On December 27, 2018, the Federal Government sanctioned Decree No. 9,640/2018, which regulates the Environmental Reserve Quota (“CRA”) instituted by Article 44 et seq. of the Forest Code (Law 12,651/2012), an instrument for environmental regularization and adequacy, which enables the economic use to rural property owners and possessors of native vegetation areas, exceeding the legal reserve limits required by law, on their properties.
Thus, rural property owners with a legal reserve registered in the CAR (and/or registered on the margin of the respective registry), and that have a surplus of remaining native vegetation or an area in the process of recovery on the property may use this surplus area to the legal reserve for the issue and sale of CRAs. The CRA, therefore, is an instrument that makes it possible to adapt rural properties that had a legal reserve deficit until 07.22.2008 to the dictates of the Forest Code, being one of the alternatives for environmental compensation.
The regulation disciplines the procedure for issuing and registering such quotas, as well as the form for their transfer, use, validity, and cancellation, when this is the case. Under the new regulations, the Brazilian Forest Service (“SFB”) was defined as the agency responsible for issuing the CRA, as well as for its registration/transcription in national commodities exchanges or in registration and financial settlement systems authorized by the Central Bank of Brazil. In this regard, it is important to note that after the edition of Provisional Measure No. 870/2019 of 01.01.2019, the SFB structure was detached from the portfolio of the Ministry of Environment (“MMA”) and incorporated into the portfolio of the Ministry of Agriculture, Livestock and Supply (“MAPA”).
With the edition of this regulation, the tendency is that now this mechanism is effectively and widely used in Brazil, to the extent that, until now, due to the absence of regulation, only a few federal units, through their own regulations, applied this expedient as one of the ways of compensation and environmental regularization of the required legal reserve.
Naturally, the regulation recognizes the validity of Forest Reserve Credits (“CRF”) issued under Law 4.771/65 (former Forest Code), which, after validation by the competent state agency, will be considered as CRA.
This regulation does not contemplate the issue of CRA relative to the area of native vegetation existing on rural property located inside a Conservation Unit of public domain still pending expropriation, in the terms of item IV of Art. 44 of the Forest Code, which will be subject to its own specific regulation.
Finally, we emphasize that there is still doubt regarding the technical/legal criteria that will be adopted and confirmed by the Supreme Court for the CRA in the Brazilian legal system. This is because, in 2018, the STF, when judging the constitutionality of part of the provisions of the Forest Code, adopted, in theory, two different concepts regarding the compensation of legal reserve by CRA being one more comprehensive, the concept “of the same biome” (paragraph 6 of Article 66 of the Forest Code) and the other more restrictive “of ecological identity” (conforming interpretation of paragraph 2 of Article 48 of the Forest Code). Considering the judgment of the STF indicated above and, furthermore, that the state environmental authorities will have to validate the areas destined for CRA issuance, the most restrictive rule should prevail, which is ecological identity.