On July 10, in Brasilia, during an official hearing hosted by the Foreign Relations and Defense committees of the ian Congress, several ian Ministries and top tier authorities gathered to assess allegations from a former United States National Security Agency´s collaborator that Brazilian communications were unduly accessed and intercepted.
The assessment: “The vulnerabilities exist. In fact, there are plenty of them. If you want to share something important, don´t use e-mail”. This is generally reasonable advise for most individuals, but when such declarations are issued by the ian Ministry of Communications, one needs to become concerned.
Amidst diplomatic and governmental apprehension, at least a single positive outcome can be highlighted: the awakening of theian Government to the importance of a strong ian homeland security infrastructure. As the espionage accusations are dealt with and regulatory activities are planned, private players of the homeland security industry are analyzing how to cope with such a delicate, yet opportunity-filled momentum
In addition, the ian government is undertaking renewed efforts to boost security in the country, particularly in major urban areas, and accounting for security needs related to hosting the 2014 World Cup and the 2016 Olympics. Add to that list the flourishing need for an overhaul of the , defense and intelligence infrastructure.
From a legal perspective, the most important step in the way towards a stronger national Defense & HLS platform was given on March, 2002, with the enactment of’s Special Tax Regime for the Defense Industry (RETID), Law 12598/2012, which defines the concept of the so-called Strategic Defense Company and its extremely competitive edge in public bids for the purchase and/or development of defense products and systems.
However, before engaging in , foreign companies must acknowledge and respect the fact the is not effectively comparable to other developing economies, thus, a “one size fits all” approach will not work at all.
In fact, most foreign companies that failed to successfully accessing theian Defense & Homeland security challenging and growing market share common features, such as the inability to follow and respect one or more of the following basic rules:
1. Assessingas “just” another developoing, Latin American market. Besides the Geographic location and certain trade pacts, is not “just” another Latin American market. Foreign players usually tend to expand Latin strategies to . That is a mistake, mostly from a regulatory, legal perspective, as there are no harmonized rules, standards for the HLS industry. If a solution is intended to access the Brazilian market, then it needs a Brazilian-oriented commercial, legal and regulatory approach.
2. Conducting Brazil-oriented business without a Brazilian individual component and/or without Brazilian installed capacity: Brazilian market requires that foreigners effectively understand the nuts and bolts of the local business culture. For that, working closely with Brazilian partners is of the outmost importance. For instance, not all Public bids are opened for foreigners and not every aspect of the HLS market is attractive to foreigners, e.g., the Information and Communication Technology side of the HLS industry is extremely cautious whenever dealing with foreign-only initiatives. The Brazilian Government, as an example, made clear that Brazilian technology and intelligence is required for thearena.
3. Ignore local rules and regulation: Real HLS solutions are highly regulated and controlled by the Government. From thermal cameras to ballistic-proof technology, local Army and Police will apply, including for the purposes of importing, showcasing, marketing and selling. Observance of applicable regulations is mandatory and may easily restrict access of foreign solutions into the Brazilian HLS market.
4. Prosecuting and protecting Intellectual Property protection: 10 out of 10 HLS companies claim to be highly innovative. However, the reality is not as bright. Real innovation is demonstrated via the existence of a robust and a well-kept Intellectual Property portfolio. The inexistence of formal, real-life rights supporting the intangible assets of the company may expose it to several risks of business and marketing losses. Ideas and or marketing approaches are not individually considered assets, so simply sharing them during a meet & greet session may as well become a company´s biggest nightmare.
The Brazilian Defense & HLS market is thriving. Recent events are pushing the Government and strategic companies to reevaluate their internal defense and data protection mechanisms. While the scenario projects several opportunities, it also encompasses several challenges.
A foreign HLS company willing to access the Brazilian market must acknowledge and respect the reality of the Brazilian market, specially its formalities and regulations. Failure and/or unwillingness of a company to handle such a reality will be critical.