Law No. 13,848/19, enacted in June, established the new framework for regulatory agencies in Brazil. Originating from Bill No. 52/13, the text signed into law differs very little from what was initially approved by the Senate, in spite of a few presidential vetoes and specific changes introduced by congressmen.

With regard to the vetoes, the Presidency rejected the application of a public pre-selection process for candidates to the boards of commissioners and the commissions of regulatory agencies, as well as extended the rule that members of these bodies (with very few exceptions) may not be reappointed for terms of office that started before the law entered into force. It also excluded the prohibition on having a person linked to a company that carries out activities regulated by the agency be appointed to its top position.

Among the pointed changes to the original bill introduced in Congress, the following stand out:

• The inclusion of the National Mining Agency (ANM), which was created to replace the former DNPM, in December of 2017;

  The assimilation of the Administrative Council for Economic Defense (Cade) to a regulatory agency for certain purposes, such as recognition of its functional, decision-making, administrative, and financial autonomy; the subjection to external control by the National Congress, with the assistance of the Federal Audit Court; the obligation to prepare strategic plan, annual management plan, and regulatory agenda; and

• 
  In line with the State-Enterprises Law is the obligation for regulatory agencies to implement their own internal compliance and corporate governance programs.

During the legislative process, the Chamber of Deputies had attempted to remove the prohibition on appointing party leaders and relatives of politicians to both the governing posts of regulatory agencies and to the management and boards of state-owned enterprises. The amendment even affected the State-Enterprises Law in this sense. The Senate, in approving the final text, rejected the amendment, so that the prohibitions on appointment under the State-Enterprises Law were unchanged and were repeated and even extended to regulatory agencies.

Congress also added reinforcement to the rule against simultaneous terms of office of agency leaders, stating that those who fail to be filled in the same year as their vacancy will be shortened. The congressmen also extended the list of scenarios for loss of office for the leaders of agencies, increasing the number of situations that objectively constitute a conflict of interests, compliance obligations, and professional duties.

As may be seen, the main foundations of the original bill, characterized by a commitment to modernization, standardization, and professionalization of regulatory techniques, were preserved in the Regulatory Agencies Law. Some pending issues have not yet been resolved, but the enactment of this important new law will provide encouragement to investors and financiers of companies operating in regulated sectors.