Last week, our consultant Luiz Felipe Monteiro Seixas spoke to Times Brasil in a report on the Federal Supreme Court (STF) resuming the hearing that could reshape the multi-billion-dollar distribution of oil royalties in Brazil.
According to experts interviewed for the article, the focus of the discussion is likely to be on how and when any changes would come into effect.
For Luiz Felipe, who is also a professor at UFPE, the ruling is likely to lead to a discussion on the transition.
“Based on the oral arguments, the ruling is likely to focus less on ‘whether the law is constitutional or not’ and more on ‘how and when the changes will come into effect’,” he said.
In our consultant’s assessment, the likely scenario is that the STF will declare the law constitutional, in whole or in part, but will phase in the effects of the decision to avoid an immediate fiscal shock in the producing states.
“The proposals circulating today vary widely: 7 years, 20 years, even 50 years. I think that defining this timeframe for the phasing-in will be at the heart of the discussions in the Supreme Court, which does not mean there will be a quick solution,” he says.