Circular No. 1589 — Foreign Currency Credit Lines - Export Financing for Income Tax Exemption on Interest Remittances Abroad. Creation of Form for Proof of Application of External Resources. Decree-Law 2303 of 21/11/86

CIRCULAR NO. 001589

TO
AUTHORIZED BANKING ESTABLISHMENTS FOR FOREIGN EXCHANGE OPERATIONS

SUBSTITUTES THE "FOREIGN CURRENCY CREDIT LINES" FORM. DECREE-LAW NO. 2,303, OF 21.11.86 - INTEREST - INCOME TAX.

WE COMMUNICATE THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN VIEW OF THE PROVISIONS OF ARTICLE 11 OF DECREE-LAW NO. 2,303, OF 21.11.86, HAS DECIDED THAT:

ART. 1. FOR THE PURPOSE OF PROVING THE APPLICATION OF CREDIT RESOURCES OBTAINED ABROAD FOR FINANCING BRAZILIAN EXPORTS, IN ORDER TO QUALIFY FOR THE INCOME TAX EXEMPTION PROVIDED FOR IN ARTICLE 1 OF DECREE-LAW NO. 815, OF 4.9.69, WITH THE WORDING GIVEN BY ARTICLE 87 OF LAW NO. 7,450, OF 23.12.85, AUTHORIZED BANKING ESTABLISHMENTS FOR FOREIGN EXCHANGE OPERATIONS MUST USE THE FORM OF THE ANNEXED MODEL, IN WHICH THE DAILY BALANCES IN FOREIGN CURRENCIES, EXPRESSED BY THEIR GLOBAL EQUIVALENCE IN UNITED STATES DOLLARS, WILL BE REGISTERED, PRESENTED IN THE FOLLOWING ACCOUNTS:

I - OF THE ASSET:
A) FOREIGN EXCHANGE PURCHASED FOR SETTLEMENT

• SUBTITLES: EXPORTATION - LETTERS TO BE DELIVERED
  EXPORTATION - LETTERS DELIVERED; B) FOREIGN EXCHANGE AND DOCUMENTS AT TERM IN FOREIGN CURRENCIES; C) FINANCING IN FOREIGN CURRENCIES;

II - OF THE LIABILITY:
A) OBLIGATIONS IN FOREIGN CURRENCIES

• SUBTITLES: BANK ACCEPTANCES LINKED TO EXPORTATION
  EXPORT LETTERS DISCOUNTED
  EXPORT FINANCING, UP TO 360 DAYS EXPORT FINANCING, ABOVE 360 DAYS; B) OBLIGATIONS - SPECIAL CREDIT LINES, IN THE COUNTRY
• SUBTITLES: EXPORT FINANCING - CIRCULAR NO. 1,163
  PROEXPORT - CAMMUNICADO NO. 616 DISCOUNT OF FOREIGN EXCHANGE-CCR; C) ACCOUNTS IN FOREIGN CURRENCIES, IN THE COUNTRY - FLUCTUATING RATES
• SUBTITLES: OF TIME DEPOSITS
  OF ADVANCE NOTICE DEPOSITS.

ART. 2. THE BASE FOR CALCULATING THE INCIDENCE OF INCOME TAX REFERRED TO IN THE SINGLE PARAGRAPH OF ARTICLE 12 OF DECREE-LAW NO. 2,303, OF 21.11.86, SHALL BE OBTAINED BY APPLYING THE HIGHEST INTEREST RATE AMONG THOSE IN FORCE FOR THE SET OF OBLIGATIONS FOR CREDITS IN FOREIGN CURRENCIES OBTAINED ABROAD FOR FINANCING BRAZILIAN EXPORTS, EXISTING ON THE DAY (FIELD 14 OF THE ANNEXED MAP), ON THE VALUE NOT APPLIED IN EXPORT FINANCING, DETERMINED DAILY BASED ON THE BALANCES OF THE ACCOUNTS INDICATED IN THE PREVIOUS ARTICLE, AND REGISTERED IN FIELD 11 OF THE ANNEXED MAP, LIMITED TO THE AMOUNT REGISTERED IN FIELD 7.

ART. 3. IN THE EVENT THAT OBLIGATIONS FOR CREDITS IN FOREIGN CURRENCIES OBTAINED FOR FINANCING EXPORTS, IN THE SAME CURRENCY, REPRESENT A PERCENTAGE EQUAL TO OR GREATER THAN 70% (SEVENTY PERCENT) OF THE TOTALITY OF THE OBLIGATIONS OF THE SPECIES EXISTING ON THE DAY, FOR THE PURPOSES OF THE PREVIOUS ARTICLE, THE HIGHEST INTEREST RATE IN FORCE FOR THE OBLIGATIONS ASSUMED IN THAT CURRENCY OF GREATER CONCENTRATION WILL BE USED.

ART. 4. FIELDS 12, 13 AND 14 OF THE ANNEXED MAP MUST BE PROPERLY FILLED OUT, EVEN IF, ON THE DAY, THERE IS NO VALUE TO BE REGISTERED IN ITS FIELD 11.

ART. 5. THE CONVERSION INTO NATIONAL CURRENCY OF THE BASE OF CALCULATION SO OBTAINED WILL BE MADE BY APPLYING THE COVERAGE EXCHANGE RATE IN FORCE FOR THE UNITED STATES DOLLAR ON THE DAY OF PAYMENT OF THE TAX.

ART. 6. CONSEQUENTLY, THE SHEETS NECESSARY FOR THE UPDATE OF THE CONSOLIDATION OF FOREIGN EXCHANGE NORMS - CNC ARE ANNEXED.

ART. 7. CIRCULAR NO. 1,502, OF 26.6.89, IS HEREBY REPEALED.

ART. 8. THIS CIRCULAR SHALL ENTER INTO FORCE ON THE DATE OF ITS PUBLICATION.

BRASÍLIA (DF), MARCH 2, 1990

ARNIM LORE
DIRECTOR

NOTE - THE MAP PUBLISHED BY THIS CIRCULAR IS AVAILABLE TO INTERESTED PARTIES, BY COPY, AT THE HEADQUARTERS AND REGIONAL DEPARTMENTS OF THIS CENTRAL BANK OF BRAZIL.