The national jurisdiction and power of a labor court judge to seize assets are limited to Brazilian territory and financial institutions under the supervision of the Central Bank of Brazil.

Credits: Conjur

Direct orders to Brazilian branches of transnational banks to freeze assets held abroad are ineffective, since these branches are subject to the sovereignty of another state. In such cases, the appropriate means for asset seizure is international legal cooperation through letters rogatory.

With this understanding, the 2nd Panel of the Regional Labor Court of the 12th Region (SC) rejected the requests of a plaintiff who asked for the issuance of official letters to financial institutions with global operations to locate and block the defendant’s assets in branches in the United States. The panel upheld the decision of the 1st Labor Court of Tubarão (SC).

The case involved the payment of a labor debt amounting to R$ 42,300, but attempts to locate the debtor’s assets in Brazil were unsuccessful. Repeated searches of Sisbajud, Renajud, and Arisp failed to locate financial assets, vehicles, or real estate in the debtor’s name. A warrant to seize a motorcycle was also unsuccessful, and a capitalization bond found in the name of one of the aggrieved companies had already been redeemed before the blocking order.

Given the exhaustion of domestic remedies, the plaintiff filed a lawsuit requesting that official letters be sent to financial institutions with global operations to freeze the defendant’s assets in the U.S., where there is evidence that he resides. She based her request on the principle of judicial cooperation and Article 797 of the Code of Civil Procedure.

Initially, the request was denied. The plaintiff then appealed to the TRT-12 (Regional Labor Court of the 12th Region), arguing that banking institutions with transnational operations and headquarters in Brazil could be compelled to freeze funds held by their own branches abroad.

International cooperation

The rapporteur, Judge Narbal Antônio de Mendonça Fileti, rejected the argument. According to him, the scope of Sisbajud does not extend beyond national borders, and the search for assets in foreign agencies requires specific instruments of cooperation between countries.

“The asset search and seizure system (Sisbajud) does not have extraterritorial reach, rendering ineffective the issuance of direct orders to Brazilian branches for the sweeping of assets held by foreign agencies, which are subject to the legislation and sovereignty of another State,” the magistrate noted.

According to the rapporteur, the seizure of assets located outside the country “ordinarily requires recourse to diplomatic channels through letters rogatory, an appropriate instrument to guarantee international legal cooperation and respect for the sovereignty of nations.”

The judge also dismissed the argument of the financial institution’s uniqueness as sufficient grounds to authorize the measure. As he explained, the principle invoked by the plaintiff does not have the capacity to override jurisdictional competence nor does it oblige a national financial institution to control assets and property outside its area of ​​expertise.

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in case number 0000275-67.2023.5.12.0006