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CHAPTER I - THE GENERAL PRINCIPLES OF THE ECONOMIC ACTIVITY



 

Article 170.The economic order, founded on the appreciation of the value of human work and on free enterprise, is intended to ensure everyone a life with dignity, in accordance with the dictates of social justice, with due regard for the following principles:
I - national sovereignty;
II - private property;
III - the social function of property;
IV - free competition;
V - consumer protection;
VI - environment protection, including by means of different treatments in accordance to the environmental impact of products and services and their respective production and rendering;

Clause XI, text in purple added by CA 42, December 19th 2003.

VII - reduction of regional and social differences;
VIII - pursuit of full employment;
IX - preferential treatment for small enterprises organized under Brazilian laws and having their head-office and management in Brazil.

Clause IX amended by CA 6, August 15th 1998. The original text made reference to "Brazilian enterprises" only.

Sole paragraph - Free exercise of any economic activity is ensured to everyone, regardless of authorization from government agencies, except in the cases set forth bv law.

Article l7l. (revoked).

This article defined what a "Brazilian enterprise" was, for the purposes of the provisions of article 170, IX, and others.

Article 172. The law shall regulate, based on national interests, the foreign capital investments, shall encourage reinvestments and shall regulate the remittance of profits.

Article 173. With the exception of the cases set forth in this Constitution, the direct exploitation of an economic activity by the State shall only be allowed whenever needed to the imperative necessities of the national security or to a relevant collective interest, as defined by law.
Paragraph 1 - The law shall establish the juridical estatute of the public company, the mixed capital company and their subsidiaries which explore economic activity of production or trading of goods or rendering of services, with provisions for:
I - their social function and the ways of accounting by the State and society;
II - the compliance with the legislation proper of the private companies, including as regards to civil, commercial, labor and tax rights and duties;
III - bidding and contracting of buildings, services, purchases and sales, with observance to the principles of public administration;
IV - the constitution and functioning of their administrative and fiscal councils, with participation of minor stock holders;
V - the terms, the performance evaluations and the liabilities of the administrators.

Paragraph 1 ammended by CA 19, June 4th 1998. Original text read: "Paragraph 1 - The public company, the mixed-capital company and other entities engaged in economic activities are subject to the specific legal system governing private companies, including labour and tax liabilities." The aim of this CA was twofold: to give more freedom to State companies to compete with private companies (before the CA, State companies and the direct public administration were subject to the same bidding and contracting laws; so, to buy a truck, Petrobrás had to face the same bureaucratic bidding as a hospital to buy medicines) and to bring accountability to the administration of the State companies (most directors are still appointed by politicians, and some directors used to be more concerned with political than economic results).

Paragraph 2 - The public companies and the mixed-capital companies may not enjoy fiscal privileges which are not extended to companies of the private sector.
Paragraph 3 - The law shall regulate the relationships of public companies with the State and society.
Paragraph 4 - The law shall repress the abuse of economic power that aims at the domination of markets, the elimination of competition and the arbitrary increase of profits.
Paragraph 5 - The law shall, without prejudice to the individual liability of the managing officers of a legal entity, establish the liability of the latter, subjecting it to punishments compatible with its nature, for acts performed against the economic and financial order and against the citizens' monies.

Article 174. As the normative and regulating agent of the economic activity, the State shall, in the manner set forth by law, perform the functions of control, incentive and planning, the latter being binding for the public sector and indicative for the private sector.
Paragraph I - The law shall establish the guidelines and bases for planning of the balanced national development, which shall embody and make compatible the national and regional development plans.
Paragraph 2 - The law shall support and encourage cooperative activity and other forms of association.
Paragraph 3 - The State shall favour the organization of the placer-mining activity in cooperatives, taking into account the protection of the environment and the social-economic furthering of the placer-miners.
Paragraph 4 - The cooperatives referred to in the preceding paragraph shall have priority in obtaining authorization or grant for prospecting and mining of placer resources and deposits in the areas where they are operating and in those established in accordance with article 21, XXV, as set forth bv law.

Article 175. It is incumbent upon the Government, as set forth by law, to provide public utility services, either directly or by concession or permission, which will always be through public bidding.
Sole paragraph - The law shall provide for:
I - the operating rules for the public service concession- or permission- holding companies, the special nature of their contract and of the extension thereof, as well as the conditions of forfeiture, control and termination of the concession or permission;
II - the rights of the users;
III - tariff policy;
IV - the obligation of maintaining adequate service.

Article 176.Mineral deposits, under exploitation or not, and other mineral resources and the hydraulic energy potentials form, for the purpose of exploitation or use, a property separate from that of the soil and belong to the Union, the concessionaire being guaranteed the ownership of the mined product.
Paragraph 1 - The prospecting and mining of mineral resources and the utilization of the potentials mentioned in the caption of this article may only take place with authorization or concession by the Union, in the national interest, by Brazilians or by a company organized under Brazilian laws and having its head-office and management in Brazil, in the manner set forth by law, which law shall establish specifi c conditions when such activities are to be conducted in the boundary zone or on Indian lands.

Paragraph 1 amended by CA 6, August 15th 1995. See article 171.

Paragraph 2 - The owner of the soil is ensured of participation in the results of the mining operation, in the manner and amount as the law shall establish.
Paragraph 3 - Authorization for prospecting shall always be for a set period of time and the authorization and concession set forth in this article may not be assigned or transferred, either in full or in part, without the prior consent of the conceding authority.

Paragraph 4 - Exploitation of a renewable energy potential of small capacity shall not require an authorization or concession.

Article 177. The following are the monopoly of the Union:
I - prospecting and exploitation of deposits of petroleum and natural gas and of other fluid hydrocarbons;
II - refining of domestic or foreign petroleum;
III - import and export of the products and basic by-products resulting from the activities set forth in the preceding items;
IV - ocean transportation of crude petroleum of domestic origin or of basic petroleum by-products produced in the country, as well as pipeline transportation of crude petroleum, its by-products and natural gas of any origin;
V - prospecting, mining, enrichment, reprocessing, industrialization and trading of nuclear mineral ores and minerals and their by-products.
Paragraph 1 - The Union may contract with state-owned or with private enterprises for the execution of the activities provided for in items I through IV of this article, with due regard for the conditions set forth by law.

Paragraph 1 amended by CA 9, November 9th 1995. Original text read: "Paragraph 1. The monopoly set forth by this article includes the risks and results derived from the activities mentioned, the Union being forbidden of granting or chartering any kind of participation, in cash or valuables, in the exploration of reservoirs of oil or natural gas, excepted the provisions of article 20, paragraph 1." This CA ended the monopoly of Petrobrás. This CA passed in the first year of the first term of President Fernando Henrique Cardoso; the same year, the CA ending the monopoly of the Telecommunication companies passed. Nationalists accused FHC of "selling the assets of Brazilian society".

Paragraph 2 - The law referred to in paragraph I shall provide for:
I - a guarantee of supply af petroleum products in the whole national territory;
II - the conditions of contracting;
III - the structure and duties of the regulatory agency of the monopoly of the Union.

Paragraph 2 added by CA 9, November 9th 1995. The former paragraph 2 was turned into paragraph 3 below.

Paragraph 3 - The law shall provide with respect to the transportation and use of radioactive materials within the national territory.
Paragraph 4. The law which institute the contribution of intervention in the economic order levied on activities of importation or commercialization of petroleum and by-products, natural gas and by-products, and alcohol fuel shall observe the following:
I - the rate of the contribution may:
a) be established in accordance with the product or its use;
b) be decreased and re-established by act of the Executive Power, the provisions of article 150, III, b not being applicable;
II - the proceeds shall be used to:
a) the payment of subsides to prices or transportation of alcohol fuel, natural gas and by-products and petroleum by-products;
b) the funding of environmental projects related to the gas and petroleum industry;
c) the funding of programmes of infra-structures of transportation.

Paragraph 4 added by CA 33, December 11th 2001.

Article 178. The law shall provide for the regulation of air, water and ground transportation, and it shall, in respect to the regulation of international transportation, comply with the agreements entered into by the Union, with due regard to the principle of reciprocity.
Sole paragraph - In regulating water transportation, the law shall set forth the conditions in which the transportation of goods in coastal and internal navigation will be permitted to foreign vessels.

Article 178 amended by CA 7, August 15th 1998. The original text gave a monopoly to national vessels to make transportations along the Brazilian coast, and determined other privileges to Brazilian ships and respective commanders.

Article 179. The Union, the states, the Federal District and the municipalities shall afford micro-enterprises and small enterprises, as defined by law, differentiated legal treatment, seeking to further them through simplification of their administration, tax, social security and credit obligations or through elimination or reduction thereof by means of law.

Article 180.The Union, the states, the Federal District and the municipalities shall promote and further tourism as a factor of social and economic development.

Article 181. Compliance with request for a document or for information of commercial nature, made by a foreign administrative or judicial authority to an individual or legal entity residing or domiciled in the country shall depend upon authorization from the competent authority.

CHAPTER II - URBAN POLICY

 

Article 182.The urban development policy carried out by the municipal government, according to general guidelines set forth in the law, is aimed at ordaining the full development of the social functions of the city and ensuring the well-being of its inhabitants.

Paragraph 1 - The master plan, approved by the City Council, which is compulsory for cities of over twenty thousand inhabitants, is the basic tool of the urban development and expansion policy.

Paragraph 2 - Urban property performs its social function when it meets the fundamental requirements for the ordainment of the city as set forth in the master plan.

Paragraph 3 - Expropriation of urban property shall be made against prior and fair compensation in cash.

Paragraph 4 - The municipal government may, by means of a specific law, for an area included in the master plan, demand, according to federal law, that the owner of unbuilt, underused or unused urban soil provide for adequate use thereof, subject, sucessively, to:
I - compulsory parceling or construction;
II - rates of urban property and land tax that are progressive in time;
III - expropriation with payment in public debt bonds issued with the prior approval of the Federal Senate, redeemable within up to ten years, in equal and successive annual installments, ensuring the real value of the compensation and the legal interest.

Article 183.An individual who possesses an urban area of up to two hundred and fifty square meters, for five years, without interruption or opposition, using it as his or as his family's home, shall acquire domain of it, provided that he does not own any other urban or rural property.

Paragraph 1 - The deed of domain and concession of use shall be granted to the man or woman, or both, regardless of their marital status.

Paragraph 2 - This right shall not be recognized for the same holder more than once.

Paragraph 3 - Public real estate shall not be acquired by prescription.





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