Resolution CMN No. 1620 - Authorization for Foreign Exchange Operations - Reformulation of Criteria

RESOLUTION NO. 001620

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the MONETARY COUNCIL NATIONAL, in a session held on this date, having regard to the provisions of Article 4, items V and XXXI, of said Law,

RESOLVES:

I - The financial institution, in order to qualify for obtaining authorization to operate in foreign exchange, must have capital no lower than the minimum regulatory levels and meet the following basic requirements:

a) be constituted as a commercial bank, investment bank, or multiple bank;

b) in the case of an investment bank, whenever it is linked to a commercial bank through common control, double accreditation is prohibited; the controlling shareholder must choose authorization to operate in foreign exchange for one or the other institution. However, double accreditation will be admitted in the event of the existence of exclusive minority shareholders of the investment bank, holding a minimum percentage of its voting capital, fixed by the Central Bank;

c) in the case of a multiple financial institution, possess a commercial or investment portfolio, in the latter case observing the provisions of item "b";

d) designate, among the Directors of the Institution approved by the Central Bank, the one who, possessing notable experience in bank administration, will be responsible for foreign exchange operations;

e) designate a person responsible for operations in each of the authorized branches, who holds proven experience in conducting foreign exchange services in general, for a period of no less than 5 (five) years, acquired in the Country;

f) dispose of the operational facilities and conditions necessary for conducting foreign exchange business, according to a project to be presented to the Central Bank.

II - Meeting the requirements indicated in the previous item, the authorization to operate in foreign exchange may be granted at the sole discretion of the Central Bank.

III - The authorization obtained by financial institutions to operate in foreign exchange implies the staunch defense of the country's foreign exchange reserves, both regarding the timely realization of revenues from exports and other rights, and regarding the legality and enforceability of operations from which payments abroad may arise or result. For this purpose, it is the duty of these institutions to provide their operations with the necessary precautions, as well as to keep them under permanent monitoring, in order to ensure their regular settlement.

IV - As a consequence of the provisions in the preceding item, institutions authorized to operate in foreign exchange must certify the qualification of their clients buying or selling foreign currency, users of international banking services, for the foreign exchange operations they intend to carry out, through the realization, among others, of necessary credit evaluations, performance assessments, commercial procedures, and financial capacity.

V - Once the authorization for the practice of foreign exchange operations is granted, these must be started within a maximum and non-extendable period of 180 (one hundred and eighty) days, counted from the date of publication of the respective dispatch in the Official Gazette of the Union, under penalty of expiration of the permission, also applicable in the event of discontinuation in the exercise of operations.

VI - The requirements dealt with in items I, II, and V of this Resolution do not apply to accreditations for the realization of operations under the regime established by Resolution No. 1,552 of December 22, 1988.

VII - The Central Bank will issue the norms deemed necessary for the execution of the provisions of this Resolution.

VIII - This Resolution enters into force on the date of its publication, rescinding Resolutions Nos. 663 of December 17, 1980, 1,250 of January 28, 1987, and 1,496 of June 30, 1988.

Brasília-DF, July 26, 1989

Wadico Waldir Bucchi
Interim President