AGU defends law that facilitates illegal gold laundering – 03/07/2023 – Market

The AGU (Attorney General of the Union) gave a favorable opinion to the use of the so-called good faith to certify the legal origin of the gold. The agency’s assessment is that the instrument is positive, but it was misinterpreted and misused.

The body’s conclusion, dated February 27, however, caused strangeness among different bodies concerned with the fight against illegal mining.

“This law needs to fall because it is ineffective, and the opinion of the AGU is contradictory, not to say absurd”, says Vera Motta, national secretary of Legal Affairs of the PV (Green Party), who follows the action against the measure.

“At various times, the AGU agrees that it is impossible that the legalization of gold can work in this way”, he adds.

The AGU’s opinion contradicts a position taken by the Ministry of Justice and Public Security almost a month earlier. On January 26, when the humanitarian crisis of the Yanomami had exploded, the holder of the portfolio, Minister Flávio Dino, criticized the instrument in an interview on the Voz do Brasil program, arguing that the norm served to legalize clandestine gold and should be considered unconstitutional .

At the time, he also stated that he had formally requested the attorney general of the Union, Minister Jorge Messias, to evaluate the matter together with the court.

“The AGU opinion is an aberration, as it makes no sense to say that good faith has a problem of interpretation”, says Sergio Leitão, executive director of Instituto Escolhas, one of the most active in the fight against illegal gold. “We are confident that the good faith instrument will be reviewed by the government through other initiatives.”

The opinion presented by the AGU was interpreted by some people who follow the discussion in court as a more political than legal position, to try to alleviate the responsibility of the PT in creating the norm.

Good faith is provided for in federal law 12,844, of 2013, authored by Deputy Odair Cunha (PT-MG). He included the articles in an MP (Provisional Measure) that dealt with agricultural insurance, with no relation to gold. That is, as they say in the jargon of Congress, he put a tortoise in the law. The final text was sanctioned by former president Dilma Rousseff.

A SheetCunha stated that his proposal was misunderstood and that he did not imagine that, over time, the instrument could evolve to “heat” illegal gold, a term that refers to the fraudulent transformation of illegal gold into legal gold.

In practice, the use of good faith is pointed out as the main mechanism to regularize the gold extracted from indigenous lands and environmental reserves. It exempts the first buyers of gold, basically DTVMs (Securities Distributors), from the obligation of demanding from the seller that he proves where the gold was extracted.

After his authorship gained publicity, Deputy Cunha sent a letter to the ANM (National Mining Agency) requesting the immediate suspension of the 6th Round of the Notice of Availability of over 420 areas for prospecting exploration. The letter also asks for a complete audit of the authorizations already issued and of the gold sold from each of them.

According to Sheet found out, at a meeting at the AGU, some members of the body stated that the opinion on good faith needed to reflect the set of interests, often contradictory, of 164 different public bodies, and that not all of them consider it ideal to end good faith, according to reports from those following the discussion.

Among those who would have presented opposition would be the BC (Central Bank). The autarchy, however, publicly declares itself against the permanence of good faith and claims to work for the construction of a new legal framework.

Sought by the report, the BC advisory reaffirmed, in a note, that “as it has repeatedly stated, the Central Bank fully supports the revocation of the presumption of legality in the acquisition of gold by a financial institution.”

The AGU’s position was a response to the STF (Federal Supreme Court) within two ADIs (Direct Action of Unconstitutionality), which question the sale of gold based on the presumption of good faith. ADI 7273, from the PSB (Brazilian Socialist Party) and Rede Sustentabilidade, and ADI 7345, presented by the PV, are under analysis in the court.

To guide his decision on the subject, the rapporteur of the action, Minister Gilmar Mendes, requested information from AGU, Central Bank, ANM and CVM (Securities Commission).

In reply to Sheet on the issue, the AGU press office highlighted that the body fulfilled its function within the legal parameters.

“The Federal Constitution, in its article 103, paragraph 3, assigns to the AGU the duty to defend all federal laws whose constitutionality is contested”, he says in a note sent to the report. “The jurisprudence admits that the AGU pronounces for the unconstitutionality only when there is a precedent of the Federal Supreme Court that understands for the unconstitutionality of the norm. This was not, however, the hypothesis of the records.”

Faced with the position considered frustrating by the AGU, the attention of defenders of the end of good faith now turns to the movement of the federal government. An MP that seeks to establish new rules for mining is being prepared. The text under review revokes the presumption of good faith.