Brazil’s Supreme Court (STF) is ruling on the constitutionality of a São Paulo state law that punishes companies linked to slave labor.

On April 9, 2025, the Brazilian Supreme Federal Court concluded the judgment of ADI 5465, proposed by the National Confederation of Commerce of Goods and Services – CNC, ruling constitutional State Law 14.946/13, which provides for the cancellation of registration in the taxpayer registry of the Tax on Operations Related to the Circulation of Goods and on the Provision of Interstate and Intermunicipal Transportation and Communication Services – ICMS, of any company that directly or indirectly uses slave labor or labor in analogous conditions.

Voting with the rapporteur, Minister Nunes Marques, were Ministers Luis Roberto Barroso, Flávio Dino, Cristiano Zanin, André Mendonça, Alexandre de Moraes, Edson Fachin, Luiz Fux, Gilmar Mendes, and Minister Carmen Lúcia. Minister Dias Toffoli cast the dissenting vote.

In judging the constitutionality of the law, the Supreme Federal Court (STF) emphasized that oversight, however, is a federal responsibility, specifically within the purview of the Ministry of Labor. Thus, once a situation of slave labor or analogous conditions is recognized by the competent federal agencies, the sanctions determined by state law could be applied.

Regarding legal entities acquiring products originating from production processes involving slave labor or analogous conditions, proof of intent on the part of the partner or representative is required.

In this sense, the recent decision requires the following for the penalization of the legal entity and its partners who acquire the goods:

1. proof, in an administrative process under the guarantees of due process and the right to a full defense, that the representative of the commercial establishment knows or has reason to suspect the involvement of slave labor in the production chain of the goods purchased; and

2. Proof, after an administrative process in which the guarantees of due process and the right to a full defense have been observed, that the partner to be punished participated, either actively or passively, in the acquisition of goods of spurious origin, defined as those manufactured using labor in conditions analogous to slavery.

This decision, therefore, impacts an entire production chain, reinforcing the social role of companies in monitoring their suppliers.

The decision should be seen as an opportunity to review and strengthen policies and procedures, aiming to comply with legislation, avoid penalties, and ensure the company’s contribution to building a more just and egalitarian society.

ADI 5465

https://portal.stf.jus.br/processos/detalhe.asp?incidente=4919704