The Brazilian Federal Attorney General (AGU) and the National Institute of Rural Settlement and Agrarian Reform (INCRA) filed a lawsuit in the Brazilian Supreme Court challenging a decision from the Court of Appeals of the State of São Paulo that considered Opinion n. 1 issued by AGU in 2010 unconstitutional.

Opinion n. 1 of AGU stated that the restrictions established by Federal Law n. 5709/71 on the acquisition of rural land by Brazilian companies with the majority of their capital held by foreign companies or individuals remained in force.

The lawsuit filed by AGU and INCRA on June 25th, 2014 seeks an injunction to suspend and an award ultimately annulling Opinion n. 461-12-E issued by the Administrative Branch of the Court of Appeals of the State of São Paulo on December 3rd, 2012. This Opinion was issued based on the decision of the Court of Appeals of the São Paulo regarding the matter.

Opinion n. 461-12-E exempts the Notaries and Real Estate Offices of the State of São Paulo from following the provisions of Federal Law n. 5709/71 and, in practice, authorizes unrestricted acquisitions of rural land in the State of São Paulo by Brazilian companies with the majority of their capital held by foreign companies or individuals.

On August 7th, 2014, a decision rendered by Brazilian Supreme Court Justice Marco Aurélio Melo denied the injunction requested by AGU and INCRA. Court Justice Marco Aurélio Mello considered that the injunction requested AGU and INCRA lacks urgency as 1 year and 7 months have elapsed between the issuance of the Opinion by the Court of Appeals of the State of São Paulo and the filing of the lawsuit.

The final decision to be rendered by the Brazilian Supreme Court will likely become the most important precedent about this controversial matter. Since 2010, when AGU issued Opinion n. 1, this topic has been intensely debated due to its adverse effects to the development of the Brazilian agro-industrial sector.

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