Resolution CMN No. 2228 — Amends Provisions of Resolution No. 1,065 of December 5, 1985, Which Regulates the Application of Penalties

RESOLUTION NO. 2228

Amends provisions of Resolution No. 1,065, of December 5, 1985, which regulates the application of penalties.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes it public that the MONETARY COUNCIL, in a session held on December 20, 1995, in view of the provisions of Article 4, item VIII, of the aforementioned Law, and based on Article 67, caput and paragraph 2, of Law No. 9,069, of June 29, 1995,

RESOLVES:

Art. 1. Amend the Regulation annexed to Resolution No. 1,065, of December 5, 1985, Title 5 - Enforcement Action, Chapter 3 - Administrative Process, Sections 3 - Development, 7 - Defense and 11 - Efficacy and Execution of Decisions; and Chapter 4 - Penalty, Section 2 - Monetary Fine.

Art. 2. The Manual of Norms and Instructions of the Central Bank of Brazil, MNI 5-3-3, 5-3-7, 5-3-11 and 5-4-2, shall enter into force with the alterations contained in the attached sheets.

Art. 3. This Resolution enters into force on the date of its publication.

Brasília, December 20, 1995

Gustavo Jorge Laboissière Loyola
President

TITLE : ENFORCEMENT ACTION - 5
CHAPTER : ADMINISTRATIVE PROCESS - 3
SECTION : Development - 3

1 - The administrative process is initiated due to non-compliance with a legal or regulatory provision. (Res. 1,065)

a) against financial institutions, their directors, members of boards and managers, as well as natural or legal persons equated to them, in accordance with Article 17 of Law No. 4,595, of December 31, 1964. (Res. 1,065)

b) against all those who, in accordance with paragraph 1 of Article 18 of the same Law, are subject to its provisions and disciplines. (Res. 1,065)

c) against any other persons who, directly or indirectly, irregularly interfere in the financial, foreign exchange and capital markets. (Res. 1,065)

2 - Public or private legal entities that have, as their main or ancillary activity, and natural persons who practice, permanently or occasionally, in a manner characterizing speculative interference in the market, the following operations or services, jointly or individually, are equated to financial institutions for the purposes of the preceding item. (Res. 1,065)

a) capture or intermediation of financial resources from third parties. (Res. 1,065)

b) application of own financial resources or those of third parties. (Res. 1,065)

c) custody of value belonging to third parties. (Res. 1,065)

d) irregular operation of purchase and sale of foreign currency. (Res. 1,065)

e) unauthorized practice of any other financial operation. (Res. 1,065)

3 - The process begins with a violation report or summons. (Res. 1,065)

4 - The procedure will be developed at the headquarters of the Central Bank of Brazil, in Brasília (DF), respecting the rights of the accused. (Res. 1,065)

5 - In the interest of the administration of the Central Bank of Brazil or when there is manifest convenience for the accused, stated in a written request, certain acts may be carried out at the Regional Delegacies. (Res. 1,065)

6 - The administrative process comprises: (Res. 1,065)

a) drafting of the violation report or summons; (Res. 1,065)

b) attachment of supporting documents, when possible; (Res. 1,065)

c) information on the background of the accused; (Res. 1,065)

d) review of the records by the accused, if requested; (Res. 1,065)

e) receipt of the defense and its attachment, or information regarding its non-presentation; (Res. 1,065)

f) examinations or diligences, if necessary; (Res. 1,065)

g) examination of the regularity of the process and forwarding to the Central Unit, if applicable; (Res. 1,065)

h) forwarding of the records to the competent authority to render a decision; (Res. 1,065)

i) reasoned decision; (Res. 1,065)

j) notification/communication to the interested party of the rendered decision;

l) receipt of the appeal and its attachment; (Res. 1,065)

m) forwarding of the records to the competent body; (Res. 1,065)

n) notification to the accused to pay the fine;

o) publication of the applied penalty in the Official Gazette.

7 - When the practice of several infractions is verified, the Central Bank of Brazil may investigate responsibilities through one or several distinct processes, depending on the nature of the occurrences. (Res. 1,065)

TITLE : ENFORCEMENT ACTION - 5
CHAPTER : ADMINISTRATIVE PROCESS - 3
SECTION : Defense - 7

1 - Once the summons has been served or the violation report drafted, the period for defense begins to run, to be submitted in writing, supported by the documents on which it is based and signed by the accused, legal representative or attorney with express powers. (Res. 1,065)

2 - A period of no less than 30 (thirty) days will be granted for the presentation of a defense. (Res. 1,065)

3 - If there are two (2) or more accused, the period for presenting a defense or any manifestation in the records will be common, counted from the last notification. When the accused are represented by different attorneys, the periods provided for in this item are counted in double. (Res. 1,970-Art.1 and sole paragraph)

4 - The defense may, to avoid forfeiture, be signed by a person without a power of attorney instrument, who undertakes to attach it within the non-extendable period of 10 (ten) days, with powers of ratification. (Res. 1,065)

5 - If the power of attorney instrument is not exhibited after the period has elapsed, the defense will be considered non-existent.

6 - During the period for offering a defense, it is permitted for the accused, legal representative or attorney with express powers duly constituted, to review the process without request, during the normal business hours of the Central Bank of Brazil, at the location designated in the summons or violation report. (Res. 1,065)

7 - The removal of the process records is permitted, upon request by a duly constituted attorney, for a period of 5 (five) days. (Res. 1,065)

8 - The provisions of the previous item do not apply when the following hypotheses occur, jointly or separately:

a) existence of two or more accused with different attorneys and common defense periods; (Res. 1,065)

b) existence of an original document of difficult restoration; (Res. 1,065)

c) occurrence of relevant circumstances justifying the retention of the records at the Central Bank of Brazil, recognized by the authority in a motivated dispatch, issued ex officio or upon request by the interested party. (Res. 1,065)

TITLE : ENFORCEMENT ACTION - 5
CHAPTER : ADMINISTRATIVE PROCESS - 3
SECTION : Efficacy and Execution of Decisions - 11

1 - The decision rendered by the following is final: (Res. 1,065)

a) Central Bank of Brazil, after the period for appeal has expired without an appeal being filed; (Res. 1,065)

b) Council of Appeals of the National Financial System. (Res. 1,065)

2 - The decision of the Central Bank of Brazil in the part that was not the object of an appeal shall also be final. (Res. 1,065)

3 - The penalty shall be published, at least once, in the Official Gazette, by the body that issued the final decision.

4 - The initial term for counting the periods of the penalties provided for in items III and IV of Article 44 of Law No. 4,595/64 is the date of publication of the final decision.

5 - The process from which a fine penalty results from a final decision shall remain, in the processing Unit, for a period of 15 (fifteen) days, counted from the receipt of the notification, for payment.

6 - After the period for payment has expired without the fine amount having been paid, the appropriate registration in the Active Debt shall be made, for the purpose of promoting judicial execution.

7 - The registration term in the Active Debt, authenticated by the competent authority, shall indicate, obligatorily: (Res. 1,065)

a) the name and, whenever possible, the Individual Taxpayer Registry (CPF) or General Taxpayer Registry (CGC) of the debtor, their domicile or residence; (Res. 1,065)

b) the amount due and the method for calculating late interest and monetary correction; (Res. 1,065)

c) the origin and nature of the credit, specifically mentioning the legal or regulatory provision infringed and the basis for the penalty; (Res. 1,065)

d) date of registration; (Res. 1,065)

e) the number of the administrative process from which the credit originated. (Res. 1,065)

8 - The certificate of registration must contain, in addition to the requirements mentioned in the previous item, the indication of the book and page of the registration. (Res. 1,065)

TITLE : ENFORCEMENT ACTION - 5
CHAPTER : Penalty - 4
SECTION : Monetary Fine - 2

1 - Fines of up to R$100,000.00 (one hundred thousand reais) follow the following gradation:

a) up to R$25,000.00 (twenty-five thousand reais), when the institution:

I - having been warned about an irregularity that was committed, fails to remedy it within the period assigned to it;

II - fails to communicate to the Central Bank of Brazil, an act related to the election of an administrator or member of any statutory body, within 15 (fifteen) days following the occurrence;

III - fails to effect, within the stipulated period, publication required by law or by determination of a competent authority;

IV - fails to provide, within the established period, documents or information required by the Central Bank of Brazil;

V - infringes a legal or regulatory provision relating to capital, reserves, cash requirements, services and operations;

VI - takes office, without prior acceptance by the Central Bank of Brazil, as an administrator or member of any statutory body, except in the cases provided for in paragraph 2 of Article 22 of Law No. 4,595, of December 31, 1964;

VII - violates conditions of competition among institutions regulated by the Central Bank of Brazil;

VIII - maintains investment in real estate in disagreement with the limits established by the monetary authorities;

IX - acquires real estate intended for own use, without observing the regulatory norms in force;

X - fails to alienate, within a maximum period of 1 (one) year, unless extension granted by the Central Bank of Brazil, real estate received in liquidation of a loan of difficult or doubtful solution;

b) up to R$50,000.00 (fifty thousand reais), when the institution:

I - reoffends in a fault punished in accordance with item "a" of this item, provided that specific recidivism is not characterized;

II - acquires real estate not intended for own use, except that received in liquidation of a loan of difficult or doubtful solution;

III - participates, except for investment and development institutions, in the capital of any society, without prior authorization from the Central Bank of Brazil, except for underwriting guarantee cases;

c) up to R$75,000.00 (seventy-five thousand reais), when the institution:

I - reoffends in a fault punished in accordance with item "b" of this item, provided that specific recidivism is not characterized;

II - guarantees or grants loans, credit or financing, in disagreement with the provisions of Articles 37 and 39 of Law No. 4,131, of September 3, 1962;

III - fails to comply with relevant legal or regulatory norms regarding resources captured abroad;

IV - fails to correctly make, or makes outside the period, the compulsory collection due;

d) up to R$100,000.00 (one hundred thousand reais), when the institution:

I - reoffends in a fault punished in accordance with item "c" of this item, provided that specific recidivism is not characterized;

II - grants loans or advances prohibited by items II/V of Article 34 of Law No. 4,595/64, or by regulatory norms issued by the Central Bank of Brazil;

III - obstructs the supervision of the Central Bank of Brazil;

IV - fails to maintain confidentiality in its active and passive operations and services provided;

V - issues debentures and beneficiary parts without being previously authorized by the Central Bank of Brazil, in each case.

2 - Also subject to a fine of up to R$100,000.00 (one hundred thousand reais), without prejudice to applicable criminal sanctions, is any natural or legal person who operates in the financial, foreign exchange or capital markets without being duly authorized by the Central Bank of Brazil, except for the competence of the Securities and Exchange Commission (CVM).

3 - The following fines are also subject to, up to a maximum of R$100,000.00 (one hundred thousand reais):

a) a value equal to double the loan or advance granted in disagreement with Articles 34 and 40 of Law No. 4,595/64, the person responsible who, for the institution, authorized the prohibited operation;

b) 50% (fifty percent) on the value of the title irregularly launched in the market, the persons mentioned in paragraph 4, Article 17 of Law No. 4,728, of July 14, 1965.

4 - The fine not paid until the period fixed for payment shall be monetarily updated and late interest of 1% (one percent) per calendar month or fraction shall apply to it, in accordance with the legislation in force.

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Obs.: Re-transmitted due to the inclusion of item 3 in the MNI annex 5-3-7.