Brazil: The New Regulation on the Brazilian Export Transactions

Last Updated: 31 May 2005

By Walter Douglas Stuber*

Under the terms of Resolution nº 3266, of March 4, 2005, which makes provisions on the receipt of amounts relating to exports, the Brazilian Monetary Council simplified the exchange rules and procedures governing exporting of goods and services. The Brazilian Central Bank (Bacen) published its new Exchange Market and International Capitals Regulation (RMCCI) by way of Circular nº 3280, of March 9, 2005, which consolidates these rules and procedures. Ahead we will make a few comments in the main rules in force applicable to the exports.

The new system still requires the entry of foreign currency related to the exports, upon execution and settlement of an exchange contract with a bank accredited to operate in the Exchange Market in the Country.1 Exchange transactions are settled by delivering foreign currency or document of settlement to the bank party to the relevant exchange contract.

Exchange contract can be made for spot or forward settlement, prior or subsequent to the shipment of goods or provision of services. The maximum term of an exchange contract is limited to 570 days counted from its execution until settlement, due respect being given to specific regulation of Bacen.2

Payment of Brazilian exports must be made by way of crediting the amount in foreign currency to an overseas account with the bank accredited to trade foreign exchange in the country. Payment may be made in cash, pursuant to Bacen instructions. Receipt of amounts regarding exports worth up to US$ 10 thousand or equivalent in other foreign exchange may also occur via international credit card, international postal money order or other instrument under terms specifically provided in Bacen regulation. Export-related sums received in national currency are allowed so long as they are provided in the export system of the Foreign Trade Integrated System (Siscomex).

Where financing is obtained for the exports from governmental institution, it is up to the body or entity to arrange for it to be designated as ultimate creditor in the transaction and exert the necessary efforts to the proper reception of corresponding amount in foreign exchange.

Instructing payment or crediting abroad directly to the exporter or to third parties, of any sum regarding an export transaction is prohibited. The only exceptions to this rule are the following: (i) agent fees and other payments owing to third parties resident or domiciled abroad, provided that it has been provided in the respective export record at the Siscomex; and (ii) exports carried out by way of intermediation abroad, of individual sum of up to US$ 10 thousand or equivalent in other foreign exchange.

Proof of exchange coverage of exports is required within: (i) 210 days of shipment date or service provision, for transactions not subject to Credit Registration (CR), irrespective of the time provided in the exchange notes and the effective date of receipt of the foreign exchange overseas; and (ii) 30 days of the date indicated in the respective CR, for financed transactions, including in the case of exporter’s own funds.

In the event of exports in consignment, exchange coverage is mandatory within: (i) 210 days of the date of shipment, for transactions whose term of stay or sale abroad does not exceed 180 days of the shipment date, irrespective of the effective receipt of the foreign exchange abroad; and (ii) 30 days of the date set for the stay or sale abroad, in all other situations.

The exchange coverage may be evidenced by way of: (i) connecting the exchange contracts settled to the respective entries of export with shipments recorded with Siscomex; (ii) settling the corresponding exchange contracts related to service provision; and (iii) checking the Corporate Taxpayer ("CNPJ") or Individual Taxpayer ("CPF") Identification Numbers corresponding to the total overseas sales as compared to the overall amount received abroad, for exports of up to US$ 10 thousand paid by means of credit card charge, international money order or simplified export exchange contract.3

Whatever the means of international transportation used (ground, air or sea), current regulation allows the direct remittance of documents abroad by the Brazilian exporter to the foreign importer prior to the execution of the exchange contract. Direct remittances of documents abroad by the Brazilian exporter following the execution of the exchange contract is also allowed, provided that the exporter and the bank have mutually agreed to it.4

From now on, the exporter is now required to deliver the export documentation to bank accredited to operate exchange in view of the deadlines imposed for shipment and proof of exchange coverage,5 but the bank will be discharged from said obligation upon statement from the exporter.6

Exchange contracts entered by other than exporter can be associated with export registration with the Siscomex in the following situations: (i) merger, spin-off or consolidation of companies and in the contractual succession situations provided in the law; (ii) court ruling; (iii) companies in the same economic conglomerate; (iv) exports financed by the National Economic and Social Development Bank (BNDES) or by the National Treasury; and (v) exports subsidized by the Export Guarantee Fund (FGE). "Companies in the same economic conglomerate" are companies and their controlled companies, as well as companies under common control, in either case so long as the exporter serves prior communication to the Federal Revenue Service (SRF) and state or district finance service or equivalent body.

Pursuant to the new regulation, a collection action against the debtor above is only required in the cancellation or retirement of exchange contracts with goods shipped or services provided if the amount equals to or exceeds US$ 50 thousand or equivalent in foreign exchange.7

Redemption of notes of exchange abroad is optional, without right of recourse, provided that separate exchange contracts are made, one for the export amount and the other for the redemption amount, and that said exchange contracts are settled on the same date. The activity of the foreign exchange may occur at net value, after discount.8

In the event of exports financed by the exporter itself, the exchange contract for each principal payment or payment of interest must be settled up to 30 days of the date provided in the RC.9

Rules governing anticipated receipt of exports apply to goods and services.10 Anticipated receipt of exports is the application of funds in foreign exchange in the settlement of export exchange contracts prior to the shipment of goods service provision. Anticipated receipt of export amount is short term where the exchange contract is settled up to 360 days of the date of goods shipment or provision of services, and long term where settlement occurs after 360 days thereof. Early receipt of funds in foreign exchange by Brazilian exporters from importers or any legal entity abroad, including financial institutions, is allowed.

Shipment of goods or provision of services must occur within no later than 360 days of the date of the exchange contract. This timeframe applies irrespective of the any early receipt with exchange contract for spot or future settlement, prior to the shipment of goods.

The payment of interest on the foreign exchange amount of the exchange contracts settled upon early receipt of export is subject to the following: (i) counting of time for interest and principal payment shall have as the earliest date the date of disbursement or entry of funds in the country; (ii) interest will be computed over the debtor balance; (iii) interest rate may be freely agreed upon by the parties;11 (iv) beneficiary of interest remittances will be he who is responsible for pre-payment the export; and (v) alternatively, the amount owing as interest will be settled upon shipment of goods abroad.12

Transactions originally made with early receipt of export amount with respect to which the goods have not been shipped or services have not been provided, upon prior consent of the payer abroad will be converted by the exporter in direct capital investment or currency loan. Such a conversion must be registered with Bacen and made within up to 90 days of the expected date of goods shipment or service provision, being a condition precedent for the future execution of the exchange transaction prior to the goods shipment or service provision. Remittances are allowed provided that they constitute the return abroad of residual amount equivalent to up to 5% of the original early amount, due respect being given to the applicable tax laws and regulations. Exporters are required to proof payment income tax accruing on any interest remitted abroad regarding the amount entering and whose goods have not yet been shipped or services rendered, both in the case of conversion or remittance of the residual amount.

Exchange contracting must be total prior to the input of the export information in the Siscomex, while exporter: (i) is involved in the transaction not backed by exchange or foreign trade regulation; (ii) is pending purchase of exchange after shipment, after the regular time fixed to that end; (iii) keeps pending the dependence of its exchange transactions, prior or after the shipment, on the respective export registration at Siscomex; and (iv) is pending compliance with the determinations by the Bacen with respect to any outstanding issue of exchange or foreign trade nature. At the discretion of the Bacen, total contracting of exchange will also precede the registration with the Siscomex of the export, upon occurrence of the events listed in items (ii) and (iii) during a period less than 180 days.

Connecting exchange transactions, made prior or after the shipment of goods, to the respective export registrations with shipments recorded in the Siscomex, within the times and conditions established by Bacen, may be a necessary condition to carry out future exchange transactions prior to the shipment of goods.

It is up to Bacen to examine, on a case-by-case basis, and make decisions regarding the following: (i) retirement and cancellation of export exchange contracts; (ii) return of sums received early from payer abroad by the traditional exporter; (iii) extension of time for shipment of goods or provision of services, for contracting and settling export exchange transaction; (iv) admission of connection of the exchange contract by person other than the exporter to the export registration in the cases not provided in Resolution nº 3266/2005; and (v) waiver of exchange contracting upon proven impossibility to receive foreign exchange.

Footnotes

1 This general rule does not apply in the situations provided in the current laws and regulations.

2 The maximum time allowed between commencement and settlement of exchange contracts was 540 days, considering the time prior and after the shipment of goods.

3 Sale of goods and provision of services abroad, by legal entity or individual, worth up to US$ 10 thousand, or equivalent in other foreign exchange, may, at the discretion of the exporter, have their respective exchange transactions made according to the simplified exchange system, which includes the use of international credit cards issued abroad or international money order. Previously, simplified exchange transactions were limited to exportation of goods only, but now they apply to the exportation of services.

4 Previously, the direct remittance of documents by the exporter to the importer was allowed provided that mutually agreed between the bank and the exporter, in the event of air of surface international transportation of goods. In the case of sea transportation, direct remittances by the exporter were allowed only where indicated on the letter of credit or if the bank buying the foreign exchange is assured the receipt of the corresponding currency.

5 Previously, the exporter was required to deliver the export documentation to the bank within 15 days of the shipment, irrespective of execution or not of an exchange contract. Now, such a requirement no longer applies.

6 The bank negotiating the foreign exchange may, at its own discretion and risk, accept express statement from the exporter of export shipment number registered with the Siscomex and amount to be associated with the respective exchange contract, in replacement of the export documents. In this case, the exporter shall keep in its files, for five years starting on the date of statement, the export documents or copy thereof for submission to the intervening bank or Bacen, upon request.

7 Previously, cancellation or retirement of exchange contracts with shipment of goods was conditioned on the commencement of lawsuit abroad, upon shipment of goods worth more than US$ 30 thousand. Now, this is not required up to US$ 50 thousand.

8 The previous exchange regulation applicable to exportations did not provide about redemption of bills of exchange abroad. The current regulation allows for the redemption of exchange notes abroad, provided that without right of recourse, due respect being given to the following conditions: (i) execution, for the value of exportation, of a type 1 exchange contract for export with shipment of goods to the Siscomex; (ii) execution of type 4 exchange contract, under "45405 – Miscellaneous services – banking, " for the discount amount, and the "Registration of connected exchange contracts" screen must contain the number of the respective export exchange contract referred to in the previous item; and (iii) the contracts referred to in the previous items must be settled on the same date, and the foreign exchange activity can occur at the net value. It is, therefore, the set of operating procedures that need to be followed by banks accredited to operate on the Exchange Market when making transactions with redemption of exchange notes abroad.

9 The previous regulation did not include any provision as to financing exportations with exporter’s own funds.

10 The previous exchange regulation made no provision as to exportation of services. The new regulation deals with and establishes exchange-related procedures that need to be adhered to in service transactions, as far as the possible early purchase of exchange is concerned, listing the services rendered by individuals or legal entities resident, domiciled or based abroad, which are subject to the service exportation regulation.

11 Although the parties can freely agree upon interest rates, the regulation clarifies that the legal threshold, if any, must be observed.

12 Upon that event – interest paid upon shipment of goods abroad – export exchange (type 1) and financial transfer abroad (type 4) transactions will have to be made at the interest amount, with concurrent settlement and without activity of the foreign exchange.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.