Circular Letter CVM/SMI/SIN 03/2019

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
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Circular Letter No. 3/2019-CVM/SMI/SIN
Rio de Janeiro, June 4, 2019.

To
Directors Responsible for CVM Instruction No. 301, of April 16, 1999

Subject: New routines in CVM Instruction No. 301/99 resulting from Law No. 13,810, of March 8, 2019

Dear Sirs/Madams,

1. On March 8, 2019, Law No. 13,810 was promulgated, with effect from June 6, 2019, which revokes Law No. 13,170, of October 16, 2015, and provides for the compliance with sanctions imposed by resolutions of the United Nations Security Council (UNSC), including the freezing of assets of natural and legal persons and entities, and the national designation of persons investigated or accused of terrorism, its financing, or related acts, establishing new procedures to be observed by natural and legal persons exercising the activities listed in art. 9 of Law No. 9,613, of March 3, 1998.

2. For the purpose of ensuring faithful compliance with the new legal discipline, the persons referred to in art. 2 of CVM Instruction No. 301, of April 16, 1999, must, within the limits of their responsibilities, adapt their internal rules, procedures, and controls for all existing business relationships, or those that may be initiated subsequently, that allow for the identification of any investors, natural persons, legal persons, or entities subject to freezing determinations.

3. In this regard, the obligated persons must comply, immediately and without prior notice to the sanctioned parties, with the measures established in the sanctioning resolutions of the United Nations Security Council (UNSC) or the designations of its sanctions committees that determine the freezing of assets owned, directly or indirectly, by natural persons, legal persons, or entities, as per Law No. 13,810/2019, without prejudice to the duty to comply with judicial freezing determinations also provided for in the aforementioned law.

4. The obligated persons must also, without delay, inform the Ministry of Justice and Public Security and the CVM of the existence of persons and assets subject to the sanctions provided for in Law No. 13,810/2019, to which they failed to give immediate compliance, justifying the reasons for such failure.

5. The freezing referred to in this Circular Letter refers to the prohibition of transferring, converting, moving, making available, or disposing of assets, directly or indirectly, including interest and other civil fruits and income derived from the contract, as provided for in arts. 2, item II, and 31, § 2, of Law No. 13,810/2019.

6. Without prejudice to the communication to the CVM provided for in item I of art. 10 of Law No. 13,810/2019, the obligated persons must monitor, directly and permanently, the freezing determinations referred to in item 2 of this Circular Letter.

7. Furthermore, the persons included in the list of art. 2 of CVM Instruction No. 301/99 must immediately and simultaneously communicate the freezing of assets and attempts to transfer them related to natural persons, legal persons, or entities sanctioned by a resolution of the United Nations Security Council (UNSC) or by designations of its sanctions committees, as per art. 11 of Law No. 13,810/2019:

7.1 – to the CVM, via the address listas@cvm.gov.br;
7.2 – to the Ministry of Justice and Public Security; and
7.3 – to the Financial Activities Control Council (COAF), in the manner used to effectuate the communications provided for in art. 11, item II, of Law No. 9,613/98, specifically in the CVM Segment in Siscoaf, as per the framework provided for in art. 7, § 3, of CVM Instruction No. 301/99.

8. The adaptation of the rules, procedures, and controls mentioned in paragraph 3 must observe the start of the effectiveness of Law No. 13,810/2019.

9. The sanctions lists of all committees of the United Nations Security Council (UNSC) can be accessed via the link https://www.un.org/securitycouncil/sanctions/information.

10. This Circular Letter revokes Circular Letters No. 04/2015/CVM/SMI/SIN and No. 05/2015/CVM/SMI/SIN from the start of the effectiveness of Law No. 13,810/2019.

Sincerely,

FRANCISCO JOSÉ BASTOS SANTOS
Superintendent of Market Relations and Intermediaries

DANIEL WALTER MAEDA BERNARDO
Superintendent of Institutional Investor Relations

Document electronically signed by Francisco José Bastos Santos, Superintendent, on 06/03/2019, at 16:50, based on art. 6, § 1, of Decree No. 8,539, of October 8, 2015.

Document electronically signed by Daniel Walter Maeda Bernardo, Superintendent, on 06/03/2019, at 17:03, based on art. 6, § 1, of Decree No. 8,539, of October 8, 2015.

The authenticity of the document can be verified on the site https://sei.cvm.gov.br/conferir_autenticidade, by entering the verification code 0769961 and the CRC Code B6DAF5E2.

The authenticity of this document can be verified by accessing https://sei.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 0769961 and the "CRC Code" B6DAF5E2.

Reference: Process No. 19957.003152/2018-21 SEI Document No. 0769961