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Rural Real Estate Acquisition by Foreigners - STF's Injunction Suspends Opinion of the Department of Internal Affairs of the State Court of São Paulo

Elapsed=00:00:00.0976756

9/8/2016 9:49 AM Demarest News

Rural Real Estate Acquisition by Foreigners - STF's Injunction Suspends Opinion of the Department of Internal Affairs of the State Court of São Paulo

On December 11, 2012, the Department of Internal Affairs of the State Court of São Paulo ("CGJ-SP") issued Opinion No. 461/2012-E, on the opposite way of Opinion No. 250/10-E of the National Justice Council ("CNJ"), dated of August 2010 - which restricted the acquisition and/or lease of rural real properties , in Brazil, by Brazilian entities with foreign equity as a result of the provisions of Law No. 5.709/71 and its regulatory Decree No. 74,095/74. Thus,  pursuant to this new Opinion No. 461/2012-E, such restrictions were no longer applicable in the State of São Paulo.

As a result of the issuance of Opinion No. 461/2012-E, the Federal Government and the National Institute of Colonization and Agrarian Reform ("INCRA") filed a writ of mandamus with injunction request, with the Federal Regional Court of the 3rd Region ("TRF-3"), requesting the annulment of the above referred opinion issued by CGJ-SP. The injunction was initially granted on May 3rd, 2013, suspending the effects of Opinion No. 461/2012-E and thus making  the understanding of CNJ prevail in relation to the acquisition and/or lease of rural real properties by Brazilian entities with foreign equity in the State of São Paulo.

The aforementioned Writ of Mandamus was ruled on August 28, 2013 when TRF-3 has declined its jurisdiction and sent the case file to the State Higher Court of São Paulo, thus revoking the injunction initially granted in a way that the effects of Opinion No. 461/2012-Ewere restated with regard to the State of São Paulo.

As a consequence of the revocation of the injunction previously granted by the TRF-3, on June 25, 2014, the Federal Government and INCRA filed a claim named Civil Originary Action No. 2463 ("ACO No. 2463") with injunction request, with the Supreme Court of Brazil ("STF"), requesting that Opinion No. 461/2012-E was declared null. On July 9, 2014, Minister Marco Aurelio, judge rapporteur of the case, denied the injunction request and stated that the case should not be ruled without hearing the allegations of the State of São Paulo.

Once the State of São Paulo had presented its allegations to the case, Minister Marco Aurélio granted the injunction claimed by the Federal Government and INCRA, suspending the effects of Opinion No. 461/2012-E until the final ruling of the lawsuit.

The granting of such injunction by STF suspending the effects of Opinion No. 461/2012-E brought back into effect the restrictions on the acquisition and/or lease of rural real properties by Brazilian entities with foreign equity in the State of São Paulo.

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