Circular No. 3734 — Establishes the Local Currency Payment System (SML) between the Central Bank of Brazil and the Central Bank of Uruguay

The Collegiate Board of the Central Bank of Brazil, in a session held on November 26, 2014, based on the provisions of Article 13 of Resolution No. 4,331, of May 26, 2014,

R E S O L V E :

Art. 1º The operation, within the country, of the Local Currency Payment System (SML) between Brazil and Uruguay, established between the Central Bank of Brazil (BCB) and the Central Bank of Uruguay (BCU), shall follow the discipline set forth in the Regulation attached to this Circular.

Art. 2º This Circular enters into force on December 1, 2014.

Luiz Awazu Pereira da Silva
Director of International Affairs and Corporate Risk Management

REGULATION ATTACHED TO CIRCULAR NO. 3,734, OF NOVEMBER 26, 2014

Regulates the operation, within the country, of the Local Currency Payment System (SML) between the Central Bank of Brazil (BCB) and the Central Bank of Uruguay (BCU).

Art. 1º For the purposes of this Regulation, the following definitions are adopted:

I - business day: any day of the year in which banking institutions are open for business simultaneously in Brazil and Uruguay;

II - recipient: any beneficiary of funds originating from the Local Currency Payment System (SML);

III - sender: any person responsible for the payment of an SML banking order;

IV - authorized institution: a national financial institution authorized to operationalize the SML within the scope of the agreement between the Central Bank of Brazil (BCB) and the Central Bank of Uruguay (BCU);

V - SML rate: the exchange rate for converting Uruguayan pesos into reais, published by the BCB on business days, until 5:30 PM, to be used in relations between national authorized institutions and the BCB.

Sole Paragraph. The authorized institution cannot be classified as a recipient or sender, except when operating in the SML on its own behalf.

Art. 2º Within the scope of the agreement between the BCB and the BCU, resource transfers may be carried out, with a view to the payment of:

I - international trade operations in goods and services associated with these operations, such as freight and insurance;

II - international trade operations in various services not subject to the registration provided for in Resolution No. 3,844, of March 23, 2010;

III - pensions and annuities and other current unilateral transfers described in Annex V of Circular No. 3,690, of December 16, 2013.

§ 1º Export operations must have a maximum term of 360 days for payment.

§ 2º Registrations related to advance receipts of export revenues with a term exceeding 360 days will not be admitted;

§ 3º With respect to the operations set forth in item II of the caput, transfers related to financial services are prohibited.

Art. 3º The transfer of resources within the scope of the agreement between the BCB and the BCU may be denominated in reais or in Uruguayan pesos.

Sole Paragraph: With respect to export operations, the currency denomination must be identical to that specified in the documents supporting the operation.

Art. 4º The registration and cancellation of payment orders and the registration of credit returns must be carried out by authorized institutions on business days, during the period from 8:00 AM to 1:00 PM (Brasília time).

§ 1º The cancellation of a payment order must be requested by the authorized institution to the BCB on the same day as the corresponding registration.

§ 2º The registration of a credit return by an authorized institution implies authorization to carry out the corresponding debit, on the same day, in its bank reserve or settlement account.

Art. 5º To carry out an operation through the SML, the authorized institution must obtain from the sender, and provide to the BCB, the following data regarding the beneficiary in Uruguay:

I - full name of the natural or legal person (corporate name or trade name);

II - Unique Tax Registry (RUT) or Identity Card (CedIdent);

III - Unique Identification Code of the Financial Institution and Branch (BIC).

Art. 6º The BCB will promptly return to the authorized institution any payment order that presents irregularities or signs of their occurrence.

Art. 7º For the purpose of calculating the value in reais for payment by the national sender, when the denomination currency is the Uruguayan peso, the exchange rate will be the rate freely agreed upon with the authorized institution.

§ 1º By 12:00 PM on the business day following the registration of the operation by the authorized institution, the BCB will debit, in the bank reserve or settlement account of the said institution, the value in reais of this operation, or its equivalent in national currency, if it was registered in Uruguayan pesos.

§ 2º For the conversion of the value in reais to be debited by the BCB, the SML rate of the day of the operation's registration will be used.

Art. 8º By 12:00 PM on the business day following the receipt of a payment order from the BCU, the BCB will credit, in reais and in the bank reserve or settlement account of the authorized institution, the value related to the operation.

Sole Paragraph. The BCB must use the SML rate of the day of the operation's registration for the conversion into reais of operations registered in Uruguayan pesos.

Art. 9º The transfer of resources from the BCB to the authorized institution, in the case of the return of payments made in the SML, will be carried out on the business day following the receipt of the corresponding values from the BCU, applying the SML rate of the day of the return's registration.

Art. 10. The values resulting from currency conversion will be rounded to two decimal places by increasing the second digit to the next unit when the third digit is equal to or greater than 5 (five); keeping the second digit when the third digit is less than 5 (five).

Art. 11. The documents related to operations carried out in the SML must be kept in the archive of the authorized institution, in physical or electronic media, for a period of 5 (five) years counted from the end of the fiscal year in which the corresponding payments are settled.

Art. 12. The agreement between the BCB and the BCU within the scope of the SML will be managed and operated by the Division of Financial Operations of International Agreements (Disip), of the Department of International Affairs (Derin), which, among other duties:

I - will issue specific operational guidelines on the functioning of the SML; and

II - will manage the registry of national authorized institutions, which is published on the BCB's website.