SP judge limits purchase of land by Asian business group

Judge Valdeci Mendes de Oliveira, of the Fourth Civil Court of Marília (SP), issued an injunction to require the Bracell Trading Group, of Singapore, which is engaged in the production and processing of eucalyptus pulp, to respect the limit set by law for the purchase of Brazilian land by foreigners.

The decision was made in a public civil lawsuit in which the Brazilian Agribusiness Association and the Central Tete Sugar Cane Growers Association accused the Brasil Group of failing to respect the legislation (Law 5709/1971) that allows the purchase of up to 10% of rural areas. Land by foreign companies.

According to the associations, the Bracell group has exceeded the 10% limit, in at least three cities in the state of São Paulo in the Marilia region: Vera Cruz, Oriente and Alvaro de Carvalho. According to records, Bracell will occupy 32.7% in the municipality of Oriente, 11.8% in Alvaro de Carvalho and 10.9% in Vera Cruz.

The associations noted abuses in the behavior of the Brasil Group and defended “the need to establish and ensure a balance between foreign investment and national sovereignty”. The judge considered the legal requirements and the possibility of the rights that the plaintiffs invoked.

Since the issues for judicial debate are related to national sovereignty, the social function of property, the food chain and security, the socio-economic structure and the environment, and the observance of the principles of reasonableness and proportionality enshrined in Article 8 of the Code of Criminal Procedure, is strong in Article 2035, single paragraph of the Criminal Code, Meaning that no agreement or contractual clause will prevail when it conflicts with principles of public order such as those laid down in the above-mentioned law to ensure the social function of said property and contracts.

In the decision, the judge also considered the restrictions imposed by Law 5.709/ 1971 on the acquisition and lease of rural land by foreigners: “At present, the purchase, sale and lease of land by foreigners on Brazilian territory is limited to 1/4 of the area of ​​each municipality, and within that limited area , each nationality can acquire or retain a maximum of 10% of that territory.”

The judge also cited evidence of adopting an “abusive and/or illegitimate institutional structure” to justify the award of the injunction. Thus, the Bracell Group is prohibited from acquiring new rural properties, under penalty of a fine of R$1 million for each new legal transaction entered into in violation of Law 5,709/71.

The judge concluded that “at the present time, it is not a matter of issuing an injunction obligating the defendants to dispose of the contracts already concluded or to terminate them in accordance with the request of the plaintiffs, and it is necessary to wait for the appeal of the dispute.” . In a statement, the Bracell Group stated that all of its activities are “in compliance with current legal regulations.”

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