ANNOUNCEMENT 14 Jul 2009In July 2009, the government of Brazil announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
BNDES ( http://www.bndes.gov.br); Circular BNDES n? 75/2009; Portaria Minist?rio da Fazenda n? 381, from 14.07.2009;Resolution from the Conselho Monet?rio Nacional, n?3759, from 09/07/2009.
Resolution n? 3910- http://www.in.gov.br/imprensa/visualiza/index.jsp?jornal=1&pagina=44&data=01/10/2010
On 10th September 2009, the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico, BNDES) implemented a new Program for Investment Support (called BNDES PSI) throught Resolution nş 3759, with a specific sub-program for the pre-shipment phase of exports.
The objective of this Sub-Program is to finance the production of capital goods destined for exports. Also, this sub-program establishes reduced interest rates for the financing of the production of these goods. The eligible goods identified as capital goods are indicated in the BNDES Circular Letter nş 31, of July 30th 2007.
The deadline for the operation of this program was first established as December 31st 2009 but BNDES has announced its extension until June 30th 2010. The financing conditions remained the same and are set out in BNDES Circular Letter nş75 of July 16th, 2009.
The BNDES Circular Letter nş 75/2009, of 07.16.2009, which estabilishes the criteria and conditions for the implementation of the sub-program, sets the annual fixed interest rate of 4.5%, which includes the remuneration of the financial agents (3%) and of BNDES. According to the BNDES, as a consequence of the new sub-program, the interest rates charged would fallfrom a yearly average of 12.05% to 4.5%. (BNDES website, 06.29.2009)
The measure does not alter the rules already in force and traditionally applied by BNDES in regards to the pre-shipment financing(for example, the local content requirement of 60% or more).
The Ministry of Finance Administrative Act (Portaria) nş 381, issued on July 14th 2009,establishes an "equalization" by the National Treasury to make feasible the interest rate differential granted by BNDES.
The measure applies equally to Brazilian as well as foreign companies established in Brazil.
The criteria for the selection of the main trade partners affected was the identification of the countries that account for 75% of total exports of the products affected by the measure.
The financing conditions were changed by Resolution nş 3851 of April 29th 2010, of the Brazilian Central Bank (BACEN). In the case of the pre-shipment financing operations contracted after 1 st July 2010 the interest rate charged will increase from 4.5% to 5.5% per year. The measure entered into force in the date of its publication and has a retroactive effect to December 31st, 2009.
Recently, through the Resolution nş 3910 of 29th September 2010, the Brazilian government decided to increase the total financing ammount to R$ 134,000,000,000.00 and the interest rate from 4.5 to 5.5 only for financing operations applied to acquision and production of certain capital goods for operation contracted from 1st July 2010.
The deadline for the operation of this program was extended to 31st March 2011.