CMN Resolution No. 5,135 — Establishes Emergency Measures for Loss Communication, Verification, and Coverage Calculation Due to Floods in Rio Grande do Sul

Resolution No. 4,587

The current text of the MCR is available at the following electronic address: www3.bcb.gov.br/mcr.

CMN RESOLUTION NO. 5,135,
OF MAY 13, 2024

Establishes emergency measures regarding the procedures for communicating losses, verifying losses, and calculating coverage, due to floods, waterlogging, intense rains, flash floods, gales, landslides, or inundations in the state of Rio Grande do Sul, for operations classified under the Rural Activity Guarantee Program (Proagro) as set forth in Chapter 12 of the Rural Credit Manual (MCR).

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the National Monetary Council, in an extraordinary session held on May 13, 2024, considering the provisions of Article 4, items VI and VIII, of the aforementioned law, Articles 4 and 14 of Law No. 4,829 of November 5, 1965, Articles 59, 65-A, 65-B, and 66-A of Law No. 8,171 of January 17, 1991, and Articles 4 and 7 of Decree No. 175 of July 10, 1991,

R E S O L V E S:

Article

1. Section 12 (Transitional Norms) of Chapter 12 (Rural Activity Guarantee Program) of the Rural Credit Manual (MCR) is hereby instituted, with the following provisions:

“1 - This Section provides for the adoption of exceptional procedures to be observed by agents of the Rural Activity Guarantee Program (Proagro), where applicable, regarding:

a) communication of losses;

b) verification of losses; and

c) analysis and judgment of the Proagro coverage request.

2 - The procedures governed by this Section apply to enterprises classified under Proagro located in municipalities of the state of Rio Grande do Sul, with a declaration of emergency or state of public calamity during the period from April 30 to May 20, 2024, recognized by the federal government, due to floods, waterlogging, intense rains, flash floods, gales, landslides, or inundations, in the following situations:

a) the communication of losses was made by the beneficiary between April 30, 2024, and June 30, 2024;

b) the communication of losses was delivered to the Proagro agent by April 30, 2024, but:

I - the initial visit to the property by the technician responsible for verifying losses has not yet been conducted, and it is not possible to conduct the visit due to mobility restrictions caused by the events described in the caput; or

II - a subsequent visit by the technician is required to conclude the verification of losses, and this is not feasible due to mobility restrictions caused by the events described in the caput.

3 - The provisions of this Section apply only to enterprises:

a) contracted by April 30, 2024; or

b) whose harvest was not fully completed by April 30, 2024.

Communication of Loss Occurrence

4 - Until June 30, 2024, the beneficiary is authorized to communicate losses remotely, with the signature waived, containing all information necessary for the correct completion of the MCR - Document 2 (Proagro - Communication of Losses) by the Proagro agent, through:

a) the sending of an email;

b) an application made available by the Proagro agent; or

c) other channels made available by the Proagro agent for this purpose, including contact via telephone.

5 - The Proagro agent is responsible for the origin and authenticity of the loss communication made in accordance with item 4, and must, at a minimum, ensure that the phone number, electronic address, or device used to access the application corresponds to that registered by the beneficiary.

6 - The requirement for the agent to release the area is waived for harvests conducted between April 30 and June 30, 2024, with the purpose of minimizing losses resulting from the event causing the losses and/or postponing the harvest date, in the following cases:

a) the beneficiary is unable to communicate losses due to the impacts caused by the events described in the caput of item 2; or

b) when it is not possible to conduct on-site loss verification services, as per item 9.

7 - The deadline provided for in MCR 12-4-7 is extended from 3 (three) to 20 (twenty) business days.

Verification of Losses

8 - In cases where it is possible for the technician responsible for verifying losses or a duly qualified agent of the Proagro to travel to the rural property, all regulatory procedures provided for in MCR 12-4 must be observed for the preparation of the loss verification report (MCR - Document 3).

9 - The verification of losses is authorized through remote sensing tools and/or based on information available to the technical advisory service at the portfolio level of the agent, with on-site loss verification services waived, in the following cases:

a) the travel of the technician responsible for verifying losses or the agent’s inspector to the rural property is proven to be unfeasible due to mobility restrictions caused by the events described in the caput of item 2; or

b) the communication of losses is made on a date when an on-site visit, due to the passage of time, is no longer capable of attesting to the cause and extent of the losses.

10 - The information contained in the preliminary report must be used in the judgment summary, except regarding the productivity obtained, which must observe the provisions of item 12-“c”, in the following cases:

a) an initial visit by the technician responsible for verifying losses to the enterprise has already been conducted; and

b) the preliminary loss verification report has already been delivered to the Proagro agent, but the second visit required due to the worsening of losses from a continuous event is unfeasible due to mobility restrictions caused by the events described in the caput of item 2.

11 - In the situation provided for in item 9, the fields of the loss verification report, as described in MCR - Document 3, must be completed where applicable, and the following must be included in an attached sheet:

a) the reasons for the impossibility of completing any field provided for in MCR - Document 3;

b) any information or clarifications necessary due to the execution of the exceptional procedures provided for in this Section.

12 - When completing the loss verification report in the situation provided for in item 9, the technician responsible for verifying losses, observing the provisions of MCR 12-4-10, must adopt the following parameters, where applicable:

a) verification of non-harvest:

I - compliance with the provisions of item 3, item “b”, must be proven through the use of remote sensing tools;

II - if, as a result of the procedure provided for in item I, it is verified that the harvest had already been fully completed before April 30, 2024, the communication of losses must be considered improper;

b) verified area: the measurement of the flooded area must be performed using remote sensing tools;

c) considered revenues: for the purpose of calculating the revenues obtained by the beneficiary in the enterprise, the Proagro agent must use:

I - the average productivity per municipality, whenever available, or for the region where the enterprise is located, published by the Public Company for Technical Assistance and Rural Extension (Emater) or similar entities;

II - in the absence of data from Emater or similar entities, average productivity data published by the Brazilian Institute of Geography and Statistics (IBGE) must be used;

III - the market price published by a reputable entity that conducts regional/local price research, provided it is verifiable and traceable.

13 - When the loss verification report is prepared outside the Proagro agent’s own staff, the technician responsible for verifying losses may deliver the report to the agent remotely, using the channels made available by the agent, which must ensure, under their responsibility, the origin and authenticity of the document, applying, at a minimum, the measures provided for in item 5.

14 - The remuneration of the technician responsible for preparing the loss verification report as provided for in this Section is R$330.00 (three hundred and thirty reais) per report delivered.

15 - In the cases described in item 2, the deduction provided for in MCR 12-7-6 regarding business days of delay between April 30 and June 30, 2024, shall not be applied.

Calculation of Coverage

16 - Regarding the procedures for calculating coverage:

a) in the case described in item 8, all regulatory procedures provided for in MCR 12-5 must be observed for the analysis and judgment of the coverage request, including the completion of the judgment summary (MCR - Document 4);

b) in the case provided for in item 9, the Proagro agent must complete MCR - Document 4 based on the parameters established in this Section.

17 - If a reduction in area is found during the procedure described in item “b” of item 12, a proportional deduction must be applied when completing the judgment summary, relative to the reduction in area, concerning the non-application of inputs and the non-performance of services provided in the budget.

18 - Regarding the verification of budget expenses:

a) the presentation of invoices by the beneficiary to the Proagro agent is waived;

b) if no reduction in area is found during the procedure described in item “b” of item 12, the full application of inputs and the performance of all services provided in the budget are presumed; and

c) in the calculation of coverage, a 5% (five percent) deduction must be applied to the sum of the value of released credit installments, plus respective financial charges, to own resources, minimum income guarantee, and investment share.

Final Provisions

19 - The Central Bank of Brazil, in its capacity as administrator of Proagro, is authorized to regulate any operational details necessary for the execution of the provisions of this Section.

20 - The provisions of MCR 12 that do not conflict with the provisions of this Section apply to the loss communications described in item 2.” (NR)

Article 2. This Resolution enters into force on the date of its publication.

AILTON DE AQUINO
SANTOS
Substitute President of the Central Bank of Brazil