By: Leonardo Neri

Recently, Bill 591/2021 was approved by the Chamber of Deputies, which provides for the end of state control over the Post Office, a federal public company linked to the Ministry of Communications and whose purpose is to execute and control, under a monopoly regime, postal services throughout the national territory (article 2, item I of Law 6,538 of 1978).

The Bill foresees the modification of the legal nature of the company, which will be a mixed economy company, as provided for in article 23.[1] of the Bill, being capitalized by public capital and private capital, guaranteeing, however, the greatest participation in the share capital as being public.

It can be said, in short, that the change from a public company to a mixed-economy company will be the ability of private shareholders to vote at Shareholders' Meetings.

It is important to highlight that changes will not only be observed in the legal nature, the Bill (sole paragraph of article 23) defines that tax benefits that are not extended to other companies that operate postal services, arising from the status of state-owned company (public company), will be excluded.

However, the most relevant change is that of article 4 of the Bill, which allows postal services to be operated by the private sector, through private sector operations, with the Union being responsible for ensuring the provision of the postal service universally, whether by a state-owned company or by entering into concession contracts. In other words, the universalization of the provision of the postal service will occur through the ECT, as a Public Limited Company or through a private company contracted by the Government to execute and operate the public service.

The Bill guarantees that ECT will have exclusivity over the provision of services (article 25) such as customer service, collection, sorting, transportation, distribution and telegram service for a maximum period of five years, and may be restricted by an act of the Federal Executive Branch.

Thus, the end of the state monopoly of the Post Office is controversial, as with the increase in deliveries made by carriers, the need for digital transformation of postal services is evident and for this transformation to occur, the Public Authorities will need to make high investments to be competitive with deliveries of sales made over the internet, often made by carriers.

However, the exploitation of postal services by the private sector could put an end to the low tariffs supported by tax incentives, thus casting doubt on the universalization of the postal service.

[1] The Federal Executive Branch is authorized to promote the transformation of the Brazilian Post and Telegraph Company – ECT into a mixed economy company, linked to the Ministry of Communications, with its name changed to 'Correios do Brasil SA – Correios', headquartered in the Federal District.