At a meeting held on July 26, 2012 the Brazilian Monetary Council (Conselho Monetário Nacional - CMN) approved measures that simplify the foreign exchange (fx) transactions of small value and provide more access alternatives and greater reach to the Brazilian fx market.

CMN Resolution No. 4113/2012 allows that manual exchange transactions (operações de câmbio manual) be carried out through a bank note vending machine (máquina dispensadora de cédulas), provided that the clients are duly identified in the manner specified by the Central Bank of Brazil (Banco Central do Brasil - Bacen). Pursuant to the current regulations, the agents authorized to operate in the fx market1 (authorized agents) shall comply with the rules to perfectly identify their clients as well as to assess the responsibility of the appropriate parties regarding the legality of the operations performed.

Each client can purchase and sale foreign currency through a bank note vending machine up to the limit of US$ 3,000.00 (or its equivalent in other foreign currency) for each operation. Within this ceiling the transaction is considered of small value. In any case the client must be perfectly identified, as explained above, but the authorized agent is waived from the submission of the documentation regarding the underlying legal act to the exchange transaction, as well as from the custody of the client´s identification documents2.

Furthermore, CMN Resolution No. 4114/2012 eliminated the current restriction on the type of company that can be hired as a correspondent to perform manual exchange transactions3.

These measures are in line with the actions adopted by the Brazilian Federal Government to simplify and modernize the exchange market in our jurisdiction and, without sacrificing security, they will enable the creation of a network compatible with tourist centers of various sizes, providing the expansion of capillarity and the increase in tourism expected in the sporting events that Brazil will host in the coming years, namely the 2014 World Cup and the Rio 2016 Olympic Games.

Footnotes

1 The matter is governed by article 18 of CMN Resolution No. 3568, of May 29, 2008, that regulates the Brazilian fx market. According to the provisions of article 2 of CMN Resolution 3568/2008, authorizations for the performance of operations in the fx market may be granted by Bacen to the following entities: (i) multiple banks (bancos múltiplos/em); (ii) commercial banks (bancos comerciais caixas econômicas); (iv) investment banks (bancos de investimento); (v) development banks (bancos de desenvolvimento); (vi) foreign exchange banks (bancos de câmbio); (vii) development agencies (agências de desenvolvimento); (viii) credit, financing and investment companies (sociedades de crédito, financiamento e investimento); (ix) securities and stocks brokerage companies (sociedades corretoras de títulos e valores mobiliários); (x) securities and stocks dealership companies (sociedades distribuidoras de títulos e valores mobiliários); and (xi) foreign exchange brokerage companies (sociedades corretoras de câmbio).

2 These rules are contained in the new wording of paragraph 5 of article 8 of CMN Resolution 3568/2008 as amended by article 1 of CMN Resolution 4113/2012. The use of bank note vending machines to carry out the manual exchange transactions is permitted by article 2 of CMN Resolution 4113/2012, which adds a new paragraph 2 to article 9 of CMN Resolution 3568/2008.

3 Article 1 of CMN Resolution 4114/2012 revoked article 1 of article 9 of CMN Resolution No. 3954, of February 24, 2011, which only authorized the hiring of the following entities to perform manual exchange transactions: (i) financial institutions or other entities authorized to operate by Bacen; (ii) legal entities registered with the Ministry of Tourism as paid tourism service providers; (iii) the Brazilian Post Office and Telegraph Company (Empresa Brasileira de Correios e Telégrafos – ECT); and (iv) the lottery services agents. Now this restriction no longer applies.

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