On April 26 2012, the Central Bank of Brazil issued a new Resolution (No 4.073/12) revoking Resolution No 3.165/2004. This brought several changes to Brazilian operations, and the general financial market, regarding the authorisation of incorporation of commercial banks under the stock exchange or the futures and commodities exchange (or under both of them) so as to render services to the economic sectors accountable for the operations.
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Meanwhile, on February 20, the Brazilian Board of Control of Financial Activity (COAF) issued Resolution No 20/2012, which draws up general rules for all sectors that are regulated or involved with COAF, so as to further oppose money laundering. These rules require companies to communicate all suspicious operations, recognise and identify clients and third parties that may be involved in such operations, and train employees to prevent money laundering and keep a register of operations that are deemed suspicious. Along the same lines, the Central Bank of Brazil issued in March Circular Letter No 3542, which increased the types of conduct that may be considered as money laundering from 43 to 106.
On March 22, the Central Bank of Brazil issued new rules regarding the Special System of Liquidation and Custody (Sistema Especial de Liquidação e Custódia, or Selic) – the Brazilian Central Bank's system for performing open market operations in execution of monetary policy. According to the new rules, there are three new types of operational agreements: the first is settled by the buyer or the seller of the title within a specific period of time; the second agreement is only settled at the buyers' discretion; and the third is settled only at the sellers' discretion. With this new arrangement, companies can now negotiate directly with the secondary market. Another point of interest regarding this matter is that Central Bank of Brazil has authorised Selic to conduct an electronic operation platform which will enable, among other things, the immediate registration of purchases and sale by foreigners.
On its part, the Brazilian National Monetary Council issued on March 29 Resolution No 4062/12 (amending Resolution No 2723/00). Before this, financial institutions had only to inform the Central Bank of an equity interest in Brazilian companies and their eventual sale. Now, financial institutions must get prior authorisation from the Central Bank for any equity interest, be it direct or indirect, in companies that have their headquarters established in Brazil or abroad. The only exception is an equity interest emblematic of the portfolio of investment banks, development agencies or multiple banks with portfolio. This authorisation is also relevant and applicable to any increase of the equity interest that requires a consolidated financial statement and will only be admitted regarding companies with purposes that are subsidiary or complementary to financial institutions. To obtain permission, several requirements must be met, among which are the supply of information containing the corporate purpose and activities undertaken by the Equity Interest Company, and the analyse of the adequacy of the business equity interest and the strategy of the financial institution.
A final recent development occurred on April 3, when Brazilian President Dilma Roussef issued Provisional Measure MP 564 amending Law No 11.529/07 so that producers of inputs used by export trading companies to get access to external financing are authorised to have access to foreign import credit. In order to be granted this benefit, the product of the raw material producer must be part of the productive procedure of the final exported product, and the producer must attest that the raw material was in fact used in the final product. This benefit will also be extended to companies that are to be sold, and that also export inputs.
Antonio Mazzuco, Byung Hong and Roberta Prado Lukaisus
Byung Hong holds a Law Degree from the São Paulo State University. He has taken the Orientation in the US Legal System Program of Georgetown University Law Center. He is a member of the Brazilian Association of Computer and Telecommunications Law and of the International Association of Korean Lawyers (IAKL). He is experienced on corporate and commercial law, with a focus on private equity/venture capital, Mergers and acquisitions, maritime law, foreign investment, and information technology.
Languages: English, Korean, Spanish and Portuguese.
Antonio Mazzuco holds a Law Degree from the São Paulo State University. He has taken the Business Negotiation Program, of Harvard Law School, and the Accounting and Finance Program of Fundação Getúlio Vargas, in Brazil. He specializes in commercial and corporate law, mergers and acquisitions, joint-ventures, merger control, corporate governance, corporate and financial restructuring, media, entertainment and information technology, foreign investments and public procurement. He is a member of the Union International des Avocats - UIA.
Languages: English, Italian, Spanish and Portuguese.