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Data sharing: Chief Justice Dias Toffoli's vote establishes conditions and benchmarks for the procedure

11/20/2019

The Chief Justice of the Brazilian Federal Supreme Court (STF), Dias Toffoli, presented on Wednesday (20) his vote in Extraordinary Appeal (RE) 1055941, of which he is rapporteur, which discusses the constitutionality of sharing tax and banking data with the Public Prosecution Office (MP) and police authorities in criminal investigations without judicial authorization. He highlighted the importance of access by the public administration to bank information of citizens and companies to curb tax evasion and combat criminal practices, but said the procedure can not compromise constitutional safeguards that ensure the intimacy and confidentiality of data to citizens.

Financial Intelligence Reports

The Justice admits the possibility of the Financial Intelligence Unit (UIF, formerly COAF) sharing Financial Intelligence Reports (RIFs) at the request of the Public Prosecution Office, the Federal Police or other competent authorities. However, he believes that the sharing should be done exclusively through electronic security systems that should be certified with access register, as is already done. In his opinion, the production or dissemination of information by any other means of communication, such as e-mail or files that are not controlled should be prohibited. RIFs, however, may not be used as criminal evidence, which is in fact a means of obtaining evidence. He emphasizes the "absolute and insurmountable" impossibility of generating "on-demand" reports against citizens without any pre-existing criminal investigation or prior UIF warning based on the analysis of intelligence information contained in his database.

Federal Revenue

In regard to the Federal Revenue, the rapporteur sets benchmarks to be observed in data sharing. He considers constitutional the forwarding of bank information to the MP, provided that there is prior administrative process and notification of the taxpayer.

In turn, the forwarding by the Revenue of the Tax Representation for Criminal Purposes (RFFP) to the MPF should only occur in cases of evidence of crimes against the tax order, social security and crimes of embezzlement and smuggling, including money laundering. "However, RFFP cannot be accompanied by documents considered sensitive to the privacy of the people involved, such as full bank statements or income tax returns, without prior court authorization," he said.

According to the justice, upon receiving the RFFP, the Public Prosecutor "can not leave them in the drawer", but immediately initiate criminal investigation proceedings and report to the competent court. For him, judicial supervision of shared information is essential to ensure fairness and transparency in the processes of sharing banking and tax data for criminal purposes. "With this, we will be enhancing the justice system as a whole and protecting the institutions themselves from possible abuses," he said.

Precedents

The Chief Justice recalled that, in previous trials, the STF recognized that the sharing of banking information with the Federal Revenue is part of a set of transparency measures outlined in a global effort to combat illegal money movements in the world, of which Brazil is part. The Justice referred to the joint trial of Direct Unconstitutionality Actions (ADIs) 2386, 2397 and 2859, when the Plenary established the constitutionality of the provisions of Supplementary Law 105/2001, but established protection requirements for the citizen, such as the need for thematic relevance between the required banking information and the tax subject to collection, prior notification of the taxpayer and its wide access to the records and the establishment of mechanisms to ascertain and correct any deviations, among other guarantees.

Appeal

Chief Justice Toffoli voted to grant the extraordinary appeal filed by the MPF against the decision of the Federal Regional Court of the 3rd Region (TRF-3) which annulled the criminal action due to the sharing of data obtained by the Federal Revenue with the MP without judicial authorization. In his view, the TRF-3 should issue a new decision in compliance with the parameters established in the vote and based on other elements of evidence that may exist in the criminal action.

VP/CR//CF - CG/FB/GL

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