Agenda 2019: main events

These were the main activities developed by ETCO throughout 2019:

• Participation in the 13th Parliamentary Meeting on Intelligence and Border Security, in Paraguay. (see here)
• Audience with the Minister of Justice and Public Security, Sérgio Moro.
• Audience with the Secretary of National Sovereignty and Citizenship, Fabio Marzano.
• Lecture by the president of ETCO for police officers in Rio de Janeiro.
• Audience with Adriano Marcos Furtado, general director of the Federal Highway Police.
• ETCO Board of Directors meeting.
• Meeting at Fiesp on traceability.

• Meeting with Angélica Garcia, Industrial Property attaché at the British Consulate.
Participation in a meeting of the Foreign Trade Council of Fiesp.
• Meeting with authorities of the Municipal Secretariat for Urban Security and the Executive Secretariat for Combating Illicit Trade of the Municipality of São Paulo.
• Participation in a meeting of the board of the National Forum against Piracy and Illegality (FNCP)
• Meeting with an economic advisor at the American Embassy on a report by the American government on intellectual property infringement (Special Report 301).
• Audience with the vice-governor of São Paulo, Rodrigo Garcia.
• Audience with Minister Ernesto Araújo, from the Ministry of Foreign Affairs (MRE).
• Audience with General Decílio de Medeiros Alves, director of the Department of Science, Technology and Innovation of the Ministry of Defense.
• Meeting with the Deputy Chief of Legal Affairs of the Civil House, Jorge Antônio de Oliveira Francisco.
• Meeting with André Veras Guimarães, director of the MRE's Department of Security and Justice.
• Participation in a meeting of the National Council to Combat Piracy (CNCP).
• ETCO Board of Directors meeting.

MARCH 2019
• Meeting on data protection with representatives of the Government of the State of São Paulo.
• Participation in the scientific table of the Center for the Study of Economic and Social Law (CEDES) on taxation and competition.
• Participation in a meeting of the OECD's Anti-Illegal Market Task Force in Paris.
• ETCO Advisory Board meeting.
• Meeting with Caio Megale, Secretary for Development of Industry, Commerce, Services and Innovation at the Ministry of Economy.
• Meeting with Rosalvo Ferreira Franco, from the Ministry of Justice's Integrated Operations secretariat.
• Hearing with Senator Rodrigo Pacheco (DEM-MG) on PL 284/17 to combat the persistent tax debtor.
• Sponsorship and participation in the 66th National Meeting of State Tax Coordinators and Administrators (Encat), in Brasília.

APRIL 2019
• Participation in a meeting of the FNCP council.
• Participation in seminar of the Americas Society and Council of The Americas.
• Participation in the VEJA EXAME 100 Days of Government Forum.
• Lecture at Folha Seminar: Challenges and opportunities for the fuel sector.
• Lecture at the event The Challenges of Consumer Protection in the Digital Era, from the Ministry of Justice and Public Security with the Fundação Getulio Vargas / SP.
• ETCO Board of Directors meeting.

MAY 2019
• Meeting with Marcos Cintra, RFB secretary.
• Lecture at the XNUMXth Meeting of the Latin American Anti-Smuggling Alliance (ALAC), in Costa Rica. (Here)
• Audience with Senator Esperidião Amin (Progressistas-SC).
• Audience with the PSL leader in the Chamber of Deputies, Deputy Deputy Valdir.
• Audience with Senator Jorginho Mello (PL-SC).
• Participation in the National Competition and Regulation Forum (Fonacre).
• Audience with Senator Major Olímpio (PSL-SP).
• ETCO Fiscal Council meeting.
• ETCO Board of Directors meeting.
• CNCP meeting.
• Meeting with the Paraná Finance Department and the PRF Superintendence, in the South region.
• Audience with the General Delegate of the Civil Police of São Paulo.
• Pro-Ethics meeting.
• Meeting with the president of the Association of Federal Delegates.
• Participation in an event at Casa do Saber with Delfim Netto, Caco Barcellos and Rogério Checker.
• Audience with Carlos da Costa, special secretary for Productivity, Employment and Competitiveness at the Ministry of Economy.
• Meeting of the CNCP Special Commissions on E-Commerce, Fight against Smuggling and Online Payment and Advertising.
• Participation in Casa do Saber event with Rodrigo Pimentel and José Vicente, from Instituto Sou da Paz.

JUNE 2019
• Meeting with state deputy Issur Koch (PP-RS).
• Lecture at CNCP seminar on Illegal Digital Market.
• Lecture at the launch event of the book 30 years of the Federal Constitution, at the Center for the Study of Economic and Social Law (Cedes).
• Meeting at the Finance Department of the State of Rio de Janeiro.
• Meeting at the Secretary of State for the Civil House of Rio de Janeiro.
• Audience with General João Camilo Pires de Campos, Secretary of Public Security of the State of São Paulo.
• Audience with the governor of São Paulo, João Dória
• Audience with Fábio Lepique, executive secretary of the Municipality of São Paulo.
• Launch of the Parliamentary Front to Combat Smuggling.
• Audience with the general delegate of the Civil Police of SP.
• ETCO Ordinary General Meeting.
• ETCO-Taxation and Legal Security Seminar. (Here)
• ETCO Board of Directors meeting.
• Ordinary CNCP meeting.

JULY 2019
• Realization of the Taxation seminar in Brazil in partnership with Valor Econômico newspaper. (Here)
• Sponsorship and participation in the 67th National Meeting of State Tax Coordinators and Administrators (Encat), in Manaus.
• Holding of the #Dentro da Lei Forum, in partnership with Gazeta do Povo, from Paraná. (Here)

• ETCO Board of Directors meeting.

• Lecture at the launch of the Front to Combat Smuggling, at the Legislative Assembly of São Paulo.
• Public hearing with federal deputy Tadeu Alencar (PSB-CE), from the Special Commission responsible for PL 1646/19 to combat the persistent tax debtor.
• Meeting with the delegate of the Federal Revenue of Foz do Iguaçu, Mozart Fuchs.
• Participation in the presentation of the new regulatory model of Inmetro, with Carlos da Costa, special secretary of Productivity, Employment and Competitiveness of the Ministry of Economy.
• ETCO Board of Directors meeting.

• Public hearing on Tax Reform, with Senator Paulo Paim (PT-RS).
• Meeting with Mayor Bruno Covas, from São Paulo.
• Lecture on defense of the legal market at the Commercial Association of Santa Cruz do Sul (RS).
• Meeting with Daniel Ackerman, from the US Department of Justice.
• Meeting of the Fiesp Traceability Committee.
• Meeting with Fábio Lepique, PMSP executive secretary.
• Meeting with Marcelo Ivo, regional delegate for the Investigation and Combat of Organized Crime of the Regional Superintendence of the Federal Police in São Paulo.
• Lecture at the Institute of Weights and Measures (Ipem).
• Lecture at the National Congress of Municipal Guards, in Niterói (RJ).
• ETCO Board of Directors meeting.

• Lecture on cigarette smuggling to the Integrated Command Committee of the São Paulo Department of Public Security.
• Lecture on the Integrated Border Protection Program at the Institutional Security Office of the Presidency of the Republic.
• Participation in the Interparliamentary Security Forum, in the Federal Senate.
• Conducting a seminar on Challenges in Brazilian Tax Litigation. (Here)
• Launch of the book Taxation and legal security. (Here)
• ETCO Advisory Board meeting.
• ETCO Board of Directors meeting.
• ETCO Extraordinary General Meeting.

• CNCP meeting.
• Meeting with the City of São Paulo and the Federal Revenue Service about the destruction of seized products.
• Presentation of the Panorama of the Legal Market to students.
• FNCP Assembly.
• Participation in the 1st International Conference for the Promotion of Integrity and in the Award for the Pro-Ethical Company 2018/2019 program.
• Participation in the installation event of the Integrated Operation Center in Foz do Iguaçu, with Minister Sérgio Moro and other authorities.
• Lecture at the 12th Seminar on the Triple Border and 2nd National Forum on Border Security.

Councils guide the Institute's activities

ETCO has two main councils that guide its activities. The Advisory Council, chaired by tax expert Evarardo Maciel, includes big names from the business sector, lawyers, intellectuals and leaders from different sectors that inspire the Institute in relation to the country's major themes. In addition to numerous occasional contributions, they participated in three meetings for the debate of ideas throughout the year.

The Board of Directors acts in the formulation and approval of the ETCO's operating strategy, as well as in the monitoring of initiatives and in the evaluation of results. In 2019, President Victório De Marchi passed this responsibility to the new holder of the office, lawyer Alexandre Jobim. During the year, ten meetings of the Board of Directors were held.

The 2019 financial statements were examined by the audit firm Deloitte, approved by the Audit Committee and ratified by the Board of Directors.

Advances in competitive ethics that we help to build

Since 2003, when it was founded, ETCO has participated in several projects that have contributed to improving the business environment in the country. See some of the main ones.

  • ELECTRONIC INVOICE: We contributed to the design, implementation and improvement of the Electronic Invoice project, which began to take effect in 2006. The system improved inspection, reduced tax evasion and reduced costs for tax authorities and companies.
  • SURVEILLANCE SUPPORT SYSTEMS: We help develop mechanisms to control the manufacture of products with high potential for tax evasion, such as the Cigarette Production Control and Tracking System (Scorpios) and the Beverage Production Control System (Sicobe).
  • UNDERGROUND ECONOMY INDEX: We created, in partnership with the Brazilian Institute of Economics of the Getulio Vargas Foundation (IBRE-FGV), the Underground Economy Index, which measures the size of the Brazilian informal economy since 2003.
  • SPECIAL TAX SYSTEMS: We support the presentation and approval, through Constitutional Amendment, of Article 146-A of the Federal Constitution, which authorizes the creation of different tax collection systems for taxpayers that adopt tax practices unfair to competition.
  • UNION OF FORCES FOR THE LEGAL MARKET: We created, in partnership with the National Forum to Combat Piracy and Illegality (FNCP), the Movement in Defense of the Brazilian Legal Market, which joins forces to act in a coordinated manner in the fight against smuggling, piracy , fraud and counterfeiting of products and defends border control actions. The Movement has the support of seventy entities. Within the scope of cities, also in partnership with the FNCP, we created the Legality Movement, which unites forces from civil society, city halls, the Federal Revenue Service, the Federal Police, Parliament, state bodies and the National Front of Mayors, to fight, effectively and blunt, the illegal market in Brazilian cities.
  • STUDIES, SEMINARS AND PUBLICATIONS: We sponsor dozens of research, events and books on topics related to ethics, including the Culture of Transgressions in Brazil series, which brings together contributions from great Brazilian thinkers, including the sociologist and former President of the Republic Fernando Henrique Cardoso .
  • INTERNATIONAL PERFORMANCE: We are members of committees that fight transnational illegal practices that cause unfair competition. In 2016, we joined the Latin American Anti-Smuggling Alliance (ALAC), which brings together civil society entities and government agencies from fifteen Latin American nations in the search for joint actions to stop smuggling in the region; in 2017, we started to act in this direction also with the World Trade Organization (WTO).
  • COMBATING PIRACY AND CRIME AGAINST INTELLECTUAL PROPERTY: We participate in the National Council for Combating Piracy and Offenses against Intellectual Property (CNCP), an intelligence body of the Ministry of Justice of the Federal Government, composed of representatives of public power and society civilian and dedicated to combating these crimes.
  • RECOGNITION TO ETHICAL COMPANIES: We are part of the management committee of Pró-Ética, a recognition program for companies committed to ethics in their relations with the public sector. Pró-Ética was created in 2010 by the Ministry of Transparency, Inspection and Controllership-General of the Union (CGU), in partnership with the Ethos Institute.

Communication Highlights

Among the projects developed by the Communication area, the main highlights of 2019 were the following:

Record audience and new sections on the site

The ETCO internet portal gained new sections, broke audience records and started a project to redesign the layout and information architecture in 2019.

The records occurred both in relation to the number of pages viewed (page views), which reached 1.051.980, as well as the length of stay of Internet users in each one, which went from 4m38 to 5m56, on average - a growth of 28% .

The content with the most views was the page about the research that ETCO commissioned Datafolha in 2017 to identify young people's perception of ethics in Brazilian society. There were 24.809 hits in the year. Another highly accessed content was the special on recurring tax debtors available on the website, with 16.365 page views.

The new sections were created to gather coverage of events held by the Institute, including videos and transcripts of the lectures. The content of ETCO Magazine, which could already be accessed in PDF format, also became available on the website pages, making it easier to consult.

New press office

In 2019, ETCO hired FSB Comunicação to take care of its relationship with the press. FSB is the main company in this sector in the country and in Latin America and the 33rd largest in the world, according to the Global Top 250 PR Agency Ranking 2019.

The Institute had a great presence in the media throughout the year, with a total of 1.497 citations in dozens of vehicles, especially Globo and Globonews, the newspapers O Estado de S. Paulo, Folha de S.Paulo, O Globo, Valor Econômico, Correio Braziliense and Jornal de Brasília, Veja, Exame and Istoé Dinheiro magazines and portals G1 and R7.

ETCO Magazine Edition

Journalistic coverage of the Institute's events and other actions was published in the 25th edition of ETCO Magazine, launched in October. The main theme, highlighted on the cover, was the contributions of authorities from politics, economics, the legal environment and academia who participated in the two seminars on tax reform and legal security held by the Institute (one of them, in partnership with the newspaper Valor Econômico ).

ETCO Magazine is sent to leaders of the Executive, Legislative and Judiciary branches and to other important actors in the public debate throughout Brazil.

Participation in the 2018-2019 Pró-Ética program

The Comptroller General of the Union (CGU) announced in December the companies approved in the 2018-2019 edition of Pró-Ética, a project that assesses the implementation of measures and integrity policies in the relations of Brazilian companies with the public and private sectors. The project is an initiative of CGU and Instituto Ethos and has the participation of ETCO and other entities in its management committee.

In this edition, 26 companies were approved (see the table), out of a total of 373 that started the registration process. The award was presented by the CGU minister, Wagner Rosário, and by the secretary of Transparency and Prevention of Corruption (STPC), Cláudia Taya.

Pró-Ética does not generate privileges for companies in their relations with the public sector. The approved entities have the following benefits: public recognition that they are committed to preventing and combating acts of fraud and corruption, positive publicity and the evaluation of the integrity program by a specialized team.

Support for the Integrated Border Operations Center

An important advance in the fight against the illegal market in the country was the inauguration, in December, of the Integrated Border Operations Center (Ciof), in Foz do Iguaçu (PR). It is a project that integrates the actions of different government agencies with a relevant role in combating transnational crimes, such as the Federal Police, Federal Highway Police, National Intelligence Agency, Ministry of Defense, Financial Intelligence Unit (the former Coaf) , Internal Revenue Service, Department of Asset Recovery and International Legal Cooperation and the National Penitentiary Department.

Ciof was implemented in an area of ​​600 square meters in the Itaipu Technological Park, in Foz do Iguaçu, at the initiative of the Ministry of Justice and Public Security.

In addition to the Center for border security, in 2019 the federal government implemented three Integrated Public Security Intelligence Centers in the Northeast, South and North regions and a National Center in Brasília.

The integration of the forces of repression to border crimes is one of the main flags defended by ETCO in the fight against smuggling and the entry of pirated and counterfeit products in the country. It is the number 1 proposal in document 10 Measures against the Illegal Market, prepared at from a survey conducted by the Center for the Study of Social Economic Law (Cedes), in 2018, at the request of ETCO. In January, the Institute's executive president, Edson Vismona, took the document to the then newly installed minister Sérgio Moro in an audience at the Ministry of Justice and Public Security, emphasizing the importance of integration.

According to the minister, Ciof will function as "a permanent task force, with the objective of preventing and suppressing border crimes". And it can also serve as a basis for greater integration with the repressive forces of other nations. "The tendency, in the future, is also to seek representatives from countries that border to work in the integrated center", said Moro.

In the STF's decision on a regular tax debtor, an ETCO study is cited

According to the understanding that was being adopted by the Brazilian courts, companies that report their sales to the tax authorities, but do not collect taxes, could be sued in the civil sphere, but not in the criminal sphere. Only tax evaders, who evade tax surveillance by not issuing invoices, could be sentenced to prison terms. In December, however, a decision by the Federal Supreme Court (STF) changed this understanding, allowing the criminalization of so-called permanent tax debtors to be criminalized. And the change took into account the campaign that ETCO has been doing for several years to combat this unfair practice.

The STF's decision occurred in the judgment of an appeal filed by a businessman from Santa Catarina accused of misappropriating the state's ICMS. By 7 votes to 3, the majority of ministers understood that persistent default can indeed be considered a crime, especially when the intention to act in bad faith is characterized.

The case reporter was Minister Luís Roberto Barroso. In his vote in favor of criminalizing conduct, he cited an excerpt from a document prepared by ETCO explaining the losses that the frequent debtor causes to the competitive environment. “The Brazilian Institute of Ethics in Competition presented a table that illustrates in a very striking way the harmful impact of tolerance with this type of conduct,” said Barroso, who then went on to describe to the other ministers the example presented in an infographic prepared by ETCO ( reproduced next).

“The example of the Brazilian Institute of Ethics in Competition says: suppose a [taxpayer with] cost of merchandise of R $ 4; expenses with salaries and rents of R $ 1; tax, R $ 3; and profit of R $ 2. Therefore, this product should be sold for R $ 10 so that the merchant could obtain his profit and collect his tax properly. The [debtor] who does not pay [the tax of] R $ 3 can either sell for R $ 7, and compete predatoryly with what is fulfilling its obligations, or sell for R $ 10 and profit more than twice than your competitor. Either practice is devastating to an economy in which economic actors must compete with consumers on equal terms. ”

The STF's decision should inhibit the action of regular debtors, but it also brings the concern that criminalization is used in an abusive manner by the tax authorities against eventual tax debtors. For this reason, ETCO has been defending the approval of a bill in the Senate, PLS nº 284/17, which establishes criteria for differentiating between defaulting taxpayers, protecting debtors in good faith and authorizing tougher measures against taxpayers. stubborn debtors. “We believe that this may be a more definitive solution to the problem”, says ETCO's executive president, Edson Vismona.

New edition of the survey that follows the evolution of the informal economy in the country

A partnership between ETCO and the Brazilian Institute of Economics of Fundação Getulio Vargas (Ibre / FGV) has followed the evolution of the informal market in the country since 2003 through the Underground Economy Index (IES). Data for 2019 were presented in December. For the fifth consecutive year, there was growth in the informal economy, which moved R $ 1,2 trillion, which represents 17,3% of the Brazilian GDP and is equivalent to the GDP of countries like Sweden and Switzerland.

The IES is calculated based on IBGE research on informality in the labor market and data on the amount of paper money in circulation in the country. The underground economy uses more money in its financial transactions.

The informal market maintained a consistent downward trend from 2003 until 2014, the country's growth period, but the curve was reversed from the beginning of the economic crisis. Unemployment and falling sales put pressure on workers and companies towards informality. "The better the economic scenario, the lower the Index", explains ETCO's executive president, Edson Vismona.

Ibre / FGV economist responsible for the research, Paulo Henrique Ribeiro Peruchetti, drew attention to the reduction in the pace of informal growth, which rose 0,1 percentage point in relation to 2018. In that year, it had increased by 0,4 pp. The trend, according to him, is that the HEI will start to fall with the resumption of economic activity. "Our medium and long-term vision remains positive, as long as the economy continues to grow," said Peruchetti. "But for that, we need to do our homework and move forward with all the reforms necessary to stimulate the economy."