission brings together professionals of notable legal knowledge in areas such as intellectual property, criminal law, tax law, regulatory law, competition law, labor law and business law, and is therefore in a position to contribute to the purposes set forth in art. 44, I, of Law 8.906 / 94 (Statute of Advocacy and OAB) and further enhance the name of our Brazilian Bar Association ”.