Brazil Supreme Court Upholds Amazon Soy Moratorium

• Brazil's Supreme Court has upheld the constitutionality of the Amazon Soy Moratorium.
• States may withdraw tax incentives from companies participating in the agreement.
• The court ordered Brazil's antitrust regulator and courts to dismiss cases premised on the moratorium's alleged illegality.
• Most major grain traders withdrew from the initiative in January 2026, undermining its collective monitoring and auditing system.

Environmental law establishes the minimum, and organizations and companies may voluntarily go further by joining other commitments that are not expressly provided for by law.

Brazil's Supreme Court has upheld the constitutionality of the Amazon Soy Moratorium, an agreement restricting purchases of soybeans grown on land in the Amazon biome cleared after 2008. The ruling, which was made by a 6-3 decision, also ordered Brazil's antitrust regulator and courts to dismiss cases premised on the moratorium's alleged illegality or that assert civil or antitrust liability arising from the agreement. This decision has significant implications for companies participating in the Amazon Soy Moratorium, as states may now withdraw tax incentives from these firms. The ruling has been met with dissenting opinions from three justices, who argued that the court should have limited its analysis to the application of state laws and that there is insufficient information to rule out potential antitrust violations.

The Amazon Soy Moratorium is a private-sector agreement created in 2006. While its constitutionality was upheld by Brazil's Supreme Court, the agreement has effectively ended due to most major grain traders withdrawing from the initiative in January 2026, and as of July 2026, no companies are listed as signatories. The agreement's collective monitoring and auditing system has been undermined by this withdrawal, but participating companies had pledged not to purchase or finance soybeans grown on land in the Amazon biome cleared after July 2008, even when the clearing complied with Brazil's Forest Code. This voluntary commitment goes beyond what is required by Brazilian law, which allows for up to 20% of forested areas to be cleared with environmental authorization. The court's decision has been seen as a victory for companies that have voluntarily committed to stricter environmental standards.

The ruling has significant implications for state tax incentives, which can now be withdrawn from companies participating in the Amazon Soy Moratorium. This means that states may choose to punish firms that follow the agreement by withholding benefits such as tax breaks or other incentives. The court's decision also highlights the importance of compliance with environmental agreements, particularly those that go beyond what is required by law. Companies must carefully consider their participation in voluntary environmental agreements and be aware of potential changes to state tax incentives and benefits.

Lawyers and compliance officers should watch for potential changes to state tax incentives and benefits for companies participating in the Amazon Soy Moratorium, as well as any updates on CADE's administrative case against the agreement.

Source: Original reporting via CN