What's new in Brazilian corporate law

Author: | Published: 13 Aug 2012
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New Brazilian Law on Money Laundering

Law 12,683 was enacted on July 9 2012, amending the existing Law 9,613/98 to incorporate into Brazilian legislation international requirements against money laundering. The Board of Control of Financial Activity (COAF) is the national agency in charge of anti-money laundering activities. Law 12,685 provided additional instruments to COAF. The main changes introduced by Law 12,683 are:

(i) Extended the definition of money laundering to concealment or disguise of goods, rights or funds derived from any criminal activity or from participation in such activity.

While the previous definition limited the money laundering concept to concealment or disguise of goods, rights or funds arising out of specific criminal conducts, the present definition encompasses goods, rights or funds arising out of any kind of criminal activity.

(ii) Extended to various entities, which include the Stock Exchange and over-the-counter market systems, realtors and companies that commercialize real property, companies and natural people that commercialize high value luxury goods, artists and football agents, among others, the obligation to communicate suspicious operations to COAF.

(iii) Increased the penalty for who fails to provide the mandatory communication to COAF, from R$200,000.00 to R$20,000,000.00.

(iv) Allowed the sale of seized assets prior the conviction sentence.

Foreign Financial Institutions back to Export Prepayment Transactions

On June 28 2012, Brazilian Central Bank issued Circular 3,604 amending export prepayment rules. Circular 3,604 revokes Circular 3,580 of March 1 2012 and reintroduces the ability of any foreign entity (and not only importers), including financial institutions, to prepay exports made by Brazilian companies. The prohibition imposed on foreign financial institutions to carry out export prepayment transactions lasted for a very short term (from March 1 to June 28). However, the 360-day prepayment limitation period introduced by Circular No. 3,580 has been maintained and is in full force and effect.

Committee of Mergers and Acquisitions

On June 27 2012 the BM&FBOVESPA, the Brazilian Financial and Capital Markets Association (ANBIMA), the Brazilian Corporate Governance Institute (IBGC) and the Capital Market Investors Association (AMEC) created the Mergers and Acquisitions Committee (CAF). CAF's purpose is assuring an equitable treatment to shareholders in public offerings (IPO), mergers, acquisitions and spin-off, by reviewing these operations, of listed companies that voluntary submit to CAF. How will CAF work and which entity will support it is still under discussion by the agencies.