Brasília – The Attorney General’s Office is going to limit sales of Brazilian land to foreigners or foreign-owned companies. The decision was made based on a legal opinion issued by the Federal Attorney General’s Office mandating that such companies may not purchase rural real estate comprising over 50 "undefined exploration modules" – a unit of area that varies depending on the state in which the land is located.
The document establishes a new interpretation for Law 5,709/71, and it also limits the size of plots of land eligible for purchase – which may not exceed a maximum of 25% of the surface of the municipality they are located in. According to the Federal Attorney General, Luís Inácio Lucena Adams, as a result of the new interpretation, purchases of land will now need to be recorded in special books at real estate notaries.
"Today, we have a limited notion of what is foreign ownership in national land, as a result of a legal interpretation that was adopted in 1998. With the new interpretation, every purchase of land by Brazilian companies owned by foreigners must be communicated every three months to the states’ Judicial Administrative Department and to the Ministry of Agrarian Development," said Adams during a press conference on this Tuesday (24th).
In order to justify the measure, the Attorney General’s Office underscores that one of its attributions is to interpret regulations. Thus, it considers that purchases of land by foreigners fits into the Brazilian Constitution’s definition of strategic sectors. Article 171 allows for the State to discipline and regulate the foreign capital of investors who do not live in Brazil, and of companies based abroad.
Adams adds that the factors that motivated the measure include recent appreciation of agricultural commodities, the global food shortage, and the trend of expansion of the biofuels market.
*Translated by Gabriel Pomerancblum
