Circular Letter No. 3.337

CIRCULAR LETTER No. 003337 ------------------------ Discloses minimum procedures necessary for the performance of the provisions of Circular 3.400, of 2008, in compliance with the special duties of central credit cooperatives provided for in Chapter IV of Resolution 3.442, of 2007. Taking into account the provisions of art. 2 of Circular 3.400, of 1 August 2008, in the periodic direct inspection process the following minimum procedures must be performed, to an extent compatible with the size and complexity of the products, services, activities, processes and systems of the affiliated credit cooperative: I - Institutional Policies: verify at least: a) existence of updated manuals, endorsed by senior management, duly disclosed to employees; b) existence of procedures that ensure segregation of duties, information security and the adequate handling of non-cooperative acts; II - Governance: evaluate the established rules, as well as the performance of the board of directors, the administrative council and the fiscal council; III - Risk Exposure: verify the risk management structure for credit, market, liquidity, operational and other risks, implemented in accordance with the regulations in force; IV - Internal Control Systems: verify their adequacy, compliance and sufficiency, observing, with regard to the system aimed at the Prevention of Money Laundering and Terrorist Financing (PLD/FT), whether the procedures established in Annex I have been adopted; V - Business Plan: adherence of the affiliated singular cooperative to the economic-financial feasibility study and to the business plan presented at the time of incorporation or statutory amendments, verify: a) whether there is compatibility between the current situation of the cooperative and the economic-financial feasibility study, especially with regard to meeting the targets provided for and consolidated in the projection of the equity and results structure; b) whether the cooperative evidences, in the management report accompanying the semiannual financial statements, the adequacy of the operations carried out to the objectives established in the economic-financial feasibility study and in the business plan, during the three fiscal years after the start of operations or the approval of the amendment request; c) whether the person responsible for the external audit has been opining, in a specific item of the report referring to compliance with legal and regulatory provisions, on the adequacy referred to in subitem "b"; VI - compliance with other legal and regulatory requirements: verify, in particular: a) observance of operational limits; b) the submission of mandatory documents to the Central Bank of Brazil; c) the consistency of the data sent to the Central Bank of Brazil systems, especially those relating to the Credit Information System (SCR) and the Information System on Entities of Interest to the Central Bank (Unicad); d) the procedures for the adequate formalization and supervision of
rural credit operations, when applicable; e) the procedures for acting as agent of the Agricultural Activity Guarantee Program (Proagro), when applicable; VII - Economic-Financial Situation: apply the analysis procedures listed in Annex II, observing the option provided for in art. 3, sole paragraph, item II, of Circular 3.400, of 2008. 2. In the report prepared by the central credit cooperative, regarding the periodic direct inspections carried out at the respective affiliated singular cooperatives, in the form of art. 4, item II, of Circular 3.400, of 2008, in addition to the provisions of item 1, the occurrence of improprieties, irregularities, internal control deficiencies, abnormalities or relevant facts must be highlighted, including: I - difficulties offered by the affiliated singular cooperatives in relation to the inspections carried out by the central cooperative; II - non-compliance with legal, regulatory or internal system rules, as well as determinations of the central cooperative; III - lack of adherence of the situation observed in the affiliated singular cooperatives to the regularization plans, the economic-financial feasibility studies and the business plans presented to the Central Bank of Brazil; IV - existence or evidence of errors or fraud, as defined in art. 23 of the Regulation annexed to Resolution 3.198, of 27 May 2004, or other irregular situations pointed out in the reports of external audits carried out at the affiliated singular cooperatives; V - situations pointed out in internal audit, if this has been carried out by a unit of the singular cooperative itself, or by an independent auditor, based on art. 2, § 3, of Resolution 2.554, of 24 September 1998, with the wording given to it by Resolution 3.056, of 19 December 2002; VI - acts understood as mismanagement practiced by management bodies; VII - reports received about fraud in affiliates; VIII - situations that may put the continuity of the cooperative at risk; IX - concentration of loan operations; X - crisis or situation that evidences liquidity problems; XI - inclusions and exclusions of affiliates. 3. The periodic direct inspection report mentioned in item 2 shall consist of at least the following documents: I - accounting and management working papers prepared during the inspection, including a brief description of the internal control systems and risk management systems of the affiliated singular cooperative, and of the information technology system used; II - report on liquidity loans granted within the scope of financial centralization, informing the individual debit balances according to the criteria of monthly average and end-of-month position; III - summary of irregularities identified in the previous inspection, informing the degree of remediation and any additional measures adopted; IV - summary of irregularities found in the direct inspection, duly referenced to the breached rules, the supporting documentation attached and the measures adopted for
regularization, identifying, whenever possible, the directors or managers responsible for the irregularities; V - summary of adjustments in the equity and financial position of the affiliated singular cooperative, when relevant in terms of effect on the Reference Equity (PR) after adjustments; VI - responses from the affiliated singular cooperative regarding the correction of the deficiencies and non-compliances identified, accompanied by an analysis by the central credit cooperative on the fulfillment of the planned measures; VII - conclusive opinion on the affiliated singular cooperative. 4. The information recorded in compliance with item 2 of this circular letter must be accompanied, where applicable, by clarifications on the initial measures adopted by the singular cooperative and its respective central cooperative aimed at correcting the deficiencies and irregularities identified. The related measures must be included in subsequent reports until the problem is resolved. 5. To perform the processes provided for in art. 1, items II to IV, of Circular 3.400, of 2008, central credit cooperatives must observe at least the following procedures: I - monitor the situations identified in the internal and external audit reports carried out at the affiliated singular cooperatives, related to deficiencies in adherence to legal and regulatory rules, compliance with internal operational rules, adequacy of control and risk management systems, and adequacy of financial statements, analyzing the measures planned to eliminate the problems found, as well as the effective implementation of said measures; II - develop and implement indirect monitoring systems capable of timely identifying, at least: a) situations of equity or financial imbalance of the affiliated singular cooperatives; b) abnormal exposure to credit, liquidity, operational, market risks or others that may, individually or collectively, compromise the soundness of the affiliated cooperatives or the associated system; c) violations of legal and regulatory rules or internal operational rules; III - monitor the regularization plans, economic-financial feasibility studies and business plans prepared by the affiliated singular cooperatives, required by the Central Bank of Brazil, analyzing the fulfillment of the planned measures and targets and compliance with the execution schedule. 6. The report prepared by the central credit cooperative on the execution of the schedule of direct inspections, referred to in art. 1, item V, subitem "b", of Circular 3.400, of 2008, must contain at least the following information: I - list of affiliated singular credit cooperatives that were not subjected to inspection in all aspects provided for in the original schedule, detailing at least the execution period of the on-site work, the base date of the financial statements analyzed and the number of personnel used; II - list of affiliated singular credit cooperatives that were not subjected to inspection in all items
provided for in the original schedule, detailing, in addition to the information requested in item I, if applicable, the reasons for non-compliance with the original planning, case by case, and the aspects that, although planned, were not examined in the inspection. 7. The submission of the report mentioned in item 6, referring to the direct inspection work carried out in 2008, is waived. 8. This circular letter enters into force on the date of its publication. 9. Comunicado 10.968, of 25 April 2003, is hereby revoked. Brasília, 27 August 2008. Department of Supervision of Cooperatives and Non-Banking Institutions Gilson Marcos Balliana Head ANNEX I Procedures for Assessment of the Control System for the Prevention of Money Laundering and Terrorist Financing (PLD/FT) As part of the process of verifying the adequacy, compliance and sufficiency of the internal control systems aimed at the Prevention of Money Laundering and Terrorist Financing (PLD/FT) in credit cooperatives, the following must be observed: I - whether the singular credit cooperative defines guidelines, actions and criteria or adopts procedures indicated by the central cooperative or by the confederation, formalized in manuals, internal instructions, code of ethics and conduct or other internal documents accessible to all employees; II - the establishment of specific competences, attributions and responsibilities, defined and segregated, of the employees involved with PLD/FT work; III - the existence of automated tools, if applicable, for detecting operations subject to reporting to the Central Bank of Brazil, covering all products and services of the cooperative; IV - the maintenance of a complete and up-to-date customer registry database, encompassing procedures for identifying the customer and their legal representatives, with the ability to identify the respective risk profile, including the analysis of compatibility between the customer's financial capacity and economic activity, as well as special procedures for monitoring politically exposed persons; V - the existence of procedures for recording and documenting occurrences related to PLD/FT, with selection and analysis of suspicious occurrences and prior examination of new products and services to identify vulnerabilities; VI - the reporting of operations as established in art. 4 of Circular 2.852, of 3 December 1998, and in Carta-Circular 3.098, of 11 June 2003. ANNEX II Procedures for Analysis of Accounting and Financial Information of Credit Cooperatives As part of the process of verifying the economic and financial situation of credit cooperatives, the following examinations must be carried out, when applicable, on the accounting and financial information: I - cash and cash equivalents, financial investments and derivative positions: a) carrying out cash counts and verification of the regularity and adequacy of the periodic counts carried out by the cooperative itself, to the extent deemed necessary; b) verification of
bank reconciliations; c) proof of the existence of financial investments; d) verification of risk diversification limits; e) assessment of financial centralization, under the rules of the system; II - credit operations: a) assessment of the risk classification model; b) determination of renegotiated operations with indications of "freezing"; c) verification of compliance with the criteria established with regard to control, accounting reconciliation and recognition of income; d) verification of the classification of operations, with special attention to the application of art. 3 of Resolution 2.682, of 21 December 1999; e) analysis of the degree of concentration of operations; f) verification of the existence of operations with non-members and non-eligible members; g) assessment of the structure of rates and terms practiced, identifying any distortions that may exist; h) verification of the timeliness, effectiveness and cost of collection and recovery procedures for credits in abnormal course; i) analysis of the adequate recording of credit operations assigned with retention of risk or benefit, observing the criteria for sale or transfer of assets established in Resolution 3.533, of 31 January 2008; j) analysis of the quality of the credit operations portfolio, on a sample basis, considering at least the following items: 1. verification of compliance with the requirements relating to the proposal, approval and formalization of the operation, especially: registration update, registration restrictions, including previous occurrences of delays and defaults in the cooperative itself, decision-making levels, economic and financial analysis (payment capacity), and formalization, including the registration of guarantees; 2. verification of the quality of guarantees, observing, in the case of real guarantee, the value and feasibility of realization, and in the case of surety, the payment capacity of the guarantor and the existence of "cross guarantees"; 3. determination of renewed operations with incorporation of interest and charges from a previous operation, and verification of compliance with the provisions of art. 8 of Resolution 2.682, of 1999; 4. verification of the consistency of balances by means of circularization tests, the need and extent of which should be established according to the degree of reliability of the management and internal controls of the cooperative; 5. preparation of a conclusive opinion on the risk of the operation, according to the regulatory risk levels, with adjustment being determined whenever the original classification corresponds to a lower risk level; 6. the sample used in this procedure must be composed so as to reflect the cooperative's risk, in accordance with clearly demonstrable objective criteria, which must mandatorily consider renegotiated transactions, and transactions with directors and their respective economic groups; III - other credits and other amounts and assets: a) identification of the origin,
analytical composition, relevance and documentary support of the relevant balances; b) verification of the origin of assets not intended for own use, with emphasis on aspects relating to the opportunity, valuation and formalization of dation-in-payment transactions, including the identification of any losses and favoritism; c) analysis of compliance with the periods of permanence in the assets of assets not for own use; d) examination of honored guarantees and sureties, paying attention to the measures aimed at recovering the respective amounts and the criteria adopted for setting up provisions; IV - permanent: verification of compliance with regulatory requirements regarding registration, valuation and compliance with limits; V - deposits: a) verification of compliance with the criteria established for controlling funding as to accounting classification and reconciliation and recognition of expenses; b) verification of the degree of concentration; c) verification of the existence of deposits in the name of non-members or of persons who cannot become members; d) assessment of the structure of the remuneration rates practiced, identifying any distortions that may exist; e) verification of compliance with regulatory requirements relating to the opening, maintenance and closing of deposit accounts, and with procedures relating to the identification and prevention of money laundering crimes; VI - other liabilities: a) identification of the origin, analytical composition, relevance and documentary support of the relevant balances; b) analysis of the accounting subgroup Liabilities for Loans and Transfers and the direction of funds to the intended purposes; c) verification of the existence of any contingent liabilities; VII - equity: a) verification of the existence of members who do not meet the conditions for membership provided for in the bylaws; b) verification of the existence of practices relating to the granting of loans for subscription of capital shares and revolving capital, as well as the regularity of redemptions; c) verification of the regularity of procedures relating to the distribution of surpluses and apportionment of losses, including as to the calculation criteria provided for in the bylaws; d) verification of adequate control of the capital account (by member); VIII - income statement accounts: a) adequacy of the volume and composition of expenses and revenues in relation to the institution's size, including the performance of tests of accrual and setting up of provisions; b) verification of service provision contracts entered into with third parties by the criteria of relevance and cost; c) identification of the composition of balances relating to synthetic-nature line items, such as other expenses and other revenues.