A PECULIAR LEGAL ISSUE INVOLVING
SWORN TRANSLATIONS IN BRAZIL
CAVEAT: I am not a lawyer, nor have had any formal legal training. My stance here was to interpret the law under the light of logic and common sense. If any reader finds errors or inconsistencies in the considerations below, I urge them to contact me using the E-mail button on the left, providing details. Thank you in advance.
There is another page in the Portuguese section of this web site covering legal issues that may occur locally. However one of them may be inadvertently created outside Brazil, so I chose to explain it in English here.
Some companies attempt to cut costs by drawing documents - usually agreements and powers of attorney - in two languages, with their clauses side by side in the original language and Portuguese. It is not a complete cost cut, because it may be assumed that someone did the translation, even if it was a salaried bilingual company staff member.
Some public registration offices ("cartórios") in Brazil have wrongly required a document that doesn't exist: an affidavit by a Brazilian Certified Public Translator (known as "TPIC" for short) vouching for the accuracy of that translation. Though such an affidavit does exist, according to the law, it only applies to situations where a legally valid translation - i.e. done by another TPIC - is challenged as being inaccurate or unfaithful. As we'll see next, the translation in these bilingual documents is not legally valid.
Brazilian Federal Decree 13.609, dated 10/21/1943, states (my emphasis here):
Sec. 18. No book, document, or paper of any kind issued in a foreign language, shall produce effect in any Federal, State, or Local government offices, nor in any judicial instance or court, nor in entities under sponsorship, surveillance or guidance by the government, unless attached to its corresponding translation done in compliance to the rules herein.
Sole Paragraph. These provisions include notaries and notarial offices, which may not register, issue certificates, nor authenticated transcripts of documents written wholly or partially in a foreign language.
Notice the Sole Paragraph. Even with the "validation" by a TPIC - something that doesn't legally exist - the document remains partially written in a foreign language. Considering the core of Sec. 18 above, in order to make the document produce any effect, it will have to be attached to its corresponding translation done in compliance to the rules herein, which will not have occurred with the simple endorsement of the existing translation.
This situation develops two interesting cases, at least as conjectures. Again, I am not a lawyer, and any comments on these would be welcome; just click on E-mail on the menu on the left.
Someone overseas executes a Power of Attorney appointing lawyers in Brazil to take legal action against some party in Brazil, claiming their rights. In order to save on sworn translations, they make it in two columns, in their ("foreign") language and Portuguese, side by side. They get their signature notarized, secure the required legalization from the Brazilian consulate in their area, and send it to their lawyers in Brazil.
The lawyers, to save on costs, request a TPIC to make a sworn translation limited to the notarization, including a phrase to "validate" the existing translation. As we just saw, such "validation" does not exist, so the POA is not legally valid in Brazil in this way. Nevertheless, lawyers often manage to use it in filing the lawsuit.
This makes it very easy for the defense attorney to request the case to be dropped, claiming that the plaintiff is not legally represented there. The fact that the POA was accepted in breach of Sec. 18 above does not make it any more valid, because it is still partially in a foreign language, and that part lacked a proper translation attached. The plaintiff is back to square one, possibly after some expenses, and the defendant will have been successful in stalling for time.
A foreign investor, attracted by the high interest rates and blossoming economy, decides to invest in Brazil. In order to do it, they have to draw a POA appointing some securities broker in Brazil to use their money to invest, buy and sell stock, etc. They'll have probably dealt with a bank representing this broker overseas, which will have provided a standard POA form, often drawn in two columns, with the text in English and Portuguese, side by side.
The broker in Brazil, to save on certified/sworn translations, as they have many of these, chooses to ask the TPIC to a) translate only the signature notarization, b) mention the consular legalization, and c) add a phrase "acknowledging" the translation therein. The Brazilian notarial office overlooks the legal requirement (see above), and registers it.
As long as the investments are profitable and the investor is satisfied, there won't be any problem. However there is a possibility of that broker going into high-risk investments... and losing everything!
If the foreign investor has a smart lawyer in Brazil, they'll have grounds to sue the securities broker for a full refund, using as evidence that the POA was void as registered. If the notarial office registered it in breach of the law, they'll probably suffer an administrative penalty, irrespective of the amount involved. If the TPIC issued an ineffective document on request, and the broker accepted it knowingly, the translator is not liable for anything.
As the investor suffered a loss, they certainly will not ratify the actions of their appointed attorney-in-fact, as prescribed by Sec. 662 of the Brazilian Civil Code. Even if the broker rushes to secure a complete translation of the POA, in full compliance to Decree 13,609, and the notarial office duly registers it, that POA will only be effective from the new registration date onwards, therefore not leaving the broker empowered in the past while they made those unfortunate investments. Hence the broker will be liable to reimburse the investor for the amount lost in that period.
So much is said and written about Risk Management nowadays, that it puzzles me to see security brokers sticking their necks out on a liability that may reach millions, to save perhaps a little over a hundred dollars to have their POAs fully valid, registered after having been translated as required by law.