The ANP initiated on Friday (May 03) a public takeover (TPC) on local content content adjustment terms (TACs) for phases already closed of contracts. The objective is to reverse fines imposed for noncompliance with local content commitments in investments, in order to stimulate Brazilian industry.

In Brazil, contracts for the exploration and production of oil and natural gas have clauses of local content, which stipulate a minimum percentage of contracting of goods and services that must be carried out in Brazil. Until 2017, the percentage offered was one of the points of scoring in the rounds of bidding of the ANP, but, from that year, the National Council of Energy Policy (CNPE) began to establish fixed minimum percentages for each round (see more in the page of local content).

The ANP supervises the fulfillment of the clause in certain phases of the contract and, when there is noncompliance, it applies the anticipated fines. According to the proposal studied by the Agency, the companies fined may sign TACs so that the value of these fines, related to contract phases already closed, is applied in the contracting of national goods and services to other phases of the same contract or other contracts operated by the same company.

The idea is that the TAC does not cancel the fine, but rather suspend it. If the term is not fulfilled, the company must pay the original fine, in addition to being sanctioned for noncompliance.

At TPC, the ANP contributes to the market and to society for how compensation would be made, deadlines for compliance with the TAC and sanctions for noncompliance, among other points.

For more information and contributions, consult the TPC page at:: http://www.anp.gov.br/consultas-audiencias-publicas/370-tomada-publica-de-contribuicoes/5163-tomada-publica-de-contribuicoes-n-1-2019