On December 30, 2021, Law 14,286/2021 was published, covering the Brazilian foreign exchange market, capital held abroad by Brazilians, foreign capital in Brazil and the reporting of information to the Brazilian Central Bank (BCB).

The enactment of Law 14,286/2021 resulted from the need to modernize, simplify and consolidate legislation regarding the Brazilian foreign exchange market. Besides introducing new rules applicable to that market, the new Law revoked or altered various provisions of existing legislation on the theme.

To strengthen the activities of the BCB as the authority responsible for regulating transactions in the foreign exchange market, Law 14,286/2021 attributes new powers to the Bank, including attributions previously delegated to the National Monetary Council, such as:

(i) regulation and monitoring of the flows and stocks of capital held abroad by Brazilians and foreign capital in the country;

(ii) authorization, under the terms of regulations to be issued by the BCB, for holding executive positions, either defined contractually or in the bylaws, of financial institutions authorized to operate in the foreign exchange market;

(iii) maintenance of deposit, compensation, settlement and custody accounts, in reais or foreign capital, held by international bodies, foreign central banks or institutions domiciled or with headquarters abroad, that render services for compensation, settlement and custody in the international market, with observance of the limits, time frames, forms and conditions to be established in regulations to be issued;

(iv) request for Brazilian residents to provide information necessary to compile official macroeconomic statistics; and 

(v) requirement to exhibit documents and provide information about Brazilian capital held abroad and foreign capital in the country, or about the institutions authorized to operate in the foreign exchange market.

Law 14,286/2021 also establishes a new maximum limit for inflow and outflow of national or foreign currency without the intermediation of institutions authorized to operate in the foreign exchange market. The previous limit of BRL 10,000.00 is now USD 10,000.00 or the equivalent in other currencies.

According to Art. 19 of Law 14,286/2021, any financial transactions involving up to USD 500.00 (or its equivalent) carried out occasionally and non-professionally between individuals are not subject to any legal restriction.

Law 14,286/2021 also establishes that banks authorized to operate in the foreign exchange market can carry out payment orders in reais received from abroad or sent abroad, through use of accounts in reais held by foreign institutions, in the form of regulations to be issued by the BCB. For that purpose, the domestic bank must obtain sufficient information about the foreign institution in order to fully understand the nature of its activity, reputation and quality of financial supervision, as well as evaluate its internal controls in matters of combatting money laundering and financing of terrorism.

Article 12 of the new Law expressly institutionalizes the authorization to engage in private compensation of credits between residents and non-residents, again according to regulations to be issued by the BCB.

Another innovation involves the remittance abroad of amounts classified as profits, dividends, interest, royalties and for other purposes. These remittances can be carried out without the need for registration with the BCB, only depending on payment of any applicable income tax, as the case may be.

Furthermore, Article 13 of Law 14,286/2021 consolidates the situations when it is allowed to stipulate payment in foreign currency of obligations enforceable in Brazil, as follows:

(i) in contracts and instruments referring to foreign trade of goods and services, or the financing or guarantee thereof;

(ii) in obligations where the creditor or debtor is a non-resident, including from credit and commercial leasing transactions, except in contracts for lease of properties located in Brazil;

(iii) in commercial leasing contracts formalized between residents based on resources obtained from abroad;

(iv) in the assignment, transfer, delegation, assumption or modification of obligations mentioned in the preceding items, including when the parties are residents;

(v) in the purchase and sale of foreign currencies;

(vi) in indirect exportation as defined in Law 9,529/1997;

(vii) in contracts signed by exporters in which the counterparty is holder of concession, permission or authorization or is a lessee in the infrastructure sectors;

(viii) in situations established in regulations issued by the National Monetary Council, when the stipulation in foreign currency can mitigate the exchange rate risk or improve the efficiency of the transaction; and

(ix) in other situations specified in legislation.

Finally, Law 14.286/2021 limits the amount that institutions operating in the foreign exchange market must deposit with the BCB in case of cancellation of contracts to purchase foreign currency, to the amount advanced contractually. The way to calculate the charges owed to the BCB and the situations where this payment is waived will be defined by the National Monetary Council. 

Law 14,286/2021 will take effect on December 30, 2022 (one year after its publication).

More information, as well as the full text of Law 14,286/2021, can be obtained at the site of the Presidency of the Republic (www.planalto.gov.br).