New Gold Rules in Brazil
Gold Provisional Measure
Amsterdam, 26 april 2023– Brasilia has finalized what has become known as the Gold Provisional Measure (MP) ending good faith and requiring electronic invoices for buying, selling, and transporting gold in the country, Brazilian media reported.
The document has already been signed by Justice Minister Flávio Dino and will also be signed by the ministries of Finance, Mines and Energy, Environment, and Indigenous Peoples, who participated in the drafting.
After that, it will be sent to the Civil House. Finally, it will be signed by President Luiz Inácio Lula da Silva and sent to the National Congress. The text, however, has immediate validity and needs to be confirmed by Parliament to remain effective, the agency also explained.
The proposal is the result of a working group created by the Justice Ministry.
With the MP, the government wants to combat illegal mining on indigenous lands and conservation units, mainly in the Amazon, besides closing loopholes in the legislation used to circumvent the control over the ore chain.
“Today, in Brazil, there is less control over gold than over wood or meat. With the provisional measure presented and already agreed with all government agencies, the individual who sells gold will have a series of regulatory mechanisms,” Secretary of Access to Justice Marivaldo Pereira said in a statement.
Between 2015 and 2020, the country traded 229 tons of gold with evidence of illegality, according to a study by the Choices Institute.
The MP comes after the government declared an emergency because of the damage caused by illegal mining in the Yanomami Indigenous Land in Roraima. It is estimated that 500 indigenous children have died as a result of the humanitarian crisis in the territory. The expansion of mines in the Brazilian Amazon has quadrupled between 2010 and 2020, according to the Alliance in Defense of Territories dossier.
The Gold PM provides for:
- – Control by the National Mining Agency.
- – System of Traceability of Transportation and Custody.
- – Penalty of seizure and confiscation if rules are not followed.
- – Requirement of electronic invoices: in March, the Federal Revenue Service established the requirement for issuing electronic invoices for deals with gold as a financial asset or exchange instrument, which will come into force in July. Currently, transactions are recorded on paper notes.
- – The first sale of gold can only be made by entities authorized by the Central Bank (BC).
- – Purchases must be paid for by bank transfer.
- – End of the presumption of good faith: Currently, a 2013 law allows gold to be considered legal based on information provided by the seller of the ore and the good faith of the buyer.
- – Possibility of liability for links in the gold buying and selling chain.