Electronic Auctions Excite Suppliers

Introduction
Regulatory Initiatives
The Information Society
Electronic Documents
Electronic Auctions

Introduction

An increasingly important issue is the legal consequence of electronic transactions. Although the prevailing regulatory system in Brazil is considered capable of providing the necessary legal support for most electronic transactions, some areas call for special attention. In this respect various bills have been forwarded to the legislative branch. The bills aim to regulate some issues including virtual crimes, electronic signatures and consumer protection in the virtual environment.

Regulatory Initiatives

While various bills are being discussed at the legislative level, the government has been demonstrating great interest in electronic transactions. Being aware of the benefits of implementation, the federal government (and some state governments) have been issuing various regulations within their scope that are aimed at regulating the circulation of electronic documents, creating e-commerce development agencies and establishing rules that encourage the purchase of goods via the Internet in an efficient and economical manner.

The first governmental regulatory initiative in relation to electronic transactions was Regulatory Instruction 156 of December 22 1999 of the Federal Revenue Department. This instruction creates the registries of natural and artificial persons before the department, enabling taxpayers to deal with the department electronically. Taxpayers may send and receive documents electronically through an asymmetric cryptographic electronic signature system. The department will consider such documents to have been physically submitted or issued. A certification system is in place which guarantees the identity of users and certifies all documents, thus preventing possible frauds.

However, the Federal Revenue Department appears to have acted rather hastily in relation to the rest of the government, which has developed a comprehensive policy for the implementation of electronic documents. Additional regulation is required and it is thought that the federal revenue department instruction will be fully implemented only when more generic regulation is ready.

The Information Society

Inter-ministerial Ordinance 47 of August 3 2000 created the Electronic Commerce Executive Committee.

The principal duties of the committee are to:

• analyze the standards and procedures of the employment of e-commerce;

• make recommendations to stimulate e-commerce; and

• promote alliances between the public and private sectors for the development of e-commerce.

It is intended that the committee will act as a communication channel between the government and the private sector in e-commerce matters.

In tandem with this initiative, Decree 3294 of December 15 1999 created the Information Society Programme. The programme recently completed the Information Society Green Book, which represents an in-depth study of the advantages, barriers and necessary measures for the implementation of the 'information society'. The document is undergoing public consultation and should lead to an Information Society White Book which will serve as a government reference guide.

Electronic Documents

The government has taken the initiative of establishing the parameters for the exchange of electronic documents within the ambit of the federal government.

Decree 3587 of September 5 2000 establishes how the government will accept, certify and issue electronic documents. It also provides for an asymmetric cryptographic system. Documents will also undergo electronic certification, to be performed by private or public entities.

It is intended that the public administration will:

• offer electronic confidentiality services;

• confer validity on electronic documents;

• guarantee the authenticity and integrity of data; and

• establish the irrevocability and irreversibility of electronic transactions.

Electronic Auctions

One of the initiatives that has affected the private sector greatly is the new electronic auction. It represents new business opportunities with the government.

On the basis of the positive response to the implementation of an auction system for the
National Telecommunications Agency (ANATEL), the government decided to expand this type of contracting for the entire federal public administration. Provisional Executive Act 2026 and subsequent regulations create a new public auction.

The electronic auction is an auction that uses electronic resources or information technology for its execution. Owing to its particular characteristics, a special regulation was required (Decree 3697 of December 21 2000). In summary, the decree establishes the conditions for the participation of bidders and the system to be adopted during the electronic auction (ie, whoever presents the lowest price by a given date will be the winner of the bidding process).

On December 29 2000 the government held the first electronic auction, which was successfully concluded.

The electronic auction promises to be an excellent source of business, of interest to the government with regard to the economy and of interest to suppliers on account of transparency and publicity.

For further information on this topic please contact Ricardo Barretto or José Leça at Barretto Ferreira, Kujawski, Brancher e Gonçalves – Sociedade de Advogados by telephone (+55 11 3066 5999) or by fax (+55 11 3167 4735) or by e-mail ([email protected] or [email protected]).