Nova Lei Cambial – Roteiro para as mudanças mais relevantes

Por Ricardo Bernardi e Lucas Bernardes Augusto.

As background, since the Brazilian economy has been historically affected by fluctuations of foreign currency,notably the United States Dollar, the local legal framework has been structured over the last decades based on amyriad of laws and regulations intended to create a greater level of control and oversight of the foreign currencyexchange market, many of them in force for more than 70 years.
Despite this scenario, in order to promote foreign investments into the Country, the Brazilian Central Bankstarted deregulating the currency exchange market and implementing improvements to the legal framework,focusing on the removal of some of the obsolete obstacles to foreign currency inflow/outflow, as well asapplicable registration requirements, especially over the past 15 years. The creation of a more flexible andbusinessfriendly regulatory environment was important to promote the growth of the currency exchange market,but some of the rules in force – especially those provided by obsolete Federal Laws, which cannot be modifiedby the Central Bank and require the approval of the Congress – still imposed relevant barriers and bureaucraciesin this market.
It is in this context that the Brazilian Government enacted the Federal Law 14,286 (the ‘
New FX Law
’),establishing a new legal framework for: (a) the local foreign exchange market; (b) foreign capital held in Brazil;and (c) Brazilian capital held abroad; which will come into force as of December 30, 2022.
Although enforceability of several modifications implemented under the New FX Law still depends onregulations to be issued by the Brazilian Central Bank and the National Monetary Council, the following mostrelevant changes can be mentioned:
(a)
Contracts priced in foreign currency
– Based on the laws currently in force, especially the Decree-Law nr.857, dated September 11, 1969, and the Federal Law nr. 9,069, dated June 29, 1995, the authorization forcontracting parties to set payments using foreign currency used to be limited to very specific circumstances,especially in international arrangements involving a Brazilian counterpart, or for contracts and securities relatedto foreign trade of goods and services, their financing and related guarantees.
The new FX law expanded the situations in which payments can be agreed in foreign currency, which will applyto obligations enforceable in Brazil related to: (i) contracts related to foreign trade of goods and services, theirfinancing and guarantees; (ii) obligations involving a nonresident creditor or debtor, including those resultingfrom credit or leasing operations, except for rental agreements involving real estate located in Brazil; (iii) leaseagreements entered into between local residents, based on the raising of funds from abroad; (iv) the assignment,transfer, assumption or modification of the obligations mentioned above, even if the parties involved areresidents; (v) the purchase and sale of foreign currency; (vi) indirect exportation; (vii) contracts entered into byexporters where the counterparty is a concessionaire, permissionaire, or lessee in the infrastructure sectors,and (viii) in the situations provided for in the regulations issued by the National Monetary Council, when thestipulation in foreign currency can mitigate foreign exchange risk or increase the efficiency of the business.

In this context, in addition to expanding the list of transactions in which parties will be authorized to set theamounts in foreign currency, the New FX Law significantly changed the existing scenario by authorizing theNational Monetary Council to regulate the adoption of prices and payments in foreign currency in othertransactions, not specifically listed in the legislation. This is a very important modification toward theflexibilization of the legal framework, since it will allow the regulatory authority to monitor the existing andpotentially new business models and update the regulation accordingly.
(b)
Offsetting of credits and debts
– For more than 70 years, Brazil has prohibited Brazilian and foreigncompanies from offsetting international credits and debts, in order to keep strict currency control rules.
Upon the entry into force of the New FX Law, Brazilian and foreign companies will be authorized to proceedwith private offsetting of credits or values owed between them, in situations to be authorized by the CentralBank. Even though this matter still needs to be regulated by the Central Bank, the revocation of the formergeneral prohibition for private offsetting is certainly an improvement toward the modernization of the regulatoryenvironment.
(c)
Registration of Transactions with Central Bank
: Based on the provisions of the Federal Law nr. 4,131,enacted back in 1962, the remittance of dividends, interests and royalties had to be registered with the BrazilianCentral Bank. Also, the Federal Law 6,099, enacted in 1974, required the previous registration of leasetransactions, as well as its assignments, as a condition for the performance of payments under these transactions.The Central Bank has modernized and facilitated the registration process over the years, to promote the access ofBrazilian counterparts to foreign capital, but the registration requirements still had to be observed.
The New FX Law revoked the provisions of the Federal Laws nr. 4,131/1962 and 6,099/1974, which required thecompletion of such registrations. The Central Bank is expected to further regulate the requirements associatedwith such transactions, but the elimination of the mandatory registration from the law is certainly animprovement in the regulation.
(d)
Currency Exchange Classification and Supporting Documentation
– From a practical standpoint, theremittance and receipt of funds in Brazil may be very complex depending on the nature of the transaction thatsupported the flow of funds. In this line, the formalization of currency exchange transactions can be completedfor a specific purpose expressly set forth in the regulation, based on a codification system created by theregulatory authority to identify each transaction. The financial institution in charge of settling the currencyexchange transaction must review the documentation provided by the Brazilian counterpart and attribute thecorrect code.
Given the risks of penalties assessed by Central Bank, financial institutions sometimes require several documentsto support currency exchange transactions and tend to adopt a very strict view of the transactions submitted forits review, especially in situations in which there is no a clear authorization and/or classification in theregulations.
In this scenario, the New FX Law transfers to the Brazilian party of the transaction the responsibility tocategorize their own exchange operation, as established by the rules to be issued by the Central Bank.
Banks and financial institutions authorized to operate in the foreign exchange market are still required to clearlyidentify its clients and process the currency exchange transactions complying with mandatory AMLrequirements, among others, but the New FX Law prohibits said entities from demanding documents.

Publicado originalmente em Inglês no site: https://www.lexology.com/library/detail.aspx?g=17e038d6-f2a8-43aa-b6e0-891085f8b572