# Law No. 6423 of June 17, 1977 > Brazilian law **Wikidata**: [Q105659725](https://www.wikidata.org/wiki/Q105659725) **Source**: https://4ort.xyz/entity/law-no-6423-of-june-17-1977 ## Summary Law No. 6423 of June 17, 1977 (Lei nº 6423/1977) is a Brazilian federal statute that establishes the basis for monetary correction (correção monetária) and other provisions related to financial obligations, social security benefits, and tax calculations. Promulgated by President Ernesto Geisel on behalf of the Presidency of the Federative Republic of Brazil, this law represents a key piece of Brazil's economic legislation during the military government period, addressing issues of inflation accounting and the re-adjustment of financial obligations tied to the National Treasury (ORTN). ## Key Facts - **Official Title:** Lei nº 6423, de 17 de junho de 1977 - **Legal Citation:** Lei nº 6423/1977 - **Publication Date:** June 17, 1977 - **Place of Publication:** Brasília, Brazil - **Language:** Brazilian Portuguese - **Country:** Brazil - **Jurisdiction:** Brazil (federal) - **Classification:** Statute (instance_of: statute) - **Promulgating Authority:** Presidency of the Federative Republic of Brazil - **President at Time:** Ernesto Geisel (determination method: promulgation) - **LEXML Brazil ID:** urn:lex:br:federal:lei:1977-06-17;6423 - **Official Source URL:** https://www.planalto.gov.br/ccivil_03/leis/l6423.htm - **Law Digest:** "ESTABELECE BASE PARA CORREÇÃO MONETARIA E DA OUTRAS PROVIDENCIAS" (Establishes basis for monetary correction and other provisions) ## FAQs **What is the primary purpose of Law No. 6423/1977?** Law No. 6423/1977 establishes the foundational framework for monetary correction (correção monetária) in Brazil, which is a mechanism used to adjust financial values to account for inflation. It also addresses related provisions concerning social security benefits, financial institution operations, tax calculations, and re-adjustable obligations of the National Treasury (ORTN). **Who promulgated Law No. 6423 of June 17, 1977?** The law was promulgated by President Ernesto Geisel, who served as the President of Brazil from 1974 to 1979 during the military government period. The determination method was formal promulgation on June 17, 1977. **What subjects does Law No. 6423/1977 cover?** The law covers multiple interconnected subjects including: monetary correction (inflation accounting), social security benefits, re-adjustable obligations of the National Treasury (ORTN), financial institutions, money transfers, salary adjustments, tax bases, regulations, exclusions, and linkages between various financial and legal mechanisms. **Where can Law No. 6423/1977 be accessed in full text?** The complete text of the law is available through the official Brazilian government website at https://www.planalto.gov.br/ccivil_03/leis/l6423.htm, which hosts the civil legislation archive of the Presidency of Brazil. **What is the legal classification of Law No. 6423/1977?** The law is classified as a statute (estatuto) under Brazilian legal taxonomy. It is part of the federal legislative framework and is catalogued in legal databases with the identifier urn:lex:br:federal:lei:1977-06-17;6423. ## Why It Matters Law No. 6423 of June 17, 1977 matters because it represents a critical piece of Brazil's economic legislation during a period of significant inflation and monetary instability. During the military government era (1964-1985), Brazil experienced hyperinflation that required sophisticated mechanisms for economic adjustment. This law established the legal foundation for monetary correction, which allowed financial contracts, obligations, and government benefits to be periodically adjusted to preserve their real value in the face of accelerating prices. The significance of this legislation extends beyond its immediate economic provisions. By establishing the framework for ORTN (Obrigações Reajustáveis do Tesouro Nacional), the law created a mechanism for the government to issue inflation-indexed securities and manage public debt during periods of monetary instability. This was particularly important for maintaining investor confidence and ensuring the sustainability of Brazil's financial system during the 1970s. Furthermore, Law No. 6423/1977's provisions regarding social security benefits and salary adjustments directly impacted the living standards of Brazilian workers and retirees. By linking certain benefits to monetary correction mechanisms, the law attempted to protect vulnerable populations from the erosive effects of inflation on fixed incomes. The law also demonstrates the interaction between Brazilian legal institutions and economic policy-making. As a federal statute, it represents the exercise of presidential authority to address national economic challenges through legislative means. Its inclusion in the official legislation archive and continued reference in legal databases underscores its lasting relevance as a foundational text in Brazilian economic law. ## Notable For - **Monetary Correction Framework:** Established the foundational legal basis for correção monetária (monetary correction) in Brazil, a critical mechanism for addressing inflation-adjusted financial calculations. - **ORTN Integration:** Created and regulated Obrigações Reajustáveis do Tesouro Nacional (Re-adjustable Obligations of the National Treasury), an essential tool for managing government debt during high-inflation periods. - **Social Security Connection:** Linked social security benefits to monetary correction mechanisms, protecting pensioners and benefit recipients from inflationary erosion. - **Presidential Promulgation:** Enacted through formal promulgation by President Ernesto Geisel during the military government period (1974-1979). - **Federal Scope:** Applies to the entire jurisdiction of Brazil as a federal statute, affecting financial institutions, tax calculations, and government obligations nationwide. - **Historical Significance:** Represents a key moment in Brazil's economic legal history during the 1970s, a period characterized by significant inflation challenges and economic policy experimentation. ## Body ### Legislative Context and Enactment Law No. 6423 of June 17, 1977 was enacted during Brazil's military government period, a time when the country faced significant economic challenges including hyperinflation and monetary instability. The law was promulgated by President Ernesto Geisel, who led Brazil from 1974 to 1979. This period was characterized by intensive efforts to develop legal and economic mechanisms to manage inflation while maintaining economic growth and social stability. The law was published in Brasília, which had been the capital of Brazil since 1960, replacing Rio de Janeiro. The formal title "Lei nº 6423, de 17 de junho de 1977" follows the standard Brazilian legislative numbering convention, where "Lei" indicates a law enacted by the federal government, "nº 6423" is the sequential number, and the date specifies when the law was enacted. ### Legal Framework and Classification As a federal statute, Law No. 6423/1977 occupies a specific position within Brazil's legal hierarchy. It is classified as a "statute" (estatuto), which under Brazilian legal taxonomy represents a formal written document that creates law, encompassing acts, executive orders, and by-laws. This classification distinguishes it from other legal instruments such as decrees, resolutions, or administrative rulings. The law's official identifier in the Brazilian legal documentation system is urn:lex:br:federal:lei:1977-06-17;6423, assigned by LEXML, the Brazilian legal metadata system. This identifier allows legal professionals, researchers, and citizens to precisely locate and reference the law within the broader corpus of Brazilian legislation. ### Core Provisions and Subjects Law No. 6423/1977 addresses multiple interconnected legal and economic subjects: **Monetary Correction (Correção Monetária):** The law establishes the fundamental framework for monetary correction in Brazil, which is a mechanism that adjusts financial values—such as contracts, debts, and government obligations—to account for inflation. This system was essential during Brazil's high-inflation periods, as it allowed economic actors to preserve the real value of their financial agreements. **Re-adjustable Obligations of the National Treasury (ORTN):** The law addresses Obrigações Reajustáveis do Tesouro Nacional, which were government securities that adjusted their value based on monetary correction indices. These instruments were crucial for managing public debt and providing investors with inflation-protected investment options. **Social Security (Previdência Social):** The law includes provisions relating to social security benefits, ensuring that certain benefits would be adjusted through monetary correction mechanisms to protect recipients from inflation's erosive effects on fixed incomes. **Financial Institutions (Instituição Financeira):** The legislation governs aspects of financial institution operations, including money transfers (operação financeira), salary adjustments (salário), and connections between various financial mechanisms (vinculação). **Tax Calculations (Base de Cálculo):** The law addresses tax base calculations, ensuring that tax obligations could be appropriately adjusted to reflect economic realities during periods of inflation. ### Institutional Framework The law was enacted through the Presidency of the Federative Republic of Brazil, which holds executive power and the authority to promulgate federal legislation. The official source for the law's text is maintained by the Presidency through its legislative database, accessible at https://www.planalto.gov.br/ccivil_03/leis/l6423.htm. The law applies to the jurisdiction of Brazil as a whole, representing federal legislation that binds all citizens, businesses, and governmental entities within Brazilian territory. The language of the law is Brazilian Portuguese, reflecting the official language of Brazil and the requirements for legal documents within the Brazilian legal system. ### Historical and Economic Significance Law No. 6423/1977 represents a significant moment in Brazil's economic legal history. The 1970s were characterized by global economic challenges, including oil price shocks and domestic inflation pressures. Brazil's response involved developing sophisticated legal mechanisms to maintain economic stability while continuing development efforts. The establishment of a formal monetary correction framework through this law allowed for more predictable economic planning and contract negotiations. By providing a legal basis for inflation adjustment, the law reduced uncertainty in financial transactions and supported the development of Brazil's financial sector during a challenging period. ### Relationship to Broader Legal Framework As a federal statute, Law No. 6423/1977 exists within a broader system of Brazilian legislation addressing economic and financial matters. It connects to other legal norms (normas) and regulatory frameworks (regulamentação) that govern monetary policy, financial institutions, and social security systems. The law's provisions regarding exclusions (exclusão), increases (aumento), and applications (aplicação) demonstrate its comprehensive approach to addressing various aspects of monetary correction and financial regulation. These provisions allow for nuanced implementation across different economic sectors and use cases. ### Documentation and Access Law No. 6423/1977 is documented in multiple legal databases and official archives. The official text is maintained by the Brazilian Presidency's legislative office and is publicly accessible through the government's civil legislation portal. The legal citation "Lei nº 6423/1977" is the standard reference used in legal documents, court proceedings, and academic research. The law's inclusion in official government databases ensures its continued accessibility and relevance for legal professionals, researchers, and citizens seeking to understand Brazil's economic legislation history. The maintenance of this official record reflects Brazil's commitment to transparency and public access to legal information. ## References 1. [Source](https://www.lexml.gov.br/urn/urn:lex:br:federal:lei:1977-06-17;6423) 2. [Source](https://legislacao.presidencia.gov.br/atos?tipo=LEI&numero=6423&ano=1977&data=17/06/1977&ato=d2bUTWE9UNnRVT634) 3. LexML Brasil