Use of precatories for payments to the Union divides government – 05/15/2023 – Panel

The decision by the AGU (Advocacy General of the Union) to suspend the use of precatories as currency in business with the Union until further analysis was motivated by a clash between government agencies.

Documents that served as the basis for the dispatch by Minister Jorge Messias, to which the Panel had access, show that he was instructed to take different attitudes, by different instances.

The Attorney General of the National Treasury (PGFN), linked to the Ministry of Finance, and the legal consultancy of the Ministry of Planning argue that, when a company presents credits, the government must accept them, regardless of its will or convenience.

The Federal Attorney General’s Office (PGF), one of the arms of the AGU, understands that it is the Union’s right to reject the proposal if it does not suit it.

The understanding of the PGFN and Planning was endorsed by the technical sectors of the AGU, but, on the last day 5, the general consultant of the Union, André Augusto Dantas Motta Amaral, disagreed and recommended to the minister that he order the stoppage of the cases. As he argues, without specific regulation, there is room for future questions in court, which could cause damage to the Union.

On the last 5th, Messias ordered ministries, regulatory agencies and other bodies to suspend, until further deliberation by the AGU (Attorney General of the Union), the analysis of requests for the use of precatories in transactions with the government. He also ordered that payments made with these papers should not be considered paid.

Precatorios are credits of third parties with the Union, resulting from lawsuits. A constitutional amendment enacted by Congress in 2021 allowed these roles to be used by companies and citizens to pay public concession grants, buy federal real estate and even acquire stakes in state-owned companies. The objective was to reduce the growing liabilities of the government, currently at R$ 119 billion.

From 2021 onwards, the approval of the amendment moved the market for the purchase and sale of precatory credits, given the new possibilities for using the titles. For companies such as concessionaires of public services, the acquisition of shares is advantageous because they are offered by the original creditors at a discount, that is, at a lower value.

The government fears massive use because it could lead to lower revenues. Instead of paying grants and carrying out other operations in cash, the companies would present the bonds, which would be deducted from the public debt.

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