December 18, 2002

Via E-Mail: rule-comments@sec.gov

Mr. Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, N.W.,
Washington, DC 20549-0609.

Re: Sarbanes-Oxley Act § 307 - Implementation
of Standards of Professional Conduct for
Attorneys - Part 205 (File No. 33-8150.wp)

Dear Mr. Katz:

We are submitting this letter in response to the request by the U.S. Securities and Exchange Commission for comments on the Commission's proposed Part 205 of Title 17, Chapter II of the Code of Federal Regulations, which would establish standards of professional conduct for attorneys who appear and practice before the Commission in the representation of an issuer.

We are members of the Brazilian Bar Association ("OAB"). Accordingly, our comments focus on those aspects of the proposed rules that raise the greatest concern from the perspective of attorneys licensed to practice law in Brazil.

There are a number of companies organized under the laws of Brazil that are, or over the next several years may become, issuers within the meaning of proposed Part 205.2(g). Accordingly, the Commission's rules, if implemented as proposed, would potentially apply to many attorneys practicing law in Brazil and to the relationship between those attorneys and their clients. As discussed below, we believe the Commission should not attempt to regulate the legal profession in countries other than the United States. In addition, we are concerned that application of the proposed rules to attorneys practicing law in Brazil would be unnecessarily disruptive to the relationship between them and their clients without significantly enhancing the protection of investors. It would also be unfair, given the fact that non-U.S. attorneys most likely will not be conversant with U.S. securities laws.

Historically, the regulation of the legal profession in Brazil has been the responsibility of OAB. Given the central role of the legal profession for the functioning of the court system in Brazil, the adoption of standards of professional conduct for attorneys practicing law in Brazil should remain the exclusive responsibility of OAB. We believe it would be inappropriate for the Commission to regulate attorneys admitted to practice and practicing law in Brazil solely because they may from time to time act on behalf of clients whose securities are listed on a U.S. stock exchange or traded on a U.S. inter-dealer quotation system or because they are in the process of conducting a public offering of securities in the United States. Therefore, we urge the Commission, in deference to long-standing principles of international comity, to refrain from attempting to exercise jurisdiction over the legal profession in Brazil or in other jurisdictions outside the United States.

If the Commission were to include non-U.S. attorneys practicing law outside the United States within the scope of its final rules, attorneys practicing law in these jurisdictions would be faced with two sets of potentially conflicting standards of professional conduct. For example, the rules applicable to attorneys practicing law in Brazil contain detailed provisions that apply when an attorney becomes aware that a client seeks to employ the services of the attorney in the commission of an illegal act. However, while these provisions contain safeguards to ensure that the attorney does not participate in the act, it contains restrictions on the "noisy withdrawal" procedure and/or notification to third parties or regulators of the illegal act in breach of the attorney's duty of confidentiality to the client. In Brazil the withdrawal causes the attorney to omit his professionals reasons and to continue with his professional responsibility for the 10 (ten) days following the date of the notice of withdrawal. OAB is unlikely to defer to the Commission's statements in the release proposing the new rules that these rules preempt conflicting bar regulations on this point. Accordingly, if the rules were adopted as proposed, attorneys practicing law in Brazil would be faced with irreconcilable conflicts.

In addition, there are a number of other reasons why non-U.S. attorneys practicing law outside the United States should not be subject to the rules, including the following:

• The rules would be unnecessarily disruptive to the client-attorney relationship. Attorneys admitted to practice law in Brazil are subject to a comprehensive set of standards of professional conduct. These rules impose on attorneys, among other things, strict duties of loyalty and confidentiality. The purpose of these rules is to foster a relationship of trust between clients and their counsel and to enable clients to be candid in their dealings with counsel. The requirement that an attorney "noisily withdraw" from representation of a client in certain circumstances could have a chilling effect on the willingness of clients to confide secrets in their counsel, thereby impairing the ability of counsel to effectively represent their clients.

• The inclusion of non-U.S. attorneys practicing law outside the United States within the definition of "attorney" would not enhance the protection of investors. As drafted, the proposed rules would include non-U.S. attorneys practicing law outside the United States who participate in the drafting of documents subsequently being filed as exhibits even if, as is typically the case, they have no participation in the review of the resulting filings. This aspect of the proposed rules is particularly troubling because the vast majority of attorneys practicing law in Brazil are not admitted to practice law in the United States, and, accordingly, have no background in or exposure to the U.S. securities laws. As a result, they cannot reasonably be expected to detect violations of the U.S. securities laws or make judgments regarding their materiality. Accordingly, subjecting them to the reporting and withdrawal requirements of the proposed rules does not appear well calculated to increase the protection of investors. Instead, we believe the responsibility for assisting issuers in the drafting of documents to be filed with the Commission and making materiality judgments is more appropriately assigned to U.S. securities counsel, especially as companies located in Brazil customarily employ the services of law firms with U.S. law capability when they access the U.S. capital markets or make filings with the Commission. With no natural rights to practice law in the U.S., Brazilian attorneys should not be held liable for responsibilities with respect to local U.S. securities law.

• Interpretation of U.S. legal concepts and standards. Non-U.S. attorneys trained in other jurisdiction, such as in Brazil, have different standards and legal concepts that although similar to the essence of those in the U.S. may vary considerable in their scope and applicability. Brazil, as many other countries, is a civil jurisdiction and thus a reference to common law definition of fiduciary duty, as expressed in the proposed rules, has little consequence to a Brazilian attorney. Other concepts such as "reasonable time", "reasonable attorney", "material violation" are also differently used in different jurisdictions and thus all Brazilian attorneys cannot reasonably know their exact meaning under U.S. law unless they all are trained in U.S. law, which would be impractical.

• Brazilian Legislation regarding attorney's confidentiality commitment. According to the principles of Law. 8.906/94 and the Ethics Code of OAB, the Brazilian attorney is bound to the confidentiality commitment, except for serious threat to the right to life, honour or when the attorney is offended by his own client or in self-defense. In Brazil, the confidentiality commitment is extremely important for a good relationship between the attorney and the client, and must also remain in case of judicial testimony. The breach of confidentiality, without good cause is considered as a disciplinary violation and the penalty for this misconduct is a formal warning. For any other conduct incompatible with attorney's profession OAB imposes the suspension to practice law for a minimum period of 3 (three) months and a maximum period of 1(one) year. In case of three suspensions the attorney is excluded from OAB, and is no longer enabled to practice law. The OAB permit to work and the eventual penalties are limited to the Brazilian territory, meaning the Brazilian attorney is not admitted to practice law in the United States, unless the attorney has complete a L.L.M. program in one of U.S. law schools that offer such masters degree for foreigners, pass the bar exam of at least one state, and be admitted by the courts as fit to practice.

Notwithstanding the above, article 14 (fourteen) of the Introductory Law to The Brazilian Civil Code determines that the laws, acts and decisions from other countries, as well as statements of will shall not be effective in Brazil when violating national sovereignty, public policy and good moral conduct.

For the reasons explained above, we strongly urge the Commission not to include non-U.S. attorneys admitted to practice law outside the United States in the definition of "attorney". We also would like to suggest that the burden, instead, be shifted to U.S. admitted attorneys that actually advise and review the work of non-U.S. attorneys in relation to non-U.S. issuers' dealings.

The comments reflected herein represent solely the views, comments and concerns of the undersigned and do not necessarily represent the views of OAB, the undersigned's law firm or any of the members or clients of such firm. If you have any questions regarding this letter, feel free to contact the undersigned.

Sincerely yours,

Nadine S. M. Baleeiro Teixeira
nbaleeiro@demarest.com.br
Phone: 55 11 3888-1661

Renata Neeser
rneeser@demarest.com.br
Phone: (212) 371-9191

Maria Fernanda L.de Mello
mmello@demarest.com.br
Phone: 55 11 3888-1895