New regulation establishes the criteria and procedures for the risk assessment of economic activities and defines the deadlines that result in tacit approval by the Public Administration

Federal Decree No. 10,178, published at the Federal Official Gazette on December 19th, 2019, regulates the recently enacted Economic Freedom Act (Law No. 13,874/2019). From the environmental standpoint, it establishes criteria to the Federal Public Administration comply with for the classification of the economic activities regarding its risk, besides defining the tacit approval of environmental authorization requests after the proper deadline without an answer from the competent agency or public entity.

The economic activities must be classified in three levels:

• Level 1: for low, irrelevant or inexistent-risk activities;
• Level 2: for those activities with moderate risk;
• Level 3: for high-risk activities.

The Public Administration, when assessing the risk, will consider at least the probability of occurrence of damaging events and the extension, gravity or level of irreparability of the impact caused to the society when a damaging event occurs. The parameters for the risk assessment, as the new rule establishes, must be evaluated, preferably, through quantitative and statistical analysis.

An exception is for the cases in which the complexity, dimension or other characteristics of the economic activity require its classification into different risk levels.

According to the new decree, the economic activities whose risks are classified as of level 1 will be exempt from requiring any public act for liberation. For those whose risk is classified as level 2, the competent agency or entity will have to adopt simplified procedures for the requirement of authorization.

Aiming at the liberation of the economic activity at a more reasonable pace, the new decree also establishes that tacit approval will be occur when the request is not answered by the responsible agency or entity in their own-established deadline. Such deadline must be defined through an act edited by the competent agency or entity. Notwithstanding, such act cannot establish deadlines longer than 60 (sixty) days. In addition, while the competent authority does not edit such act, the maximum deadline for the answer to the request for liberation of the economic activity will be 30 (thirty) days, which results in celerity and legal security to the applicant.

Finally, it is worth mentioning that, even though the regulation applies to the federal public administration, it can also apply to other federative entities, such as States and Municipalities. Concerning the risk levels of economic activities, the decree will apply to States, Federal District and Municipalities in case they lack proper regulation on the issue. On the other hand, regarding tacit approvals, they will apply to other federative entities in case the public act for liberation of the economic activity has been delegated or derived by ordinary federal law, or in case the federal entity decides to bind up to the rule through a valid and proper instrument, in the terms of Article 3, IX of the Economic Freedom Act.

Federal Decree No. 10,178 will come into force on February 01, 2020.