On October 10 this year, Brazil’s Central Bank (Banco Central do Brasil/Bacen) released a set of draft rules regarding the country’s foreign exchange and international capital market. The new rules are the result of evaluations and discussions from public consultation 90 (CP 90), carried out between May 12 and July 1.
The main changes to the original CP 90 text are the following:
- ● Greater alignment between exchange operations and other operations within the financial system; exchange operations must observe only Bacen requirements as to the provision of information;
- ● Treating transactions in non-residents’ deposit accounts in BRL in a way that is equivalent to residents’ accounts within institutions authorized to operate in the foreign exchange market;
- ● Criteria regarding information and supporting documents to prevent money laundering and combat terrorism (prevenção à lavagem de dinheiro e de combate ao financiamento ao terrorismo/PLDFT) are now included in Circular 3,978, of January 23, 2020 – reinforcing and consolidating them within the rule that contains provisions on policy, procedures and internal controls that prevent these crimes.
The draft rules disclosed herein also include propositions contained in the CP 90 text, such as:
- ● A comprehensive review of the requirements for trading within the foreign exchange market, especially those that are needed for supervision and statistics;
- ● Incorporation of the proportionality criterion provided for in the new law, considering the values of operations and the profiles of stakeholders. An example: simplified classification of operations up to USD 50,000, reducing necessary codes to ten. Presently, there are more than 180 codes for this operation, regardless of its value.
The draft rules will be assessed and resolved by Bacen on December 31, 2022, when Law 14,286, of 2021, comes into force.
It must be noted that this disclosure does not address matters pertaining to Brazil’s public consultation notice 91/2022, regarding regulation of foreign direct investment and external credit.
For more information, please contact our Financial and Capital Markets team at ([email protected]).